77 W. Va. 551 | W. Va. | 1916
At the suit of O. E. Ridenour and G. B. Skidmore, partners, and creditors of 0. A. Roach, the circuit court of Doddridge county set aside .a conveyance of real estate made by said Roach to Lorraine Davis, on the ground that'it was made for the purpose of hindering, delaying and defrauding said-creditors in the collection of their debt, and Davis has appealed.
All the parties reside in Upshur county. The real estate ‘-conveyed is the oil and gas underlying a tract of 87 acres of land in Doddridge county, with the privilege of mining and removing the same. It was all the real estate said Roach owned and was then leased for oil and gas to the Hope Natural ■'Gas Company. Plaintiffs had recovered a judgment against Roach in a justice’s court in Upshur county, on 18th of November, 1913, for $253.28, and execution thereon had been returned “no property found.” An abstract of the judgment was docketed in the county court clerk’s office of Dod-dridge county on February 6, 1914; and the deed from Roach and wife to Davis bore date 2nd of February, 1914, was acknowledged on the 3rd, and recorded in the county court clerk’s office of Doddridge county on February 4, 1914, two days before the docketing of the judgment. It recites a consideration of $100.00 in cash.
The bill avers that Roach was insolvent when he made the conveyance; that he made it for the sole purpose of hindering, delaying and defrauding plaintiffs in the collection of their judgment; and that the grantee Davis had knowledge of such fraudulent intent. These averments are denied in the answers of Roach and Davis, the latter averring that he is a bona fide purchaser and had no knowledge of Roach’s indebtedness to plaintiffs.
There is no direct and positive proof of the fraud alleged, which is true of most cases of this character, and the decision depends upon whether or not certain suspicious facts and circumstances, proven to exist; are sufficient to justify the reasonable inference .of a fraudulent purpose on the part of
Fraud on the part of Roach being clearly established, the burden is cast upon his vendee to prove that he paid a valuable consideration. Butler v. Thompson, 45 W. Va. 660; and Colston v. Miller, 55 W. Va. 490. The recital of the consideration in the deed is not evidence against the plaintiffs who are assailing it as fraudulent, and, notwithstanding the burden of proving the fraud is on them, the burden of proving
The expression oft quoted from the law books, that fraud can not be presumed but must be proven, is sometimes misleading. It does not mean that fraud must be established by-direct and positive proof, but means no more than that it must be established by such evidence, either direct or circumstantial, as will satisfy a reasonable mind. It may be proven by evidence which is wholly circumstantial; in fact, in the great majority of cases of fraudulent transfers of property, that is the only character of evidence available. Knight v. Nease, 53 W. Va. 50; Moore v. Gainor, 53 W. Va. 410; Moore v. Tearney, 62 W. Va. 81; and Harvey et als. v. Nutter et als., 66 W. Va. 208. Whenever the facts .and circumstances proven are such as to lead a reasonable man to the conclusion that an attempt has been made by a debtor to withdraw his property from.the reach of his creditors, by conveying it to another, and such suspicious facts and circumstances are not satisfactorily explained, they are sufficient, to establish fraud. “Fraud is to be legally inferred from the facts and circumstances of the case, when those facts and circumstances are of such a character as to lead a reasonable man to the conclusion that the conveyance was made with intent to hinder, delay and defraud existing or future creditors.” Sturm v. Chalfant, 38 W. Va. 248. Burt v. Timmons, 29 W. Va. 441; and Kadne v. Weigley, 22 Pa. St. 179. Quoting from the opinion of Judge Black, at page 183, in the case last cited: “The frequency of fraud upon creditors, the supposed difficulty of detection, the powerful motives which tempt an insolvent man to commit it, and the plausible casuistry with which it is sometimes reconciled to the consciences even of persons whose previous lives have been without reproach; these are the considerations which prevent us from classing it among the grossly improbable violations of moral duty;
In view of all the foregoing facts and circumstances we think the court reached the right conclusion in holding the deed to have been made with fraudulent intent.
It appears from Exhibit No. 4, with plaintiffs’ bill, that the 87 acres of land, the oil and gas under which is the subject of this litigation, was conveyed to 0. A. Roach by Margaret Roach and her husband in 1885, in consideration of *$800.00, and that only a part of the price was paid in cash; that the balance, evidenced by three promissory notes for $102.29 each, payable in six, twelve and eighteen months, was secured by a vendor’s lien retained. The failure to make Margaret Roach, the lienor, a party to the bill, and the failure to ascertain the amount of her lien, before decreeing a sale.of the oil and gas, is assigned as error. This assignment is not well taken, for the reason that it appears from the record that Margaret Roach’s lien was discharged. This is shown by Exhibit No. 5, with plaintiffs’ bill, which is a deed from O. A. Roach and wife, conveying back to Margaret Roach the same 87 acres of land, excepting and reserving the coal, oil and gas underlying ■ the same. That deed, made in 1903, recites the pendency of a suit in chancery, brought by Margaret Rhaeh to subject the 87 acres of lqnd to sale, to satisfy the aforesaid notes, and that the consideration for said conveyance was $618.00 in cash, and “a full and complete compromise of all matters in difference between' the parties. ’ ’ It is, therefore, not necessary to determine the question of law, whether or not it is reversible error, in a suit attacking a conveyance as made to hinder, delay and defraud creditors, to decree a sale of the land, without making prior lienors parties. The sale in this case is not made subject to prior liens.
Modified and Affirmed.