129 Iowa 384 | Iowa | 1906
Lead Opinion
There is no dispute between counsel as to the law applicable to the case, nor is there any direct conflict in the evidence as to any material fact, but the difficulty in reaching a conclusion arises from uncertainty, as appears from the conflicting claims of counsel, with regard to inferences or deductions to be drawn from the testimony of the witnesses, all of whom were examined in plaintiffs’ interest. It is conceded that Wm. P. Hickey, as heir, appears to be the owner of a one-fifth interest in the tract of land to which this controversy relates, and that the plaintiffs’ appear to hold the title to only four-fifths of the tract as against creditors of Wm. P. It is clear, then, that the burden is on the plaintiffs to overcome the presumption of ownership of a one-fifth interest by Wm. P. Hickey, in order to entitle them to relief as against the defendants. This burden plaintiffs have attempted to sustain by evidence which, as their counsel claim, establishes the fact that prior, to the death of John Hickey his son Wm. P. Hickey was indebted to him to an amount in excess of the share to which Wm. P. would become entitled as heir on the death of his father intestate, and that under these circumstances they entered into an arrangement by which the indebtedness of.Wm. P. to his father was treated as an advancement and canceled, and’ all claims of Wm. P. to share in his father’s estate were surrendered and extinguished.
The question before us to decide is whether there was such an arrangement, for, if such a valid arrangement was made, then on the death of John Hickey all his property, not including the claim against his son Wm. P., which was extinguished by the arrangement, vested in his other four children and nothing remained subject to be taken by defendants under the judgment against Wm. P., and whatever apparent interest Wm. P. had in the 120-acre tract of land as heir was apparent only and not real, having been extin
There is no controversy between counsel as to the proposition- that an indebtedness may, by mutual agreement, be converted into an advancement. The only question is as to the sufficiency of the evidence to show such an arrangement between Wm. P. and his father in this case. But there can be no doubt under this record as to the sufficiency of the evidence on this point. Wm. P. testified to the fact and it is shown by one of his daughters and another witness that just before such arrangement was made, as testified to by Wm. P, the father had caused the daughter to write a letter to Wm. P. in response to' one asking for more money, in which it was specifically stated that Wm. P. had already
Hnless we are justified in absolutely disbelieving and dis- • regarding the testimony of unimpeached witnesses, we are not warranted in saying that there is not sufficient evidence to show the conversion of the indebtedness into an advancement. What was subsequently done by the parties in interest indicates their understanding- that such an arrangement was made. Soon after the death of the father, and without further conferance with his brother and sisters, Wm. P. executed to his sisters a conveyance of his interest in the 252-acre farm which included the homestead, joining for the purpose, as we understand the record, in a deed which also conveyed the interest of his brother John; and in connection with the execution of this conveyance the $7,500 note, which was in the hands'of one of the daughters, was surrendered. No attempt appears to have been made by his brother and sisters, as the other heirs and jointly interested in the personal property, to enforce this obligation against Wm. P. or to treat him as in any way a debtor to the estate. It also appears that Wm. P. joined with his brother John, in transferring to his sisters without further consideration all their interest in the personal property. The entire record can be consistently explained (in the absence of an inference of fraudulent collusion, to which matter, we shall presently refer) on the theory that all the heirs per- , fectly well understood that Wm. P. had no further interest in his father’s estate.
Counsel dwell upon the fact that no explanation has been made in the record as to why the sisters conveyed an interest in this 120-acre tract to the son of Wm. P. instead of to him. But, as we look at the case, such explanation was uncalled for. If Wm. P. still had a real interest, as he had an apparent interest in this 120-acre tract, the conveyance would simply pass to his son the additional interest held by the daughters therein; and the question to be determined by the court was, not the intention of the daughters, but the subsisting interest, if any, of Wm. P. Had his sisters conveyed their interest directly to Wm. P., it would simply have invested him with their interest in addition to his own, and they would thereby have been giving him their own property to be taken by his creditors in satisfaction of his debts. There was certainly no badge of fraud in a transaction by which they vested their own interest in his son instead of in himself.
