Case ID: iowa_206/html/0649-01.html
Source: Caselaw Access Project
Author: {"author": "Morling, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Margaret V. Coburn, Appellant, v. Delmar L. Davis, Appellee.
    September 28, 1928.
    
      
      F. L. Meredith and Frank T. Jensen, for appellant.
    
      Miller, Kelly, Shuttleworth & McManus, for appellee.
   Morling, J.

The decree in Coburn v. Davis was entered June 14, 1924. The purported assignment by Coburn to his wife, the applicant, is dated April 27, 1925. Coburn’s former wife, Eflie Coburn, sued him for divorce, and in January, 1925, obtained decree for divorce and for payments of alimony. Only one payment of alimony appears to have been made. On April 29, 1925, a judgment was entered in favor of the Dreseher Company against Coburn for $262, with interest and costs. Davis was a party defendant to the Dreseher Company ease, but, as we infer, to foreclose him of some property interest. No judgment was rendered against Davis. The Dreseher judgment, on June 22, 1925, was assigned to Davis. Execution issued on September 12, 1925, and was levied on the interest of Coburn in the decree in the action of Coburn v. Davis. The applicant, Margaret Y. Coburn, gave notice of ownership and demand for release, verified by her attorney. Appraisers were appointed, and the property levied on (Coburn’s interest in the decree) was appraised at $100. Notice of execution sale was published. The sale was twice postponed for want of bidders. Coburn’s interest in the decree was sold, under the execution, at the adjourned .sale, to Davis for $66.67. The defendant, Davis, founds on this execution sale his resistance to the application and his contention that he is the owner of Co-burn’s interest in the decree; that applicant has no interest therein, and is not entitled to reports.

Applicant’s argument is based upon her abstract of the record. Since her argument was filed, appellee has filed an amendment to abstract entirely changing appellant’s abstract.

There is no denial of the amendment. A number of questions of law and fact suggesting themselves to the reader are evidently considered by both parties as not involved in the ease as it actually is, and will, therefore, be ignored by us. -Hence no implications of- the determination of any questions except those discussed are to be drawn.

I. One,of appellant’s points is:

“To prove a fraudulent conveyance, direct evidence of the conduct of the grantor, or grantee, shoiild be introduced. If fraudulent conduct' or words are not proven, strong circumstantial evidence of- fraud must be introduced.”

The uvidenee dearly shows- that Coburn was in financial difficulties, - and involved in criminal' prosecutions. After Co-burn’s former wife got her divorce from him, his present wife procured a divorce from her then husband. The attorney who represented Coburn in his divorce proceedings represented applicant in her divorce proceedings. Coburn guaranteed to' this attorney his fees in the applicant’s case. The attorney has beeri unable to collect his fees and a printer’s bill incurred in the case.. This attorney investigated Coburn’s affairs, and, as appears in the amended abstract, testifies, without objection:

“During my negotiation with Coburn, and .when I intimated that Í might bring suit against him to collect, the printer’s bill and my own attorney’s fees, he told me his money was all in his mother’s name, and that nobody could get anything out of him unless he wanted to pay them. He told me that the house he had bought on Fifty-ninth Street, had been bought in his wife’s name. That is -the same woman for whom I procured the- divorce, and the second Mrs. Coburn. * * * He told me about the money, being in his mother’s name, and having deeded the property to his wife, and for that reason it would do me no good to institute proceedings against him. * * * During the course of my investigation,. I was unable to find assets belonging to H. C. Coburn of any kind within the.state of Iowa. Even the automobile that he purchased was purchased in his wife’s name. He told me that it was his money that paid for the automobile. * * * From my conversation with him, there was no consideration for the assignment -upon which Margaret V. Coburn is relying: that is, the' assignment of this judgment in the ease of Coburn v. Davis.”

This is the only evidence in the case on 'the subject of consideration for the assignment of 'the judgment to applicant. Neither Coburn nor applicant has given testimony, and apparently they are keeping themselves out of the state. The purported assignment was made out and filed by Coburn’s attorney, and on the eve of .the recovery -of the Drescher Company judgment against Coburn. There is further evidence in the case on the subject of Coburn’s insolvency and fraudulent purpose, both of which are clearly shown. The evidence makes a prima-facie case of fraud, shifting to applicant the burden of going on with the evidence and proving good faith and valuable consideration. Glenn v. Glenn, 17 Iowa 498; Brittain Dry Goods Co. v. Plowman, 113 Iowa 624; Sillyman v. King, 36 Iowa 207; 27 Corpus Juris 488 et seq., 798 et seq. This she has not done.

II. Appellant’s next proposition (first in his argument) is : ....

“Gross inadequacy of consideration.in the purchase of a contingent interest in property (a judgment) at sheriff’s sale, in connection with other circumstances establishing fraud, makes the sale of the judgment invalid.”

