Court Opinion

ID: 7277599
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:02.75007+00
Date Added: 2024-06-11T16:18:55.598491
License: Public Domain

Mr. Justice Robb
delivered the opinion of the Court:
In the first assignment of error it is contended that the evidence did not warrant the finding “that the appellee was an *33existing creditor of William W. Breneman when the alleged fraudulent conveyance of September 28th, 1895, was made.”
As to the extent of Breneman’s indebtedness to complainant, the judgment is, of course, conclusive. The only question, therefore, under this assignment of error, is as to when that indebtedness was incurred. The complainant testified to the effect that the last loan made to Breneman was the result of repeated requests, and that it was finally made because of Breneman’s representation as to his urgent need for the money. Complainant further testified that, at the time this loan was made, Breneman showed him a letter purporting to have been written by Breneman’s mother, who was then at Cape May with Miss Breneman, in which she criticized Breneman for not sending her money. This letter complainant read in the presence of a Mrs. Dawson, in whose house he roomed. Mrs. Dawson testified that she remembered this occasion of Breneman’s visit to her house, and that it was about June, 1895. She was enabled to bring to mind the particular visit because of the reading of said letter. Breneman himself testified for the defendants that he owed the complainant in 1895, prior to the execution of the first deed to his sister, and did not attempt to deny that the whole indebtedness was incurred prior to that time. The complainant kept no books, the practice being to require Breneman to give a note for the amount of each loan, which, when due, would be taken up by the giving of another note. We think, however, that the testimony above briefly reviewed, in the absence of anything tending to contradict it, is sufficient to sustain the finding challenged. It is a somewhat significant fact that Breneman, while on the stand, did not deny that he obtained the last loan from the complainant at the time and under the circumstances detailed by the latter.
It is next contended that the court erred, in finding that Breneman made said deed of September 28th, 1895, with intent to hinder, delay, or defraud his creditors. This assignment is easily disposed of. The record conclusively shows that at the time he made this conveyance he was harassed by creditors, and that the only property he had in the world was the interest *34which he conveyed to his sister. It will appear, in the consideration of the next assignment of error, that said conveyance was made upon little or no consideration, although purporting to have been made upon a fairly adequate consideration. It is apparent, therefore, that he was not in'good faith preferring one creditor over others, as he would have had the right to do. Merillat v. Hensey, 32 App. D. C. 64. But, on the contrary, the inevitable consequences flowing from his acts were to hinder, delay, or defraud his creditors, within the meaning of sec. 1120 of the Code [31 Stat. at L. 1368, chap. 854]. Barber v. Wilds, 33 App. D. C. 150.
The third assignment of error is closely related to the second, involving, as it does, the finding that Miss Breneman participated in Breneman’s intent to hinder, delay, or defraud his creditors. Let us briefly review the testimony bearing upon this point. At the time this conveyance was made, Miss Breneman and her brother occupied their mother’s house, and their relations were those usually existing between brother and sister. Miss Breneman was without means other than her joint interest in the property left in trust by her grandfather, and had no income. In her answer she admits that at the time this conveyance was.- made she had reason to believe that her brother had other debts. Breneman testifies that he told his sister he was borrowing money, but denies that he mentioned complainant’s name in that connection. The testimony, however, shows that-during the period covered by these loans the family was greatly pressed for money. Breneman himself, in his direct examination, stated that he gave part of the money which he obtained from different sources to his mother; and complainant testifies to an interview which he had with Mrs. Breneman, at her request, shortly after the last loan to Breneman, in the summer of 1895, when Mrs. Breneman endeavored to secure another loan.. The complainant then explained to Mrs. Breneman how he came to make loans to her son, and during the interview Miss Breneman came into the room, and remarked that, she could not help hearing what had been said, “as she was at the top of the stairs.” Miss Breneman admitted being *35present at such an interview, and remembered that her mother criticized complainant because “she felt that Mr. Herdman was responsible for his (Broneman’s) heavy debts.” She testified, however, that this interview occurred “about 189 G, — in that neighborhood;” but this statement as to time was made without reference to any other date or event tending in any way to fix the date in her memory.
