Bruggerman v. Hoerr

By the Cowrt Emmett, C. J". The Plaintiff is a judgment creditor of one John Keck, and as such brings this action — 341 — against him and bis grantees, to set aside certain conveyances of Keck’s real estate, which are alleged to have been made to defraud creditors, and particularly to defraud the Plaintiff. The judgment which he recovered against Keck was rendered long after the execution of the conveyances against which he asks relief, hence it became important for the Plaintiff to show the relation which he bore to Keck at the time they were made. And to this end he alleged in his complaint that Keck was, at and prior to the making of said conveyances, indebted to him in a certain sum. That he, at a specified time, which was about the time the deeds bear date, commenced his action to recover said debt, and afterwards recovered judgment against said Keck for the amount thereof. The Defendant Hoerr to whom all of the lands were conveyed, either by Keck himself, or Klugorty, his grantee, answers, denying all allegation of fraud, and that Keck was indebted to the Plaintiff at the time the several conveyances mentioned were executed, and avers that he paid a fair and adequate consideration for the lands, setting forth the particulars thereof in detail; and that said lands, or a specified portion thereof, were at the time occupied and claimed by said Keck as a homestead. The reply is chiefly directed to the allegations of the answer concerning the consideration paid by Hoerr for the lands, and the claim of a homestead therein by Keck. On the trial the case seems to have been submitted to the jury on certain written interi’ogatories, but the paper books furnished us do not inform us whether all the issues were submitted, or only the particular facts embraced in the several written interrogatories. The action itself is one in which the issues of fact should all be tried by the Court, unless by consent of parties or order of the Court, they or specific facts /involved therein are submitted to the jury or referred. The jury found specially, upon the interrogatories submitted to them, — that the several deeds were made with intent to defraud the Plaintiff of his debt against Keck, — and that Defendant Hoerr had notice of such indebtedness and intention to defraud, — and that he received the conveyances- to himself in aid of Keck’s fraudulent design. But they also — 342 — found that tbe indebtedness of Keck to tbe Plaintiff was for moneys advanced by Plaintiff to purchase a portion of Keck’s pre-emption claim, before .tbe same was pre-empted, and that Hoerr bad no notice of any other indebtedness from Keck to the Plaintiff. Upon this finding tbe Defendant moved for judgment, and tbe Court having granted tbe motion, tbe Plaintiff appealed from tbe order granting it. He now insists that the finding of tbe jury in regard to tbe nature of tbe alleged indebtedness of Keck to tbe Plaintiff, was not responsive to any allegation contained in tbe pleadings, and therefore should not have been considered. "We think,' however, that as tbe facts tended directly to disprove tbe allegation of Keck’s indebtedness, they were admissible under that issue as evidence, without being specially pleaded. Tbe Defendant traversed tbe allegation of indebtedness in tbe words of tbe allegation, and that was sufficient. He was not required to be more sjmcific. than tbe Plaintiff. Tbe Plaintiff further urges that tbe judge, on tbe bearing of said motion, was not authorized to go behind tbe verdict, and consider tbe evidence on which it was founded ; and that, as it is apparent from tbe opinion filed, that tbe Court did base bis opinion on. tbe evidence as be remembered it, and not upon the verdict alone, tbe order should be reversed. It was unnecessary, perhaps, for tbe judge to make any effort to sustain tbe correctness of tbe finding, by a reference to tbe evidence on which it was founded, because the verdict itself was conclusive on that point; but still we cannot see bow it can affect tbe merits of the order, for him to show that tbe evidence fully justified tbe verdict in this particular. Tbe most important question, however, raised in this case, one in fact involving tbe right of the Plaintiff to relief under any circumstances, is whether tbe judgment which tbe Plaintiff recovered against Keck is conclusive in this action, and '■precludes tbe Defendant, Hoerr, from inquiring into tbe alleged indebtedness on which it was founded. < There seems to be a strange dearth of authorities on tbe ¡ point here' presented. Neither party has produced or cited a Wgle case, that we have been able to find, that can be said to — 343 — bear directly upon this question. Reasoning from principle and analogy, however, we have found little difficulty in arriving at conclusions satisfactory to ourselves. We have before remarked, in substance, that the Plaintiff was himself obliged to go behind the judgment, and aver an indebtedness to him at the .time of the making of these conveyances, because