12 Colo. App. 403 | Colo. Ct. App. | 1899
The controversy between these parties has been before-the court in various forms and in some of its phases has been re-presented to us in the argument of two other causes submitted since the original decision of this particular case. It has occasioned us a great deal of difficulty, and while it may appear to be free from doubt when our position is fully stated, the various arguments which have been liad before, us have led to a re-examination of the specific question on which the appeals have been generally rested and the defense based, and we have deemed it best to reformulate the opinion hi this case, and fully as we can, and clearly as we may, state our conclusions. The result is in some of its aspects precisely like that antecedently reached, although in one particular it
From 1883 to 1888 one Otis, who was an employee of Elizabeth Rose, earned wages which were unpaid when he brought his suit and obtained judgment in 1888 for $1,221. From that judgment Elizabeth Rose, the defendant, prosecuted an appeal to the supreme court, wherein the judgment was reversed for errors exhibited in the opinion and the cause sent back for a new trial. In April, 1893, the cause was retried and Otis had a verdict. A motion for new trial was interposed, various proceedings had under our practice, the objections to the verdict and procedure were overruled, and final judgment entered. Between the commencement of the suit and the disposition of the motion for a new trial, and in January, 1893, the defendant Rose deeded to her daughter, Mrs. Riddle, who is a codefendant in this suit, a large amount of property. The deed was executed in January, acknowledged in February, but was not recorded by Mrs. Riddle until the day the jury rendered the verdict against her mother Mrs. Rose. The history of this particular case with other facts which are illustrative of the controversy are set out and commented on in the case of Otis v. Rose et al., 9 Colo. App. 449. This' case is referred to because that litigation and the facts which it developed are more or less explanatory of the situation in this cause. Since they are neither vital nor pivotal in the determination of this particular appeal, it is enough to refer to that case, and parties who may be interested in tracing the history of the litigation, taking the various opinions together, will be abundantly advised of the transaction out of which the litigation has grown. After that judgment was recovered the cause was appealed to this court and the judgment affirmed. Thereafter Otis brought suit to set aside the conveyance made in January, 1893. The basis of the suit was the alleged fraudulent character of the transfer by Mrs. Rose to her daughter. The consideration which was set up in that suit as establishing the bona fides of
“ Q. Did you build a house on these lots?
“A. Yes, sir.
“Q. When?
“A. I do not know just when it was commenced. We went into it after we were married.
“ Q. And then you commenced building before you were married ?
“ A. In April or May. Tt was not quite built, but we went right in. It was being built before we were married, and before I got the deed. The house cost $1,465, and the furnace we put in the following fall cost $65.00, and the barn and fence we built separate from the house cost $72.00. We have since built two porches that cost $75.00, and the putting-in of the lawn and getting- it graded, etc., cost us nearly $100, I have forgotten just the number of dollars. I have been living- there all the time since with the exception of about six weeks. My home has been there all the time. My mother was owing me at that time, $4,468.80. I possibly may not have figured it correctly. I figured it at simple interest. She owed besides $1,000 to a Mr. Mann for the use of W. G. Cowan. The debt was incurred before I was married.
“ Q. And the house and improvements were put on there before the deed was given to you ?
“ A. It was given as a wedding present, and we did not get it until the day we were married.
“ Q. And at that time your mother was owing you this sum?
“ A. Yes, sir, but that was never taken into consideration; it was a gift the same as to the other girls. I have these thirty-three lots now, yes, sir. They are clear, except the taxes.”
It is thus apparent that the property as improved was deeded to the daughter as a wedding gift, having been arranged to this end, and there is nothing- in the testimony which denotes or compels us to conclude, or even justifies us
What we have already stated clearly exhibits the facts that the conveyance was voluntary. After an execution had been issued on the Otis judgment and returned nulla bona, and the former suit to set aside the conveyance of the other lots to Mrs. Riddle had been determined, the assignee had a right to file his bill to set aside the conveyance of two lots because the conveyance was voluntary and fraudulent in law as against a then existing creditor, Otis. The case very clearly shows that the conveyance was wholly without consideration and the property a gift to the daughter in view of her approach
The case is environed with difficulties. The conveyance was voluntary. Voluntary conveyances are usually invalid against existing creditors and on proper bill may be set aside. The preliminary inquiry always is, whether the conveyance is in the contemplation of the law voluntary because of the insolvency of the grantor. The court, though making no distinct findings of fact, rendered an opinion wherein the facts are stated from which it appears the court concluded that Mrs. Rose was in fact insolvent at the time she made the conveyance of these lots to her daughter. It is quite true the evidence discloses that at this date Mrs. Rose owned a very considerable amount of property in Lakeview which ivas acreage property of an uncertain value according to the testimony of the witnesses who place it at various sums, varied of course by their judgment, interest, and conclusion respecting its situation and worth. Whatever this may have been, however, it very clearly appears from the evidence in this case, and the record and opinion in the other, all the necessary parts of which are presented by this record, that the balance of her property other than these lots was transferred to Mrs. Riddle in the payment of a very ancient debt. While this latter conveyance was attacked as fraudulent in fact, the contention was not supported, but the court concluded that the consideration was a valuable one and not so largely in excess of the debt as to be fraudulent. It therefore appears that Mrs. Rose conveyed substantially all of her property at the time Otis got his verdict, and left nothing with which to pay the remainder of her debts. Of course, it is contended by the appellant that there was a very wide difference between the amount of her debts and the value of her property, and the circumstances of the transfer to the daughter of the balance in the liquidation of her claim does not evidence an insolvent condition in such manner as to enable us to conclude, as a matter of law on the proof, that Mrs. Rose was insolvent when in 1890 she deeded these two lots to Mrs. Riddle. We
In the light of these authorities and the principles which they declare, and on the record as it stands, we must conclude, and we therefore hold, that Mrs. Rose was insolvent at the time she deeded these two lots to her daughter, the conveyance was voluntary, and therefore, in law, fraudulent as against the existing creditor, Otis. This troublesome question being resolved against the appellant, the other matters to be determined are of less difficulty.
