Knight v. Nease

Millee, Judge : Appellants, Henry Lieving and George M. Uease, appeal from a decree of the circuit court of Mason County, made and entered on the 17th day of May, 1901, in the suit in equity, wherein ap-pellee, James L. Knight, was plaintiff, and appellants and 0. C. Sayre, were defendants. Plaintiff filed his bill at the April rules, 1899, wherein he alleges: That on the 18th day of July, 1894, said Hease was the owner in fee of fifty acres of land, situate in the county aforesaid; that on the day and -year last mentioned, said Hease and Sayre executed to plaintiff their note for five hundred dollars, payable twelve months after its date, with interest at eight per cent.; that on the 4th day of May, 1898, plaintiff recovered a — 52 — judgment in said circuit court upon said note, against ISTease and Sayre for $613.83, with interest thereon until paid, and $17.40 costs; that no part of the judgment has been paid, although execution had been issued thereon, and returned unsatisfied; that after the execution of the note, but before the judgment thereon as aforesaid, ISTease transferred and conveyed said real estate to Lieving “for the ostensible consideration as expressed in tho deed, of $800.00;” that at .the time of the conveyance of the land by ISTease to Lieving, ISTease was living upon the land with his family; that it was his home place; that Lieving, was at that time, and still is, tho father-in-law of Jvoase; that while the said deed purports to be for a valuable consi deration as expressed on the face thereof, in truth and in fact, the said George M. ISTease made a voluntary conveyance of the said real estate without any valuable consideration therefor, to the said Henry Lieving as aforesaid, and that no money or other thing of value passed between the said Lieving and the said ISTease as a consideration therefor, and it was a mere sham and a shift to have the transaction to appear to have been founded upon a valuable consideration so as to hinder, delay and defraud this plaintiff in the collection of his said debt; that said canveyance was made by ISTease to Lieving, to' hinder, delay and defraud the creditors of a ease, and especially the plaintiff, and of this intention on the part of ISTease, Lieving had notice at the time of said conveyance, and that he participated therein, and aided Nease in the alleged fraud, by acepting said conveyance; that ever since said conveyance, ISTease has resided on the land as if no conveyance thereof had been made as aforesaid; and that ISTease and Sayre are insolvent. The bill, which is verified by affidavit, then propounds to defendant, Lieving, and to defendant, ISTease, respectively, six several special interrogatories, not necessary to be here set out; and prays that said interrogatories may each be answered; that said deed may be set aside as to plaintiff’s said demand; and for general relief. The joint and separate answer of defendants, ISTease and Lieving, was filed to the bill, “or to so much thereof as they are advised it is necessary or material for them to answer.” They admit that ISTease was the owner in fee of the tract of land described in the bill, on the 18th day of July, 1894; admit the execution of the note, judgment thereon, and non-payment — 53 — thereof., as alleged; admit the coirreyan.ee of the laird by Hease to Lieving; but "ray that about one year before said judgment rvas rendered, respondent, George M. Hease, sold and conveyed to said defendant, Henry Lieving, for the sum of $800.00, the tract of land, and respondents and each of them deny that said deed was made to hinder, delay or defraud the said plaintiff.” "Respondents and each of them say that said deed for said tract of land from said George M. Hease to said Henry Lieving was made in good faith and in truth and in fact, the consideration, $800.00, stated in the said deed, was paid to said George M. Hease by said Henry Lieving. And said Iienry Lieving says that the allegation in said bill wherein he is charged with having knowledge of the intent on the part of said Geo. M. Hease to defraud the plaintiff and other creditors of said Hease, and that this respondent Henry Lieving participated therein, is not true.” Respondents also answered the specific interrogatories, and verified their answer as prescribed by statute. Depositions were taken and filed by both plaintiff and defendants. Sayre did not make any appearance; and as to him, the bill was taken for confessed. On the 17th day of May, 1901, the cause was heard upon the bill, taken for confessed as to defendant, Sayre, and its exhibits; upon the joint and separate answer of Hease and