Lund v. Howell

LARSON, Justice. This is an appeal from a judgment of the district court of Salt Lake county upholding and refusing to cancel, annul, and set aside an assignment of an undivided interest in an *234 estate, as a fraud upon creditors of the assignor. The facts are simple. In 1913, Ezra J. Howell, a widower, whose home was at Fish Haven, Bear Lake county, Idaho, married defendant Nellie B. Howell, and they built a house in Salt Lake City, where defendant Nellie B. Howell lived much of the time since. Mr. Howell owned some land, sheep, and cattle in Idaho, and kept his legal residence there. About 1919 the record title to the home in Salt Lake City passed to defendant Nellie B. Howell. In 1928, the Shepherd interests of Idaho obtained two judgments in the courts of that state against Ezra J. Howell in the aggregate sum of $4,881.66. The Shepherd judgments have not been paid, and on April 19, 1929, were by the judgment creditor assigned to Henry J. Howell, a brother of Ezra. Henry J. Howell, on June 30, 1934, assigned said judgments to his son, Ernest Howell. On June 9, 1930, Emmett J. Howell died in Salt Lake City, leaving surviving as his heirs at law, six brothers and sisters, among whom were Ezra J. Howell and Henry J. Howell, and on September 4, 1930, Ezra J. Howell, in writing duly acknowledged before a notary public, assigned to defendant Nellie B. Howell, all his interest in the estate of Emmett J. Howell. In August, 1931, partial distribution was had in the Emmett J. Howell estate and $2,000 distributed to Nellie B. Howell, and $1,000 distributed to her in July, 1933, on a second partial distribution. On May 26, 1934, Nellie B. Howell in writing assigned to defendant David J. Davis all her interest in the Emmett J. Howell estate. Ezra J. Howell died in Idaho on May 14, 1934, being a resident of Bear Lake county, Idaho. One, Dr. Moore, was appointed administrator of his estate in Idaho, and in September, 1934, plaintiff was appointed administrator of the estate of Ezra J. Howell in Utah. The administrator has found no property in the name of Ezra J. Howell in Utah. The above matters are shown either by public records or documentary evidence and are not in dispute. Plaintiff instituted this action to set aside, void, and cancel the assignments from Ezra J. Howell to Nellie B. Howell, *235 and from Nellie B. Howell to David J. Davis, of the interest in the estate of Emmett J. Howell, which vested in Ezra J. Howell upon the death of Emmett, and subject such interest to the payment of the 'Shepherd judgment. A companion case, 92 Utah 250, 67 P. (2d) 223, was brought by plaintiff herein against Nellie B. Howell, alone, to recover the $3,000 she had received on partial distributions. from Emmett’s estate. Plaintiff contended that such assignments were without consideration, and were made to hinder and defraud the creditors of Ezra J. Howell. The trial court held that the assignments were made for fair value and consideration, in good faith, and not to hinder or defraud creditors, and denied plaintiff relief. The challenge of the plaintiff to these holdings presents the only question on this appeal. There is no dispute between counsel as to the rules of law which govern these situations. The question is: Does the evidence support and sustain these findings of the trial court? In an analysis of the evidence we will find the answer. The defendant Nellie B. Howell called as a witness by plaintiff testified: That at the time of her marriage she had about $5,000 of her own money; that $4,000 was put into the house built in Salt Lake City, and the other $1,000 loaned or advanced to Mr. Howell for use in his live stock business, in two $500 loans (April and June) to be repaid in the fall at 7 per cent.; no notes were taken; that in 1921, 1922, and 1923 she advanced to Mr. Howell, and paid bills for him, in the sum of $3,500 evidenced by a series of bank checks signed by Nellie B. Howell, and put in evidence; that this money was derived from a mortgage placed on her home, $3,000 of which was still outstanding, and that during 1926 she further loaned or advanced to Mr. Howell another $1,300, making total advancements of $5,800; that Mr. Howell always promised to repay these amounts with interest on the $3,500, and the $1,300 at 6 per cent, (there are no documents or written evidence of the loans in 1913 or 1925); that after *236 Emmett Howell’s death Ezra offered to, and did give her an assignment of his interest in Emmett’s estate, the assignment being made and signed in the office of O. W. Carlson, attorney for the Emmett Howell estate, and acknowledged before J. Grant Iverson, an attorney and notary. A copy of the assignment was given the same day to Dr. Neher, the administrator. That two partial distributions were had in the Emmett Howell estate, checks for $2,000 and $1,000 being made to Ezra J. Howell, and indorsed over to her. That after the death of her husband she was in need of money, so sold and assigned to David J. Davis for $150 the remaining interest she had in the Emmett Howell estate; that she estimated such interest to be worth, perhaps, $800 to $350'; that she did not know that Ezra Howell, during his lifetime, was unable to pay his bills; that though he needed money at times, and borrowed some, his business was carrying on; that she did not know of the Shepherd judgments until after Howell’s death, though she knew at times he had run an account with them; that some of the money she advanced to Mr. Howell was put into the business by him to enlarge