The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-04-17
RUTHERFORD
CASE DECIDED

down its decree in the Rutherford case
which was tried before Judge Pollock
in district court. The higher court
madifled and aftirms the finding of the
district court. The syllabus Of the
case:
L. c. Johnson, as administrator Of
the estate of John Rutherford, de-
ceased, appellant, VS.. Mary Ruther-
ford, respondent. l.. G. Johnson, as
administrator of the estate Of John
Rutherford, deceased, respondent, VS..
Mary Rutherford, appellant.
This is a creditors bill in equity to
obtain a decree that the real and per-
sonal property, formerly belonging to
John Rutherford, deceased, Grams
ferred by deeds and bill of sale to his
wife n day before he died) is a part
Of the ~decedent's estate and subject to
administration, and that the transfers
were made in fraud Of creditors. Held:
/. Where such transfers are made
without valuable consideration, and to
avoid administration, though with no
specific intent in the grantor or
grantee to defraud the grantor's credi-
tors, but when the conveyance divest-
ed he grantor Of all his property,
rendered his estate insolvent and
operated to defeat the collection Of
debts owing by decedent, the con-
veyances must be held to have been
made in fraud Of creditors.
2. A fraudulent conveyance vests
title in the grantee, who takes the
property subject to it's being charged
by administration proceedings, aided
by an equitable action as this. with
any debts owing by the state, for the
payment of which the property or it's
proceeds may be taken.
3. In taking the property for such
purposes resort should be had first to
the personally and then, for any de-
f~1ciency unpaid, to the realty.
4. The decree in equity, holding
property thus subject to payment Of
debts, to be established by county
court administration, should designate
the claimant and adjudge that his
claim has been approved by the coun-
ty court for a stated amount, that the
plaintiff suing has been appointed the
personal representative and maintains
the action for the benefit Of said
claimant, the facts concerning the
transfer and the insolvency thereafter
of the grantor and his estate, that the
transfer was in fraud of creditors, the
identity Of the property conveyed, and
the order in which 1t may be resorted
to n applied, and that the same is
subject to the payment of the approx
ed claim exhibited in the creditors
bill, with administration costs Of it's
collection; and by interlocutory decree
require and direct the property to be
held in status quo subject to the final
determination of the debt in the course
of administration, whenever it shall
appear that the grantee in good faith
desires to litigate in probate court the
validity Of the debt on which the
claim is asserted. After the final
determination of the county court on
the validity of the deb a final decree
in this equitable action may be enter
ed, dealing with both the property and
the costs of his action on trial and
on this appeal.
S. The question of the indebtedness
Of the estate to the claimant, and the
amount of such indebtedness, if any,
cannot be an issue in the equitable
action. and the judgment in such ac-
ton should not pass upon such QueS-
ton or find such Indebtedness, but
leave that for the determination of
the county court or the district court
on appeal taken.
6. The county courts record of the
appointment of the administrator, and
its approval of the creditors claim
against the estate, so far as the dis
trict court action is concerned, incon-
testably establishes the power Of the
plaintiff to sue, and that there is
prima facie a debt owing by the
estate, and it's amount, for which the
property shall respond, if it be de-
termined to AVE been conveyed in
fraud Of creditors and the estate be
insolvent.
7. When the decedent leaves no
estate. but leaves debts unpaid, and
where property has been transferred
shortly before his death by fraudulent
conveyances to avoid payment of claims
or administration of his estate, and
where no personal representative has
been appointed, the order of proceed
ings to enforce payment of claims is
by statute intended to be: (a) A
petition by the creditor for administra-
ton, r~eciting his claim to establish his
interest or right to petition; CD the
appointment thereon Of an admins
TRAITOR; Co giving of usual notice by
the administrator to present claims
within the statutory period; Cd pre-
sentiment by the creditor, who petit
toned for administration, Of his veri-
fed claim to the administrator, and
it's allowance and approval by the
representative and the court; (e) suit
by the administrator to recover, under
section 8173, for the benefit of those
creditors whose claims shall be ap-
proved by the county judge in usual
course. the property SO fraudulently
conveyed, and which may thus be held
subject to administration for the pay
ment of claims to be established in
county court.
8. The district court sustained a
demurrer to a plea Of payment and re-
jected evidence tending to prove full
payment of the claim approved by the
county court and as such the basis of
this action, it being the sole claim
made against the estate in admins
tration proceedings. Held proper, the
district court having no jurisdiction to
| entertain a joinder of assure or receive
evidence thereon of payment. The APP
prevail by the county court, even
though ex parte. is a prima facie de-
termination sufficient under h stat
ute to furnish a basis for the equitable
action. and as such conclusive upon
the district court upon the question OF
debt.
8. BY section III of the state con-
%stitution the county court shall have
exclusive original jurisdiction in pro-
bate and testamentary matters, the
appointment Of administrators and
guardians. the settlement Of the &C.
counts of executors, administrators
and guardians. This constitutional
provision confers upon the county
court exclusive original jurisdiction to
determine and enter Judgment upon
the validity of claims against estates
Of fdecedents, and the district cour
has no jurisdiction to pass upon the
validity Of the debt Of estates to
claimants other than appellate juris-
d~iction. and therefore, the district
court IN the equitable action has no
jurisdiction to determine or pass upo
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