Case ID: iowa_81/html/0469-01.html
Source: Caselaw Access Project
Author: {"author": "Beck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

D. M. Douglass, Appellee, v. John Hannah et al., Appellants.
    Conveyance in. Fraud of Creditors: negotiable paper : notice. A conveyance of real estate by an insolvent debtor to one of Ms sons in consideration of his promissory note for the purchase price, which note is transferred by the father before maturity to another son, will, in the absence of evidence that the holder of the note paid value therefor, be deemed fraudulent and void as to existing creditors.
    
      Appeal from Mills District Court. — Hon. George Carson, Judge.
    Tuesday, October 28, 1890.
    Actioít in chancery by creditors’ bill. There was a decree granting the relief prayed for by plaintiff. The defendant and an intervenor appeal.
    
      L. T. Oenung and W. S. Lewis, for appellants.
    
      Shirley Gilliland and H. G. WatMns, for appell ee
   Beck, J.

The plaintiff recovered judgment against W. F. Hannah & Co. and John Hannah. Before the judgments were rendered, John Hannah conveyed eighty acres of land to A. J. Hannah. Plaintiff alleges that this conveyance was without consideration, and was made to defraud plaintiff,, and prevent the collection of his claim against defendants in the judgments. L. Bently, L. H. Dalhoff & Co. and Anderson, Lewis & Co., who had recovered judgments against defendants, intervened, alleging that the conveyance by John Hannah was fraudulent, and executed to defeat them and other creditors. A. J. Hannah, after the filing of the petitions of plaintiff and intervenors, died, and his administratrix was substituted as a party, and answered the petitions in this case, denying all the allegations thereof. L. C. Hannah intervened,, showing that he was the holder of a note payable to bearer, given by A. J. Hannah for the purchase of the land from John Hannah. He alleges that he purchased the note before maturity for a valuable consideration, and without notice of any equity therein, or of any fraud connected therewith. These pleadings were all denied by the adverse parties.

The questions involved in the case, upon all the issues, are wholly of fact, and demand discussion at no length. The evidence leads the mind to the conclusion that the defendants and the intervenor, L. C. Hannah, who were father and sons, resorted to the expedients of the sale of the lands, the taking of a negotiable note therefor, and the transfer thereof to one of the sons, in order to defeat the judgment creditors who are parties to this suit. That the son to whom the land was conveyed, and the other to whom the note was transferred, had knowledge of the fraudulent purpose of their father cannot be doubted. The note given for the consideration for the land was assigned to L. C. Hannah, and it is not shown that he paid one cent for it, and we are authorized to infer that he did not. Surely a transaction of this character between parties having knowledge of its fraudulent purposes cannot defeat honest creditors.

It is our opinion that the decree of the district court ought to be affirmed.