36 Neb. 775 | Neb. | 1893
Lead Opinion
In 1883 the appellant Sarah Cooper was the owner of lots Nos. 4, 5, 6, 7, 8, and 9, in block No. 124, in the city of Lincoln, and, together with her husband, the appellant Philip H. Cooper, occupied of said lots as a homestead Nos. 8 and 9. Mrs. Cooper was engaged in the mercantile business, and about October 1, 1884, failed, owing appellees debts contracted on the faith and credit of her property and business. On January 8, 1883, Mrs. Cooper conveyed by quitclaim deed said lots Nos. 8 and 9 to the State National Bank of Lincoln, to secure the payment of a debt she owed it. On January 7, 1884, she was still indebted in the sum of $4,500 to said bank, as an evidence of which said debt she executed and delivered to it her note due in sixty days, on which, prior to October of said' year, there were indorsed $1,300. At this date all these lots were incumbered by a mortgage of $3,500, held by one Bowles. On October 27, 1884, Mrs. Cooper and her husband, by a warranty deed, and for the expressed consideration of $5,200, conveyed to John R. Richards, then president of said bank, four of said lots, namely, Nos. 4, 5, 6, and 7. This deed contained this clause: “ The party
The deeds of Mrs. Cooper and husband to Richards, and from the bank to Mrs. Cooper were both recorded October 28, 1884. About this last date Mrs. Cooper and husband conveyed said lots Nos. 8 and 9 to one Hyde, and he at once conveyed them to appellant Philip H. Cooper, who thereupon gave his wife a written receipt, or paper reciting that he accepted said conveyance from Hyde in full payment of $1,300 before then loaned by Mr. Cooper to his wife, and agreeing to hold said lbtsas the.homestead of the family. It appears that this $1,300 was the money indorsed on the $4,500 note.
Some time after the date of the deed from Mrs. Cooper and husband to Richards he was succeeded as president of the bank’by one Brown, and at that time Mr. Richards conveyed said lots Nos. 4, 5, 6, and 7 to him, Brown. About April 1, 1886, Mr. Brown sold and conveyed two of said lots, namely, lots Nos. 4 and 5, to one Patrick for $4,500; and, on April 14 of the same year, Brown conveyed to appellant Philip H. Cooper the other two lots, namely, lots Nos. 6 and 7, the consideration expressed in the deed being one dollar.
Appellees further alleged that some time after that one Brown succeeded Richards as president of said bank, and that thereupon Richards conveyed said lots to Brown on the same terms under which they were conveyed to him by the Coopers, and that, in pursuance of the trust and agreement between the said Coopers and the said Richards
The answer of the appellants alleged that as to lots 8 and 9 they were conveyed to the appellant Philip H. Cooper, in consideration of the $1,300 which he had loaned his wife, and which she had paid on the note held by the State National Bank. As to lots 4, 5, 6, and 7, the answer alleged that the deed made by the Coopers of said lots to Richards on the 27th of October, 1884, was an absolute sale and conveyance of the property, and made in good faith. The appellants also pleaded the statute of limitations, viz., that the cause of action of the appellees accrued more than four years prior to the bringing of this suit.
The judgment of the court, found in the record, makes no disposition whatever of said lots Nos. 4, 5, 8, or 9. The court found and decreed, however, that the conveyance made by the Coopers on the 27th of October, 1884, to Richards of lots 4, 5, 6, and 7 was made to secure the payment of $3,200, then owing by Mrs. Cooper to the State National Bank, and in trust for Mrs. Cooper, with an agreement on the part of Richards that after the debt Avas paid the remaining property, or the proceeds of the
The appellants filed the usual bond in the court below and bring the case here on appeal.
The finding of the court, that the conveyance made by the Coopers to Richards on the 27th of October, 1884, and the subsequent conveyance of Brown to Cooper in April, 1886, were fraudulent and made for the purpose of hindering and delaying the appellees in the collection of their debts, is supported by the evidence. But we are of the opinion that the finding of the court, that the appellees were ignorant of both these fraudulent transactions until Avithin four years next prior to the bringing of their suit, is not supported by the evidence in the record. This suit Avas brought more than four years after October 28, 1884. Now, when did appellees discover the fraud perpetrated October 27, 1884, within the meaning of section 12 of the Civil Code, as construed by the courts?