Taking into consideration the situation of the parties at the time, as disclosed by the testimony, the circumstances surrounding the making of these loans, the testimony of Breneman as to the disposition of the money borrowed, the admission of Miss Breneman that she had reason to believe her brother was in debt, the confidential relations existing between brother and sister, the fact that Breneman frequently spoke to his sister of complainant, and the pressing need of the family for more money, we think clearly justifies the conclusion that, when this conveyance was made, Miss Breneman was fully aware of the extent of her brother’s indebtedness to complainant, as indeed she must have been aware of his indebtedness to others.
The learned trial justice in construing said will ruled: “That when the two children arrived at the age of twenty-one years, their interests became vested, and were no longer contingent on surviving their mother;” that “their right to possession, however, did not begin until their mother’s death;” that, at the date of said conveyance to his sister, William W. Breneman had a vested title to an undivided interest in said property, subject to his mother’s life estate therein. We concur in this construction of the will. It is in evidence that the assessed valuation of said property for the years 1895 and 1896 was $40,755. It is apparent, therefore, that Breneman’s one-half interest at the time he executed said deed must have been worth something more than $15,000. What was the consideration for the deed ? As above stated, the recited consideration was $10,000 and other valuable and good considerations. Breneman in his answer under oath states that, at the time of said conveyance, he was indebted to his sister in the sum of $12,500, and that the deed was made “in settlement and satisfaction of the amount *36due by him.” Miss Breneman in her answer under oath states that at time of said conveyances her brother “was largely indebted to her for cash loaned by her to him, for notes of his which she had indorsed and had been compelled to pay, and for other sums of money which she had expended for him at his request, said sums aggregating the sum of $12,500.” Accepting her testimony, we find that the only money she had to loan her brother was a small legacy of “between $500 and $600” which she thinks she received in 1894- or 1895. There is no evidence that she paid a dollar on account of her brother’s indebtedness until after said deed of trust in 1900, when, out of part of the proceeds of that transaction, she did pay notes bearing her name, her mother’s or her brother’s, or, in some instances, the names of all three; but the aggregate amount of said notes bearing date prior to the .execution of the deed of September 28th was small in comparison with the value of the property conveyed to her.
Having signed or indorsed notes with her brother to the extent of about $4,000 for the purpose of raising money for their joint benefit, Miss Breneman took an absolute deed of property worth four times that amount, knowing that her brother had other creditors whose claims would, in all likelihood, be defeated unless the real, character of the conveyance to her should become known. Moreover, it is apparent, as suggested by the learned trial justice, that the only money paid • on account of Breneman’s obligátions was paid out of the proceeds of the very property he conveyed to his sister. In view of Miss Breneman’s knowledge of her brother’s indebtedness at the .time this property was conveyed to her, the fictitious nature of the consideration, her inconsistent and misleading positions with respect to the same, and the other facts and circumstances, constrain us to rule that in talcing this deed Miss Breneman was attempting to protect her brother from his creditors. In other words, that she was a party to the intent to hinder and delay them.
It is next urged that the complainant was not entitled to the relief prayed, because of laches. The evidence shows that *37Breneman renewed the notes evidencing his indebtedness to‘ complainant several times, and that complainant finally obtained judgment against him in January, 1902. Prior to May, 1900, when Breneman joined in said deed of trust, there was nothing to indicate that said conveyance to Miss Breneman was other than what it purported to be, namely, an absolute deed in good faith and upon a. valuable consideration. Hence there was no occasion for haste on the part of complainant. Three months after obtaining judgment he filed his bill. In the circumstances of the case we think complainant was exercising due diligence. Nelson v. Worthington, 3 App. D. C. 507; Tyler v. Moses, 13 App. D. C. 428.
It is further contended that the court erred in not decreeing that said deed of September 28, 1895, should stand as security to Miss Breneman for at least one half the amount paid by her on account of her brother’s debts. Having been a guilty party to the transfer made with intent to hinder, delay, or defraud her brother’s creditors, her rights must be postponed to the rights of those creditors. Equity will not permit such a party, when the real nature of the transfer becomes known, to stand on. an equal footing with honest creditors. The fact that there was some consideration for the deed does not affect this conclusion. Hamilton Nat. Bank v. Holsted, 134 N. Y. 520, 30 Am. St. Rep. 693, 31 N. E. 900; Wait, Eraud, Conv. § 207.
In the last assignment of error it is suggested that the decree, in any event, should direct that any balance remaining after the satisfaction of complainant’s demands should be paid to Miss Breneman, as said conveyance to her was at least good as between the parties. We think this point well taken.
As modified the decree will be affirmed, with costs.

Affirmed.