We now approach the main legal question which has been urged on this appeal, and is urged in the other cases which have since been submitted to us. The defense other than as to the one question of fact respecting the solvency or insolvency of Mrs. Rose after the transfer to her daughter was based on the statute of limitations. According to tlie argument, the applicability of the statute is conclusively determined by the fact that the conveyance was in 1890 and the suit begun in January, 1896. Our statute respecting bills for relief is found in two sections of the General Statutes of 1883, numbered 2174 and 2175, and they are:
“ Bills for relief, on the ground of fraud, shall be filed within three years after the discovery by the aggrieved party, of the facts constituting such fraud, and not afterwards.
“ Bills of relief, in case of the existence of a trust not cognizable by the courts of common law, and in all other cases not herein provided for, shall be filed within five years after the cause thereof shall accrue, and not after.”
The argument is, that since the first section, 2174, enacts that bills for relief on the ground of fraud shall be filed within three years after its discovery, the statute begins to run the instant the fraud is discovered, whether the plaintiff then had, or did not have a cause of action against the defendant. The argument continues that since the deed was made in 1890, and was with a recited consideration of $1.00, it was thereby to the notice and knowledge of the plaintiff conclusive information that the conveyance was voluntary; that he
This doctrine is supported in other states, and is one Avhich
The same rule was in a way expressed in a case recently decided by this court at the September term, being Kenney v. The Jefferson County Bank, ante, p. 24. An evident difficulty in the application of the doctrine to the present situation springs from the consideration that the fraud complained of is one in law and constructive rather than actual. The transfer was entirely valid and binding between the parties, the consideration was love and affection, recognized as one of the most praiseworthy. Had Mrs. Rose remained solvent the deed was good against Otis. To charge him with notice of the voluntary character of the conveyance when he was unadvised as to the financial condition of the grantor is stretching the doctrine of constructive notice to the point at which it ought to, and must, break. The consideration put into deeds cannot in this country be taken as an evidence of the actual price paid. It is often more, frequently less, and is a vague, uncertain, indeterminable quantity, significant and indicative of nothing. If we should hold that a creditor who is without right to file a bill because he is a general creditor, and not one by judgment, is bound to take notice of recorded deeds and of the expressed consideration, and therefore conclude that the conveyance is voluntary, it would be carrying the doctrine of constructive notice to an extent unwarranted by precedent and unjustified by the law which ought to prevail in determining what is or is not constructive notice.
This leaves then the inquiry, whether the case as exhibited is brought either within the terms of the statute properly construed, or within its terms as the appellants construe it. In its opinion the court practically finds, as a matter of fact, that the plaintiff did not discover the fraud until he learned of the secret debt of upwards of |4,500, which Mrs. Rose insisted she owed Mrs. Riddle, and which was found to have been the real consideration for the transfer of the great bulk of Mrs. Rose’s property. While this opinion is not in the
We do not concede, however, that this is the proper construction of that enactment. The situation and circumstances of the case do not require us to enter into an exhaustive discussion of sections 2174 and 2175 and determine all the conditions and circumstances under which either the one or the other, or both, may become operative. The difficulty with the appellants’ contention as a legal proposition is, that he assumes that section 2174 is a specific limitation, and that it will of necessity bar an action where the plaintiff has discovered the fraud although at the time of the discovery he did not have, and for a long time thereafter could not acquire, the right to begin his suit. As we understand it, this is in the face of a fundamental principle which underlies the statute of limitations in the various states. Statutes of limitation can never become operative as we understand the law, until there is a cause of action to which it may be applied. In other words, as it is put by a learned text writer: “ The time limited * * * is to be computed from the time at which a right of entry accrues, and from the time at which a creditor is authorized first to commence a suit.” Angelí on Limitations, chap. 6, § 42. The same doctrine has been expressed in many courts, and it has been decided in New York that the time of the commission of the fraud is not of necessity the point from which the limitation is to be computed, but that , time must necessarily be the point at which the plaintiff ac
If the necessities of the case demanded it, we would cite with approval the case in the 18 South Carolina above referred to, to the proposition that the statute is inoperative until a right of action accrues, and since in this case neither Otis nor Dunklee could bring a suit to set aside this voluntary conveyance until Otis had recovered his judgment and it had been affirmed, there is no statute of limitations which could bar his right of action whether he had or had not knowledge of the fraud giving him his right. The trouble with the other doctrine would be, that so far as cases of this descrip
In any view, therefore, which we take of the case, whether with regard to the time of tlie discovery, or whether we take it as a matter of strict statutory construction, viewed in the light of principles by which statutes of limitations must be construed, the statute of limitations had not run at the time the bill was filed and the plaintiff is not and was not barred his remedy.
Another contention earnestly insisted on, is that the construction for which the appellants contend must be right and-that he was not without remedy for the reason that he might have sued out a writ of attachment and levied it on the property and thereby' secured his rights. We are cited to a Missouri case which seems to hold the doctrine, but it does not accord with our judgment of the law. The difficulty with the present doctrine is, that the right to sue out a writ of attachment can in no event be determinative of the plaintiff’s cause of action because even though we should concede that the writ might have issued in the present case in aid of the original suit, it is not a principle of universal application. Statutes of limitations are general in their terms and must be so construed that they will apply to the various descrip
For the foregoing reasons the judgment of the court below will be affirmed.
Affirmed.