the judgment was not of itself sufficient, having been rendered long after the lands had been conveyed. It was, therefore, essential to the success of the Plaintiff in this action, that he should show himself to have been a creditor of Keck at the time of the transfer. The issue upon this point was, in fact, one of the main issues in the case, for unless Keck was then indebted to him, the Plaintiff was not in a position to be prejudiced by any disposition which Keck might make of his property. But whether Keck was so indebted depends entirely upon the facts as they then existed, — not as they have since been moulded by subsequent events. If he had a claim or demand which could then, or when it became due, be legally enforced against Keck, he was a creditor. But if his claim or demand was not of a character to be légally or equitably enforced, he was not accreditor, in our opinion, and therefore could not be prej udiced by any disposition which Keck might choose to make of his property. And if the conveyances were not invalid at the time they were executed, as a fraud upon the rights of the Plaintiff, (and it does not appear that at that time or since, there was any other person to whom Keck was indebted), it seems clear that they could not be vitiated by the subsequent act or omission of the grantor, to which the grantee was not a party. What then was the character of the Plaintiff’s claim against Keck ? The jury have found that the alleged indebtedness was for moneys advanced by the Plaintiff for the purchase of a portion of Keck’s pre-emption claim, before the same was preempted. And this Court has held, in the case of The St. Peter Company vs. Bunker, 5 Minn., 192, that such a contract is in violation of law, and against public policy, and that money paid thereon cannot be recovered back. Under this decision, — 344 — it is plain that the Plaintiff had no claim which he could then or at any subsequent time legally have enforced against Keck. He was not indebted to the Plaintiff, and the conveyances were not, therefore, at the time they were executed, in fraud of the Plaintiff’s rights as a creditor. They were valid as between the parties thereto, and equally so as against the Plaintiff, whatsoever may have been the intention with which they were made and received. But, says the Plaintiff, I have since recovered a judgment on the claim which I then had, and the Defendants cannot now deny that the indebtedness oh which it was founded was proper and legal. This may be true as to Keck, who was a party to the action, but we cannot admit that the proposition is correct as to the other Defendants, who are not parties' to said action, and had no opportunity of' defending against the Plaintiff’s claim, against Keck. We do not recognize the power1' of a grantor, under such circumstances, to destroy or impair the title of his grantee, by neglecting or refusing to make a proper defence to an action against himself alone, in which the title was in no way involved. That Keck could easily have defeated the action, is apparent from the finding of the jury in the case. And his failure to make the proper defence, whether by collusion with the Plaintiff, or through indifference as to the result of the action, would be a fraud upon his grantee, if the judgment were allowed to affect the conveyances. : Again, as the Plaintiff has himself found it necessary to go behind the judgment and appeal to the facts as they existed at the time of the transfers, why should he not be bound by them ? He alleged that Keck was at that time indebted to him, a fact necessary to his recovery in this action. Why may not the Defendant, after traversing this allegation, show that no such indebtedness existed ? I cannot understand how the allegation may be traversed, but not disproved. It appears to me that the doctrine contended for by the Plaintiff, would enable the grantor to defeat his own conveyance at pleasure, and place the grantee entirely at his mercy. A conveyance valid and operative when executed, should not be vitiated by the acts or omissions of a party no longer inter- I — 345 — ested in tbe subject matter conveyed. Nor should tbe bolder of a title, perfect in its inception, be divested of bis estate at tbe will of another over whom be can exercise no control. Again, our statute is in the terms following : “ Every conveyance of any estate or interest in lands * * * made with intent to hinder or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts or demands, * * * shall be void” as against the person so hindered and defrauded. This, as well as the statutes of most of the United States on the same subject, is taken from the English Statutes of 13 Eliz. and 27 Eliz.; but as the English statutes do not make use of the term “ lawful,” may we not conclude that our Legislature inserted it (to exclude the idea that such conveyances could be declared void as against any one holding a claim or demand that could not be enforced in a Court of justice ? The order appealed from is affirmed.