Some claim is made in argument that there was after the death of the father a practical partition of the property among the brothers and sisters, in pursuance of which, and for the purpose of defrauding the creditors of Wm. P., the share of the latter was conveyed to his son instead of to himself. But there is no evidence of any arrangement for partition, and what was done was not consistent with any such arrangement. The value of the one-half interest in the 120-acre tract, which the sisters purported to convey to their brother’s son, did not correspond to his interest in the estate, disregarding his indebtedness or advancement, nor to his in
We therefore reach the conclusion that Wm. P. Hickey had no interest in the 120-acre tract of land which the defendents sought to reach under execution, and that the decree of the trial court quieting the title of the plaintiffs, and enjoining the defendents from levying upon any interest in the property under the judgment against him, was correct; and it is affirmed.
Dissenting Opinion
(dissenting). — The law applicable to this case is well settled, and the facts are not seriously in dispute. The difficulty, as I understand it, is in the application of the law to these facts and with the final conclusion reached by the majority. The case is this:
Before the death of his father William P. Hickey, Sr., was largely in debt and practically insolvent. He owed various parties something like $14,000, and the defendants are of these creditors. John Hickey, Sr., father of William, died March 11, 1901, leaving surviving five children, to wit: William P. Hickey, Sr., John Hickey, Jr., Maggie and Nellie Hickey, and Mary O’Connor. There is some dispute in the evidence, or rather some doubt regarding the character and value of the property which John Hickey, Sr., owned at the time of his death. It is conceded, however, that he died seised of 372 acres of land in Linn county, two town lots, a large amount of personal property worth at least $4,300, and cash to the amount of $900. Some other property, hogs, cattle, horses, harness, and household furniture, was also left, the value of which is not shown.
A few days after the death of John Hickey, Sr., and before any administrator was appointed, or any appraisement made of the property belonging to the estate, and without any computation being made in order to determine what
It is well settled that the law operates • upon the conveyance and not upon the estate transferred, and the creditor will take all the estate which the debtor has-at the time when they impeach the transfer, and not merely the interest trans
What is the law under such a state of facts ? A conveyance of land made with intent to hinder, delay, or defraud creditors is always regarded as invalid, and existing creditors may have such conveyances set aside and the property subjected to their claims, or they may disregard the conveyance and levy upon the land so fraudulently conveyed. Moreover, if one has the beneficial interest in a piece of property, then,' no matter in whose name the title may be, the holder of that title is regarded as a trustee, and the property may be reached by the creditors of the real, - the beneficial, owner. Doolittle v. Bridgman, 1 G. Greene (Iowa) 265. Wlhen one furnishes the consideration for property, title to which is taken in the name of another, a resulting trust immediately arises, and he who furnishes the consideration is regarded as the true owner, and the property may be levied upon and subjected to the claims of his creditors. Bearing in mind that William P. Hickey, Jr., furnished none of the consideration for the transfer of the land to him, and looking to the transaction as it is, undisguised by any surmises or inferences, it is clear to my mind that William P. Hickey, Sr., furnished the consideration for the conveyance to his six year old son, and that a resulting trust immediately arose in his favor. State Bank v. Harrow, 26 Iowa, 426.