Lieving, with general replication thereto; and.upon the depositions taken and filed as aforesaid; whereupon the court decreed that the defendants, Hease and Sayre, do pay to the plaintiff, $725.83, with interest thereon, until paid, and the costs of suit; that the said deed from Hease to Lieving be set aside and held for naught as to plaintiff’s said demand; and that said indebtedness constitutes a valid and subsisting lien on said fifty acres of land. This is the decree appealed from. The answer in its denials is not as specific and positive as it might be; but its sufficiency or insufficiency is not necessarily a question to be here determined, as this appeal can be decided on other grounds. The interogatories contained in the bill are as follows: “First. Did you, Henry Lieving, know at the time of the said conveyance, or had you been informed at the time of said conveyance that the said George M. Hease had signed a note to the said James L. Kniaht alona with C. C. Savre, for five hundred — 54 — dollars, or any other sum, for a loan of money or for any other thing ? Secvond. Did you, Henry Lieving, pay any money to George M. Hease by reason of said conveyance, and if so, how much and where did you obtain the said money, and from whom ? Third. How far do you live from the residence of the said George M. Kease and how long have you continued to reside within that distance of him, the said George M. Eease? Fourth. What relation were you to the said George M. Kease at the time of the said conveyance, and how long had such relation existed between you and him? Fifth. Who is now living upon the property conveyed to you by George M. Nease by the deed hereinbefore referred to ? Sixth. If you paid any money to George M. Hease for said land did you borrow it, and if so. from whom did you borrow it, and have you paid the party back from whom you borrowed ? If you have paid the money back to the party from whom you borowed it, state where you got the money and when, with which to pay the money back to the party from whom you borrowed it.” And said plaintiff also propounds the following interrogatories, which the said George M. Hease is asked and required to answer under oath: “First. How much money did you, George M. JSTease, receive from Henry Lieving for the transfer of your land as set out and described in this bill? Second. When and where did you receive said money? Third. What have you done with said money, state particularly how you have disposed of the same; whether you have any left of it, and if so, how much and where it is? Fourth. What relation were you to Henry Lieving at the time of the transfer of said land by him to you, and what relation are you now to him? Fifth. Do you still live upon the land which you transferred to Henry Lieving? Sixth. What property did you own at the time of said conveyance made by you to said Henry Lieving, where was it located, what was its character and what was its value?” Lieving, in answer to the special interrogatories thus propounded to him, says that several months before the conveyance was made, he knew that Hease and Sayre had executed the note — 55 — to plaintiff for five hundred dollars; but, at the time of said conveyance, he understood and thought that said note had been paid, off by Sayre; that for said conveyance ho paid ISTease seven hundred dollars cash, which he had had on hand for some time?. and also cancelled a debt for one hundred dollars, due from him: to respondent; that he lived about one mile from ISTease, and had so resided about eighteen years; that, at the time of the conveyance, he was the father-in-law of Kease, and had been for about seventeen years; that Mary L. Nease, mother of Geo. M. Please,, had dower in the tract of land when purchased by respondent, which dower had been assigned and set apart to her by agreement; that since said assignment and allotment, said Geo. Mi ISTease had been living with his mother upon the dower part of the land; that the residue thereof, had been in possession and under control of respondent and his tenants ever since his purchase thereof; that respondent did not borrow any of the money so paid to ISTease for said land; and that said respondent had said money on hands; and had been saving the same up for several years. ■ Defendant, ISTease, in answer to said several special interogatories propounded to him says, that he received from Lieving for the conveyance of the land, seven hundred dollars in money; one hundred dollars of which was paid to him by Liev-ing on the 28th day of May, 1897, at the office of John E. Beller, in Point Pleasant; that six hundred dollars thereof was paid to him by