6 Wash. 261 | Wash. | 1893
On March 16,1891, the appellant obtained a judgment against the respondent, Charles H. Kittenger, in the superior court of King county, for the sum of f>2,-233.87, and costs. Executions were issued, and returned by the sheriff unsatisfied; and thereupon the appellant brought this action against the respondents, alleging in his complaint the rendition of his judgment and the issuing and return of execution thereon, as above stated, and that after the said Charles H. Kittenger contracted the debt upon which the said judgment was rendered, and after the maturity thereof, he, on the 20th day of June, 1890, pretended to transfer and convey by deed to the respondent Yan Tuyl, a large number of town lots and blocks, in Irondale Addition to the town of Kirkland, in King county and State of Washington, and described in the complaint; that after-wards, on January 8, 1891, the said Charles H. Kittenger pretended to transfer and convey by deed to the said Yan Tuyl certain other described town lots situated in Jackson and Bainier Street Addition to the city of Seattle, in said county of King; that on or about September 16, 1889, the said Kittenger pretended to transfer and convey by deed to the respondents George B. Kittenger and Mary C. Kittenger, his wife, certain described real estate situated in said county and state; that the said Kittenger, on the 8th day of January, 1891, pretended to transfer and convey by deed certain real estate described in the complaint, and situated in King county, to the respondent C. S. Preston; that the said pretended transfers wei’e made without consideration, and in pursuance of a conspiracy between the said Charles H. Kittenger and the said several grantees, with intent to hinder, delay and defraud the plaintiff and other creditors of said Kittenger, and in secret trust for the use of said Kittenger; that the said Charles H. Kittenger
And the prayer of the complaint is, that said transfers be declared fraudulent and void as against the plaintiff, and that the lands described in the several deeds of conveyance be decreed to be subject to the lien of the plaintiff's judgment, and that the said Charles H. Kittenger be adjudged to pay the plaintiff’s judgment out of said equitable interests, things in action and other property which cannot be reached by execution, and debts due him, and all property held in trust for him, or in which he is in any way or manlier beneficially interested, and that the said Kittenger be enjoined from transferring the property pending the suit, and that a receiver of all the property which cannot be reached upon execution be appointed, with authority and
The respondents filed separate answers, admitting that the property described in the complaint was conveyed to the respective parties therein mentioned, at the times specified, but denying all other allegations of the complaint, except that the appellant commenced an action in the superior court and obtained a j udgment therein against Charles H. Kittenger and the return of execution thereon unsatisfied, as alleged in the complaint.
Upon the issues thus framed the cause proceeded to trial. And after the plaintiff had introduced his testimony, and rested his case, the defendants moved the court to dismiss the action on the ground that the evidence was insufficient to sustain the allegations of the complaint. The motion was granted by the court, and judgment rendered in favor of the defendants for costs, from which the plaintiff appealed to this court.
The appellant insists that the ruling of the court is erroneous, and whether or not his contention is tenable, can only be determined by a review of the evidence in the record. The burden of proving the fraudulent intent alleged was upon the appellant. And, as he was opposed at the outset by the presumption of honesty and legality that prevails in favor of the ordinary business transactions among men, it was incumbent upon him to prove, by clear and satisfactory evidence, that the conveyances which he assailed were in reality fraudulent and void as to him. Bump, Fraud. Conv. (3ded.), 600,604, 605, and cases cited. Wagner v. Law, 3 Wash. 500 (28 Pac. Rep. 1109). And if he has not done so,‘the action was rightfully dismissed. It will be observed by an examination of the complaint that the action is divisible into as many distinct branches as there are respondents and transfers. And we will, therefore, first examine the evidence adduced by the appellant
As to the transfer of the lots in Irondale Addition to Kirkland to Van Tuyl, the facts as disclosed by the testimony of appellant’s witness are briefly as follows: Some time before the execution of the deed to Van Tuyl, the respondent Charles H. Kittenger, together with three other individuals, purchased an eighty acre tract of land near Kirkland, and subdivided it into lots and blocks, and platted it as a town plat. They borrowed the money used in the purchase from the banking house of Dexter Horton & Co., and gave the bank, or one of its officers for it, their note and a mortgage on the property to secure the payment thereof. The title from their vendor was taken in the name of C. H. Kittenger by agreement between the parties interested. On June 20, 1890, in order to remove the mortgage and thereby facilitate the transfer of lots, and at the same time not deprive the bank of its security, the property, except some portions thereof which had been conveyed to other parties, was conveyed by Kittenger to the respondent Van Tuyl, who was the cashier of the bank, by deed in which the consideration stated was one dollar. No money whatever was paid by Van Tuyl to Kittenger for the conveyance, but it was agreed between the parties interested in the property that the transfer should be made, and that Van Tuyl should hold the land, as a trustee, to secure the bank for the sum loaned to the said purchasers, which then amounted to something over eight thousand dollars; and also in trust for the four owners whose interests were equal and undivided. A declaration of trust was duly executed and delivered evidencing this agreement, but it was never recorded.