The parties all lived in the city of Lincoln, in Lancaster county, Nebraska. The lots fraudulently conveyed were situate in said county and city. The fraudulent deed was recorded in said county and city October 28, 1884. Mrs. Cooper had failed in business and was known to be insolvent. The fraudulent grantors remained in possession of the property conveyed to Richards. The ap-. pellees testify:
Q. You are one of the plaintiffs in this case?
A. Yes, sir.
Q. Are you acquainted with the defendants Cooper and his wife?
A. Yes, sir.
Q. How long have you known them ?
A. I should say about fourteen years.
Q. Did you know or hear about the conveyance of Coopers to J. R. Richards ?
A. Yes, sir; I did.
Q. Of the property in question in October, 1884?
A. Yes, sir.
Q. At that time Mrs. Cooper then was or had been in the grocery business ?
A. Yes.
Q. It was about the time of the failure of that businesss was it not?
A. Yes, sir.
Q. At or about that time, or immediately afterwards, did you have any conversation with Mrs. Cooper in reference to the transaction?
A. Yes, sir.
Q. State when and where that conversation was.
A. It was at Mrs. Cooper’s house.
Q. On what date ?
A. I could not say the date.
Q. With relation to the transaction, on what date?
A. It was the day that those deeds were to be made. I met her son and I think the attorney — I was not acquainted with the gentleman — as I went up.
Q. Was that this gentleman, Mr. -.
A. I could not identify him now, but she told me that Mr. had advised her to deed the property out of her hands.
Q. Where did that conversation occur?
Q,. Did you have any further conversation with her at, that time and at that place?
A. Yes, sir; she asked me if I had taken any action in the matter as soon as I went in, and I told her no; that I called to see her to see what she hkd to say about it, and she said they intended putting the property into Mr. Richards’ hands until they could settle the matter and straighten themselves. She said of course she intended to pay me and she said she intended to fix it so the creditors of Willie could not get hold of it. And she said when that property was sold Mr. Richards had entered into an agreement with her that she would have all over and above her indebtedness to Mr. Richards, and that she would have ample means to pay all her debts of honor, as she termed them, when that was fixed up.
Q. Willie was her son ?
A. Yes, sir.
Q. He had been conducting her business in the grocery?
A. Yes, sir; he had been conducting the grocery business
Q. That was the business that failed about that time ?
A. Yes, sir.
Q. That business was conducted in her name — it was her business?
A. Yes, sir; that was my understanding.
J. H. McClay:
Q. Where do you reside?
A. Lincoln.
Q. Are you acquainted with the defendants ?
A. Yes, sir.
Q. You are one of the plaintiffs in this action?
A. Yes, sir.
Q. You may state whether you had any conversation with the defendants, or either of them.
A. I have had conversation with them at different times
Q. State when and where they were and what they were.
A. Very soon after her failure and the transfer of this property in these deeds offered heretofore.
Q. What was said?
A. It was after the quitclaim deed and prior to the 1884 deed; it was between that time; it was just after the failure of the grocery business that I had the conversation.
Q. Fix the date.
A. I could not do that. It was just after the failure of the grocery business. My conversation with Mrs. Cooper was about some money that she owed me that I had paid as security on a note, and she said she had made arrangements by which she could pay all her debts to the people here in Lincoln; that there were some debts that she did not feel bound to pay; she had plenty of property to pay them with. I asked her where the property was. She refused to tell me where it was. She said she had made such arrangements as would protect her interests and she thought it would protect the rest of us.
W. W. Holmes:
Q. You are one of the plaintiffs?
A. Yes, sir.
Q. You live in Lincoln?
A. Yes, sir.
Q. You are acquainted with the defendants?
A. Yes, sir.
Q. You have heard the testimony in this case so far?
A. Yes, sir.
Q. Did you at any time, about the time of the transfer or conveyance of these lots to Richards, have any conversation with the defendants, or any of them, in reference to it?
