Court Opinion

ID: 9586972
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:16:59.730966+00
Date Added: 2024-06-11T17:32:57.909352
License: Public Domain

McGRAW, Chief Justice,
dissenting:
Without question, the transfer of legal title from the grandfather to his seven year old grandson in this case was made to avoid the appellant’s potential creditors. In this respect, West Virginia Code § 40-1-1 (1982 Replacement Vol.) provides:
Every gift, conveyance, assignment, or transfer of, or charge upon, any estate, real or personal ... with intent to delay, hinder, or defraud creditors, purchasers, or other persons, of or from what they are or may be lawfully entitled to, shall as to such creditors, purchasers, or other persons, their representatives, or assigns be void....
The fact that the property in question did not technically pass through the hands of the appellant is irrelevant. In Syllabus Points 1 and 2 of Lockhard & Ireland v. Beckley, 10 W.Va. 87 (1877), this Court stated:
Where a husband or father purchases land in the name of a wife or child, or in his own name, and in either case procures a conveyance to be made to the wife or child, there is no resulting trust for the husband or father, as in the case of a purchase by one and a conveyance to a stranger.
But such a deed, if made with intent to hinder, delay, or defraud the creditors of the party so purchasing, may, at the suit of such creditors, be impeached, being within the statute against fraudulent conveyances.
See also Rogers v. Verlander, 30 W.Va. 619, 5 S.E. 847 (1888). Had the transfer in this case been challenged by the appellant’s creditors, it could have been set aside under this statute.
Despite the ability of the appellant’s creditors to void the conveyance in question, as this Court stated in Kanawha Valley Bank v. Wilson, 25 W.Va. 242, 260 (1884), “As between the fraudulent grantor and grantee the deed is valid and binding, and the law leaves them where they have *226placed themselves, and will neither aid such grantor to regain his property nor such grantee to reclaim his purchase-money.” See also Syl. pt. 1, Thornburg v. Bowen, 37 W.Va. 538, 16 S.E. 825 (1893); Syl. pt. 1, Love v. Tinsley, 32 W.Va. 25, 9 S.E. 44 (1889); Syl. pt. 7, Duncan v. Custard, 24 W.Va. 730 (1884); Syl. pt. 1, Gibbs v. Logan, 22 W.Va. 208 (1883); Syl. pt. 3, Murdock v. Welles, 9 W.Va. 552 (1876).
The policy against aiding a debtor seeking shelter from his creditors behind a sham conveyance is even stronger where, as in this case, an innocent seven year old is made, in effect, an unwilling accomplice. Even where the grantor and the grantee are knowing partners in the attempted avoidance of the grantor’s creditors, this Court has traditionally refrained from assisting either party. As this Court stated in Syllabus Point 4 of Edgell v. Smith, 50 W.Va. 349, 40 S.E. 402 (1901):
A suit in equity cannot be maintained to cancel a deed made to hinder, delay or defraud creditors, though grantor and grantee are equally guilty, and equity will take no step to help either, but will leave them where they have placed themselves under the maxim, “In pari delicto potior est conditio defendentis.”
The majority in this case not only ignores this ancient maxim by assisting the appellant despite his attempt to defraud his potential creditors, it punishes his son, who was without fault at the time of the transfer, because of his subsequent behavior upon reaching majority. Each of the cases cited by the majority for the proposition that a different rule obtains when it turns out that supposed claims were invalid, unproved, or illusory share one distinctive characteristic which is nonexistent in the present action: the grantee in each case agreed to reconvey the property at the time of the conveyance, usually upon the happening of a subsequent event. See Wilcoxon v. Carrier, 132 W.Va. 637, 53 S.E.2d 620 (1949) (daughter agreed to reconvey property to parent furnishing purchase money); Hall v. Linkenauger, 105 W.Va. 385, 142 S.E. 845 (1928) (daughter agreed to reconvey property to her mother upon request); Thomas v. Anderson, 76 W.Va. 496, 85 S.E. 657 (1915) (sister agreed to reconvey property to sister upon disposition of claim against grantor/sister); Criss v. Criss, 65 W.Va. 683, 64 S.E. 905 (1909) (son agreed to reconvey property to mother upon disposition of claims against mother). It also appears that the grantee in each of these cases had reached majority at the time of the transfer. There is no evidence in the present case that the grantor’s grandson, who was seven years old, agreed to convey the property in question to his father under any circumstances. Furthermore, even if such promise had been made by this seven year old, its enforceability would be questionable. See State ex rel. Myers v. Hodge, 129 W.Va. 820, 42 S.E.2d 23 (1947); Andrews v. Floyd, 114 W.Va. 96, 170 S.E. 897 (1933).
Related to the majority’s inappropriate application of the illusory creditor exception is its imposition of a constructive trust upon an innocent seven year old. Recently, in Patterson v. Patterson, 167 W.Va. 1, 277 S.E.2d 709 (1981), this Court stated:
The requisites of a constructive trust are delineated in 5 Scott on Trusts, § 404.2 as follows:
“A constructive trust is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it. The duty to convey the property may arise because it was acquired through fraud, duress, undue influence or mistake, or through a breach of fiduciary duty, or through the wrongful disposition of another’s property. The basis of the constructive trust is the unjust enrichment which would result if the person having the property were permitted to retain it.”
Similarly, in St. Clair v. St. Clair, 166 W.Va. 173, 273 S.E.2d 352, 355 (1980), this Court stated, “To invoke the law of restitution or unjust enrichment to impose a constructive trust upon property of another, it is necessary that it be shown that one party has been unjustly enriched. See, Annon v. Lucas, 155 W.Va. 368, 185 S.E.2d *227343 (1971); 1 G. Palmer, The Law of Restitution §§ 1.1, 1.4, 1.7 (1978); 5 Scott on Trusts § 404.2 (1967).”
Perhaps the reason that the majority opinion is barren of any reference to unjust enrichment, an essential precondition to the imposition of a constructive trust, is simply because, in fact, there was none. There was no fraud, no duress, no undue influence, no mistake, no breach of fiduciary duty, and no wrongful disposition of another’s property by the grantee in this case. Therefore, there could be no unjust enrichment; enrichment perhaps, but not unjust enrichment. Undoubtedly, as Shakespeare’s Lear proclaimed, “How sharper than a serpent’s tooth it is to have a thankless child!” Shakespeare, King Lear, Act. I, Scene 1. Yet, courts cannot be moved by such ingratitude if the result is to ignore well established rules of law. Accordingly, I must respectfully dissent.