Appellant cites Copper v. Iowa Tr. & Sav. Bank, 149 Iowa 336, in which;'on direct proceedings in equity, a sheriff’s deed was set aside for gross inadequacy of consideration. The plaintiff' there, without fault, was ignorant of the sale. There were failure to serve notice, an absence of bidders, and a failure to adjouin the sale, as well as óther circumstances appealing to the conscience of the court. Appellant also cites Glenn v. Miller, 186 Iowa 1187. That was also an independent suit in equity, to set aside an execution sale. The judgment under which the sale was had Was for $102.15 and costs. A levy was made upon property of the Value of $76,950 to $102,600, the judgment defendant’s interest in which was shown, without material dispute, to have- been 'worth $6,000 to $10,000. The sheriff admitted that he knew the valúe of the lairds. The judgment creditor was the only bidder. The judgment defendants’ interests in the different tracts were bid in at nominal sums, amounting in all to $142.82. It is said:

“True,::it is. a general, rule that m;ere. inadequacy ©^consideration is not- ordinarily sufficient ;to -invalidate, -a -judicial sale .otherwise -fair -and. regular, .but it Is, also- true -that ,the -inadequacy may be so,gross-as, in the. absence of explanation, to raise a .presumption- of undue advantage, .and equity will intervene to correct the wrong, .* * * The .sheriff is not the mere agent or servant .of. the judgment, creditor... .He .is, the.officer of..the law, and his duty to execute .the writ and. collect the, judgment, is no. more, apparent.or; obligatory:than is ¡his. duty to.-protect the debtor, against; an'unjugt or oppressive "levy,.and s,ale, .¡It is to .that end that the;,statute, gives:him¡.discretion,to,postpone the sale,, in the -absence of. bidders, or- when-‘.confronted-by bidr ders who offer only bids grossly-out of proportion to:the value of the-property.; and abuse of that discretion will invalidate his sale. ”

In the case now before- us,’notice of sale-was published. There was an appraisement,- 'There were'two'postponements of the sale'. The bid was- for-'twO thirdS of the-appraiser valuation.' ' See Code of 1924, Section 11741. Applicant'offered'evidence tending'--to sh'ow'that'-the' "owner- of- the' decree' for' accounting would be-entitled ultimately-to lárge sums. - She 'did'- not offer- tO -show knowledge thereof on the part óf the sheriff, The-'smallness of the' bid' and' the lack of bidders- may' be - accounted - for by the faet that the-assignment-' to applicant appeared in-'the public records, which would tend to- répel-bidders and lower the bids. The; applicant-had actual knowledge of"the levy, for she-'gave notice of ownership. If the property to be sold was of the value which she notv claims;-and she''and Coburn-were not endeavoring to defraud'creditors, she naturally would have taken some steps-toward payment of the-small judgment‘or otherwise protecting her- interest; beyond the mere giving of notice' of ownership; The only fraud appearing in the-record is that of Coburn and applicant. The--principle' on-which-an '¿xeeutiori-sale-may be set aside for great inadequacy of -price is-that an-'inference of fraud arises there from. Drake v. Brickner, 180 Iowa 1166, 1175. The circumstances here, however, repel any inference of fraud on the part of the sheriff or the bidder. A sale will not be set aside for inadequacy for which the debtor or the claimant to the property is responsible. 23 Corpus Juris 678.

Furthermore, this is not an independent suit in equity to set aside the execution sale, nor is it a proceeding in the cause of Dreseher Company v. Coburn, to set aside the execution therein issued and sale thereunder.' The proceeding here is in the case of Coburn v. Davis, to compel the making of reports for the benefit of the applicant, who to establish her right, collaterally attacks the execution and sale in the other' action. Even though the sheriff’s sale might have been vacated for gross- inadequacy of price and fraud in a direct suit for that purpose, it cannot be held collaterally on that ground to be invalid. Thomassen v. De Goey, 133 Iowa 278; Williams v. Dickerson, 66 Iowa 105; Foley v. Kane, 53 Iowa 64; 23 Corpus Juris 682 et seq., 685 et seq., 693 et seq., 757 et seq., 678; Howard v. Corey, 126 Ala. 283 (28 So. 682).

-III. Appellant’s ¡remaining point is that she. “is entitled to the benefit of the rule: ‘Mutual executions which are in the hands of the same officer may be set off, the. one against the other.’ Davis did not make reports according to the original decree.- This concealment prevented the clerk of court, issuing an execution in favor of Mrs. Coburn, as the clerk did not know whether there was a balance due Mrs. Coburn. ’ ’

Mrs. Coburn, on the record before us, was not, as-against her husband’s creditors, the owner of the judgment. She had no execution.. If she had been the owner, the record does not show that she would have had a right to an execution.

IY. Appellant urges that Davis committed a fraud in purchasing the judgment for $66.67; that he did this for the purpose of defeating the judgment on which the reports are sought ; that he had notice of the assignment to applicant; that he was a joint debtor in the Dreseher Company judgment; that he has disregarded the spirit and letter of the original judgment, refused to make reports, concealed payments, and his reports are insufficient. To what we have said, it need- only be added that we find no evidence to sustain the charge of fraud.&emdash;Affirmed.

Stevens, C. J., and De Graff, Albert, and "Wagner, JJ., concur. '