Court Opinion

ID: 9728584
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:12:04.089091+00
Date Added: 2024-06-11T18:25:50.083819
License: Public Domain

Krivosha, C.J.,
dissenting.
I must respectfully dissent from the majority in this case. While the result which the majority seeks to attain may be appropriate, the legal basis upon which it is obtained is, in my view, not sound and will only cause us to have to make a host of distinctions in future cases. In my view, the majority opinion has established a rule that a subsequent creditor may have a conveyance made by a guarantor set aside as a fraudulent conveyance even though the conveyance was made prior to the execution of the guarantee. I do not believe that even the majority intends for that to be the rule of law; yet, I believe that is, in essence, what does result from the majority opinion.
As the majority opinion notes, suit against Max Rupe (Max) individually was dismissed with prejudice in Bob & Boots, Inc. v. Overland Armored Express et al., Doc. 247, No. 315 (Omaha Mun. Ct., May 16, 1977). At that point in time, Max was no longer personally indebted to Bob and Boots (B & B), if ever he was personally liable.
It was not until May 13, 1977, in consideration of B & B’s promise to withhold execution of its judgment against the corporation, that Max personally signed the guarantee involved in this case. The suit in the instant case is not on the judgment obtained against the corporation but, rather, upon the judgment obtained on the guarantee signed by Max on May 13, 1977, almost a full year after the conveyance by Max to his wife on May 21, 1976.
The majority holds that the corporation was indebted to B & B on May 21,1976, and that the corporation was, *139in fact, Max’s alter ego and that, therefore, there was the requisite relationship of debtor and creditor existing between Max and B & B on May 21, 1976, when the conveyance was made. This permits the court to set the conveyance aside as a fraudulent conveyance. The difficulty with that reasoning is that the execution which brings about this action was not on the judgment obtained against the corporation or the debt existing between the corporation and B & B on May 21,1976. The execution is upon a judgment arising out of a guarantee which did not exist before May 13, 1977. Piercing the corporate veil produces no legal basis for setting aside the conveyance when the judgment involved in this action is not the judgment against the corporation but rather the judgment against Max personally by reason of the guarantee. Attempting to simply mix them all together does not serve any benefit except to add confusion to the state of the law.
The relationship of debtor-creditor upon which B & B bases its attempt to have the conveyance set aside did not come into existence until the guarantee was executed. That was long after the conveyance. The majority simply disregards the dismissal with prejudice as though it never existed.
In First National Bank in Kearney v. Bunn, 195 Neb. 829, 832, 241 N.W.2d 127, 129 (1976), we said, “A different standard is applied to creditors whose debts are in existence at the time of conveyance, as opposed to subsequent creditors. A creditor whose debts did not exist at the date of a voluntary conveyance by the debtor cannot attack such conveyance for fraud unless he pleads and proves that the same was made to defraud subsequent creditors whose debts were in contemplation at the time.” Likewise, in Tanner v. Frink, 103 Neb. 817, 174 N.W. 417 (1919), we said, “The question of fraudulent intent is to be considered as of the time when the conveyance is made and with reference to the particular conveyance alleged to have been fraudulent as against creditors.” (Syllabus of the court.) Finally, *140in DeForge v. Patrick, 162 Neb. 568, 575, 76 N.W.2d 733, 738 (1956), we said, “The rule seems to be well settled that, to set aside a conveyance on the ground that it is fraudulent as to subsequent creditors, such creditors must allege and prove that such conveyance was made with intent to defraud subsequent creditors and in contemplation of such future indebtedness.” Likewise, see, Jayne v. Hymer, 66 Neb. 785, 92 N.W. 1019 (1902). The record in this case conclusively establishes that B & B neither pleaded nor proved that the conveyance made on May 21, 1976, was made for the purpose of defrauding B & B in connection with a guarantee obtained on May 13, 1977.
To be sure, B & B may have been entitled to collect on its judgment against the corporation and, in so doing, raise the issue of alter ego. The dismissal with prejudice against Max personally undoubtedly would have presented some problems in that regard. But B & B elected not to pursue its judgment against the corporation, just as it elected to dismiss with prejudice its earlier action against Max personally. The net effect of this case is to say that a guarantor who has made a conveyance prior to the execution of the guarantee may have that conveyance set aside if judgment is subsequently obtained on the guarantee even though there is no pleading and no proof that such conveyance was fraudulent as to the guarantee. I do not believe that is the law nor do I believe that the majority wishes it to be the law.
The majority further disregards the dismissal with prejudice by maintaining that res judicata is an affirmative defense which must ordinarily be pleaded to be available. While that is, indeed, a correct rule of law generally, in this case it has no application. The evidence of that dismissal was before the court. It is in the record without objection as to its admission. Evidence which is part of the record, though not pleaded, may be considered by an appellate court. See 5 C.J.S. Appeal and Error § 1480(b) (1958). For these reasons, I must respectfully dissent from the majority.