Case Name: FIRST NATIONAL BANK OF HAILEY v. VAN NESS
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1895-12-16
Citations: 4 Idaho 539
Docket Number: 
Parties: FIRST NATIONAL BANK OF HAILEY v. VAN NESS.
Judges: Morgan, C. J., and Sullivan, J., concur.
Reporter: Idaho Reports
Volume: 4
Pages: 539–543

Head Matter:
(December 16, 1895.)
FIRST NATIONAL BANK OF HAILEY v. VAN NESS.
[43 Pac. 59.]
'Special Findings of Jury — Defrauding Creditors. — Where special findings of a jury are not supported by the evidence, they will be disregarded.
'Same. — Where a judgment is based on findings of a jury in a special verdict not supported by the evidence, the same will be set aside.
APPEAL from District Court, Alturas County.
R. F. Buller and Texas Angel, for Appellant.
The jury found, and it is a fact, that Iiodgman transferred the notes to Yan Ness fraudulently. Nevertheless they also saw proper to find that he did not participate in the fraudulent intent. But he was a mere voluntary grantee, and that is fraudulent per se. (Bump on Fraudulent Conveyances, 2d ed., 268.) A fraudulent transfer cannot be purified by merely abandoning the fraudulent purpose for which it was given and using it for an honest one. “If a transfer is fraudulent, the subsequent payment in full of the purchase money will not render it valid.” (Bump on Fraudulent Conveyances, 2d ed., 474; Bunn v. AM, 29 Pa. St. 387, 72 Am. Dec. 639; Borland v. Mayo, 8 Ala. 104; Ghenery v. Palmer, 6 Cal. 119, 65 Am. Dec. 493; Wood v. Hunt, 38 Barb. 302; Lynde v. McGregor, 95 Mass. 182," 90 Am. Dec. 188; Law v. Payson, 32 Me. 521; Holcomb v. Bay, 1 Ind. 340.)
P. M. Bruner and M. E. Bruner, for Respondent.
It is a well-settled rule that when the verdict of a jury, af'firmed by the judge presiding, goes to the supreme court, indorsed by the refusal of the court which tried the ease to grant •a new trial, the supreme court will not interfere on the ground “that the evidence was insufficient to justify the verdict.” “Jurors are the appropriate judges of facts, as the courts are of law.” (State v. Anderson, 19 Mo. 246; K. P. By. Co. v. Iiunkel, 17 Kan. 171-173.) The jury found that Hodgman transferred the notes with the intention of hindering, delaying and defrauding his creditors, but they also found that Yan Ness did not know of the fraudulent intent on the part of Hodgman, but purchased them in good faith, and for a valuable consideration; and it has been determined and settled by the appellate courts “that a question whether a particular transfer-of property is in good faith or in fraud of creditors is a question for the jury, and their findings when affirmed in the appellate court are final and cannot be reviewed in the supreme court.” (Foster v. Magill, 119 111. 75, 8 N. E. 771.)

Opinion:
HUSTON, J.
Appellant, having recovered judgment against one J. W. Hodgman and others upon a note for $5,000,. garnished defendants, as debtors of, or holding property and effects belonging to, said Hodgman. In its complaint, appellant alleges that at the date of its service the defendant Mcr-Leod was indebted to said Hodgman in the sum of $600, balance due upon two promissory notes, for $400 each, dated September 29, 1890, executed by defendant McLeod to one David Earhart; that the said notes were really the property of defendant Hodgman, and were made in the name of Earhart to defraud the creditors of said Hodgman, and that they were afterward, in pursuance of the same design to hinder, delay, and' defraud creditors of said Hodgman, and particularly plaintiff, transferred, fraudulently and without consideration, to defendant Yan Ness; that defendant McLeod admitted the indebtedness, but said that Yan Ness claimed the notes, and defendant Yan Ness answered, denying that he was indebted to said Hodgman, or had any of his property under his control; that afterward, on the 5th of June, 1893, judgment was rendered in favor of appellant, and against said Hodgman and others, in said cause, for $10,075 and costs, upon which execution was duly issued, and said McLeod and Yan Ness again summoned as garnishees. Defendant McLeod filed no answer. Defendant Yan Ness answered, denying knowledge of the alleged indebtedness of Hodgman, and denying the alleged indebtedness of himself to Hodgman, and alleging that prior to the twenty-ninth day of May, 1891, two notes, for $400 each, dated September 29, 1890, executed by defendant McLeod to David Earhart, were sold, assigned and transferred to him for a valuable con sideration, and that they were his sole and individual property at the time of the service of the garnishment, viz., June 5, 1891. Issue was joined upon the answer of defendant Yan Ness and a trial had before the court with a jury. The following special findings were returned by the jury: "Q. 1. Was J. W. Hodgman the real owner of the notes that were placed in the hands of J. H. Yan Ness? A. 1. Yes. Q. 2. Did J. W. Hodgman have the notes made payable to David Earhart, and transferred to J. H. Yan Ness, for the purpose of placing and keeping them out of the hands of his creditors? A. 2. Yes. Q. 3. If J. W. Hodgman so placed the notes to keep them out of reach of his creditors, did J. H. Yan Ness participate in such intent and purpose? A. 3. No. Q. 4. Did J. H. Yan Ness purchase the notes mentioned in plaintiff's complaint, for a full and valuable consideration, on the thirtieth day of May, 1891, in the ordinary course of business, for himself, and in good faith? A. 4. Yes. Q. 5. Was the transfer of the notes from J. W. Hodgman to J. H. Yan Ness made with intent to hinder, delay and defraud the creditors of said Hodgman? A. 5. Yes. Q. 6. Did J. H. Yan Ness know this? A. 6. No." The answers Nos. 1, 2, and 5 are given by the entire jury. The answers Nos. 3, 4, and 6 are by a majority of the jury. Motion for judgment upon the findings of the jury was made by appellant, and denied by the court, and judgment was entered in favor of defendant Yan Ness for costs, from which judgment, and the order overruling motion for new trial, this appeal is taken.
