Smith v. Johnson

89 S.E. 3, 78 W. Va. 395, 1916 W. Va. LEXIS 119
CourtWest Virginia Supreme Court
DecidedMay 16, 1916
StatusPublished
Cited by2 cases

This text of 89 S.E. 3 (Smith v. Johnson) 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
Smith v. Johnson, 89 S.E. 3, 78 W. Va. 395, 1916 W. Va. LEXIS 119 (W. Va. 1916).

Opinion

Lynch, Judge :

At April rules, 1914, Charles D. Smith filed his bill against James Johnson and others in the circuit court of Tucker county, and at the ensuing June term an amended bill against the same parties. He alleged, That in October, 1912, James Johnson became indebted to him in the sum of $150, evidenced by the promissory note of the debtor upon which the bank to which he endorsed it later procured a judgment, which complainant paid, wherefore he asks to be subrogated to the status and rights of the bank. That, although James Johnson informed plaintiff when assuming the liability that he was the owner of several tracts of land in-Tucker county, yet, as appeared of record, James Johnson, being heavily indebted and having suits by creditors pending against him and anticipating still other litigation of similar character, had on March 20, 1911, conveyed to his brother Raymond three tracts of land in that county, containing 117, 103 and 11 acres respectively, for a pretended and fictitious consideration of $2500 cash, to his brother Orlando an undivided half interest in 26 acres for a pretended consideration of $60 cash, and on April 11,1913, to Raymond Johnson another tract of 3.8 acres for-[397]*397tbe pretended consideration of $800 cash, with the intent on the part of the grantor in each instance to defraud his creditors and especially the plaintiff, of which intent Raymond and Orlando Johnson had notice; which tract of 117 acres, on December 13, 1911, Raymond Johnson conveyed to his brother Orlando for a. consideration entirely fictitious and false, in furtherance of the fraudulent design and purpose of the original grantor. Hence, that James Johnson is still the actual owner of the several tracts so conveyed, and that the grantees hold them in trust for his use and benefit. Plaintiff prayed that the several alleged fraudulent conveyances be set aside and the property thereby conveyed be sold and the proceeds applied to payment of his debt.

Their demurrers to the amended bill having been overruled, the defendants Raymond and Orlando Johnson answered fully. Admitting the conveyances to them as alleged, they denied any fraudulent intent on the part of their grantor and their knowledge thereof, denied knowledge of any indebtedness owed by him or of any litigation pending against him when the grants were made, and averred bona fides on the part of all parties and full payment of the consideration recited in the several deeds.

By petition filed at October rules, 1915, Repair Brothers, partners, alleging an indebtedness to them by James Johnson of $50.12 by promissory note dated January 16, 1911, and Robinson & Ford, also partners, alleging an indebtedness by James Johnson to them of $235.54 on open account beginning in November, 1909, adopted the allegations of the original and amended bills, and prayed that 'they might be made parties to the suit and the conveyances by their debtor annulled and the property thereby conveyed sold in payment of their debts. The objections and demurrers to these petitions were overruled ; and the defendants answered them with the same particularity and to the same effect as in case of the amended bill.

The sole defects pointed out in argument on demurrer are that the liability to the plaintiff on the note on which the bank recovered the judgment paid by him arose after the date of the conveyances of March 20th, and that the fraud alleged is [398]*398not sufficiently averred. Neither proposition is sound. The first is not, because creditors whose rights accrue after a debtor has disposed of bis property may have the transfer annulled, except as between the parties thereto, when fraudulent and voluntary and intended to defeat the payment of debts thereafter contracted by the grantor. Duncan v. Custard, 24 W. Va. 730; Mayhew v. Clark, 33 W. Va. 387. The second proposition is not sound, because the bills do sufficiently •charge that the deeds were fraudulent and without consideration and were made with intent to defraud, and that the grantees had notice of such purpose and intent. Moreover, the ground urged in support of the denial of the right of Repair Brothers and Robinson & Ford to be heard upon their respective petitions filed in the cause is not tenable. Richardson v. Ralphsnyder, 40 W. Va. 15.

Upon final hearing, on pleading and proof, the debts of .Smith, Repair Brothers and Robinson & Ford were adjudicated in the respective amounts averred, and the conveyances by James to Raymond Johnson of March 20, .1911, for the 103 and 11 acres, and of April 11, 1913, for 3.8 acres were can-celled as fraudulent as to such debts and the land therein conveyed decreed to be sold in payment of plaintiffs’ claims; but as to the deed of March 20, 1911, by James to Raymond •Johnson for the 26 acres, and of Raymond to Orlando Johnson of December 13, 1911, for the 117 acres, the court, for want Of “fraudulent knowledge on the part of the” second grantee denied the relief sought and dismissed the bill and petitions. Raymond Johnson alone appeals.

The decree complained of is sustained, if at all, by numerous but disconnected facts and circumstances, appearing in the record, tending in part to generate a strong suspicion and in part to establish the fact of the fraud alleged. There is little direct or positive evidence either of fraudulent intent •on the part of the grantor, or, if such design in fact existed, of knowledge thereof on the part of his grantees.

-Each of the deeds assailed recited a cash consideration in the several amounts averred in the bills. The recitals were not suported by the testimony of defendants, but in part if not wholly disproved. They say that the stated consideration [399]*399of $2500 .in the deed of March 20th to Raymond Johnson was paid by a note by James Johnson for a pre-existing debt of $1500 and the balance of $1000 in cash upon delivery of the deed. But. neither of the parties satisfactorily explained the source from which or the manner in which the cash payment was procured, or the items of indebtedness that entered into the note, dated February 1, 1909. An attempt was made to show that this note was given in payment of two prior ones aggregating $700 covering miscellaneous transactions between the brothers, an account of $137, and an additional sum of $663 covering the share of James Johnson, paid by his brother Raymond, of losses sustained by them as partners in a livery business. But it is conclusively shown that the livery business referred to did not begin until the summer or fall of 1909, several months after the date of the $1500 note. Nor were the items making up the two notes for $700 explained, except by vague and general statements not sustained by any written or other evidence of particular transactions. Indeed, Raymond Johnson, when pressed on cross-examination for a definite statement of the dealings out of which these obligations were said to arise, became confused and expressed his inability to give the information asked for. As to the component items of the $700, he said they were “different amounts; some would be fifty, some seventy-five, some one hundred and fifty; different amounts along there” during several years; “sometimes selling a horse or trading horses, something like that; different things”. When asked to give a fuller statement of the transactions, he replied: “I can’t, and there aint no use to try to; I don’t remember the’items”. Nor did his brother give the desired explanation. Neither of them seemed to be able, or if able willing, to specify or explain any one of these numerous transactions.

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Related

Smith v. Smith
157 S.E. 37 (West Virginia Supreme Court, 1931)
Elliott v. Johnson
102 S.E. 681 (West Virginia Supreme Court, 1920)

Cite This Page — Counsel Stack

Bluebook (online)
89 S.E. 3, 78 W. Va. 395, 1916 W. Va. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-johnson-wva-1916.