Donohoe v. Collett

105 S.E. 265, 87 W. Va. 383, 1920 W. Va. LEXIS 238
CourtWest Virginia Supreme Court
DecidedNovember 23, 1920
StatusPublished
Cited by4 cases

This text of 105 S.E. 265 (Donohoe v. Collett) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donohoe v. Collett, 105 S.E. 265, 87 W. Va. 383, 1920 W. Va. LEXIS 238 (W. Va. 1920).

Opinion

POEEENBARGER, JUDGE :

The decree under review on this appeal, setting aside a deed, as having been made in fraud of the rights of creditors, and enforcing a judgment lien on the property conveyed by it, is founded upon the theory of duty on the part of close relatives between whom a conveyance has been made, directly or indirectly, which stands in the way of a creditor complaining of it and charging fraud in the execution thereof, to prove good faith in the transaction. In the opinion of the trial court, there was no admissible evidence of fraud in the record, but, because the debtor and the purchaser of the property, sisters, were charged with fraud in the pleadings and did not prove by their own testimony facts showing such good faith, the final decree is in substance and effect as above indicated. The grantee has appealed.

The deed in question was not made directly from the debtor to the grantee therein. It was executed by a trustee in a deed of trust by way of execution of the trust. Mrs. Eronia H. Collett, the debtor, and Mrs. M. E. Durkin Donohoe, the creditor, had been partners in business, and the indebtedness is evidenced by a decree in favor of the latter, pronounced May 27, 1916, after long and troublesome litigation, in a suit brought by the former for settlement of the partnership accounts. While that suit was pending, Mrs. Collett borrowed from J. C. Michael $350.00 and secured the debt on the property in question, by a deed of trust in which L. R. Eowler was the trustee. Professing to. have sold it under the deed of trust to Miss Nell Phares, a sister of Mrs. Collett, he conveyed the same to her, by a deed dated, June 24, 1916. In the original bill, filed Aug. 31, 1916, the deed of trust was not noticed. The land, about an acre, worth not more than $500.00, was proceeded against as if it were unincumbered. While the cause was be[386]*386fore a commissioner, under a decree of reference, the debtor died an answer disclosing the deed of trust and conveyance by the trustee. Thereupon an amended and supplemental bill was filed, June 8, 1917, making Miss Phares and Michael parties, and attacking the deed of trust and the conveyance, on the ground of fraud in both transactions. It charges there was no such indebtedness as the deed of trust purports to secure; that, if there was, it had been fully paid and discharged before the alleged sale and conveyance; and that Miss Phares, Michael and- the debtor had conspired with one another to prevent collection of the plaintiffs debt. A second amended bill was filed, April 13, 1918, more specifically charging fraud, collusion and conspiracy against the plaintiff, in the transactions above mentioned, and making Fowler, the trustee, a party. Answers were filed in which all charges of fraud were fully and specifically denied..

The indebtedness to Michael, secured by the deed of trust, was clearly proven by a witness called by the plaintiff, and the trial court specifically found and held that the deed of trust was executed in good faith and without fraud. As the witness related the facts upon his personal knowledge and. is wholly uncontradicted, this finding cannot be disturbed.

Whether the Michael debt had been paid, at the time of the sale and that transaction and the subsequent conveyance were mere pretenses, are questions that depend for solution, upon the admissibility of certain evidence and, if it is admissible, upon its sufficiency to prove payment. The evidence of payment of the debt prior to the sale was held by the trial court to have been a privileged communication between an attorney and bis client. J. T>. Ward, the witness, was an attorney at law and represented Michael in the making of the loan to Mrs. Col-lett. Tie examined the title and prepared the deed of trust and note and the loan was made upon his advice as to the state of the title. He testified further that, before the property was advertised, he prepared and delivered to Michael, at his re- , quest, a release of the deed of trust, which hot thinks Michael signed and acknowledged before him; and that Michael told him at that time the debt had been paid or was then 'to be paid. \Jpon a second, interrogation in chief about the matter, he testified that Michael had said the debt had been paid. On eross-[387]*387examination, ho went back to his first statement. He further testified that later, how much later he did not remember, Michael had told him in a casual conversation, that he intended to have the trustee sell the property, in order to protect Mrs. Collett ironi the debt due from her to Mrs. Donohoe, and also, that the trustee knew nothing of the release which had not been recorded. lie admitted that he had been Michael’s attorney in a general way. He was frequently consulted, but generally paid by those with whom his client dealt upon his advice. In this state, the rule of privilege between attorney and client -is. strict and rigid. State v. Douglass, 20 W. Va. 770. If the relation of attorney and client existed between the. parties to the transaction in question, the communication was clearly privileged. The witness had approved the title of the property and the note and deed of trust for Michael, and prepared a release. He did not see the release delivered and was not told in terms that it had been. He merely inferred that it had been from Michael’s representation in a subsequent conversation, that it had not been recorded and the trustee was ignorant of it. After preparation and execution thereof, Michael came bad? to him and discussed the debt with him again, saying he had decided to sell the property under the deed of trust for the debt. He did not know what period of time elapsed between the two conversations. They may have been very close together, and there is no proof of any clear admission that the debt had been paid. Fairly interpreted, the witness’ statement was that the creditor said, it had been paid or was about to be. Whatever the status of the debt may have -been, the crédito:' was still concerning himself about it, and discussed it with the witness by whom he had been advised as to it. Besides, the witness admitted that, at that time, he was advising Michael generally concerning the legal phases of his business transactions, but was not always paid by him for the services rendered. Whether he was paid or not is immaterial. His action in a professional capacity at the time suffices to make the communication a privileged one. Foster v. Hall, 12 Pick. (Mass.) 89; Hunter v. VanBomborst, 1 Md. 504; Cross v. Riggins, 50 Mo., 335; Denver Tramway Co. v. Owens, 20 Colo. 107. We ate clearly of the opinion that Ward’s testimony as to the [388]*388admission of payment and purpose of the sale was properly excluded.

The Michael debt having been actual and bona, fide and payment thereof not having been shown, there was right in the creditor to have the property sold under the deed of trust and in the trustee to make the sale. It is equally clear that Miss Phares could rightfully purchase the property, with her own money and for her own use. According to the averments of the answers, she paid only the expenses of the sale in cash, at the date of the purchase. This amount was credited on- what was regarded as the cash installment, $150.75, being about one-third of the purchase money, and, for the balance of that installment, Michael took her note with personal security and she afterward paid it. She also executed to the trustee her two notes for $150.70 each, representing the balance of the purchase money, payable in one and two years, respectively.

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Bluebook (online)
105 S.E. 265, 87 W. Va. 383, 1920 W. Va. LEXIS 238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donohoe-v-collett-wva-1920.