I cannot forbear the suggestion, in this connection, that, if this be not true, William Hickey, Jr., has a very precarious title, for the grantors in his deed did not undertake to convey more than a three-fifths interest in the land. Tf they in fact had a three-fourths interest, it is important to inquire where is the title to the other three-twentieths, which they did not pretend to convey. Why did they convey a three-fifths interest in the land to William P., Jr., and to John, Jr. ? The answer is, because they regarded John and William, Sr., as holding the other two-fifths in
The propositions of law above announced are so fundamental and so well established that I do not need to further fortify them with authority. I have never heard any doubt expressed about any of them. And if the facts above recited do not make out a strong, if not impregnable, case of fraud, I do not know how to construct one, unless we are permitted to see into the secret purpose of the actors, which, unfortunately, we can never do. Assuming, then, as I think I am justified in doing, that these facts call for an explanation, if any truthful one could be given, from those who were parties to the transaction, and in whose breasts is locked the secret of the making of the conveyances, what is the rule? Certainly it was the duty of those having the sole and only information regarding the matter to testify to the facts, if
Let us now see if any of these persons who knew why and for what purpose thesé conveyances were made have frankly and truthfully explained the same. Maggie and William P. Hickey, Sr., were witnesses in the case. Here is Maggie’s testimony as to how the conveyances came to be made:
After my father’s death my two sisters and myself deeded one-half our interest in the 120-aere farm to young William P. Hickey, a little boy, the son of our brother, the other half to our brother John. We received nothing from young William P. Hickey for this deed. There was no money passed, neither to me nor either of my sisters. And I now make no claim to any part of the 120 acres. [The 120 acres referred to is the property in dispute in this petition.] We received a deed to the home farm, 244 acres. William P. Hickey and John Hickey, our brothers, made a bill of sale to we three girls for all the personal property. William P. Hickey signed this just like he did the deeds. We three girls received the home farm, the timber land, the lots in Clarence, and all the personal property. . . . Everything was settled before I was appointed administratrix.
This is all she said about why. and how the conveyances came to be made. William P. Hickey, Sr.’s testimony is even more unsatisfactory. Here it is:
*397 I was not present at the meeting of the heirs on the farm after father’s death. Yes; I signed a deed. My brother-in-law, (YOonnor, was present. He is an attorney. If I'remember right — he delivered some notes to me, but I don’t remember what they were. It might be he delivered this one. I could not say. He came over to my store, representing my sisters, for my signature. I said he might have brought these notes over. I don’t remember that Exhibit A was one of them. I don’t know what he said to me, except he said something. I signed a deed that he presented to me in behalf of my sisters. 1 signed it without objection. I don’t think I ever asked any questions. That deed ivas for 252 acres of land, the homestead and the timber, and the town lots in Clarence. 1 don’t know whether I asked him any questions at all or not. N o, sir; there ivas nothing said after father’s death between me and my sisters, prior to my signing this deed with reference to any division of the property— nothing at all. I had no conversation whatever in regard to that matter up to the time of signing the deed. I did not see my sisters at all. I mean to say I had no talk with my sisters after father’s death up to this time of signing the deed with reference to a division of the property, or to surrender these notes.
This, then, is William Hickey’s explanation as to why and hoAV the deeds came to be made. To my mind it is very far from satisfactory, and, even Avere the other testimony in equipoise, I would regard William P. Hickey’s testimony, which I have' quoted in full, as quite conclusive evidence of an attempt on his part to cover up his interest in his father’s estate, so that creditors might not reach it. Credulous, indeed, must one be who regards this as a satisfactory explanation of a prima facie case of fraud. What is it, then, which the majority regard as sufficient to overcome this prima facie case? Why, this, and only this: That William P. Hickey, Sr., had received from his father by way of loans or advancements all that he Avas entitled to of his father’s estate. This T do not believe, but, even if it were true, it does not amount to that full and frank explanation
Was any accounting had at the time these deeds and this bill of sale were made to determine what each heir was entitled to receive? Was it agreed that William P., Sr., had no interest in the property left by his father ? Is any reason given for making the conveyance to one of the heirs and a six year old son of the other? Was any accounting had between John, Jr., and the women heirs ? No; nothing of this kind. No one pretends that there was any accounting or settlement as between the heirs, save such as the papers indicate. No one says that it was agreed that William, Sr., had no further interest in his father’s property, and that this was the reason for the conveyances. On the contrary, he proceeded as if he had an interest by joining in a deed with his brother, and in uniting with him in a bill of sale for the personal property, conveying all his interest in his deceased father’s estate, save the 120 acres of land which was conveyed back'to his brother and to his six year old son. Was not this an assertion of interest? If it was agreed that he had no interest, why did he join in the deed, and, if he had no interest, why did not his deed cover 'the 120 acres of land which was thereafter conveyed to his son and his brother ? If he was making the deed to clear up the title simply, why did he not include the 120 acres of land as well as the 252 and the town lots ? If made simply to clear the title, why was the conveyance made back to John and William P.’s son ? Why was the conveyance made to the son ? Was it because of the love and affection that his aunts, the grantors, had for him ? They do not say so, and, as they are the only ones who hold that secret, we must conclude that, if this were true, they would have said so. Was it a pure gift to the little boy? No one says so. If that
And yet counsel, in the face of this record, want us to assume a state of facts, which his clients for some reason dare not testify to. Is the prima facie case made by this record to be met by inference upon inference; especially where the parties who knew all aboqt it were on the witness stand, and did not for some reason, do more than testify to certain facts from which an inconclusive inference might be drawn ? Again, why was not the deceased’s estate administered upon in the regular way, and by one who would furnish security for the fulfillment of his trust? What was the hurry in getting the apparent title out of William P. Hickey, Sr. ? Why were not the supposed claims for advancements presented to an administrator and the estate settled under the supervision of a court? Why was there no inventory taken of the property, as required by law ? Why was all the property, save this 120 acres of land, conveyed to the female heirs ? What was the value of this property when the decedent died? None of these questions are answered by any one.