A. I had with Mrs, Cooper.
Q. When?
Q. What day of the week were the conveyances, do you know ?
A. She said she had been up all night Sunday night making them.
Q. It was the day following that you had that conversation with her?
A. Yes, sir.
Q. Where was that conversation ?
A. At her house.
Q. What was it?
A. She said she had turned the property over to Richards to beat her foreign creditors, and all the home creditors were to be paid.
Q. Was there any further conversation?
A. Yes, sir; I had a long conversation with her.
Q. State the substance of it as near as you can.
A. I don’t know as she said anything more about that. She said she was most sick, she had been up all night.
Q. Did she say what the object of the transfer to Richards was, what office that was intended to perform ?
A. It was to secure the bank; the bank was to be paid first.
Q. What was to become of the residue?
A. That was to go to her.
J. H. McClay recalled :
Q. Did you have any such conversation as that with Mrs. Cooper?
A. Yes, sir; I had that kind of a conversation with her, and she told me that the lands were hers after the bank had been paid off — the State National Bank was paid — the balance belonged to her;
Were these facts a discovery by appellees of the fraud of October 27, 1884, within the meaning of section 12 of the Civil Code and the construction placed thereon by the courts? Part of that section is as follows: “An action for
In Parker v. Kuhn, 21 Neb., 413, this court said: “An action for relief on the ground of fraud may be commenced at any time within four years after the discovery of the-facts constituting the fraud, or of facts sufficient to put a person of ordinary intelligence and prudence on an inquiry, which, if pursued, would lead to such discovery.”
Hellman v. Davis, 24 Neb., 793, was a creditor’s bill, alleging that in 1873 the defendant was a member of an insolvent copartnership, and on said date caused certain, lands to be purchased with his money and title taken in his wife’s name for the purpose of defrauding his creditors that the plaintiff had no knowledge of the fraud until within four years prior to the bringing of the suit. It appears from the evidence quoted in the opinion that the fraudulent deed was recorded in 1873; that the plaintiff knew that the defendant and his wife were living on the land, and that the defendant was insolvent, and the only other fact of the fraud that plaintiff had learned since its perpetration was that within four years before the suit was brought his attorney had told him his claim against the defendant could be made. Justice Cobb, speaking for this court, with those facts before him, held that the action was barred by the statute of limitations, citing and affirming Parker v. Kuhn, 21 Neb., 413.
In Wright v. Davis, 28 Neb., 479, a creditor’s bill, it was alleged that the defendant became indebted to the
Q. You knew this land had been bought and stood in the name of Mrs. Davis ?
A. I presume I did. I don’t think I ever looked at the records, but I was satisfied that was the ease.
It also appears that he testified on the trial that he had seen the defendant frequently after the recovery of his judgment, had conversed with him about the payment of it, had received assurances that it would be paid, and that he was to be taken care of. Chief Justice Reese, speaking for this court with these facts before him, said : “ There is no question but that the plaintiff’s right to apply the property to the payment of his claim was barred by the statute of limitations if the statute began to run upon the filing for record of the deed by which the real estate was finally conveyed to Mrs. Davis, for by section 12 of the Civil Code the statutory limit is four years after the discovery of the fraud.” He then cites Helman v. Davis, supra, and Parker v. Kuhn, supra, and continues: “By
In Laird v. Kilbourne, 70 Ia., 83, the supreme court of Iowa say: “An action to set aside a fraudulent conveyance of real estate is barred in five years after the fraud is discovered, and it is conclusively presumed to be discovered when the fraudulent conveyance is filed for record.” (See also Humphreys v. Mattoon, 43 Ia., 556.)
In Rogers v. Brown, 61 Mo., 187, the supreme court of Missouri say: “ They (the appellees) are chargeable by law with notice of the recorded conveyance. * * * The statute must be held to have commenced to run against them on the 26th day of October, 1857, the day on which the deed was recorded.”
