10 N.E.2d 1017 | Ohio Ct. App. | 1937
Plaintiff, Helen Ursak, bases her instant cause of action against the defendants, Jacob and Katie Sivanick, on a note executed by them on June 20, 1921, in the sum of $1900, made due and payable *435 in 1926. On April 24, 1934, the plaintiff reduced the note to judgment in the sum of $1905, in the Municipal Court of the city of Cleveland by virtue of a warrant of attorney thereto annexed. Thereupon, on good cause shown after hearing, that court ordered the operation of the judgment suspended and gave the defendants leave to answer thereto, whereupon the defendants filed their answer of confession and avoidance based upon payment. The cause then came on for hearing regularly on its merits with the intervention of a jury, at which time the court vacated the judgment theretofore rendered and the jury returned a verdict for the plaintiff. The court then rendered judgment thereon on March 27, 1936, in favor of plaintiff and against the defendants for the sum of $1943.99.
The plaintiff in the instant case brings her action to set aside two claimed fraudulent conveyances made by the defendants to their son, which conveyances were made on March 7, 1934, of one parcel of real estate, and on March 13, 1934, of another parcel of real estate, the claim being made by plaintiff that the conveyances were made by defendants with intent to hinder, delay and defraud their creditors and that the conveyances made to the son were fraudulent and not for a valuable consideration.
The record discloses that the defendant grantors were the owners of two pieces of income producing property with an equity of approximately $4700. This property was paying its way from rentals. A few days after the grantors were notified that they were going to be sued on the $1900 note, and a few days before they were actually sued, they illegally transferred their equity in these two pieces of property to a minor son for a consideration of $2500, $1500 of which represented earnings of the minor son, which they had already used years before, but which, according to law, belonged to the father and mother, and $1000 of *436 which consideration represented payments of $40 to $50 per month made after the transfer. No record of these payments was kept by either the parents or the son. We note from the record that the son was receiving a wage of $18 per week. The record fails to disclose any reason for transferring the property to the son except for one reason, which was to put the property beyond the reach of the plaintiff, a creditor. The $1000 in payments made by the son were not an addition to the parents' estate, as it could have been made out of the excess of rentals left after payments on the mortgage and taxes. The father and mother did not benefit to any extent whatever by this transfer. They relieved themselves of no burden; the fact being that before the transfer they were solvent and by this transfer, according to their own testimony, they deeded away to their son all of the assets which they owned, leaving themselves totally insolvent.
There are but two questions of law involved in the case: First, whether it was necessary for the plaintiff to prove fraudulent intent or knowledge on the part of the grantee, and second, whether it was necessary for the plaintiff to prove that the grantors had the actual intention of defrauding the plaintiff when making the conveyances.
It is a well settled rule of law in Ohio that: "* * * a voluntary conveyance by an indebted parent to his child is presumptively fraudulent. It is said that a voluntary conveyance by a father, in embarrassed circumstances, to an infant child is on its face fraudulent against creditors." 19 Ohio Jurisprudence, 769.
So, that on the first question, whether it was necessary to prove fraudulent intent on the part of the grantee, the law of Ohio is to the effect that if the conveyance be voluntary the fraud or knowledge of the grantee is immaterial. Counsel for appellants call attention to Section 11105, General Code, making knowledge of fraudulent intent material on the part of *437
the grantee, but the instant case was filed under Section 8618, General Code, under which section the knowledge of the intent of the grantee is immaterial. See Huwe v. Knecht,
As the second proposition, we cite Bell v. Hallenback, Wright's Report, 751:
"A father has a right to the custody and earnings of his minor children, and if he invest their earnings in real estate and take a title to them, the estate will be charged with the debts he then owed."
In 27 Corpus Juris, 570, the proposition is stated thus:
"Since a father is entitled to the earnings of his minor child unless emancipated, the receipt by him of such earnings is not, where there had been no emancipation before the earnings were made, a sufficient consideration to support a conveyance by the father to the child as against the father's creditors. There is no obligation to return to the child money so received."
Again quoting from the same authority at page 570, footnote 64 (a):
"Thus, where a father, being insolvent, made a deed of land to his minor son and received from him in part payment money which he had earned as wages, and his note for the residue of the price, the deed was fraudulent and void as against the father's creditors, since the money so received by the father belonged to him."
Taking into consideration the above authorities it was not necessary to prove that the grantee had a fraudulent intention, since he was merely a volunteer, not a purchaser. So the record before us shows that the transfer in this case was made a very few days before a judgment was taken against the grantors and at a time when the grantors knew that a judgment was going to be taken and that the transfer left the grantors *438 absolutely insolvent, devoid of any other property or assets.
We are of the opinion that the transfer of the property in this case was made only for the purpose of defeating the collection of the $1900 note upon which they were expecting the plaintiff to take judgment.
It follows then that there will be a decree for the plaintiff.
Decree accordingly.
MONTGOMERY, P.J., and SHERICK, J., concur in judgment.
MONTGOMERY, P.J., SHERICK and LEMERT, JJ., of the Fifth Appellate District, sitting by designation in the Eighth Appellate District.