But it is said that William P. Hickey, Sr., received, in advancements from his father before his death, all that he (William) was entitled to. I do not think the evidence shows it, and I do not believe that any one can fairly figure out this conclusion from the very unsatisfactory record we have before us, even conceding, arguendo, that the other heirs were insisting upon these advancements in the distribution of the estate. But, concede that upon an accounting now made, and which no one contends was made at the time of the transactions in controversy, it should be found that William P. Hickey, Sr., has received all he was entitled to; what does this amount to ? Does it do more than furnish a reason which might have actuated the parties in making the division of the property? Surely this is all
What reason have we for indulging in an' inference which may or may not be true, when it was the duty of the parties who were on the witness stand, and in whose breasts the information lay, to speak the very truth, and for some reason they dare not say the word, but content themselves with allowing us to guess. Suppose we guess wrong; is any one liable for perjury? Suppose we say that the conveyance attacked was a pure gratuity to the minor son, or was made out of love and affection, and it should afterward turn out from unmistakable evidence that it was made to defraud; could Maggie or William Hickey be convicted of perjury?
But it is said that, if William had secured all he was entitled to from his father’s estate, he furnished no part of the consideration for the conveyance to his minor son, and there is therefore nothing for his creditors to reach. Let us look at this for a moment. Even if he had received all that a court of probate would have awarded him, it does not follow that the heirs may not have waived these advancements or part of them. They were not bound to insist upon them, and, save for purposes of distribution, they were no part of decedent’s estate. If they did insist upon them in this volutary settlement and division of the estate, it would have been very easy for the parties to have so testified. But they did not say so. What they in fact did negatives any thought of that kind.
But, if this be not true, it was incumbent upon them, under the rule above stated, to explain the transaction and to testify that this was the object, purpose, and consideration for the conveyances. This they did not do. Shall we say that they counted so much as advancements in settling up the estate and making the conveyances, when they do not say so themselves ? Moreover, there is some evidence as to advancements made to the other, or some of the other, children. How much was advanced to each heir ? Was any computation made as to what each had received? No; the record says there was no settlement. See Floyd v. Floyd, 7 B. Mon. (Ky.) 290, holding that a court cannot, on its own motion, direct an account of advancements with a view to equalizing the distribution of an estate. That an advancement is only to be considered in making division and distribution and not as property of the estate, see Code, Section 3383; In re Miller, 73 Iowa, 118; Gleaver v. Kirk’s Heirs, 3 Metc. (Ky.) 270; Cecil v. Cecil, 19 Md. 72, (81 Am. Dec. 626). It is doubtful if they may be considered, save where an estate is being distributed in probate (State v. R. R. Co.,
One other thought: .If William P. Hickey, Sr., furnished any valuable consideration for the property which was deeded to his minor son, no matter'how small, the son confessedly having paid no part thereof, a resulting trust arose, for the question of adequacy or sufficiency of consideration does not arise in the case. That there was a consideration in the conveyance he made to his sister is very clear, and this should end the case. See Roundtree v. Davidson, 59 Wis. 522 (18 N. W. Rep. 518.) But William P., Sr., does not claim advancements exceeding $1,800. As the loan was converted into an advancement, no interest should be allowed, but the heir charged with money received. Krebs v. Krebs’ Ex’r, 35 Ala. 293. Taking, as proper evidence of value, what the personal property sold for after the settlement ivas made, and other testimony as to the value of the real estate at a time different from that of the division of the property, which I may say is rather poor evidence as to its value when the division was made, T do not believe, when we also consider that he made some' advancements to his other children, the amount of which is left to inference, that Willaim P., Sr., had received his full share. The visible property, including