Lieving on the 1st day of June, 1897, at his home in Graham District of said County; that this money was paid to him by Lieving as part consideration for the land conveyed to him by deed, dated on the 28th day of May, 1897; that the balance of the consideration, mentioned in the deed, to-wit, the sum of one hundred dollars was for a debt which he owed to Lieving, and which debt was cancelled by the making of said deed; and that said Lieving paid seven hundred dollars in cash. He further states that he paid out and used said money as follows: To L. W. Brown, $37.50; P. L. Roush, $110.00; for cow, $22.50; for 1897 taxes, $8.91; Marion Rousch, $25.00; S. E. McMillen, $60.00; Bertha McDaniel, $28.00; Bentz and Haywood, $5.00; G. M. .Rickard, $65.00; Dr. L. P. Roush, $26.00; G. McCloud, $4.00; O. A. Kent, $6.50; Waid Cross, $305.00; J. Vr. Lciving, $95.00; that the balance, $203.54, was used by him for maintenance and care of himself and family; and that he then had — 56 — none of said money; that he was the son-in-law of Lieving, at the time of the conveyance, and had been such since 1882; that he then lived with his mother on the dower part of said land; that her house is on the dower-part of said land; that at the time of the conveyance to Lieving, he owned no other real estate; that he then owned a cow of the value of $22.50; a watch, .$25.00; a calf, $5.00; plow, $3.00; harrow, $1.00; hay fork, $2.00; and saddle, $2.00. The said interrogatories having been thus answered, the question arises, as to the effect, if any, which should be given to said answers, either in favor of the plaintiff or of the defendants. It has been suggested that a defendant’s answers to specific interrogatories thus propounded are evidence for him. Whatever the general equity practice in this particular is, or may have been, we hold that this question is now controlled in this State by our statute. In Story’s Eq. Pl., (10th ed.) sec. 38, it is said: “It is clear ■from what has been already said, that the interrogating part of a bill is not absolutely necessary; because, if the defendant fully answers to the matters of the bill, with their attendant circumstances, or fully denies them in the proper manner on oath, the object of the special interogatories is completely accomplished. In the old forms of bills-there accordingly were no special interrogatories. But from ..the considerations already mentioned/ the insertion of special interrogatories is often highly useful to sift the conscience of the defendant, and is almost universal in practice, except in amicable suits. In truth, without such interrogatories, it would be impracticable, in many cases, to extract from a reluctant defendant the facts and circumstances, so as to justify any decree.” Bart. Chy. Pr., Vol. I, 279; Fletcher’s Eq. Pl. & Pr., sec. 76, and cases there cited. These authorities establish conclusively that the interrogatories are a part proper, of the bill; and that the answers thereto are a part of the answer to the bill. The interrogatories and their answers are distinctively parts proper of the bill and answers respectively in this cause. The interrogatories are inserted in the bill before the prayer and verification thereof; and said answers thereto are also in the body of the general answer to the bill. Our Code, chapter 125, section 38, declares: “If the plaintiff desire the defendant to answer the bill on oath, he must verify — 57 — his bill by affidavit, and if tlie bill be so verified, the defendant must, in like manner, verify his answer. But if the bill be not verified, the defendant need not verify his answer, and if he does so it shall not be entitled to any more weight in the canse than if it had not been verified.” In section 59, of same chapter, it is provided: “When a defendant in equity shall, in his answer, deny any material allegation of the bill, the effect of snch denial shall onty be to put the plaintiff on satisfactory proof of the truth of such allegation, and any evidence which satisfies the court or jury of the truth thereof shall be sufficient to establish the same.” In the case of Rogers v. Verlander, 30 W. Va. 619, 639, Judge Green, in discussing this question, says: “The appellant’s’ counsel, it is true, claims that the allegations in the answer of Mary A. Rock in reference to the consideration paid by her to J. W. Yerlander for said three acres of land conveyed by this deed, are to be regarded as evidence in her behalf, against the plaintiff and other creditors of J. W. Verlander, as they were responsive to the allegations on the subject in the bill. * * * To sustain his position that these allegations in the answer are to be considered as evidence for Mary A. Rock against the plaintiff, as they are responsive to allegations in the bill, the appellant’s counsel refer to 2 Story Eq. Jur. sec. 1, 528, and other text-writers. These authorities simply lay down the rule, uni■versally recognized, that prior to the passage of statute law regulating the pleading in chancery causes the rule in equity was, in the language of Story: ‘In every case the answer of the defendant to a bill filed against him, upon any matter stated in the hill, and responsive to it, is evidence in his own favor.’ And the reason given by Story and others for this rule»is: 'As the plaintiff calls upon the defendant on oath to answer an allegation ■of fact, which he malees, he hereby admits the answer to be evidence of that fact.’ ” “But this effect of an answer responsive to a bill has been ■changed by our statute, as well as by the statute-law of most, if not all, of the states. In this State, under our statute laws, answers are not usually sustained by the respondent’s affidavit; ■and their effect has been changed entirely. They are, under our statute law, no longer to bé regarded as evidence in any case, whether they be sworn to or not. They are simply pleading, — 58 — and have effect as such only, just as a plea in a common law-case, whether it be sworn to or not, has no effect as evidence. And hence, to use the language of section 36, chapter 125, Code 1S87, p. 785, ‘every material allegation of a bill, not controverted bjr an answer, shall, for the purpose of the suit, be taken as true, and no proof thereof shall be required.’ This is the exact effect of a plea at common law. And section 38, chapter 125, Code 1887, p. 786, provides that, ‘If the plaintiff desires the defendant to answer the bill on oath, he must verify his bill by affidavit, and, if the bill be so verified, the defendant must in like-manner verify his answer; but, if the bill be not verified, the defendant need not verify his answer, and, if he does so, it shall not be entitled to any more weight in the cause than if it had not been verified.’ In other words, the only weight the answer has-in any cause is the weight attached to it as pleading. In no casé-is it entitled now to any weight as evidence. In this respect it stands on the same footing as pleas at common law. They are-never entitled to the weight of evidence, though the particular plea may be required to be supported by affidavit; as, for instance, pleas in abatement, and pleas of non est factum. See section 39, chapter 125, Code W. Va., p. 786.” In the ease of Johnson v. Ruley, 41 W. Va. 147, Judge Brannon, in his dissenting opinion filed in the case, very tersely states-the same views, as follows: “The bill charged that the deed was-without consideration, voluntary and fraudulent. This called on the party to prove the consideration recited to be true. Rogers v. Verlander, 30 W. Va. 619 (5 S. E. 847). He did not do so, unless his answer be read as evidence. The rule was atone time that an answer responsive to the bill was conclusive evidence in favor of the defendant, unless overcome by two or more-witnesses, or one witness and corroborating circumstances; but my understanding has been,-and, as I had thought, also- that of the profession, that our Code provisions had uprooted that rule and given the answer no force as proof, whether me bill be sworn to or not, or the answer sworn to or not, its only office being now to put the plaintiff to- proof of those things in his bill calling for proof: Chapter 125, section 38, gives the plaintiff right, by swearing to his bill, to search the conscience of the defendant for purposes of discovery by thus requiring a sworn answer; but the answer is not evidence for defendant, as the section says that, if — 59 — the answer be sworn to, it shall not be entitled to any more weight than if unsworn. ISTow, this means that though the bill be sworn to, and the answer likewise, yet the answer shall not-have any more force from being verified by oath. It does not mean that it is no evidence only in the case where the bill is not sworn and the answer is, leaving it to ■ be implied that, where both are sworn, the answer is evidence. The plain meaning is that in no case is the answer evidence. This is plainer from section 59, declaring that when a defendant, in his answer, denies-any allegation of the bill, its effect shall only be to put the plaintiff on proof of the truth of the allegation. Does not this apply to all answers, verified or not verified ? Mr. Barton, in note in his Chancery Practice (page 396) so construes our statute. The very fact that section 59 