This has been the rule in California for a long time, well before California enacted the UFTA: "It is well settled that it is the motive of the grantor, and not the knowledge of the grantee, that determines the validity of the transfer." Bush & Mallett Co. v. