Court Opinion

ID: 7122815
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:54:48.018166+00
Date Added: 2024-06-11T16:14:10.041815
License: Public Domain

The opinion of the court was delivered by
Milton, J. :
Assuming that the execution creditors herein were subsequent creditors of the grocery firm, we think the court erred in denying to the defendant the right to a trial of- the issues of fact in the case, and that the practical effect of the rulings was a denial of thatright. Whether ornot thé transfer by C. P. Johnson of nearly all of his property to his wife was fraudulent as to the execution creditors in this case is not a question of law but of fact. We think the supreme court, in the case of Sheppard v. Thomas, 24 Kan. 780, did not intend to declare that subsequent creditors are not entitled under any circumstances to attack a voluntary or fraudulent conveyance made by their debtor, and that the language of the opinion *619does not bear the construction placed upon it by counsel for the defendant in error.
The rule which we think applicable to the trial of this case may be thus stated : A voluntary transfer of substantially all his property by a husband to his wife, even when he is not indebted at the time, but with a view to future indebtedness, is void. (1 Story’s Eq. Jur., § 356; Reade v. Livingston, 3 Johns. Ch. 481; Parkman v. Welch et al., 39 Pick. 231; Harrison v. Cramer et al., 3 Iowa, 543.)
The syllabus of Smith et al. v. Vodges, Assignee, 92 U. S. 183, reads:
“ In order to defeat a settlement by a husband upon his wife, it must be intended to defraud existing creditors, or creditors whose rights are expected shortly to supervene.”
In the opinion the court said:
“The law of this case is too well settled to admit of doubt. In order to defeat a settlement made by a husband upon his wife, it must be intended to defraud existing creditors, or creditors whose rights are expected shortly to supervene, or creditors whose rights may or do so intervene ; the settler proposing to throw the hazards of the business in which he is about to engage upon others, instead of honestly holding his means subject to the chance of these adverse results to which all business enterprises are liable.”
Among the badges of fraud in such a case, the courts specify the magnitude of the ' conveyance compared with the grantor’s means, the existence of prior debts at the time of the transfer, the immediate engagement in a hazardous business, and the contracting of debts immediately after the transfer.
‘ ‘ The conveyance must be made with an intent to put the property out of reach of debts which the grantor at the time of the conveyance intends to con*620tract, and which he does not intend to pay, or has reasonable grounds to believe that he may not be able to pay.” (Bump, Fraud. Conv., 4th ed., 328.)
So far as our investigation has extended, we think the foregoing statements fairly represent the views held by a majority of our courts of last resort. The rule as to continuous indebtedness is well stated and the supporting authorities are set forth at pages 322-324 of the last-named work. See also Parish et al. v. Murphree et al., 13 How. 92.
"Fraud is always a question of fact, to be determined by the court or jury upon a careful scrutiny of the evidence before.it.” (Smith v. Vodges, Assignee, supra.)
Fraudulent intent is generally a question of fact for the jury and not for the court. (Hyde v. Chapman, 33 Wis. 391; Barkow v. Sanger, 47 id. 500.)
Believing that the court erred in its rulings in the trial of this case, to the prejudice of the plaintiff in error, the judgment will be reversed and the case remanded for a new trial.