Van Riper v. Davenport
256 P. 193
Or.
1927
Check Treatment

Lead Opinion

McBRIDE, C. J.

This was a suit to impeach transfers made by the defendant to his wife the other defendant. In the course of the proceedings, she denied- any claim or interest in certain lots involved in the controversy. The ease was decided in favor of the defendant, and an appeal was taken by the plaintiff to this court. An application is now on file for leave to file, with the transcript in this case, a quitclaim deed made to this same property by Marie Gr. Davenport to Mary R. Motschenbacher, which deed bears the date of September 24, 1925, long after the decree was rendered.

We are aware of no theory upon which this can be permitted. An equity case is tried here upon *476 the evidence submitted in the lower court, and to allow this deed to be filed with the transcript here would be practically allowing new evidence to be submitted in this court. If the cause were still pending in Klamath County, a motion to open up the case and take additional testimony might possibly be allowed, but the deed, and other papers accompanying it, can have no possible relevancy here and the motion is denied. Motion Denied.





Addendum

On the Merits.

*478 For appellant there was a brief and oral argument by Mr. J. H. Carnahan. For respondents there was a brief over the name of Messrs. Oneill <& Irwin. McBRIDE, J.

We will address ourselves to the condition of the property situated on lot 6, in block 37, referred to in the foregoing statement. W. C. Davenport purchased this lot in 1908 and upon the southerly half of it he erected a house which then, and up to the date of his death, was occupied by himself and family as a home. It is not claimed that this was purchased otherwise than with W. C. Davenport’s own money. Subsequently there was erected a cottage on the northerly half of the lot, which the defendant Marie Gr. Davenport claims as her separate property by reason of the fact that, with the assent of her husband to the arrangement, the cottage was built thereon with her own means and for her own use and benefit. This lot 6 is the principal portion of the property involved in this controversy. There is no competent evidence of the fact that defendant Marie Gr. Davenport built this house at her own expense or under an agreement with her husband *479 that it should belong to her, excepting her own statement, and the fact that no other evidence was introduced on .this point is very significant. If she received $500 from her mother’s estate, her testimony on this point could easily have been corroborated by the usual records of the administration of the estate, and by such checks, drafts or orders in probate as would have indicated the source from which she derived the money. If, as she says, she received the rents which she estimated from $25 to $35 a month from 1910 to the date of the conveyance of the property to her by her husband in 1922, some evidence that she received these amounts certainly could have been available. We learn from the testimony that there were banks in the City of Klamath Falls and, if she had been in receipt of these sums of money, her bank account would have been available as to testimony tending to show when, where and how she kept these accounts; but no such testimony was proffered and the court is asked to believe her bare statements uncorroborated by a bank account or by a single check or draft showing that she was carrying on the business, managing this property and receiving the rentals; and that the sum so received amounted to $3,840 from the time that the cottage was built in 1910 until the date of the conveyance of the property to her by her husband in 1922. The profits of the faithful servant mentioned in the scriptures, who put his master’s five talents at usury, pale into insignificance beside the profits of this little cottage.

It is hornbook law in this state that in a suit to set aside a voluntary conveyance made by a husband to his wife, the latter has the burden of proving that she is an innocent purchaser for a valuable consideration, if that question is involved, and where a conveyance made to a near relative is attacked as *480 fraudulent by creditors, the burden is on the grantee to show that he purchased without notice of fraudulent intent, and for a valuable consideration: Blackabee v. Seaweard, 112 Or. 675 (231 Pac. 146); Stubling v. Wilson, 50 Or. 282 (90 Pac. 1011, 92 Pac. 810); Walker v. Harold, 44 Or. 205 (74 Pac. 705); Robson v. Hamilton, 41 Or. 239 (69 Pac. 651); Weber v. Rothchild, 15 Or. 382 (15 Pac. 650, 3 Am. St. Rep. 162); Marks v. Crow, 14 Or. 382 (13 Pac. 55). We do not think that the defendant has made such a showing. In addition to this negative argument against her present position is the positive fact shown by her own admissions before the referee in bankruptcy that she was aware of the statements made by her husband to the jewelers association in 1919, in the first of which he impliedly represented himself to be the owner of the whole of the property in question, and in the second, by which he absolutely represented himself as the owner without any disclosed objection or remonstrance on the part of his wife Marie O. Davenport. In other words, at that date when he made these statements, as she must have known with a view of obtaining present and future credit upon them, she allowed him to hold himself out as the owner of lot 6 and the buildings thereon, which, if her contention is true, would have been an implied assent to gross fraud and misrepresentation as to present and future creditors. These statements do not appear to be in any way modified until just before the day W. O. Davenport became a bankrupt.

It is true that in her testimony in the Circuit Court she denied that she knew the contents of exhibits “L” and “M” and claimed that her statement before the referee in bankruptcy was a mistake; but this is incredible as in her testimony before the referee in bankruptcy she gave a reason for not pro *481 testing against her husband making such representations. This change of front, after discovering how vital the admission before the referee was to her case, tends to discredit her later testimony. As to the testimony of Davenport before the referee in bankruptcy, he convicted himself of wilful imposture on his existing and expected creditors and his statements. are worthless.

As to this lot 6 and the two buildings thereon, we are constrained to hold that they were the property of the bankrupt W. C. Davenport, and that this conveyance was made in order to place them beyond the reach of his creditors. The same may be said of the property purchased of E. H. DuFault for which a contract was in existence and which contract was assigned to the defendant Marie Gr. Davenport and a deed placed in escrow. It is claimed by the defendant that the contract has been forfeited, and she expressly disclaimed any right therein upon the trial. It may be doubtful whether there is much which can be realized out of this property, but the trustee in bankruptcy may have some equities in the property which could be enforced for the benefit of the estate. As to the property consisting of lot 2, block 41, it appears probable that some portion of Marie Gr. Davenport’s money went into it and as to that the decree of the Circuit Court ought to be sustained. It is undoubted that the defendant Marie Gr. Davenport has a valid claim for a homestead on the southerly half of lot 6 subject to the usual course to be pursued in regard to such a homestead and subject to her homestead rights therein; and to her dower right in all of lot 6, the conveyance to her should be set aside as fraudulent as to creditors; and the same result should follow in respect to the property contracted for with DuFault so far as that course is *482 applicable. As to tbe other property, the decree should stand as above stated, and a decree will be entered here in accordance with this opinion. Under the circumstances, neither party will recover costs this court or in the court below. Modified.