Radford v. Folsom
Radford v. Folsom
Opinion of the Court
- This is a bill brought by the complainant, as assignee of Simeon and Frank Folsom, to set aside two deeds and a mortgage executed by Frank Folsom and wife to Eliza Folsom, the defendant, upon the ground that these conveyances were made by said Frank Folsom and wife at a time when he was hopelessly insolvent, without consideration, and for the purpose of defrauding his creditors, by placing the property beyond their reach. The first conveyance was a deed dated February 18, 1875, convoying to said defendant certain store property situated in the city of Council Bluffs, Iowa. The second was a deed dated October 5, 1875, and
A preliminary objection was taken at the hearing to the effect that the validity of these conveyances, and of the title of the defendant to the. property in question, was now res ad~ judicata, by reason of certain proceedings in the circuit court of Pottawattamie county, Iowa. It seems that in June, 1871, Jeremiah Folsom deeded the real estate in question to his brother Simeon, taking back from him a bond to reconvey at the end of ten years, should certain conditions therein named be fulfilled. Afterwards Simeon conveyed to Frank under a power of sale said to be conveyed in said bond. Afterwards, and in 1872 or 1873, Frank, claiming to own the real estate by virtue of the deed from Simeon, and also claiming that Jeremiah had broken his covenant, began an action in the circuit court of Pottawattamie county, asking that his title to this real estate be quieted as against Jeremiah Folsom and his wife, whom he made defendants, and that he might be decreed to be the owner in fee of the premises.
Defendants answered, setting up in substance that the deed and bond constituted simply a security or mortgage, and not ah absolute conveyance as between the parties, and that Frank had full notice of this fact, and consequently had no better title than Simeon. Defendants also filed a cross-bill, asking that the transaction be decreed to be a mortgage; that the same be redeemed, that an accounting might be had, and a time fixed within which the defendants might pay such sum and retain their title to the premises. To this answer and cross petition Frank Folsom replied, and the case was at issue. After the issues were thus joined, Frank conveyed a large portion of said real estate by two warranty deeds to Eliza F. Folsom, the defendant in this suit. Before the hearing Eliza filed an intervening petition, averring that she had become the owner of a portion of the
The question now arises whether this decree vesting the title to a portion of the property in Frank, and to another portion in Eliza, estops the plaintiff in this suit from questioning the validity of the conveyance from Frank to Eliza made pending the legislation in Iowa. The general principles applicable to this class of questions are well settled.
When a question is distinctly put in issue, and tried and
Section 2689 of the Iowa Code indicates very clearly that amendments are a matter of discretion with the court. “The court may, on motion of either party, at any time, in furtherance of justice, and on such terms as may he proper, permit such party to amend any pleadings or proceedings by striking out the name of a party, or by correcting a mistake in the name of a party, or a mista,ke in any other respect, or by asserting other allegations material to the case, or when the amendment does not change substantially the claim or defence by conforming the pleadings or proceedings to the facts proved.” Of course, it is impossible for us to say how tiro court would have exercised its discretion, hut it would seem the proper course, as the case was instituted solely for the purpose of determining the plaintiff’s rights as against Jeremiah Folsom, and no question had been raised as between the plaintiffs, to remit the parties to this court, where a suit had already been launched to determine the validity of the conveyance from Frank to Eliza. The defence oí res adjudícala is not maintained; neither does the case present any difficulty upon the merits. It is said that the arrangement under which these conveyances were executed was made in the latter part of 1874, between Frank and Simeon Folsom, acting for the defendant Eliza. This arrangement was not in writing, nor can the witnesses point to any definite conversation at which the bargain was perfected. No exact time is specified, and we are left to infer that the arrangement was a mere loose understanding between the parties. The testimony is abundant to the effect that at this time Simoon and Frank Folsom, who had been in partnership since 1860, were indebted in about the sum of $35,000, increased during
There was, however, a consideration for these conveyances. On August 21, 1865, the Connecticut Mutual Life Insurance Company issued a policy upon the 10-year life plan, on the life of Simeon Folsom, in favor of Eliza Folsom, his daughter, for $10,000, the premium to be paid in ten annual payments, but with the proviso that if, after two years, the assured should elect to pay no further premiums it was to be an insurance pro rata. Nine annual premiums were paid as they became due. The policy lapsed, in 1874, the last premium having been paid in August, 1873, without any notice being given to the company of any election to pay no further. This policy was assigned by Eliza Folsom, on the seventh of February, 1875, to the wife of Frank Folsom, and is admitted to be the only consideration for the conveyances by Frank and his wife of the Council Bluffs property. This policy was not taken out by Eliza Folsom, was never in. her possession, nor did she have anything to do with the payment of the premiums. She had heard of it from her father, and this was all she knew about it. The value of the policy on the eighteenth day of February, 1875, reckoned upon the basis that it had not been forfeited, was $3,739.11. The
As the title to the lands at that time was in litigation, and their then value somewhat uncertain, I cannot say that the consideration paid for them was grossly inadequate; but I have no doubt that the conveyance was intended by all parties as a, fraud upon the creditors of Simeon and Frank Folsom. The exchange was negotiated entirely by Simeon, acting for his daughter, who, in fact, knew nothing of the transaction. Indeed, she can scarcely be considered a real party to the agreement. Siat nominis umbra. His know! edge was her knowledge, and the evidence that he intended to withdraw this property from his creditors is overwhelming. Had the consideration for the lands been received by Frank Folsom himself, and turned over to his assignee, there might be some reason for claiming the transaction to be valid; but the effect of it was to withdraw from the assets of the estate land exceeding $20,000 in value, and to put the consideration where it could only be readied by further litigation. I have not deemed it necessary to review the facts at length. They seem to me to constitute a very clear case of fraud, and I feel compelled to direct that a decree be entered in favoE of the complainant.
Reference
- Full Case Name
- Radford, Assignee v. Folsom
- Status
- Published