To my mind the case is an unusually clear one, and avc liaise no right to make a supposed settlement for these parties and attempt to equalize matters for them, when they themselves do not say there was any attempt to do so when the conveyances in question were made. Does any one suppose, if the transaction was fair, open, and free from fraud, that Maggie and William Hickey, Sr., would not have said so, and explained it according to some of the inferences suggested by the majority? Does any one believe that if the conveyance to the minor son of William P. Hickey, Sr., was out of love or affection, or a March gift to him, due to their regard for him, Maggie Hickey would not have said so ? As she did not, what is the fair, the reasonable, inference ? Does any one suppose that if William Hickey, Sr., had deeded his interest in the lands and personal property left- by his father, Avhich, as Ave have seen, he did not do, for he left out the 120 acres redeeded to his son and brother, to his sisters without any consideration, and because, after a conference, they had concluded that he had had his share, he would not have said so ? Did he do so ? Let the record which I have quoted speak. Why was the land conveyed to this six year old son of
The majority have entirely overlooked the fact that from the face of the records and papers in the case we have a strong prima facie showing of fraud, and are insisting that the case is one of inference only. This, in my judgment, is not true, and if my preliminary statement of the case, which cannot be challenged, does not make out a pruna fade case for the defendants not only of fraud, but of a resulting or secret trust, I do not know how one can be made. The truth, in my judgment, is that the majority are treating a mere inference upon an inference as a satisfactory explanation of a strong prima facie case. If persons may do as the parties did in this case, and yet not be called upon when the conveyances are challenged to explain them, it is very easy to perpetrate a fraud by a voluntary partition and distribution of property. An impecunious heir has been shown the method whereby to defeat the honest claims of his creditors.
As to the suggestion of the majority that the pleadings do not raise the issues I have been discussing, there are three answers, any one of which is, in my opinion, sufficient to relieve of all anxiety on this score: First. Counsel concede in argument, both oral and in print, that they do involve the questions I have discussed; at least they make, no point that the issues are not broad enough to reach these matters. Second. Plaintiffs are John Hickey and William P. Hickey,
Defendants in answer, in addition to a general denial, pleaded fraud in the transactions I have discussed, not only as a bar to plaintiffs’ prayer for relief, but affirmatively by way of cross-petition. This being true, plaintiffs must recover on the strength of their own title, and not on any alleged weakness of their adversaries. When once it is established that William P. Hickey’s title in and to the 120 acres of land was fraudulent and void, or was held in trust, resulting, or secret for his father, his case is at an end, no matter what the prayer in defendant’s cross-petition. He must establish that he holds title to the land, or to one-half thereof, and if it be shown, as I have said, that his title is fraudulent or in trust, his case is at an end. Third. In the cross-petition filed by defendants all the transactions I have commented upon as showing fraud, and a trust in the plaintiff William Hickey, Jr., are pleaded with sufficient fullness, and the relief prayed is that the interest pretended to be conveyed to the minor child, William, Jr., be held subject to defendants’ execution, that the injunction he dissolved, and the judgment established as a lien against William P. Hickey’s undivided one-fifth interest in and to the 120 acres of land.
The majority seem to think that this last clause of the prayer for relief is conclusive. But not so. By Code, section 3where there is an answer to the petition or a cross-petition, the court- may grant any relief consistent with the case made and embraced within the issue. See, also, Wilson v. Miller, 16 Iowa, 111. So that, in my judgment,
I should unhesitatingly reverse.