Lipman v. Norman Packing Co.

131 S.E. 797, 146 Va. 461, 1926 Va. LEXIS 345
CourtCourt of Appeals of Virginia
DecidedFebruary 25, 1926
StatusPublished
Cited by12 cases

This text of 131 S.E. 797 (Lipman v. Norman Packing Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lipman v. Norman Packing Co., 131 S.E. 797, 146 Va. 461, 1926 Va. LEXIS 345 (Va. Ct. App. 1926).

Opinion

McLemore, J.,

delivered the opinion of the court.

The cause is before us upon an appeal from a final decree entered therein on the 21st day of December, 1923, wherein the appellees here were the complainants, but the parties will be hereafter referred to as they were designated in the court below.

The Norman Packing Company, Inc., filed its bill in chancery at the March rules, 1922, against the defendants, S. Lipman and H. Lipman, alleging among other [464]*464things that S. Lipman was indebted to it in the sum of $421.16 with interest from December 19, 1921, and that being so indebted he with his wife, Frances, executed a deed on February 1, 1922, whereby he attempted to convey to H. Lipman, his brother, in consideration of $10.00 and other good and valuable considerations, two certain parcels of land; one on Brambleton avenue in the city of Norfolk, thirty feet by 107 feet; one on Hill avenue in the city of Portsmouth with fifty feet front (two lots) on Hill avenue, and running back between parallel lines sixty-five feet. That said deed “was not upon consideration deemed valuable in law, and was made with intent to delay, hinder and defraud your complainant of the debt which was then due it, of all of which the said H. Lipman had notice.”

The usual prayer for relief followed, and the answer of the defendants was “that they deny the allegations of .the said bill.”

On April 6, 1922, City Realty Corporation filed its petition, setting up an obligation due to it by S. Lipman of about $3,000.00, and praying that it be allowed to (file its petition and) join the said Norman Packing Company, Inc., as parties complainants.

On October 27, 1923, the defendants filed their joint and several amended answers to this petition and to the bill of complaint in which they say: “That they deny each and every allegation of said bill and petition.”

Depositions were duly taken, and the cause coming on to be heard upon the merits resulted in a decree being entered on the 27th day of October, 1923, setting aside the deed of February 1, 1922, and directing certain accounts to be taken of the real estate of defendants and of the debts due to complainants. A report [465]*465was made in dne course, and on December 21, 1923, an order was entered confirming the report, fixing the amount due the complainants and directing a sale of the real estate unless the debts and costs were paid within sixty days from its entry.

To correct these orders an appeal was prayed and allowed, and the cause is before us for final determination.

This brings us to a consideration of the evidence with the view of ascertaining first, whether the deed of February 1, 1922, was made without consideration deemed valuable in law, and with intent to hinder, delay and defraud the complainant and petitioner; and second, was that fraudulent design on the part of the grantor known to and participated in by the grantee.

We have no difficulty in reaching the conclusion that S. Lipman conveyed the property to his brother, H. Lipman, for the purpose of defeating complainant in its effort to collect the account admittedly due it.

F. W. Beasley in his testimony, which stands uncontradicted, says: “I then stated to Mr. Lipman, Mr. Lipman unless you pay the Norman Packing Company, Inc., immediately I am going to proceed to attach the real estate which I personally, know you own, etc.” To this statement S. Lipman replied: “You can’t do that; I expected you would attempt to do it, and I have transferred that property to keep you from doing it.”

At the time of this conversation S. Lipman owned a piece of property known as the High street lot in Portsmouth, upon which there was a mortgage for $6,500.00 held by City Realty Corporation, and was well known to be more than the property would sell for. Lipman' was therefore anxious to be relieved of the contingent liability resulting from his signature [466]*466as maker of the bond evidencing the debt, and approached F. W. Beasley, who was interested in the Norman Packing Company, Inc., and in the City Realty Corporation as well, with the proposition: “Unless you have this original sale cancelled, and. release me of the mortgage notes which I now owe on that property, I will never pay the Norman Packing Company, Inc., because the Norman Packing Company, Inc., is you.” All of this occurred some fifteen or more days after the deed conveying his property to his brother.

We pass to the second question in the case, because that involves and determines the course this cause must ultimately take. Was there fraudulent design on the part of the grantor known to and participated, in by the grantee in the conveyance of February 1, 1922?

The grantor and grantee were brothers, and had been living in the same house from December 20, 1921, to March 1, 1922; Sam and his family having come to his brother’s on December 20th because his combination store and residence was destroyed by fire on hh&t date.

There is no great difficulty in determining in a general way what the law is as applied to this class of eases, but the facts surrounding each case are subject to shadows and colorings as variable as human emotions- and impulses, the result being that adjudicated cases-rarely prove to be decisive of the ease in judgment, and the court must, in the light of the general principles, of the law, and of its knowledge of human nature,, read the evidence with these fundamentals in mind, and interpret it in that manner that best comports with common sense and human experience.

A few general legal principles may be kept in mind, as bearing upon the issues involved:

[467]*467“Fraud is not to be assumed on doubtful evidence, or circumstances of mere suspicion. It must be clearly and distinctly proved. The law never presumes fraud, but the presumption is always in favor of innocence and honesty.” New York Life Ins. Co. v. Davis, 96 Va. 739, 32 S. E. 475, 44 L. R. A. 305.

“(4) A fraudulent intent concurred in by both grantor and grantee always vitiates a conveyance, as indeed the statute declares affirmatively by pronouncing its nullity, and negatively by providing that it shall not be void if founded on a valuable consideration, and the grantee had no notice of the fraudulent intent.” 2 Minor on Real Property, section 1173.

“(5, 6) Relationship is not a badge of fraud, and there is no law which forbids persons standing in near relationship of consanguinity, affinity, or business, from dealing with each other, or which requires them to conduct their business with each other differently from the manner in which they deal with other persons, though when fraud is charged their dealings with each other will be closely scrutinized, as they may strengthen a presumption arising from other circumstances.” Johnson v. Lucas, 103 Va. 36, 48 S. E. 497.

“The relationship of the parties (father and son) and the insolvency of the grantor, do not of themselves constitute badges of fraud and relieve the creditors from proving the charges of fraud set up in their pleadings.” Johnson v. Lucas, 103 Va. 36, 48 S. E. 497.

“As a general rule the burden of proof rests on him who charges fraud, and not on him whose conduct is charged to be fraudulent. But, where the transaction assailed is between brother and brother or other near relatives, only slight evidence is required to shift [468]

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131 S.E. 797, 146 Va. 461, 1926 Va. LEXIS 345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lipman-v-norman-packing-co-vactapp-1926.