Dirks v. Union Savings Ass'n

McCOY, J. Plaintiff brought this action to he adjudged) the owner of a certain savings certificate. 'Findings and judgment were in fatvor of defendants, from- which -plaintiff appeals on -the ground that tire findings do- not support the' judgment. The facts ae stated in the complaint and ais found by the court are, in substance, that ablout a .week prior to- 'his death the late Peter B. Dirks, plaintiff’s 'hu'sba-nd, voluntarily -and without consideration gave her a certificate representing ten -shares of the stock of the Union Savings Association, by delivering said1 certificate to1 her and promising to indorse the s-ame sio that it would he transferred on the hooks of said association; that the plaintiff took and' retained said certificate until after her husband’s defit’h, and, without intending to pant with ’any right or interest therein, she turned it over to tíre administrator of the estate, together with oltiher papers; tíiaJü -s-aid certificate of stock had a book value of $977.57; that said -certificate was never indorsed by said Peter B. Dirks, -and! the Said stock was never transferred to the iplaiinfiff on the books of said association; that at the time salid certificate was so given and delivered to plaintiff, the said Peter B. Dirks' was indebted to various creditors in th'e sum lof -about $150,000-, and) that the [assets of hi-s estate did mot exceed in value the sum of $60,000; and that the estate of said [531] Peter B. Dirks is and was insolvent at the time when' he -gave said certificate to plaintiff. From the facts so found the trial court 'Concluded that tire said 'Certificate of stock was given to plaintiff by her husband1 without any consideration therefor a,t a time when he was insolvent, and that therefore itlhé said gift was a fraud upon his creditors, and1 that the same should be held to belong to the estate of said decedent, 'as assets, and- not to the 'plaintiff. [1, 2] By this appeal the appellant presents the questions, Did the ownership of the certificate pass to the plaintiff, ¡and are the findings of fact sufficient to sustain the judgment giving the certificate to the defendant administrator for the benefit iotf the estate of the decedent, in that the -complaint did not allege nor the findings state that said gift was made with intent to defraud creditors. As to the first proposition, we are of the view- 'and so hold, that title- to the said certificate did pass to the plaintiff, but that the title so passing was qualified and sub-j ect to be set aside, under the circumstances iotf this case, ia.s an actual constructive fraud upon the -creditors of -said decedent. ¡Some contention is rrfade, and authorities cited, to the effect that the administrator Coul-cl not -sue in equity to avoid the gift where title had passed by conveyance made, by deceased in (his lifetime, to defraud creditors. This seem-s to be the general rule, in ,the absence of statute, prevailing in many jurisdictions ; but it certainly is not the rule in this jurisdietiloln. Under the statute of this state (section 250, Probate Code) an administrator is expressly authorized to maintain this land of action, when there is a deficiency of assets to pay the credlitors- of a decedent. Section. 250 of -our Code is the same as section 1589, Code Civ. Pr. of California. This section of the California- Code has been frequently construed by -the courts of that state. Ohm v Su.pr. Ct., 85 Cal. 545, 26 Pat. 244, 20 Am. St. Rep . 245; Field v. Andrada, 106 Cal. 107, 39 Pac. 323; Shields v. Nathan, 12 Cal. App. 604, 108 Pac. 34; Smith v. Ins. Co. (C. C.) 57 Fed. 133; Sifford v. Cutler, 244 Ill. 234, 91 N. E. 428, 135 Am. St. Rep. 326, 18 Ann. Cas. 36, and note. [3] As between husband and wife a voluntary transfer of property hv gift in consideration, -of love and1 affection- only is a good consideration as between them, but it is not a sufficient -consideration as against •creditors of the do-n-or. Siu-ch a transfer operates as a constructive -and; actual fraud upon -creditors, and may -be set aside [532] at the suit of creditors, Although the -parties feoi the transfer may not have had1 in mind any actual present intent to commit such a fraud. The effect is ’the same in- either case, whether fraud was intended Or Hot; when the'donor is insolvent. In’ the-eye erf the law- every one is presumed to intend1 the natural consequences of -his own acts. At the time the gift in question, Peter B. Dirks must 'have known of his insolvency,' and’ the law will1 impute to him’ a constructive intent to hinder and delay bis: creditors in the eclllectiom of their debts -by the making of the -gift in question. 20 Cyc. 522; Moore on Fraudulent Conveyances, 263 Whitehouse v. Bolster, 95 Me. 438, 50 Atl. 240; Gardiner Sav. Inst. v. Emerson, 91 Me. 535, 40 Atl. 551; Baker v. Hollis, 84 Iowa, 682, 51 N. W. 78; Shaw v. Manchester, 84 Iowa, 246, 50 N. W. 985; Milholland v. Tiffany, 64 Md. 453, 2 Atl. 831; Knight v. Kidder (Me.) 1 Atl. 142, and note; Houston v. Blackman, 66 Ala. 539, 41 Am. Rep. 756; Woodruff v. Bowles, 104 N. C. 197, 10 S. E. 482; Smith v. Ins. Co. (C. C.) 57 Fed. 133. Intent to’ defraud on the part of the donor alone is sufficient to avoid the gift.- Bump on Fraudulent Conveyances, p. 268 . 'Finding-no error in the record, the judgment appealed from is affirmed.