Murray v. Shoudy

The opinion of the court was delivered by Dunbar, J. This was an action brought in aid of a judgment which appellant had procured in the superior court of Kittitas county against respondent John A. Shoudy. The allegations of the complaint were non-satisfaction of the judgment, the return of nulla bona, the insolvency of the respondent, John A. Shoudy, and the conveyance by him, joined by his wife, the respondent M. E. Shoudy, of the lands described in the complaint, to the respondent Dexter Shoudy, who is the husband of the other respondent, Hattie Shoudy. It was alleged that the conveyance was made without consideration, and for the purpose and with the design of hindering, delaying and defrauding creditors, etc. The respondents answered, denying the indebtedness of the respondent John A. Shoudy to the appellant, and the other allegations of the complaint in regard to the judgment. They admitted the relationship of the parties and the conveyance of the premises described in the complaint to the respondent Dexter Shoudy, but alleged that the conveyance was made in- good faith and for a valuable consideration, in payment of a valid and subsisting indebtedness then due and owing from the respondents John A. Shoudy and M. E. Shoudy to the respondent Dexter Shoudy. On these issues the case was tried by the court and at the close of the plaintiff’s testimony the court, on motion of the defendants, [35] granted judgment of non-suit, to which exception was taken. No findings of fact or conclusions of law were made hy the court. The respondents object to the trial of this case de novo in this court for the reason that no findings of fact were made by the court and that none were requested by the appellant. This court has held in several cases that, under the provisions of § 21, page 130, of the Laws of 1893, no question of fact would be reviewed by this court when exceptions to the findings of fact and conclusions of law had not been taken; but it seems to us that this case presents a different question. The only object of excepting to the findings is to bring the matter to the attention of the court, and the object in requesting the findings is to except to the same for the same reason. There was but one proposition announced by the court in this case, and that, it seems to us, was a legal proposition, viz., that, conceding the evidence introduced by the plaintiff to be true, as a question of law, it was not sufficient to sustain the allegations of the complaint, and no other finding could have been made by the court, and it would have been useless to have requested a finding which would have been simply a repetition of the conclusion already announced by the court. It is also objected by the respondents that the statement of facts furnished by the appellant in this case was not such a statement as they should have been required to answer, or have been called upon to amend, and that, therefore, this court will not review the testimony from the fact that the presumption is that the testimony is not all here, it having been reduced to narrative form. This court could not reach such a conclusion without disregarding the certificate of the trial judge who testifies that the said statement [36] of. facts and exhibits attached contain all the material facts,. matters, things and proceedings . occurring at the trial. On the merits, we are of the opinion, from an investigation of the testimony, so far as it was admitted, that the conclusion of the lower court, that the same would not sustain the allegations of the. complaint is correct. This court in various decisions has made a distinction between insolvent corporations and insolvent individuals, so far as the application of their funds is concerned, and we think, under all the decisions heretofore rendered by us and under the authorities generally, that, from the testimony in this case, the transaction between John-A. Shoudy and Dexter Shoudy was a justifiable and legal one. • ■ But it appears from the record that the’ plaintiff offered to prove, by witness Leonhard, who testified that he was familiar with the actual market value of the lands and, premises conveyed in- the deed mentioned and described in the complaint,’that the value of the land so conveyed was greatly -in .excess of the the sum for . which the defendant, Dexter Shoudy, claimed to be surety for the defendant, John A. Shoudy (this conveyance, having been made by Shoudy, father, to Shoudy, son, in consideration of a promise on the part of Shoudy, son, to pay certain debts due-from Shoudy, father). This testimony -was objected to by the respondents and the objection was sustained by the court. This, we think, was plainly error on the part of the court. It is suggested in the brief of the respondents that, under the pleadings in the case, this, testimony was immaterial .because the complaint .did not charge fraud. We, think the authorities cited under this head by the respondents do not bear them out. They are simply t.o the effect [37] that general allegations of fraud are not sufficient hut that the matters constituting the fraud must be pleaded. This proposition cannot, of course, be gainsaid, but it seems to us, from an examination of this complaint, which alleges that “ at the time said deed was so executed by the said John A. Shoudy and M. E. Shoudy to the said Dexter Shoudy' the said John A. Shoudy and M. E. Shoudy were wholly insolvent and unable to pay their debts; that the said Dexter Shoudy is a son of said John A. Shoudy and M. E. Shoudy, and plaintiff avers that said deed was so executed by the said John A. Shoudy and the said M. E. Shoudy to said Dexter Shoudy without any consideration therefor; that no money or thing of value was paid or to be paid for said premises, but that such conveyance was made for the sole purpose of hindering, delaying and defrauding the creditors of the said. John A. Shoudy and M. E. Shoudy, and particularly the plaintiff herein, and for the purpose of placing said property beyond the reach of the creditors of said John A. Shoudy and M. E. Shoudy, and for no other purpose whatsoever,” that the particular circumstances or acts constituting the fraud are set out as explicitly as they possibly could he in a case of this kind. Considering the relations existing between the. main actors in this transaction, the widest latitude should be given to the investigation of the question of fraud, and one of the surest indications of fraud in a transaction of this kind would be the showing that the property which had been placed beyond the reach of creditors was largely in excess of the consideration expressed, or of the amount of the debts alleged to have been the consideration; and while, in the absence of this showing, as we have before indicated, this court feels justified in affirming the decision reached by the lower [38] court, .yet we are not prepared to say that we would feel so justified if it should appear that there was a material .difference shown between the value of the land sold and the debt which was assumed. For this reason the judgment must be reversed and the cause remanded with instructions to the lower court to admit the testimony rejected. Hoyt, C. J., and Scott, Anders and Gordon, JJ., concur.