121 Neb. 28 | Neb. | 1931
This is a suit in equity, brought as a creditors’ bill, by a judgment creditor to set aside, as fraudulent, conveyances of real and personal property to members of the family of William H. Mackley, the debtor, and by them to others, subsequent to the incurring of the debt upon which the claim of the creditor is based; for a decree that title to the property is in William H. Mackley and to subject it to plaintiff’s judgment. Plaintiff appeals from a decree rendering judgment for defendants and dismissing its petition.
The record, the evidence and the briefs, though they are able and helpful, are unusually voluminous, as might be expected in a suit of this nature, covering so much land, so divided up, so conveyed and so mortgaged, and setting forth the history of so many persons dealing with it for more than 40 years; even to state the salient facts and conclusions will take much space, and to give them in full detail would extend an opinion beyond all reasonable bounds.
The judgment against William H. Mackley, upon which plaintiff based its suit, was for $10,179.83, with 10 per cent, interest from February 12, 1929, with costs, entered September 12, 1929, in accordance with a mandate from this court in a suit between these two parties after extended and continuous litigation begun on March 3, 1922. But the debt between them was first evidenced by Mackley’s note for $5,000 in- favor of Sarvis Lumber Company, dated June 20, 1919, due in one year, and purchased by plaintiff June 19, 1920, a day before it was due. It was renewed on December 20, 1920, and again on April 29, 1921, at which time Mackley executed to plaintiff one note for the $5,000 principal and one for $745 for interest due. It was upon these notes, due August 29, 1921, the original
Mackley had filed a homestead entry on the southeast quarter of section 5, township 15, range 25, in the eighties and proved up and got his patent from the government about 1898. It is on the table-land and about nine miles south of Arnold, in Custer county. He was married in January, 1891, and from that time this quarter section has been the homestead of himself and wife, Rose B. Mackley.- They weathered the hard years of the nineties on this homestead. Their children were born there,. Margaret on December 3, 1891, Elizabeth on January 26, 1894, Mary on October 4, 1895, and Anna (now Mrs. Faherty) on December 27, 1899. Rose B. Mackley and these daughters, with the husband of Anna, who married, are among the defendants. Another daughter, Agnes, was born in 1893, but she died and was buried on the farm. A son, James, was born November 1, 1897, another, John, was born January 7, 1902, and the last, Edward, was born August 24, 1906. The sons are not parties.
From time to time other land was acquired until the holdings, in addition to the original homestead, included all of section four and the north half of section nine. Reference to a township map will show that this makes a compact body of 1,120 acres, the six quarter sections in sections four and nine making a rectangle and the original homestead in section five being just west of the middle of the rectangle.
February 20, 1920, William H. Mackley and wife mortgaged all of section four and the ndrthwest quarter of section nine to the United States Trust Company for $25,-000. This mortgage was recorded March 24, 1920, and is not affected by the proceedings.
The evidence also shows, without objection, that on April 1, 1921, William H. Mackley gave to James M. Mackley a chattel mortgage for $3,000 on 73 head of cattle and 12 work horses, described as in grantor’s possession on section 5, township 15, range 25, Custer county, and this was duly filed May 16, 1921; and that on May 13, 1921, William H. Mackley executed to Rose B. Mackley, named as grantee, in consideration of $3,000, a bill of sale of 40 head of hogs, all farm machinery and tools, all grain and his share of planted and growing crops on said southeast quarter of said section five and on said sections four and nine. This bill of sale was filed May 16, 1921. Mrs. Mackley testified that she never bought any of the items described, never knew anything about the bill of sale, and that it was never delivered to her.
The mortgage of the defendant Arnold State Bank, dated September 11, 1928, heretofore referred to as for $10,000, stated that consideration and described a note for that sum. The note is in evidence and is for that amount, but it bears an indorsement of a credit of $4,900 as of September 11, 1928. The cashier of the bank testified that the girls were wanting to get more money, but after the mortgage was negotiated he did not care to go further with it and so the note was credited with $4,900, leaving the debt and mortgage $5,100, which was what they already owed the bank except about $160 which was loaned at the time. On cross-examination he explained that part of the indebtedness to the bank was in the form of notes by William H. Mackley, but it was arranged with the girls and Mr. Mackley to take all the indebtedness up with this mortgage. The bank knew of the deeds of lands to the girls more than seven years earlier and considered the mortgage as security for the “indebtedness of the outfit out there — of the outfit, the Mackley folks.”
The evidence clearly shows that the southeast quarter of section five has continued to be the home of William H. Mackley and Rose B. Mackley from the time she went
Mr. Mackley had received a serious injury to his arm in 1892 and had not been able to do much heavy work since that time. The chief income from the land had
The evidence shows that the four sisters remained on the land, operating it together, until 1927, when Anna was married and moved to a home provided by her husband, the defendant, John W. Faherty, and that thereafter the three sisters remained on the land working together. By their joint efforts they had reduced the $25,000 mortgage to $13,700 at the time of the trial and had kept the interest paid. They had also paid off more than $1,000 of other debts of their father assumed by them at the time their deeds were given them almost ten years ago.
