Hawley v. Smeiding
Hawley v. Smeiding
Opinion of the Court
The opinion of the court was delivered by
H. E. Smeiding brought an action in the district court of Franklin county to foreclose a mortgage made by Charles Vandusen and wife upon a certain piece of real estate situated in said county. The plaintiff in error, Edgar Hawley, filed an answer setting’ up the rendition of a certain judgment in his favor and against Vandusen, and the plaintiff below, Smeiding, replied, alleging in, substance that Vandusen was not the owner of the land in question, and had no interest whatever in the same, although the title appeared in him at the time that the mortgage was made, and detailed the facts upon which such claim was made, which will more fully appear later in this opinion. The cause was tried to the court, who made certain special findings of fact and conclusions of law, for a review of which the plaintiff in error brings the case here. The only question to which our attention is directed is that the conclusions of law found by the court are not supported by the findings of fact. The court found the facts in substance as follows : .That on March 2, 1889, Hawley recovered a judgment in the district court of Franklin county against the defendant Chas. Vandusen for $196.12 damages and $60 costs, which judgment remained in full force and unsatisfied ; that on November 12,1889, one Watkins was the owner of the. real estate described in the petition, and on that date said Watkins made a trade with F. E. Crane, whereby Crane delivered to him a stock of merchandise, and he, Watkins, executed
From these findings of fact the court made the following conclusions of law, in substance : That as Vandusen never owned the real estate in question, and had no interest therein, Hawley’s judgment never became a lien thereon, and he can take nothing, in this action by or through such judgment; that the lien of Smeiding under his mortgage, as established and merged in the judgment therein rendered, was a first and prior lien upon said real estate, and that Hawley had no lien whatever. Did the court commit error in its conclusions of law? Paragraph 7164, General Statutes of 1889, provides :
“When a conveyance for a valuable consideration is made to one person, and the consideration therefor paid by another, no use or trust shall result in favor of the latter; but the title shall vest in the former, subject to the provisions of the next two sections.”
■ Under this paragraph, the moment the name of Vandusen was inserted in the deed in question the title to the real estate thereby conveyed vested in Vandusen, unless the transaction was one coming within the provisions of either paragraph 7165 or paragraph 7166 of said statute. Paragraph 7165 provides, in substance, that every such conveyance shall be presumed fraudulent against the creditors of a person paying the consideration, and, unless such fraudulent intent is disproved, a trust results in favor of
‘ ‘ The provisions of the section next before the last shall not extend to cases . . . where it shall bé made to appear that by agreement, and without any fraudulent intent, the party to whom the conveyance was made, or in whom the title shall vest, was to hold the land, or some interest therein, in trust for the party. paying the purchase-money, or some part thereof.”
Under the findings of fact in this case, in what position are the parties to this transaction? As between Crane and Vandusen, when the deed was made the title to the real estate in question vested absolutely in Vandusen. The only person who might interpose as against this title were the creditors of Crane, as to whom the conveyance, under the findings of fact, was fraudulent, because it was made for the purpose of withholding the land from the lien of the judgment creditors of Crane, and therefore was not within the •exception stated in either ^paragraph 7165 or paragraph 7166 of the General Statutes. • Now, what was the position of Smeiding in this transaction? It is undisputed thát Beachy was the agent of Smeiding and it is so found by the court. The court further finds, that Beachy knew that the title to the real estate in question was made through Vandusen to avoid the lien of the judgment against Crane, of which judgment he, Beachy, had actual knowledge. The knowledge of an agent must be presumed to be the knowledge of the principal, and the principal is bound by such knowledge in the transaction in which the agent is acting for him. Smeiding therefore had knowledge of the fact that title to the real estate had been made to his' grantor, Vandusen, with a fraudulent intent, and he now seeks the interference of a court of equity
“A conspiracy to defraud creditors is an offense against good morals, common honesty, and sound public policy, for it is a let and hindrance to the due course and execution of law and justice, and tends to overthrow all true and plain dealing, bargaining and chevisance between man and man, without which no 30m monwealth or civil society can be maintained or continued.”
If this rule ought to be applied in a case where a party sought to avoid a possible lien, as in the Weatherbee case, it certainly must be where, as in this case, the whole transfer was made with the sole purpose of defeating the rights of parties whose claims had received the sanction of a court of competent jurisdiction whose judgment had not been reversed. While
Nor does this doctrine conflict with the decision in Harrison v. Andrews, 18 Kan. 535. In that case a husband and wife conveyed to one Hoag a tract of land occupied by them continuously as a homestead,, and Hoag immediately reconveyed the same to the wife. The whole transaction was in furtherance of an agreement previously made to that effect at the time of the' original purchase of the land, the wife having furnished all of the purchase-money. It was held in that case that the land was not subject to the lien of a judgment rendered against Hoag jprior to the two conveyances. The reasoning is obvious, for the facts of that case brought the transaction clearly within the exceptions of paragraph 7166, General Statutes of 1889. No conveyance of the homestead could be considered as in fraud of creditors, and the conveyance was made in conformity with a previous agreement, made without fraudulent intent, that the person to whom the conveyance was made was to hold the title in trust for the person who paid the original purchase price for the same.
The judgment rendered by the district court of Franklin county is set aside, and this case is remanded to the district court, - with instructions to render judgment in accordance with the views expressed in this opinion. The costs of this court will be taxed to defendant in error.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.