Shank v. Craun

177 S.E. 60, 163 Va. 753, 1934 Va. LEXIS 214
CourtSupreme Court of Virginia
DecidedNovember 15, 1934
StatusPublished

This text of 177 S.E. 60 (Shank v. Craun) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shank v. Craun, 177 S.E. 60, 163 Va. 753, 1934 Va. LEXIS 214 (Va. 1934).

Opinion

Epes, J.,

delivered the opinion of the court.

This is a suit brought by J. F. Craun and W. J. Kaylor against E. M. Shank and Beulah Shank (husband and wife) to set aside a deed, dated September 24, 1932, from E. M. Shank to Beulah Shank.

The bill sets forth and the proof establishes that on September 24, 1932, E. M. Shank was indebted to W. J. Kaylor in the sum of $180, and E. M. Shank and Beulah Shank were indebted to J. F. Craun as evidenced by three notes drawn by them for $281.18, $298.93 and $177, respectively; and that in November, 1932, these creditors procured judgments on their claims.

The ground upon which the complainants seek to set aside the deed is that it “was not upon a consideration deemed valuable in law, or upon an adequate consideration, but was executed with intent to hinder, delay and defraud the creditors of E. M. Shank and especially your orators.”

Lago and Stickley and J. Y. Lago filed petitions setting forth that on September 24, 1932, E. M. Shank was indebted to F. H. Lago and Sam S. Stickley, partners, trading as Lago and Stickley, for $175.72, and to J. V. Lago for $150, and prayed to be admitted as parties complainant to this suit.

Mrs. Shank filed answers to the bill and the petitions. E. M. Shank did not appear, and the bill stands taken for confessed as to him.

These facts appear from the evidence:

By deed dated March 1, 1926, Irma Shaver, W. D. Funkhouser and others conveyed to E. M. Shank and Beulah Shank a farm in Rockingham county, Virginia, containing about fifty-three acres. The consideration for the convey[755]*755anee was $9,500, of which $4,000 was paid in cash and the residue evidenced by five notes for $1,100 each drawn by E. M. Shank and Beulah Shank, payable to the order of William M. Funkhouser, attorney in fact, on or before March 1, 1927, 1928, 1929, 1930 and 1931, respectively, with interest at six per centum per annum payable annually. A vendor’s lien was reserved in the deed to secure the payment of the deferred installments.

Mrs. Shank testified that she paid $1,700 of the cash payment out of money she had been accumulating since 1915 from the sale of chickens, eggs, turkeys, guineas, and now and then a hog raised by her, and that $2,300 of it came from money which her husband’s father left him several years before.

On May 2, 1927, all five $1,100 notes were paid, marked paid, and delivered to either Mr. Shank or Mrs. Shank, and the vendor’s lien released of record. Of the money used to pay off these notes $3,300 was procured by the negotiation of a loan for that amount from J. F. Craun. This indebtedness was evidenced by four bonds (three for $800 and one for $900) dated May 2, 1927, made by E. M. Shank and Beulah Shank, payable to J. F. Craun on or before May 2, 1928, 1929, 1930 and 1931, respectively, bearing interest at five per centum per annum payable semi-annually, which were secured by a deed of trust on the fifty-three acre farm. The residue of the money required to pay off the $1,100 notes amounted to $2,530, of which $230 was for interest. Mrs. Shank testified that she paid all this $2,530 from funds she saved from the sale of poultry, eggs, etc., but that one of the $1,100 notes paid therefrom “was paid through Elvin’s name, Mr. Shank’s name.” She further testified that she attended to procuring the loan from Craun and to the payment of the five $1,100 notes.

On May 2, 1928, the interest on the four Craun bonds and $365 of the principal of the first bond was paid. On May 2, 1928, remainder of the principal of the first $800 bond and the interest to that date on the other three bonds was paid, the payment amounting to $581.75. On May 2, 1930, [756]*756the interest to that date on the three unpaid bonds and the principal of the second $800 bond was paid, the payment amounting to $925. When these two bonds were paid they were marked paid and delivered either to Mr. or Mrs. Shank. Each of these three payments was made by a check drawn by Beulah Shank upon an account standing in her name in the First National Bank of Harrisonburg. Mrs. Shank testified that, with the exception of $50 turned over to her by her husband at the time the payment of May 2, 1928, was made, each of these checks was paid with money she had accumulated from the sale of poultry, eggs, etc.

No other payments have been made on either the interest or the principal of the Craun bonds; but some time prior to September 24, 1932, E. M. Shank and Beulah Shank executed and delivered to J. F. Craun their note for $177 of which $85 was for one year’s interest on the unpaid $800 and $900 bonds. The residue of the $177 note was for mill feed and flour and for “a little money” he had loaned them. This note is one of the notes upon which Craun procured the judgment on which he is here suing; but it is the only item of indebtedness alleged by the complainants or petitioners which has any connection with the property conveyed in the above mentioned deed.

By deed dated September 24,1932, in consideration of $1 and “the further consideration of the assumption by the party of the second part (Beulah Shank) of the payment of two homestead waiver bonds, dated May 2, 1927, made by E. M. Shank and Beulah Shank, one in the sum of $800 * * * and the other in the sum of $900 payable * * * to J. F. Craun, with interest from May 2, 1932,” secured by deed of trust on the below mentioned land, E. M. Shank conveyed to Beulah Shank, with general warranty, “all his right, title and estate in the following real and personal property” in Rockingham county, Virginia:

(1) A tract of land containing fifty-three acres seventeen poles conveyed to E. M. Shank and Beulah Shank by Irma Shaver and others by deed dated March 1, 1926:

(2) “The following stock and chattel property, located [757]*757upon the aforesaid, farm, namely:” Two mules, one old mare, two cows, four yearling heifers of mixed breeds, two Poland China brood sows, two shoats, ten Poland China shoats, one John Deere two-horse wagon, one Milwaukee binder, one McCormick mower, one McCormick Deering manure spreader, one Superior drill, plows, harrows, and other farming implements, three sets of work harness, a DeLaval cream separator, twenty-four ewes and one buck; all fowls, and all household and kitchen furniture.

The one-half interest of Elvin M. Shank in the real estate and the personal property conveyed in this deed is worth very considerably more than $850.

When first questioned about this transaction Mrs. Shank testified most positively that at the time the above mentioned deed was executed and delivered to her, she did not know her husband owed to the complainants or the petitioners any of the debts upon which they are here suing. But at a later time she was recalled to the stand and modified this, saying that she did not know of them until a short time before the deed was executed.

The court being of opinion “that the deed * * * bearing date on the 24th day of September, 1932, * * * was voluntary, and was made to hinder, delay and defraud the creditors of said E. M. Shank, * * * and that said Beulah Shank had knowledge of the said fraudulent intent and purpose of the said E. M. Shank, in the execution of said deed,” decreed that the same be and is “hereby set aside and held for naught, but so far only as the said debts and demands of said plaintiffs and petitioners are concerned.” It then committed the cause to a commissioner in chancery to make certain inquiries which need not be noticed here.

Mrs.

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177 S.E. 60, 163 Va. 753, 1934 Va. LEXIS 214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shank-v-craun-va-1934.