declares that answers shall only put the plaintiff on proof, coupled with the fact that section 38, treating' of those particular answers that are verified, declares that they shall have no more weight than if not verified, shows a cautious design in the lawmaker to pointedly and expressly so provide as-to them.” Bronson v. Vaughn, 44 W. Va. 406; Kerr v. Hill, 27 W. Va. 576, 605; Jarrett v. Jarrett, 11 W. Va. 584, 630; Bart. Chy. Pr., Vol. I, 424. Why should the interrogatories be evidence, and the other parts of the answer not be such ? It seems to be conclusively established by the authorities, cited,, that the answer is not, nor is any part of it, entitled now to any weight as evidence- Its only effect is to put the plaintiff on proof of the allegations of his bill, denied by the answer. Plaintiff proved by the deputy clerk of the county court of’ Mason County that Lieving was assessed on the personal property books as follows: For the )rear 1897, with three horses, total valuation, $100.00; two cattle, $25.00; two hogs, $10.00; one-carriage, $15.00; and household and kitchen furniture, $30.00, total, $180.00; for the }rear 1896, with five horses, $150.00; six cattle, $60.00; two hogs, $10.00; farming implements, $10.00 •; one carriage, $5.00; and household furniture, $25.00, total. $260.00; for the year 1895, with personal property of a total valuation of $220.00; for the year 1894, with a total valuation of $340.00; for the year 1893, with a total valuation of $360.00; for the year 1898, with personal property all valued at $210.00, it being three horses, two cattle, one hog, two carriages, farming' implements and household and kitchen furniture; but vras not' — 60 — for any of the years mentioned, assessed with anjr money, notes or bonds. The evidence also shows that Lieving was assessed for all of the years mentioned with fifty-five and one-lialf acres of land, at a valuation of $750.00; with five acres at $52.00, and for 1898, with fifty acres, valued at $546.00. Nease did not testify in the case, but Lieving took and filed his own deposition, in which he, in substance, states: That the sale and conveyance of land to him was true and honest; that he could not give the dates when he got the money with which he paid for the land; that part of the money, he got from his wheat crop, but just how much, he did not know; part he got from the sale of young cattle and hogs; and some of it, just how much he did not know, was money he already had; and that he sold the cattle and hogs mentioned by him just before he bought the land. On cross examination, he stated that he supposed he owed on the 1st day of April, 1897, $300.00 to $400.00; that he owed Samuel Roush the largest sum — he could not state the amount exactly — about $200.00; that he thought less than $200.00 — how much less, he did not know; that Roush held two notes; that he did not recollect the amounts; that he could not tell what other parties he owed on April 1, 1897, but would find out, when he went home. He could not state how much wheat he sold, nor how long before the conveyance of the land to him, he sold it; could not say who bought the wheat, nor how much per bushel he got for it. He could not state how many acres of wheat ho.had in 1896; was unable to state how much wheat he sowed on his own place, in 1896; he could not state who threshed his wheat crop in 1896. He stated that he had been renting from Henderson Sayre, but could not say whether he harvested wheat on Henderson Sayre’s land in 1896, or not. He could not tell to whom he paid the money for the threshing. He supposed he sold twelve to fifteen head of cattle in 1897, but could not say who bought them, nor how much he got for them. He did not know from whom he bought the cattle. Did not know how many hogs he sold in 1897; could not say exactly how old they were when he sold them; that he generally raised them; and did not know how much per pound he got for the hogs sold in 1897, although they were sold by the pound. He stated that a part of the $100.00 which Nease owed him was an open account; that some of it had been standing for a long time, he did not know how long — he — 61 — could not tell. "Witness also filed a statement showing that on April 1, 1897, he owed H. K. Coe, $17.70; W. A. Ellis & Co., $175.08; Waid Cross, $24.90; J. C. Hayman, $10.45; H. W. Sayre, $21.50. The deed acknowledges a cash consideration of $800.00 paid, on the date of the deed, to Lease by Lieving, yet the testimony of Lieving, if it is to be believed, shows that only $100.00 was then paid, and that $600.00 was afterwards,, on.the 1st day of June, 1897, paid by him to Lease. Lieving