Harris v. Harmon

1928 OK 681, 272 P. 383, 134 Okla. 116, 1928 Okla. LEXIS 811
Supreme Court of Oklahoma·Decided November 27, 1928·No. 18567·Published·Cited by 4 cases

Opinion

RILEY, J.

A debtor must be just before being generous. Creel et al. v. Cloyd (Ky. App.) 152 S. W. 776.

That salutary -principle is statutory in Oklahoma, for section 5271, C. O. S. 1921. provides:

“Every conveyance of real estate or any interest therein, and every mortgage or other instrument in any way affecting the same, made without a fair and valuable consideration, or made in bad faith, or for the purpose of hindering, delaying or defrauding creditors, shall be void as against all persons to whom the maker is at the time indebted, or under any legal liability.”

In Ward v. Wiggins, 73 Okla. 46, 174 Pac. 231, it was held the italicized provision of the statute made void a deed as to the named class, (1) irrespective of fraudulent intent, or (2) solvency.

The case of First Nat. Bk. of Barnsdall v. Little, 122 Okla. 37, 250 Pac. 799, covered the same ground and went further, holding to the same result irrespective of (1) fraudulent intent, or (2) solvency of the grantor as before, and irrespective of adjudication of the claim of the creditor.

In Lewis v. Manning, 123 Okla. 297, 253 Pac. 281, we held:

“In a suit by a truste'e in bankruptcy to-set aside an alleged fraudulent transfer of property by the bankrupt to his relatives, the burden is upon the defendant to show valid consideration and good faith.”

See, also, Vacuum Oil Co. v. Quigg, 127 Okla. 61, 259 Pac. 858.

“ T have never been able,’ says an eminent jurist, ‘to discover the principle upon which a title acquired by mere gift should, under any circumstances whatever, be deemed superior to the claims of the creditor to be paid his debt.’ ” 27 C. J. 547.

The donee’s equity in th'e real -property is justly inferior to that of°-the donor’s creditor.

“No man shall be heard to say that h'e acted honestly and with good faith in giving away property which in equity and good conscience ought to have gone to pay his just debts.” 12 R. C. L. 596.

The claims of creditors rest on legal obligations, higher than the demands of affection or generosity, and a man must be just before he is generous. 12 R. C. L. 592.

Our statute, supra, makes a voluntary conveyance of real estate fraudulent per s'e as to existing creditors. The part of the statute with which we are concerned does not trifle with intent, fraudulent or otherwise; in fact it is not based on the bona fides, but upon protection from the injury of those to whom the grantor debtor is legally bound. Dirks v. Union Saving Ass’n (S. D.) 168 N. W. 578. See, also, Betts & Co. v. Richardson (S. C.) 99 S. E. 815, and Jackson v. Lewis, 34 S. C 6, 12 S. E 560, where voluntary deeds were set aside at the instance of 'existing creditors upon the ground of constructive or legal fraud, where there was not the slightest taint of actual or moral fraud in the transaction, under the principle of law herein first above announced. McCasky v. Potts (W. Va.) 64 S. E. 908.

In Baldwin v. Kingston, 247 Fed. 163, construing the law of New Jersey, it was held a voluntary conveyance was voidable at the instance of an 'existing creditor, irrespective of intention or solvency. To the same effect is Williams v. Travis, 277 Fed. 134, wherein the law of Florida is construed.

*117 The case of Allen v. Overton et ux. (Ala.) 94 So. 477, holds:

“A voluntary conveyance as to creditors existing when executed and delivered is void per se without regard to the intention of the parties, unless the property is exempt from payment of debts of the grantor.”

So in Pennsylvania (American Trust Co. v. Kaufman [Pa.] 119 Atl. 479); and in Oregon (Clark v. Philomath College [Ore.] 193 Pac. 470.)

In Myers v. Harness, 116 Okla. 268, 244 Pac. 1109, it was held:

“Purchasers of land which has be'en fraudulently transferred to their grantor mast establish the good faith of th'eir purchase, and it cannot be presumed.”

With these principles of law, we turn to the facts and find beyond dispute that A. J. Harmon owned 260 acres of land in Gar-vin county. He was indebted to the First National Bank of Stratford by reason of an unsecured promissory note. Joined by his wife, he executed two warranty deeds to his daughter, Ollie Womack, purporting to convey a 30-acre and a 70-acre tract of land, other than his homestead, and excepting mineral rights and reciting in said deed a consideration of $1 and other good and valuable considerations. Said grantor, A. J. Harmon, in his testimony repeatedly said he gave the land to his daughter, that he received nothing of value at the time of delivery of the d'eeds, his purpose being that he wanted his daughter to have a home. Counsel for defendants below, defendants in error, in his opening statement said in reference to grantor, A. J. Harmon:

“He had a perfect right then under the law to give away all his property, provided he retained sufficient to pay his debts,” and “I am going to admit everything he says except one or two things. * * * We admit the conveyances, * * * admit the relationship of the party, and admit that the first conveyance was a gift to the daughter, but our answer takes issue with the charge of fraud for the purpose of defeating the payment of his claims. * * * We say that the said A. J. Harmon, at the time of th'e execution of the conveyances of said land to Ollie Womack, was solvent and the said conveyance was executed in good faith. * * * The testimony will show that h'e had personal property subject to execution at the time that he gave to his daughter a home.

Free access — add to your briefcase to read the full text and ask questions with AI

Harris v. Harmon, 1928 OK 681, 272 P. 383, 134 Okla. 116, 1928 Okla. LEXIS 811 (Okla. 1928).

1928 OK 681 (Harris v. Harmon) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Saddler v. Smith
1940 OK 456 (Supreme Court of Oklahoma, 1940)
Harry v. Hertzler
1939 OK 211 (Supreme Court of Oklahoma, 1939)
Colby v. McClendon
116 S.W.2d 505 (Court of Appeals of Texas, 1938)
Rye v. McReynolds
1935 OK 219 (Supreme Court of Oklahoma, 1935)