it; that some was used to buy sheep and rams as shown by notations on the checks in evidence, and some to pay some notes of her husband as also shown by notations on the checks; that about the time of the assignment to her they had 4,000 sheep clear of encumbrance which were later mortgaged by Howell to the Kemmerer Bank, and foreclosed after his death; that Howell was not insolvent or unable to pay his debts in due course of business until 1932 or 1933, if at all. David J. Davis testified that in 1934 Mrs. Howell sold and assigned to him her interest in the Emmett J. Howell estate for $160:; that he paid $10 cash and a check for $150 drawn by Loraine Bagley of Salt Lake City; that he knew the Emmett Howell estate was mostly stocks, but did not know what the interest was worth. This is substantially all the evidence pertaining to the assignments. The administrator’s report in the Emmett Howell estate filed in December, 1934, after the assignment to *237 Davis, shows the balance on hand to be about $8,253 represented by stock of various kinds, the values of which were estimated by the administrator. The record does not disclose if there were any outstanding debts or what the probable further expenses of administration would be. It does show that from time to time there were assessments to be paid on some of the stocks. There were six heirs at law to share the remainder whenever distribution should be had. Appellant assails the testimony with respect to the assignments, not by evidence from other witnesses, but upon claimed uncertainties and evasions in the testimony of Mrs. Howell, which he claims throws doubt upon the narration of the events noted above. There is no proof that Howell was insolvent except the existence of the Shepherd judgments unpaid, and the plaintiff’s declaration that he had not been able to find any property in Utah in the name of Ezra J. Howell. Appellant’s position is stated in these propositions: ■ A conveyance by a husband to his wife of all his property is fraudulent against creditors even though she does not participate in the fraud and no actual fraud need be shown; an assignment giving preference indicates fraudulent intent, and such intent voids the assignments as against creditors; where a conveyance showing nominal consideration sideration leaves a debtor unable to pay his debts, the burden is upon the grantee to show sufficient consideration and good faith; and where a conveyance is to a near relative, in a creditor’s suit, the burden of showing good faith is on the grantee. As legal postulates, these statements may be accepted, but the question is: What force and effect is to be given to the evidence as noted above? Did Mrs. Howell sustain the burden of showing good faith and sufficient consideration for this assignment? She satisfied the trial court on both questions. Since this is an equity case and we may weigh the evidence and pass upon it, we have painstakingly gone over the transcript in the light of appellant’s argument, and we also must conclude that Mrs. *238 Howell sustained her burden of showing good faith and fair consideration. This is not a situation like the case of Paxton v. Paxton, 80 Utah 540, 15 P. (2d) 1051, where all the testimony was merely the oral testimony of the parties to the transaction. At least $3,500 advanced in 1921, 1922, and 1923 are shown by documentary evidence. The checks themselves are in evidence, signed by Nellie B. Howell, and many of them containing corner notations such as “Part payment on fifteen rams” (for $210); another for $150 marked “for lambs”; another for $720’ marked “to cover note.” Others are identified in the evidence as payments for sheep; for hay, and other matters. All seem to be drawn in favor of people in and about Bear Lake county where Howell did his business. This was the money received from the mortgage on Mrs. Howell’s home. As to this sum there is supplied in definite documentary evidence the very proofs the court demanded, and noted as missing in the Paxton Case, supra. Were we to disregard the items of $1,000’ claimed in 1913, and of $1,300 in 1925, this item of $3,500 with interest at 6 per cent, would amount, at the time of the assignment to Mrs. Howell, to the sum of $5,180 or $1,000 more than the record indicates could possibly be realized upon the assignment to Mrs. Howell. Without further comment, we think the evidence sustains the finding of the trial court. Since the assignment from Ezra J. Howell to Nellie B. Howell is valid and effective, of course appellant is in no position to question the validity of the second assignment from Mrs. Howell to Davis. We remark, however, that we think the evidence amply sustains the findings of the trial court that this assignment also was made in good faith, for sufficient consideration, and not to hinder or defraud creditors. Appellant contends that the trial court erred in one of its conclusions of law, “The claim of plaintiff herein was barred by sections 6607 and 6611, Idaho Compiled Statutes *239 1919.” The court does not find as a fact that the action is barred by limitations, but does include the quotation above in the conclusions of law. It can make no difference in the instant case whether the court was right or wrong in this conclusion, because since the assignments are valid the judgment must be affirmed regardless of the view that may be taken upon the question of limitations. The judgment of the district court of Salt Lake county is affirmed. Costs to respondent. FOLLAND, C. J., and HANSON and MOFFAT, JJ., concur.