In Cockrell’s Ex’r v. Cockrell, 15 S. W. Rep., 1119, a creditor’s bill, the supreme court of Kentucky say: “The
The foregoing facts, looked at in the light of the authorities just quoted, were sufficient to put appellees on an inquiry, which, if pursued, would have led to the discovery of the fraud in the conveyance by the Coopers to Richards, and appellees must be held to have discovered that fraud October 28, 1884. The statute then began to run in favor of Mrs. Cooper’s grantees and against her and her creditors.
Appellees, however, claim that their cause of action did not accrue until they recovered their judgments against Mrs. Cooper. What was appellee’s cause of action? Evidently the fraudulent conveyance between the appellants. When did it accrue? When discovered, and it was discovered when appellees were in possession of sufficient facts to put a person of ordinary intelligence and prudence on an inquiry which, if pursued, would have led to the discovery that the conveyance to Richards was fraudulent. What facts were in possession of appellees October 28, 1884? The fraudulent conveyance from the Coopers to Richards was of record. The appellees and appellants all resided in the same county and city. Appellees knew that Mrs. Cooper had failed in business and was insolvent. . The appellees knew that the Coopers continued in possession of the property conveyed to Richards. Appellees had been told by Mrs. Cooper that she had conveyed her property to Richards to defeat lier creditors, or some of them. These facts were sufficient for appellees to have maintained an attachment suit against this property October 28, 1884, whether their claims against her were due
Were the appellees limited to a creditor’s bill in order to obtain relief from this fraudulent conveyance? We think not. Appellees could have attached the property on the ground that it was fraudulently conveyed to Richards for the purpose of delaying Mrs. Cooper’s creditors. (Civil Code, sec. 198, subd. 8 ; Keene v. Sallenbach, 15 Neb., 200; Brown v. Brown, 11 S. W. Rep. [Ky.], 4; Rogers v. Brown, 61 Mo., 187.)
For this court to hold that appellees’ cause of action did not accrue—the fraud discovered—until appellees were in a position to file a creditor’s bill, would be to judicially amend this statute and leave it to the discretion of creditors to fix the time of the accrual of their cause of action by hastening or delaying the recovery of judgment. A case might arise where, by reason of the debtor being a non-resident, a personal judgment could not be obtained. In such case would appellees have no cause of action for relief on the ground of fraud until the debtor became a resident and a personal judgment was rendered against him? It is an old maxim that for every wrong the law affords a remedy, but if one effectual remedy is afforded by the law the maxim is complied with.
The final contention of the appellees is, that if the October, 1884, conveyance was fraudulent, and discovered by them in such time as to make the statute of limitations a bar, yet the conveyance by Brown of lots Nos. 6 and 7 in April, 1886, to Mrs. Cooper’s husband gave appellees a new cause of action. In this view we concur. From the evidence of Mr. Brown in the record it appears that during the time Richards held the title to these lots he agreed with Mrs. Cooper that, if she would sell them, or find a purchaser for them, he would allow her as commissions what
Complaint is made by appellants because the decree is silent as to said lots 8 and 9, and no account taken of taxes and interest on the Bowles mortgage paid by Mr. Cooper on lots 6 and 7. As to lots 8 and 9 we think the statute of limitations precludes appellees from questioning Cooper’s title to the same. The decree of the district court will be so modified here as to dismiss the petitions and cross-petitions of appellees as to said lots 8 and 9. As to interest and taxes paid on lots 6 and 7 by Mr. Cooper, he accepted the title to these lots without consideration and for the purpose of defrauding the creditors of his wife, and is therefore in no position to ask a court of equity to reliéve him from burdens he voluntarily and fraudulently assumed. A decree will be entered in this court dismissing the petitions and cross-petitions of appellees as to lots 8 and 9, block 124, in the city of Lincoln, and as thus modified the decree of the district court is in all things affirmed.
Decree accordingly.
Concurrence Opinion
I concur in the conclusion reached, but not in the construction given the statute of limitations. I think the statute means that in such cases the cause of action shall not be deemed to accrue until the discovery of the fraud, but not necessarily that it does accrue upon, such discovery. The cause of action in this case was the-right of the creditors to proceed against the fraudulent grantee, and was not complete until judgments were recovered. I therefore think that the statute began to run upon the recovery of judgments, when the creditors were for the first time in position to institute the action.
