Knight v. Capito

23 W. Va. 639, 1884 W. Va. LEXIS 22
CourtWest Virginia Supreme Court
DecidedMarch 29, 1884
StatusPublished
Cited by42 cases

This text of 23 W. Va. 639 (Knight v. Capito) 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
Knight v. Capito, 23 W. Va. 639, 1884 W. Va. LEXIS 22 (W. Va. 1884).

Opinion

Woods, Judge :

The appellant has assigned many grounds of error, all of which may be reduced.to a single one, viz: that the court erred in dismissing the plaintiff’s bill, because the facts proved, that the -deed made to Charles Oapito was made with intent to hinder, delay and defraud the plaintiff and other creditors in the collection of their debts against God-frey Oapito.

From the view we have taken of this case it becomes unnecessary to recite all the testimony taken, tending to show the amount of usurious interest paid or that the sale of lots “13” and was in any degree affected by the collusion between, the plaintiff and other persons, who desired to bid for it, referred to, rather than set forth in the answers; for if the said sale to Charles was fraudulent, the cause must be remanded for further proceedings, where these matters if they exist, can be enquired into; and if the said deed was not fraudulent, the decree of the circuit court must be affirmed, and in that event all other questions become immaterial. ,

[643]*643This is a case where a father, in embarrassed and failing circumstances, pressed for four or five years to the necessity of asking for and obtaining from his son, long separated from him, small sums of money and many of the necessaries of life as mere gratuities; part of the time engaged in an unprofitable and unsuccessful business, largely in debt; his most valuable property encumbered to much more than its selling value, prostrated by paralysis, confined to his bed for a year before and a year after the making of the alleged fraudulent deed; almost entirely destitute of personal property, has conveyed all of his unencumbered real estate, which was in effect all the real estate he owned which could be made liable for his debts to his son, for an ostensible consideration wholly made up of old debts alleged to be due the son for services rendered and moneys advanced by him many years before the date of the deed, for which no note, bond, account or other memorandum in writing was ever given or made by either of the parties: and by far the gi’eater portion of said alleged debts, if they ever in fact existed, were barred by the statute of limitations long before the date of said deed to the son. If this deed can be maintained, the just demands of the plaintiff and other creditors of said grantor must remain unsatisfied. All these circumstances are the usual badges of fraud; and unexplained or unrefuted, they directly tend to establish the fact, that such a conveyance made under such circumstances was made with intent to hinder, delay and defraud the creditors of the grantor in the collection of their debts, Herrin, use, &c. v. Munsford, &c., 9 Dana 450; Hunters v. Waite, 3 Gratt. 26, 72; Lewis &c. v. Caperton’s Ex’or &c., 8 Gratt. 148; Crawford v. Carper, 4 W. Va. 56; Garland v. Rues, 4 Rand. 281; Hunter’s Ex’ors v. Hunter, 10 W. Va. 321; Martin & Gilbert v. Rexroad, 15 W. Va. 512; Lockhard & Ireland, 10 W. Va. 87; Goshorn’s Ex’or v. Snodgrass, &c., 17 W. Va. 717.

The 1st section of chapter 74 of the Code ot W. Ya. provides that “every gift, conveyance, assignment or transfer of, or charge upon auy estate, real or personal, every suit commenced, or decree,' judgment or' execution suffered or obtaiued, and every bond or other writing given, with intent to delay, hinder or defraud creditors or other persons, of or [644]*644from what they are or may he entitled to, shall as to such creditors, purchasers or other persons, their representatives or assigns, he void. This section shall not affect the title of a purchaser for valuable consideration, unless it appear that he had notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.”

By the second section of said chapter, it is declared that “every gift, conveyance, assignment, transfer or charge which is not upon consideration deemed valuable in law shall be void as to creditors whose debts shall have been contracted at the time it was made,” hut not on that account merely as to subsequent creditors and purchasers. It is contended by the appellants, that the deed of August 29, 1878, to the defendant Charles Capito is fraudulent and void under both of the said sections of chapter 74 of the Code, because the deed was wholly voluntary, and without any valuable considera-ti on; and because even if made for a valuable consideration, it was made by the grantor, with intent to hinder, delay and defraud the plaintiff and others of his creditors, and that at the time of making this deed the grantee had notice of, and participated in this fraudulent intent. On the other hand the grantee denies the existence of any such fraudulent intent on the part of his father or himself, and denies all knowledge of such fraudulent intent on the part of his father, and also that at the time he purchased said lands, that he knew that his father was in any way indebted to the plaintiff, and he pretends to'set forth the manner in which the consideration of one thousand four hundred dollars mentioned in the deed originated and was in fact paid.

’While it is true as a general proposition that fraud is never to he presumed, but must always be proved by the party alleging it, yet this “must be understood only as affirming that a contract honest and lawful on its face must be treated as such until it is shown to be otherwise by evidence either positive or circumstantial. Fraud may be inferred from facts calculated to prove it.” Kane v. Weigly, 22 Pa. State 179; Martin & Gilbert v. Rexroad and Goshorn’s Ex’ors v. Snodgrass, supra. It is equally well settled, that in a transaction between near relatives as father and son, "brothers and sisters, and many [645]*645others, for whom there is naturally a strong motive to provide, at the expense of honest creditors, whenit is impeached as fraudulent, the party claiming the benefit of such transaction, is held to stricter proof of his claim, and of his honesty in the whole transaction, than would have been required of a stranger. Lloyd v. Williams, 21 Pa. State 327; Bump on Fraud. Conveyances, 45 and 56; Hawkins v. Alston, 4 Iredell’s Eq. R. 137; Peebles v. Horton, 64 N. C. 374.

It is also well settled, that a bona fide conveyance of a part or even of the whole of a debtor’s property, for an adequate price in satisfaction of a valid pre-existing debt, without fraudulent intent, will he upheld, although the necessary effect of such conveyance should be to wholly defeat other creditors in the collection of their just debts. Such a conveyance however 'is always regarded with a degree of suspicion, and if accompanied by any of the usual badges of fraud, it will become necessary for the grantee to 'prove the fairness of the transaction.

Among the badges of fraud, is a false statement of the consideration for which the conveyance was made. In the case of a mortgage, a discrepancy between the amount to be secured and the mortgage debt, is a badge of fraud; and ii the statement of the debt due, is intentionally false it is held to be a direct evidence of fraud. Marriott & Hardesty v. Givens, 8 Ala. 694; Bump on Fraud. Con. p. 43.

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Bluebook (online)
23 W. Va. 639, 1884 W. Va. LEXIS 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knight-v-capito-wva-1884.