Farmers State Bank v. Dierks

289 N.W. 860, 137 Neb. 442, 1940 Neb. LEXIS 17
CourtNebraska Supreme Court
DecidedJanuary 26, 1940
DocketNo. 30730
StatusPublished
Cited by5 cases

This text of 289 N.W. 860 (Farmers State Bank v. Dierks) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers State Bank v. Dierks, 289 N.W. 860, 137 Neb. 442, 1940 Neb. LEXIS 17 (Neb. 1940).

Opinion

Simmons, C. J.

The plaintiff, a judgment creditor of the defendant M. H. Dierks, brought this action to set aside a conveyance of land from its debtor, M. H. Dierks, to his son, Lyle P. Dierks, a defendant. The defendants prevailed in the court below, and plaintiff appeals. For convenience, in reciting the evidence, the judgment debtor will be referred to herein as the father and his grantee as the son.

In its petition plaintiff alleges its corporate capacity; a loan to the father of $3,700, evidenced by promissory notes, the maturity of the notes, its demand for payment and his refusal to pay; suit upon said notes, the recovery of judgment thereon, that the judgment is final and unpaid; the relationship of the parties; the conveyance by the father to the son, after the maturity of the notes, but prior to the judgment, of approximately 4,000 acres of land in Holt and Wheeler counties “for the sole purpose and intent of hindering, delaying and defrauding the creditors of said M. H. Dierks, of their lawful rig'hts and debts, and especially for the purpose and with the intent of hindering, [443]*443delaying and defrauding plaintiff herein in the collection of the aforesaid judgment and indebtedness;” that, by reason thereof, the conveyance is absolutely void as against the plaintiff. Plaintiff prayed that, as against it, the conveyance be annulled and set aside, that its judgment be decreed to be a lien upon the real estate superior to the interest and lien of the son, and for equitable relief.

The son (and his wife), answering plaintiff’s petition, admits plaintiff’s corporate capacity, the recovery of the judgment against the father, the relationship of the parties, the conveyance of the land in controversy from the father (and wife) to the defendant son, and the recording of the deed; and generally denies all other allegations of plaintiff’s petition. Further answering, defendant son and his wife allege the sale and purchase of the land for a valuable and adequate consideration; that the son paid the full and fair market value for said land (reciting an alleged consideration to which he later testified) ; that the debts of the father to the son were actual, subsisting, and just obligations; that, in purchasing the land, he acted in good faith and for no other purpose than to secure his just demands owing him by the father; and that since October, 1937, the son has been the owner of the property. The son prays that plaintiff’s action be dismissed.

The father, answering separately, admits that plaintiff recovered judgment against him; that no part of the judgment has been paid; the relationship of the parties; that the land was conveyed by him to his son and the deed recorded; and denies all other allegations of plaintiff’s petition. Further answering, the father alleged that the conveyance in question here was made in good faith, for a fair and adequate consideration; that at the time of the conveyance he was indebted to the son .(and sets out the alleged consideration in detail, to which he later testified) ; that the son is the owner of the land in fee simple; that the conveyance was made for the sole purpose of paying his obligations to his son, which were then “actual, honest and existing and just.” The father prays that plaintiff’s action be [444]*444dismissed. The reply was a denial of new matter in the answer.

The trial court found generally in favor of the defendants; that the transaction was in good faith; that the son paid the full and market value of the land; that the plaintiff’s judgment is not a lien upon the real estate here involved, and dismissed plaintiff’s action, at its cost.

Plaintiff filed a motion for a new trial, which was overruled.

At the beginning of the trial, it was stipulated that the value of the land, subject to the encumbrances of record at the time of the conveyance, was $8,794.39.

The trial court properly ruled that the burden of proof was upon the defendants. With one exception (noted hereafter) all evidence was offered by the defendants. The testimony of father and son may be summarized as follows: The father inherited this and other land from his father; the father was 66 years old at the time of trial, and all his life had been engaged in general ranching operations on the land here involved. His entire ranch was once free of indebtedness; in 1923 or 1924 he borrowed $25,000 from the Federal Land Bank and secured it by a mortgage on the entire property. In 1929 the father “had to have more money,” so the ranch was “split” into what will be referred to herein as the north and the south ranch. At that time, the father conveyed the south ranch to the son. The title to the south ranch -is not in issue in this action; however, that transaction and the handling of that land enter into the problem here presented. The north ranch, plus seven or eight hundred acres of unencumbered land, is the land involved in this action. This entire tract will be referred to herein as the north ranch.

As to the conveyance of the south ranch to the son, the father testified: “I was trying to get by with the Federal Land Bank.” “I had to have more money, and the only way to get it was the Federal Land Bank would let us take sixteen hundred acres of that south ranch; * * * he (the son) could get ten thousand on that.” The son borrowed the [445]*445$10,000 on the south ranch and turned that money over to his father. He made no other payment to his father for the conveyance of the south ranch. The father testified that, under oral lease from his son, he continued to operate the south ranch until 1934, when the son took over its operation. There were 800 acres of pasture and 800 acres of hay land on the south ranch. After the conveyance, the father used the pasture and paid the taxes on the entire south ranch “for the use of the pasture.” (The disposition of the hay and the payment of interest on the land bank mortgage on the south ranch will be set out later herein.)

At the time of the conveyance of the south ranch to his son, the father borrowed $23,000 on the north ranch (excluding the unencumbered land), and in 1936 made a commissioners’ loan thereon.

In 1937 the father was again behind in taxes and interest (he had never been able to meet his current obligations after he borrowed the first money) ; his cattle were mortgaged for more than their market value to an Omaha bank and were sold by it in June, 1937. That year the father discussed the matter of his loans with the plaintiff’s cashier, who suggested that the father go to Omaha and discuss them with the land bank officials. That was done. Officials of the land bank suggested that the father “turn this land over to” his son, that his son kept his payments up and was young; that the father was “going to be around there anyway.” The father and son studied it over and the father “deeded this land over to him” in October, 1937. The father, at that time, owed the plaintiff the debt upon which this action is based. The consideration recited in the deed was $6,566.77. Revenue stamps in the sum of $8.50 were attached to the deed.

The actual consideration claimed was the surrender to the father by the son of a promissory note made by the father payable to the son, dated March 10, 1932, for $5,566.77, due December 1, 1933', bearing interest at 5 per cent, from maturity. No interest or principal had been paid on the note, and the computed interest due was in excess of $1,000, [446]*446but figured in the settlement at $1,000.

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Cite This Page — Counsel Stack

Bluebook (online)
289 N.W. 860, 137 Neb. 442, 1940 Neb. LEXIS 17, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-state-bank-v-dierks-neb-1940.