Gustin v. Mathews

70 P. 402, 25 Utah 168, 1902 Utah LEXIS 50

• Court: Utah Supreme Court
• Decided: October 25, 1902
• Docket: No. 1375
• Status: Published

Opinion

BARTCH, J.

This is an action brought by "the plaintiff, as trustee in bankruptcy of Thomas Mathews, to set aside and declare null and void a certain deed executed by Mathews to his wife, conveying a certain parcel of real estate, on the ground that the conveyance was fraudulent and void, and made'for the purpose of placing the property out of reach-of his creditors. From the evidence it appears, substantially, that the property conveyed and in controversy consists of a comer lot, ten by twenty rods, situate in the northwest portion of this city; that Thomas Mathews conveyed it to his 'wife, the defendant, for the sum of one dollar; that at the time of the conveyance a suit was pending against the grantor to collect a claim, for which judgment was afterwards recovered, and which judgment remains unsatisfied; that the price for which the property was conveyed was wholly inadequate; that at that time its assessed value was not less than $100, and the taxes thereon amounted to $6 or $7 per annum; that the grantor also conveyed to his wife another piece of property, worth $300, for one dollar; that, aside from the real estate so transferred, the grantor owned no property subject to execution or to the payment of the claims of his creditors; and that thereafter he filed a petition in bankruptcy, and was adjudged a bankrupt. When the plaintiff rested, the defendant moved for a non-suit on the ground of a failure to make out a case against her. The court overruled the motion, and, upon the defendant failing to offer any testimony, entered judgment in favor of the plaintiff, declaring the deed to be fraudulent and void, and directing that the property attempted to be conveyed be considered as a portion of the bankrupt’s estate. This action of the court has been assigned as error.

The main contention of the appellant is that the conveyance cannot be set aside for the fraud of the grantor in which the grantee did not participate, and that there is no evidence 1 that the grantee, or even the grantor, had any knowledge of or intention of fraud. This contention is not tenable under the facts of this ease. The deed was made for but a nominal consideration at a time when the grantor was unable to pay his debts. It must, therefore, be regarded' as a mere voluntary conveyance, without consideration, and void as to creditors whose claims existed at the time of its execution, whether reduced to judgment or not, and who-, because of such conveyance, would be hindered or delayed in the collection of their claims. While a man may make provision for his wife out of his estate by deed, donation, or otherwise, and ought to do so when he is solvent, yet if he attempts to thus dispose of bis property and effects at tbe 2 expense of bis creditors, and to tbeir injury, bis conveyance, in tbe eye of tbe law, will be a fraud upon them; •and tbe fact, if it be a fact, that sucb a grantee did not participate in any fraud against tbe creditors, but accepted the instrument in good faitb, does not relieve tbe grantee from tbe effect and operation of a voluntary conveyance. In sucb case it is immaterial bow innocent tbe grantee was; tbe question is tbe intent of tbe grantor. Sucb a conveyance, under tbe circumstances of tbis case, is constructively fraudulent, and will be held void as to existing creditors, without 3 proof of actual fraud. These principles, and questions like those herein presented, were fully discussed in Bank v. Barker, 12 Utah 13, 40 Pac. 765, and on tbe authority of that case this one must be affirmed, with costs, there being no reversible error in tbe record. It is so ordered.

BASKIN, I., and HART, District Judge, concur.