Pettyjohn v. Newhart

The opinion of the court was delivered by McElroy, J. : Complaint is made that the seventh finding of fact is not sustained by the evidence. This complaint is directed to that portion of the finding which states that “Catherine Cochran was indebted to Newhart for board and lodging for three years next prior thereto in the sum of $468.” The undisputed facts are, that Catherine Cochran boarded with Newhart for 156 weeks next prior to November 14, [68] 1890, and that such board was reasonably worth $468. It is insisted that as the board was furnished without any previous express promise to pay for the same, such charge was not collectable. There is no merit in this contention. If Catherine Cochran resided with Newhart, her son-in-law, as a member of his family, without any express previous promise made to pay for her board, there is no apparent just reason why she should not compensate him if she desired so to do. (Howard v. Rynearson, 50 Mich. 307, 15 N. W. Rep. 486.) The plaintiffs in error contend that the court erred in giving Newhart a first lien upon the property for $3110.34, and in not setting aside, unconditionally, the deed of Catherine Cochran to Newhart as a fraud upon her creditors. Mrs. Cochran had the right to convey this property to Newhart, subject to the judgments and tax liens, in payment of her indebtedness to him upon the notes and her account for board, and she was not guilty of actual fraud in so disposing of the property. A debtor in- failing circumstances may prefer one or more of his creditors. This is true although it may take all of the debtor’s property, and there may be other creditors who get nothing. It is only required that the creditor act with a real view to the securing of his actual debt. (McDonald v. Gaunt, 30 Kan. 693, 2 Pac Rep. 871; Farlin v. Sook, 30 id. 401, 1 Pac. Rep. 123; Bailey v. Kansas Mfg. Co., 32 id. 73, 3 Pac. Rep. 756;. National Bank v. Croco, 46 id. 629, 26 Pac. Rep. 942.) A conveyance made upon a valuable consideration is not presumed to be fraudulent, and the extent of the grantor’s indebtedness is wholly immaterial. The creditor who receives a conveyance from his debtor in good faith, and without intent to [69] defraud other creditors, will be protected as against them, though he had knowledge that the debtor was in failing circumstances. It is wholly immaterial that Newhart, by the exercise of proper care and due diligence, could and would have known of the existence of the debt and claim of J. L. Pettyjohn & Co., at the time and before the execution, delivery and acceptance of the deed, provided he received the conveyance from Mrs. Cochran in good faith and without intent to defraud her other creditors. A creditor has a right to secure his own claim, although he may know by so doing other creditors will lose their claims. In Schram v. Taylor, 51 Kan. 547 (33 Pac. Rep. 315), the court says : “A creditor who in good faith, takes the property of his debtor, at a fair valuation, in payment of an honest debt, is not guilty of defrauding any one; and the fact that the payment of his debt in this manner may absorb the entire property of the debtor is no evidence of bad faith on the part of the creditor, and it does not necessarily taint the transaction with fraud.” The cases cited by counsel for plaintiff in error are not applicable to the case at bar. They are cases of actual fraud on the part of the grantor, which fraud was known to the grantee, or might have been known to him by the exercise of reasonable diligence. There was no intentional fraud on thepartof Mrs. Cochran, the grantor. The defendant in error acted in all respects in entire good faith. The court included in the defendant in error’s prior lien the claim for support, maintenance and care of Catherine Cochran from the 14th day of November, 1890, until the date of her death, and her funeral and burial expenses, all together amounting, with interest, to $742. This was erroneous. This claim for $742 should have been subordinated to the judgment of [70] the plaintiffs in error, and the judgment of the trial court should be so modified as to order the proceeds of sale to be applied to the .payment of the claim of Phillip Newhart in the sum of $3110.34, less the item of $742, which latter item should be paid after the payment of the claim of plaintiffs in error. The judgment will be modified so as to conform to the views herein expressed, and affirmed as modified. The costs of this proceeding in error will be divided equally.