On the facts we have outlined, the district court found that the transfer of the homestead to Rose B. Mackley was founded upon a good, valuable and adequate consideration, without fraud or intent to hinder, delay or defraud any creditor of her husband; found likewise as to the deeds to the daughters; and ordered the petition of the plaintiff dismissed.
In argument much discussion was had over the fact that the grantees in these deeds kept no books or memoranda nor took from Mr. Mackley any written evidence of promises or of his debts to them; and also that they did not exercise entire dominion over the land and transact in their own names all the business arising out of it to the exclusion of Mackley. In view of the circumstances and the relations between the parties, we do not think this is so important or controlling. It goes more to the value of their evidence than to the ultimate truth in relation to it.
The appellant complains because the wife and daughters were allowed to introduce evidence of a consideration other than one dollar and love and affection, as expressed in their deeds from William H. Mackley. Section 36-407, Comp. St. 1929, provides that the consideration for any
In Columbia Nat. Bank of Lincoln v. Baldwin, 64 Neb. 732, a creditors’ bill case, it was held: “Where a deed is assailed by third parties as fraudulent, and proof by them is introduced to impeach the recited consideration, the grantee may show by parol evidence the actual consideration, though different from the one recited in the deed.”
In Wells v. Aufrecht, 96 Neb. 402, this court held that, where the consideration expressed in an instrument forms no part of a promise to pay but is only the recital of a fact, the true facts as to the consideration may be proved by parol.
In the recent case of American Surety Co. v. School District, 117 Neb. 6, it is said, citing numerous cases, that this court is thoroughly committed to the doctrine, which it expressed in the syllabus as follows: “The rule excluding parol evidence to vary or contradict a written instrument applies only between the parties to such instrument and those claiming under them. It has no application to controversies between a party to the instrument on the one hand and a stranger to it on the other.” The district court was right in allowing parol testimony to be received and in relying thereon under .the well-established rule in this state, so as to ascertain the true consideration for the deeds involved.
As to the homestead, deeded to Rose B. Mackley; the district court found, and, without reciting at length the testimony relating to the subject, we are of the opinion that the finding was justified, that Mrs. Mackley made the contribution and advancements of her own money for the
It is proper to say, also: “The homestead of a debtor and his family is not subject to the claims of his creditors, and fraud cannot be predicated upon the transfer of the homestead interest by the debtor to his wife.” McCormick v. Brown, 97 Neb. 545. See, also, Smith v. Neufeld, 61 Neb. 699; Jayne v. Hymer, 66 Neb. 785; Herring v. Whitford, 119 Neb. 725.
With respect to the deeds to the daughters, the situation differs little from that of the mother, except in the latter ■case the land deeded was the actual homestead. The girls were creditors of their father. They were not creditors subsequent in point of time to plaintiff, if that makes any ■difference, but the promise to pay them wages was earlier than the debt on which plaintiff relies, and they had performed before the evidence of plaintiff’s debt matured. The property of an insolvent debtor is not a trust fund in the hands of the debtor in favor of creditors “which inferieres with a bona fide sale of it by the debtor.” Crites v. Hart, 49 Neb. 53. “The essential thought running through all our cases bearing on this question is that to make a conveyance a fraudulent transfer, a fraudulent intent participated in by both parties to the transfer must exist. In the absence of a mutual fraudulent intent, the law does not interfere with the right of a person, be he solvent or insolvent, to make such disposition of his property, based upon a valid consideration, as his judgment -dictates.” Farmers & Merchants Nat. Bank v. Mosher,
Appellant’s brief mentions the fact that the- decree did not make any specific reference to the $3,000 chattel mortgage made by William H. Mackley to James M. Mackley on certain cattle and horses, dated April 1, 1921, and recorded May 16, 1921. Plaintiff pleaded this as one of the fraudulent transfers and introduced the chattel mortgage in evidence. Under section 36-303, Comp. St. 1929, a chattel “mortgage shall cease to be valid as against the creditors of the person making the same, or subsequent purchasers or mortgagees in good faith, after the expiration of five years from the filing of same or copy thereof.” Appellant points out no evidence, as required by our rules, nor do we find any, as to whether or not this personal property is still in existence. We are not advised as to whether it may or may not be levied on as the property of William H. Mackley, irrespective of this creditors’ bill. The district court’s decree found generally in favor of the defendants and against the plaintiff. We cannot say that the court erred, nor do we think it necessary in the circumstances to consider the particular subject further.
Many other propositions of law are argued in the briefs. We think those we have presented and decided are controlling. The decree of the district court was right as to the title of Rose B. Mackley to the home and as to that of the daughters to the six other quarter sections. The conveyances thereof were not fraudulent as to appellant.
The district court found that the mortgages made to the Arnold State-Bank and James M. Mackley by the respective grantors were valid liens. Inasmuch as these grantors have not cross-appealed, and as they had title to the lands
For the reasons stated, the judgment of the district court is
Affirmed.