Case ID: f2d_209/html/0674-01.html
Source: Caselaw Access Project
Author: {"author": "WOODROUGH, Circuit Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SIEB’S HATCHERIES, Inc. v. LINDLEY et al.
    No. 14908
    United States Court of Appeals, Eighth Circuit,
    Jan. 19, 1954.
    See also 108 F.Supp. 415.
    
      Ulys A. Lovell, Springdale, Ark., and James R. Hale, Fayetteville, Ark. (James E. Evans, Springdale, Ark., on the brief), for appellant.
    E. J. Ball, Fayetteville, Ark. (Rex W. Perkins, Fayetteville, Ark., on the brief), for appellee Willie Lindley.
    
      Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.
   WOODROUGH, Circuit Judge.

, ... , The plaintiff m this action is a judgment creditor of the insolvent Arkansas corporation, Ozark Poultry & Egg, Inc., and the action was brought to obtain judgment against the corporation s officers for the amount of plaintiff’s judgment and then to subject certain real and personal property alleged to have been conveyed in fraud of the plaintiff to payment of plaintiff’s debt. There was federal jurisdiction because of diversity of citizenship and amount involved, and in the course of the proceedings in the trial court without a jury that court has delivered three very carefully prepared opinions, reported respectively at 13 F. R.D. 113, 118, 108 F.Supp. 415, and 111 F.Supp. 705.

As is clearly shown in the reports, the court found that two of the corporation’s organizers and officers, F. M. Lindley, father, and Lester Lindley, his son, were liable to the plaintiff under Section' 64-607, Arkansas Statutes, 1947 Annotated, in the amount of the debt of the corporation to the plaintiff and the court rendered judgment against each of them accordingly. 108 F.Supp. 422-423. No appeal was taken. Then, after plenary trial, the court adjudged that two out of five accused transfers of property which were made to Mrs. Willie Lindley, wife of F. M. and mother of Lester Lindley, after the corporation’s indebtedness to plaintiff and the liability of F. M. and Lester Lindley for such indebtedness had accrued, were fraudulent as to the plaintiff and said two transfers were avoided and the property transferred was sub-l'ected to Payment of the plaintiff’s debt. F.Supp. 718, 719. No appeal has been taken from that Part of the iMgment.

The court also adjudged that three of the accused transfers to Mrs. Willie Lindley were “valid transfers” and “not a fraud uP°n the plaintiff” and avoidanee thereof was refused. 111 F.Supp. 718. Plaintiff has taken this appeal to reverse that part of the judgment.

The three properties now in the handg of Mrg. wmie Lindley which the court refuged to subject to plaintiff,g are Q) a decree agreed upon and entered during trial evidencing that Southwest Lime Company had received the sum of $i0,000 from F. M. Lindley and in consideration thereof transferred to him its claims in its suit against Ozark Poultry & Egg, Inc., consisting among other things of a $10,000 note issued to it by that company secured by a mortgage on the company’s real estate of date prior to the accrual of plaintiff’s debt; (2) a judgment in favor of the Illinois Central Railroad Company against Ozark Poultry & Egg, Inc., for $780.22 and costs, also constituting a lien on the p0Uitry company’s real estate pri- or to plaintiff’s debt, and (3) a small farm in McDonald County, Missouri, which Lester Lindley had contracted to purchase.

As to these three items of property, the trial court found that during the 47 years F. M. Lindley and Willie Lindley had been married they had worked together and accumulated property consisting of (1) a large farm in Washing- , „ ¿ A, , , ,, ton County, Arkansas, owned by them , , , ,, ... , , as tenants by the entirety, (2) a rental , , , property m Springdale also owned by f, , , , ,, ... j /o\ them as tenants by the entirety, and (3) .... , , . ci ■ j i mi. their homestead m Springdale. They , , , , ••.i! have also had a joint bank account for , ,T r • .n , , years and Mrs. Lindley had saved some „ , . ,. i , money from her individual work.

Their large farm was sold in February, 1952, and they received around $25,-000 net for it after satisfying liens and Mrs. Lindley demanded a division of property between her and her husband, On March 12, 1952, the sum of $17,-821.09 was deposited in a Springdale bank in the name of F. M. Lindley and/ or Willie Lindley which Mrs. Lindley testified belonged to her and represented her interest in the proceeds of the sale of the farm.

The court found as fact that in acquiring the three properties in question Mrs Lindley did not intend to perpetrate any fraud upon the creditors of her hus- , * , . * 1 . ^ _ band and son and that she paid from her t j? xi. xx» own funds for the three items of property which were transferred to her and are now in her hands. That the money with which the Lime Company suit was settled and the $10,000 note and mortgage and the McDonald County, Missouri, land were acquired by Mrs. Lind-ley came from the said bank deposit derived from the sale of the large farm, Both Mr. and Mrs. Lindley so testified and the court so found. It also found that the transfer for value of the three properties to Mrs., Lindley occasioned no injury or prejudice to the plaintiff’s rights.

. „ , Appellant earnestly contends that said findings of the trial court were clearly erroneous, that the properties were not . , , T . ,, , acquired by Mrs. Lindley with her own funds and that even if they were so acquired, she ought not to he allowed to asset ownership against appellant because she was joined with her husband in a scheme to cheat and defraud appellant out of its debt.

. The applicable Arkansas law concern- . , , ,, „ . , , . .. mg fraudulent transfers to defeat credi- . . tors, especially where, as in this case, ,, ’ *. , , , , ,. the transfers are between close relatives, . „ . , , . , . ’ is fully discussed and declared m the . . , , three opinions of the trial court and we , , .. ,, , ,, not hold that the court was m error . , , ,, , ... m respect to the law. The contention ,, , ,1■ . , „ ,. . . that the fact findings were clearly erroneous has compelled careful consideration of all the evidence. But after such study 0f the evidence we are not “left -with the definite and firm conviction that a mistake has been committed” in the findings. Rule 52 (a), Fed.Rules Civ. proc. 28 U.S.C.A.; United States v. United States Gypsum Co., 333 U.S. 364, loc. cit. 395, 68 S.Ct. 525, 542, 92 L.Ed. 746; Kasper v. Baron, 8 Cir., 207 F. 2d 744; Aetna Life Ins. Co. v. Kepler, 8 Cir., 116 F.2d 1.

The proof wag pogitive that Mrg_ Lindley actually had the cagh money ac_ crued tQ her from ^ gale of ^ large « . , . , , . , , , , farm m which her interest as a tenant by the entirety was shown as matter of , 47 rf°fd' ®he .ufd /T ^ as she had the rlgM to do to buy the hens a®ainst the Poultry and company real estate which were Prior to P^intiff’s debt> and also the small Missouri farm, As shown in its opinion, the trial court scrutinized all of the accused transfers to her and did not hesitate to avoid those as to which the court was not satisfied that she had in good faith bought them with her own funds, without injury to the plaintiff. We have not failed to consider the forceful arguments for the plaintiff in support of contrary inferences that might have been drawn from the evidence_ But ^ findingg of the Wal cQurt are rted b substantial evi- , , , T t ^ dence and are not clearly erroneous,

The judgment is affirmed.