Court Opinion

ID: 6588276
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:51:30.497094+00
Date Added: 2024-06-11T15:57:34.401593
License: Public Domain

Beard, Justice.
Plaintiff in error, as plaintiff below, commenced this action in the District Court against the defendant in error and caused a writ of attachment to be issued and levied upon defendant’s property. Defendant moved to dissolve the attachment and discharge the attached property, which motion was upon a hearing sustained, and plaintiff brings error.
The grounds for the issuance of the writ of attachment, as stated in the affidavit therefor, are as follows: (1) “That the. defendant is about to remove his property, or a part thereof, out of the jurisdiction of the court, with intent to defraud his creditors.” (2) “That said defendant is about *136to convert his property, or a part thereof, into money for the purpose of placing it'beyond the reach of his creditors.” (3) “Said defendant has property or rights in action which he conceals.” (4) “Said defendant has assigned, removed, disposed of, and is about to dispose of his property, or a part thereof, with intent to defraud his creditors.”
The motion to discharge the attachment was made upon the ground that the several grounds for the attachment contained in the.affidavit therefor were not true. The defendant in his affidavit in support of his motion positively denied that either of said, grounds existed or was true. The motion was heard upon affidavits and other evidence. The only ground for the attachment which the evidence tends to sustain is the fourth, that defendant had disposed of his prop-ety, or a part thereof, with intent to defraud his creditors. This action was brought upon a promissory note of defendant for $5,500.00, dated October 10, 1911, due three years after date with six per cent interest, on which two years’ interest had been paid. The action was commenced April 20, 1916. It appears that about November 16, 1914, defendant gave a chattel mortgage on the property to one Duncan for $2,000.00, and one to the Thermopolis Bank for $600.00, and on that date one to his wife for $1,950.00. It is the latter mortgage which plaintiff claims was given to defraud creditors. Defendant testified that the mortgage to his wife was given to secure that sum which he then owed her for labor performed by her for about two years just prior to their marriage in July, 1912, and $521.00, money loaned to him by her, the same being the proceeds from the sale of some cattle and town lots which she owned before their marriage; and $330.00 of which he applied to the payment of interest on the note in suit. His evidence as to that is not contradicted, and if believed by the court, as it evidently was, established full consideration for the mortgage to her. That a debtor may prefer one creditor to another, although the preferred creditor is his wife, we entertain .no doubt, if the purpose is to pay or secure a bona fide claim. As stated in National Bank v. Croco, 46 Kan. 629, 26 Pac. 942, *137“It is well settled that a debtor in failing circumstances may prefer one creditor to another, although that creditor should be his wife, and he may. in good faith transfer his property at a fair price to her in payment of her bona fide claim.” And in Rockford Boot & Shoe Mfg. Co. v. Mastin, 75 Ia. 112, 39 N. W. 219, the court said: “The evidence tends to show, and we think it is established, that George W. either knew his father was in seriously embarrassed circumstances at the time of the conveyance, or, if not, he had sufficient knowledge thereof to put him on inquiry. But as he was a bona fide creditor, he had a right to secure himself; and in such case -the diligent creditor is entitled to priority over the tardy or less fortunate creditor, unless there was an actual intent to defraud, instead of a desire simply to secure an honest debt.” In Laird, et al., v. Davidson, 124 Ind. 412, 25 N. E. 7, a case in which judgment creditors caused executions to be levied upon property which had been conveyed by the debtor husband to his wife, the court said: “No difference from what source the appellee (the wife) acquired the money, so that such acquisition was not tainted with bad faith, she had a perfect right to. loan it to her husband, and take his promissory note therefor; and thereafter, and when in failing circumstances, he had a right to prefer her to the exclusion of other creditors. We think these are not debatable questions.” Without further quotations, as sustaining our views, see Bamberger v. Schoolfield, 160 U. S. 149, 16 Sup. Ct. 225, 40 L. Ed. 374; Micou v. National Bank, 104 U. S. 530, 26 L. Ed. 834; Wait on Fraudulent Conveyances and 'Creditors’ Bills (3rd Ed.), Sec. 390; 20 Cyc. 472. In the present case the defendant testified — and it was not contradicted — that when he gave the mortgage to Duncan his wife asked him to give her security for her claim, and he did so. There was no evidence that she had any other purpose than obtaining security.
Evidence of the value of defendant’s property at the time the mortgage was given was introduced. It was in sharp conflict, and if, as counsel for plaintiff states, the court de*138cided that defendant was not insolvent, there was sufficient evidence'to sustain such finding.
We discover no error in the record, and the order dissolving the attachment and discharging the attached prop.-erty is affirmed. Affirmed.
Potter, C. J.,concurs.