15 Or. 8 | Or. | 1887
The plaintiffs brought this suit to have certain deeds, conveying certain real property from the defendant James B. Leahy to the defendant Isaac N. Solis, and the same from the defendant Isaac N. Solis and Maria, his wife, to the defendant William J. Leahy, set aside, on the ground that the same were executed without any consideration, and for the purpose of hindering, delaying, and defrauding the plaintiffs, judgment creditors of James B, Leahy. After issue joined, the suit was referred and tried before a referee, who found on all the questions involved in favor of the plaintiffs, and reported the same to the court, all of which was subsequently confirmed by the court and a decree entered in accordance therewith. From this decree the defendant William J. Leahy appeals to this court. The contention of the appellant resolves itself into two propositions: (1) That he is a purchaser in good faith and for a valuable consideration, and that the deed executed to him ought to be allowed to stand; but (2) that if the court for any reason should not sustain this proposition, that the deed to him should be allowed to stand as security for his re-imbursement or indemnity.
Notice of fraudulent intent. Under the provisions of statute, when a conveyance is alleged to have been made with the intent to hinder, delay, and defraud creditors, the question of fraudulent intent is to be deemed a question of fact and not of law
Facts showing fraudulent intent. Now turning to the evidence, the facts in-this case show that the defendant James B. Leahy is the brother of the defendant ¥m. J. Leahy, and that the defendant Isaac 1ST. Solis a short time before had been the business partner of James B. Leahy; that at the time the property was transferred to Solis, James B. was insolvent, and that the transfer was made without consideration; that the property would have brought at a forced or cash sale two thousand five hundred dollars; that Solis, after holding the property for a few days, and manifestly under the circumstances as detailed in the record, in trust for James B., and at his request, transferred the property to Wa J. without consideration. Luring all this time ¥m. J. knew thoroughly the financial troubles and condition of James B. — had gone over minutely his accounts, and had counseled and advised with him concerning his affairs, and at the time he took the property from Solis, at the instance of his brother, knew and understood the circumstances under which Solis took and held the property. It is explained that the property was put in the hands of Solis to raise money to pay debts; but the conduct of Solis so shortly after the transfer, his refusal to go forward, or have anything to do wdth it, his unwillingness to longer hold the property, and the necessity he made of putting it into other hands to retain the secret trust already created, is inconsistent with such explanation, and shows that the property was put beyond the reach of creditors to hinder and delay their demands. The same argument is made in behalf of ¥m. J., with this difference: As to him, it is claimed that although he took the property with a knowledge of such facts, that it Avas for the purpose of, and that he, in fact, did borrow of the Loan Association, of which he became a member, to further that object, about six hundred dollars, giving his personal note for one thousand dollars, and mortgaging this property to secure it, which he represented to be worth three thousand dollars, and that he paid over to his brother the money thus obtained (six
Deed not allowed to stand as security. As a last resort, however, it is asked that the deed be allowed to stand to re-imburse him, or as a security for his personal liability on the note to the Loan Association. The result which we have reached precludes this. A fraudulent deed cannot stand as security for money paid on it. In Levisay v. Beard, 22 W. Va. 585, it is held that a deed fraudulent in fact is void in toto, and cannot stand as security for grantees who have notice of the fraud. In Swinford v. Rogers, 23 Cal. 233, it is held that a conveyance of a property made and received with intent to defraud creditors is void, though there may have been a full and valuable consideration paid therefor. The fraud taints and vitiates it, and it will not be allowed to stand, even as security for advances actually made.