Johnson v. Union Investment Co.

182 N.W. 955, 149 Minn. 106, 1921 Minn. LEXIS 604

• Court: Supreme Court of Minnesota
• Decided: May 20, 1921
• Docket: No. 22,153
• Status: Published

Opinion

Dibell, J.

Action of ejectment. .There was a verdict and judgment for the plaintiff. The defendant appeals.

The defendant claims title under an execution sale against the grantor of the plaintiff. The judgment was docketed after the conveyance. The question is whether the conveyance was fraudulent as to the defendant, a creditor of the plaintiff’s grantor.

1. Pulver, the owner, conveyed a quarter section in Swift county to the plaintiff, Johnson, on January 9, 1913. Defendant obtained judgment in Hennepin county against Pulver for $11,678.48 on June 3, 1915. The land was attached on June 13, 1914. The judgment was reduced by payments to $8,361.24. On February 27, 1917, a transcript was docketed in Swift county. The defendant .purchased the land at the execution sale on July 11, 1917. There was no redemption. The defendant has no title, unless the conveyance from Pulver to the plaintiff was fraudulent. If it was fraudulent as to the defendant, it has title.

The action in which the judgment was rendered was commenced in May, 1913. An amended complaint was filed in May, 1914. It sought a recovery on notes aggregating some $25,000. Payments were made after suit. On June 1, 1915, the parties stipulated for judgment for $11,-678.48. There was collateral which it was agreed should be applied when collected, and collateral so applied reduced the judgment to $8,-361.24. Two of the notes in the amended complaint were dated on November 12, 1912. The others were dated after the date of the transfer from Pulver to Johnson.

The judgment was conclusive of the indebtedness at the time of its rendition. It did not prove the existence of a debt on January 9, 1913, the date of the conveyance from Pulver to Johnson. The burden was on the judgment creditor alleging fraud to prove that the debt antedated the conveyance. Irish v. Daniels, 100 Minn. 189, 110 N. W. 968; Schmitt v. Dahl, 88 Minn. 506, 93 N. W. 665, 67 L.R.A. 590.

It is alleged as error that the court submitted the question whether the defendant’s judgment represented.a debt existing at the time of the conveyance to the plaintiff. The evidentiary facts involved in a solution of the question are confusing. Counsel for the plaintiff urges that it conclusively appears that none, of the indebtedness antedated the conveyance, and counsel for the defendant with equal earnestness contends that it conclusively appears that all of the indebtedness existed on January 9, 1913. Of course the mere renewal of notes then existing did not pay the indebtedness which they represented.

After going over the evidence with all possible care, we are unable to say that it conclusively appears that the indebtedness antedated the conveyance. The evidence sustains a.finding that none of it did. There was no error against the defendant in leaving the question to the jury.

2. The defendant, then, is in the position of a subsequent creditor. A conveyance may be fraudulent as to subsequent creditors. The purpose and effect of a conveyance may be to defraud subsequent creditors, and if so it will be adjudged fraudulent. Sovell v. County of Lincoln, 129 Minn. 356, 152 N. W. 727; Williams v. Kemper, 99 Minn. 301, 109 N. W. 242; Fullington v. Northwestern I. & B. Assn. 48 Minn. 490, 51 N. W. 475, 31 Am. St. 663; Walsh v. Byrnes, 39 Minn. 527, 40 N. W. 831. And the conveyance may he made really for the use of the grantor upon a secret trust or understanding that he shall 'have the benefit o'f the property, in Which event it is fraudulent as to subsequent creditors. Wetherill v. Canney, 62 Minn. 341, 64 N. W. 818; Anderson v. Lindberg, 64 Minn. 476, 67 N. W. 538. Pulver’s testimony was that the property was deeded to Johnson to secure the support of his (Pulver’s) crippled daughter, then a young child, who has since died. Pulver was not well at the time and feared unfavorable results. He testified that he was indebted to the plaintiff in an uncertain sum at the time. The plaintiff was his cousin. His stoTy did not greatly impress the trial court.' It was not so incredible that a jury could not believe it, and the trial court did not think that a new trial should he granted in the exercise of its discretion. The jury might have found that Pulver’s financial condition at that time, as he understood it, was not at all had, and that he might 'as to future creditors make a provision for his daughter, or might make a gift, and it was not required to find that the conveyance to the defendant was only a cover. It may he noted that Pulver claims that before the deed was made he talked over with the officers of the defendant the malting of it and its propriety and that the arrange* ment had their approval. The evidence did not require a finding of fraud.

Judgment affirmed.