Matlock v. Alm

BENNETT, J. 1, 2. We are satisfied with the findings of the court below as to the character of the conveyance in question. It seems to be the established practice in this state, where the transaction is tona fide, but the consideration inadequate, to treat the conveyance as a mortgage, and permit the property to be sold, and the proceeds applied, first, upon the amount actually due from the grantor to the grantee; second, upon the claim of the judgment creditor: Morrell v. Miller, 28 Or. 354 (43 Pac. 490, 45 Pac. 246); Hazeltine v. Epsie, 13 Or. 301 (10 Pac. 423) . Neither shall we disturb the findings of the [713] court below as to the amount expended for repairs of the automobile, or as to the depreciation thereof. 3, 4. We think, however, the court should have allowed the defendant, Julius Aim, the amount expended on behalf of his son for attorneys’ fees, etc., in defending the actions at law. The respondent cites upon this question a paragraph from 20 Cyc. 492, and also National Bank v. Croco, 46 Kan. 629 (26 Pac. 942); Ringold v. Leith, 73 Ill. 656; all of which seem to be in point and support plaintiff’s contention, and were, no doubt, followed by the court below. However, the case of Morrell v. Miller, 28 Or. 354 (43 Pac. 490, 45 Pac. 246), seems to be on all-fours with this case and decisive of this question. In the latter case the plaintiff had a judgment against one Miller, who had seriously wounded him in a shooting affray. After the shooting Miller was indicted for the offense, and the plaintiff also brought suit against him, to recover damages for his injuries. Under these circumstances, Miller executed two deeds, absolute in form, for the purpose of securing to his attorneys the amount of their fees, for services to be performed in defending him on the criminal charge and against the civil claim. Judge Wolverton, delivering the opinion of the court, said: ‘ ‘ There was some attendant indicia of fraud, such as the transfer of all Miller’s property of such considerable value to Lord; the declaration of a secret trust in connection therewith; and the inadequacy of consideration for the second deed. But, upon the other hand, Miller was deeply interested. He was in the toils of the law, charged with a grave offense, and his object was to extricate himself therefrom. The purpose of making such use of his property as to secure able counsel to conduct his defense, and to attend to other apprehended litigation, was perfectly legitimate. His [714] right to he heard by counsel is a constitutional right, and he should be permitted, unless hindered by legal process, the free and untrammeled use of his property to obtain legal assistance, otherwise constitutional privileges would be invaded! Upon the whole, we believe the second deed was intended to be and operated as an absolute conveyance of the title to said premises, and we are unable to say from the evidence that it is fraudulent and void as to creditors. But the transaction is attended with such suspicious .circumstances that we ought not to permit the conveyance to stand, except as security for such liability as Miller legitimately incurred to meet the expenses of impending litigation, under the doctrine laid down by Chancellor Kent in Boyd v. Dunlap, 1 Johns. Ch. (N. Y.) 478: ‘When a deed is sought to be set aside as voluntary and fraudulent against creditors, and there is not sufficient evidence of fraud to induce the court to avoid it absolutely, but there are suspicious circumstances as to the adequacy of consideration and fairness of the transaction, the court will not set aside the conveyance altogether, but permit it to stand for the sum already paid.’ ” The opinion in this case was followed in the Supreme Court of Washington in Zent v. Gilson, 52 Wash. 319 (100 Pac. 739), and in Farmers’ Bank v. Mosher, 63 Neb. 130 (88 N. W. 552), and may be said to be a leading case upon this branch of the law. It follows that the defendant, Julius Aim, was entitled- — in addition to the amount allowed by the court — to have the attorneys’ fees and the expenses paid out for the benefit of his son in the actions at law, held as a prior lien against the claim of the plaintiff. 5. But we think he was not entitled to the attorneys’ fees and expenses paid in the law actions on his own account. If there was any obligation on the part of the defendant, Christian Aim, to reimburse his father for these sums, it was at the best, no more than a moral [715] obligation, and such an obligation seems to be insufficient as against tbe creditors, as a consideration for a conveyance of tbis kind: 20 Cyc. 490, subd. 3, and authorities cited. In tbis case tbe amounts paid in bis son’s bebalf are not segregated in tbe testimony from tbe amounts paid for himself. Tbe amounts paid were $476.70 in one action, and $274.60 in tbe other, totaling $751.30. We think it fair to assume that half of tbis sum was for bis own benefit, and half for tbe benefit of his son; therefore, one half of $751.30, or $375.65, ought to be added to tbe $560 allowed by tbe court for repairs. 6. It does not appear in tbe evidence when these sums were paid out for attorneys’ fees, etc., by Julius Aim. Indeed, it appears that all of them bad not yet been actually paid at tbe time this suit was tried. Under all these circumstances, we think interest should not be allowed on tbis part of tbe claim. Tbe decree should provide that tbe $560 with interést, as decreed by tbe lower court, and tbe sum of $375.65, should be made a prior lien upon tbe property in bebalf of tbe defendant, Julius Aim. With tbis modification the decree of tbe lower court is affirmed. Affirmed. McBride, C. J., and Bean and Johns, JJ., concur.