It further appears that about this time the respondent
The above is the substance of all the evidence pertinent to the conveyance under consideration, and we think it fails to show any actual fraud either on the part of Charles
In respect to the transfer of the Jackson and Rainier street property by Kittenger to Van Tuyl, the appellant proved, by the deed which he introduced in evidence, that on January 8, 1891, Kittenger conveyed the property to Van Tuyl for an expressed consideration of 85,000, and that the deed was recorded on the following day at the request of Kittenger, and he further proved by Van Tuyl that he paid nothing for the deed and knew nothing concerning it until a short time afterwards when Kittenger informed him of its execution, and stated, in effect, that the property had belonged to his two brothers and himself, and that ho, Kittenger, had received his share from sales made, and that his brothers were the equitable owners of the property. Van Tuyl thereupon agreed to hold the property for the owners thereof. No evidence was introduced in reference to this deed, tending to show that the property was to be held for the benefit or use of the grantor, or that Van Tuyl had any knowledge whatever that the transfer Avas designed to place the property beyond the reach of Kittenger3 s creditors. And, while the transaction Avas an unusual one, still we are not prepared to say, under the state of facts disclosed, that the conveyance ought to be declared illegal. Only those transfers which are inhibited by law are void. And a conveyance of property in trust for those to whom it equitably belongs can in no event be void as to creditors for the reason that their equities cannot be paramount to those of the cestuis que trust.
The only proof offered concerning the transfers to George B. Kittenger and Avife was the deeds which shoAV that, on
The deed of C. H. Kittenger and wife to C. S. Preston, purporting to convey to him the lots in Irondale Addition to Kirklaxxd was, as the evidence discloses, in fact, made in trust to secure axx existing ixxdebtedness of Kittenger to E. M. Carr and Harold Preston, for cash advanced and legal services theretofore rexxdered. The amount of this indebtedixess at the time of the transfer, as shown by the books of Carr and Pi’eston, was between three and four hundi’ed dollars, but the exact sum was not stated. Hor can the real cash or market value of Kittenger’s interest at the time be deduced from the testimony, although the speculative and contingent value of one-fourth of the prop-’ erty was far in excess of the debt secured. The evidence negatives the idea that Preston took the conveyance with a secret trust to hold the surplus for the use of Kittenger, or with any intention or design of preventing the' creditors of Kittenger from reaching such surplus. He paid nothing for the conveyance, and simply held the property for the benefit of these creditors whom Kittenger desired to prefer over others. Our statute denounces as fraudulent and void such conveyances only as are made in trust for the use of the grantor. Gen. Stat., §1452. And where
The method adopted by Kittenger to secure this debt is open to suspicion, and is not to be commended, but upon the proof made we do not feel warranted in declaring the transaction void.
In addition to the foregoing testimony relating specially to the several transfers which the appellant alleges are fraudulent and void, the appellant proved that Charles H. Kittenger, subsequently to the time when he became indebted to the appellant, made other transfers of property, both personal and real, to trustees in some instances, and that several actions were commenced against him and prosecuted to judgment in the superior court. And upon the whole evidence in the record the learned counsel for the appellant insist with much earnestness that the judgment ought to be reversed.
In order that a deed may be declared fraudulent and void as to creditors it is indispensably necessary, as before intimated, to satisfy the court that it was made with a fraudulent intent on the part of the grantor; and the question of intent is generally one of fact and not of law. Where, however, the intent of the parties may be gathered from the face of the instrument itself, and the natural and inevitable consequences of its provisions is to hinder, delay or defraud creditors, or where an insolvent makes a voluntary conveyance of the property, the instrument is void as
The conveyances sought to be set aside as fraudulent in this case are not void upon their face, nor have either of them been shown to be voluntary merely, and hence the question to be determined is one of fact to be established by the proofs. It is specially urged, however, on behalf of the appellant, that a deed absolute in form but intended to operate as a mortgage is fraudulent and void as to the grantor’s other creditors. Upon this proposition the decisions of the courts are not uniform, but we think the weight of authority is in favor of the doctrine that such conveyances, where given in good faith and to secure an actual indebtedness, are not constructively fraudulent. Ross v. Duggan, 5 Col. 85; McClure v. Smith, 14 Col. 297 (23 Pac. Rep. 786); Muchmore v. Budd, 53 N. J. Law, 369 (22 Atl. Rep. 521); Bump, Fraud. Conv. (3d ed.), 41, and cases cited; Wait, Fraud. Conv., § 238; Warren v. His Creditors, 3 Wash. 48 (28 Pac. Rep. 257).
A careful consideration of the whole evidence in the case fails to satisfy our minds that the decision of the court below was wrong, and the judgment is, therefore, affirmed.
Dunbar, C. J., and Scott and Stiles, JJ., concur.
Hoyt, J., not sitting.