It is contended by appellant that the motion for judgment by appellant upon the special verdict should have been granted by the court, for the reason that the third, fourth, and sixth findings are unsupported by the evidence. The evidence is conclusive upon the following facts: That Hodgman was the Teal partner of McLeod, under the firm name of Earhart & McLeod; that, when Earhart pretended to sell his interest in •said firm, such interest really belonged to Hodgman, and the name of Earhart was used simply as a guise or cover for Hodgman against his creditors; that the notes given by McLeod in payment of the pretended interest of Earhart, although made payable to Earhart, were really the property of Hodgman, and were by Hodgman placed in the hands of Van Ness, and by-Van Ness placed in the appellant bank; that, when said notes were so placed in said bank by Van Ness, they were the property of Hodgman. Van Ness testified that he supposed the notes belonged to Hodgman. He had been an intimate friend; of Hodgman for years, and apparently well advised as to his business affairs. The notes (three in number, for $400 each)were on the day of their execution delivered by Hodgman to> Van Ness, and by the latter deposited in the bank, and as fast as payments were made on them the money was remitted by Van Ness to Hodgman. That Van Ness knew that Hodgmanwas the owner of the notes is too clearly shown by the evidence-to admit of doubt. It is apparent from all the evidence that Van Ness never had any interest in the notes, up to May 30, 1891, the time of the alleged sale to him of the two unpaid notes for the sum of $625 by Hodgman, for Earhart. Van. Ness testifies: "I think it was on the thirtieth day of May, 1891. Hodgman asked me, a time or two, if I would not take those notes. On this morning he came down there, and he asked if I would not take those notes — buy his notes — and let him have the money.55 Surely Van Ness could have had but little doubt at this time as to the ownership of the notes. He knew the notes belonged to Hodgman, and he also knew that the use of Earhart's name in the transaction was a mere pretense. It does not appear that Earhart was present at any of the conversations in regard to the sale of the notes, or that, he was ever consulted or alluded to. McLeod testifies: "He. [Van Ness] spoke to me different times about the notes, to see what I could pay on them. He [Van Ness] asked me if I would have any objections to taking Hodgman in the way he was before, and I told him I didn't want any partner, if" I could get along without one. He [Van Ness] says, 'Well, you know — of course you know — that is Wes5 [Hodgman's] money.5 I said I never knew positively, although I always, supposed so. That conversation took place probably in February or March, 1891.55 And yet, when Hodgman gives Van. Ness a receipt for the $625, claimed to be in payment for the-notes, the receipt is signed, "J. W. Hodgman, for D. -Earhart.55" That .Van Ness could have had the intimate acquaintance with. Hodgman, and with his business and business transactions, the record shows him to have had; that he should have acted as his agent in the collection and remittance of money paid upon notes purporting to be the property of Earhart, but, which Van Ness knew were the property of Hodgman, and still be ignorant of the fact that Hodgman was resorting to these shifts and subterfuges to avoid his creditors, passes belief. We have examined the record with most scrutinizing care, and we are forced to the conclusion that the special findings 3, 4 and 6 are not supported by the evidence; that the defendant Van Ness was fully cognizant of the object and purpose of Hodgman to hinder, delay and defraud his creditors; that Hodgman was, at the time of the garnishment served on the-defendant Van Ness, the owner of the said notes. The judgment of the district court is reversed, and the cause remanded, with directions to enter judgment for the plaintiff in accordance, with the prayer of its complaint.
Morgan, C. J., and Sullivan, J., concur.