says that he then had the $700.00. AVhy was it not all paid then, instead of the $100.00 ? It is fair to presume that the $100.00 was paid in the presence of Beller, in his office, if it was so paid, because he as notárv public appears to have taken and certified Lievings acknowledgment of the deed. AVhy Beller and Lease did not testify to this matter, is not explained. In as much as the deed is attacked as voluntary and fraudulent, this ommission to testify raises a strong presumption that Beller and Lease would not have supported Lieving’s statement regarding the payment of the $100.00, had they given their evidence. It is also shown that Lieving and Lease were father-in-law and son-in-law; had sustained that relation for about seventeen years; and for all that time had lived within one mile of each other. They must have been thoroughly conversant with each other’s business relations, and financial conditions. Lieving says that he knew of the execution of the note by Lease and Sayre to Knight for $500.00, but was informed that it had been paid by Sayre. Of whom he obtained the information he does not say; certainly not from Knight who could, and no doubt would, have willingly given him the correct information about the matter. He says he generally sold about four hundred bushels of wheat, in the year, but cannot state who bought it, or how much per bushel he received for' it. He also says that the crop he sold shortly before he bought the land was raised by him the year before. He swears that he sold twelve or fifteen head of cattle in the spring of 1897, which were over one year old, yet his assessment for that year shows only two head of cattle, valued at $25.50. As above shown, the largest valuation of personal property with which he was assessed was $360.00 in 1893, and the smallest, $180.00, in 1897. The next smallest was $210.00 in 1898. The list of his creditors filed by him shows quite a number of them. It is not probable — 62 — that Lieving conic! have concealed from the assessor and his creditors, all trace of the $700.00, and the property claimed to have 'been sold by him, but not assessed, if he had possessed the same, as stated. He testifies that he was sixty-three years old, and had rnever done anything but farm. He was a man fully matured, with nothing to divert his mind from his usual vocation, yet he ■cannot, as it seems, recollect, the stock owned by him on his farm, or the wheat produced by his toil. He can, however, prepare and file with apparent great accuracy, tire names of his sev■eral creditors, with the exact sums due to them respectivefy.. This testimony is so contradictory and unreasonable that rve cannot accept it as a guide by which the rights of the parties to this •suit must be determined. The statement of Hease filed with his answer is not less re■markable. He gives tire names of his several- creditors, with the exact amount paid to each. The amounts so given aggregate :$496.46, leaving the net balance of $303.54, of the $700.00, which balance he used in the maintenance and care of himself •and his family. Ho receipts are exhibited by nim for any of said •disbursements. This answer and statement, however, are not evidence, as we have shown. . In addition to this, Hease yet owed the debt; he sold his home, his only land; and has failed to explain the transaction by his ■own evidence. The rule, as to-proof of fraud is stated in 8 Am. & Eng. Enc. Law, 654, as follows: “It is not always necessary, however, that •direct affirmative or positive proof of fraud be given. It may be and usually is proved by circumstantial or presumptive evidence. If the evidence is sufficient to satisfy the mind and conscience of the existence of the fraud, it will be sufficient, although it does not lead to a conviction of absolute certainty. The fraud need not be proved beyond a reasonable doubt. Ballard v. Chewning, 49 W. Va. 508, 519. It was incumbent on Lieving to show that the deed was made for a valuable consideration. Rogers v. Verlander, 30 W. Va. 619; Childs v. Hurd, 33 W. Va. 68; Cohn v. Ward, 33 W. Va. 34; Haman v. Ward, 33 W. Va. 507; Spence v. Smith, 34 W. Va. 697. This he has not done. It also satisfactorily appears from the facts and circumstances in this case, that the deed is fraudulent as to plaintiff’s demand. Goshorn v. — 63 — Snodgrass, 17 W. Va. 717; Hogg’s Eq. Prin., sec. 180; Id. secs. 187, 188. There is no error in the decree complained of. It is, therefore affirmed; and the canse must me remanded to the circuit court of- Mason County, to be therein further proceeded with according to the rules and principles governing courts of equity. Affirmed.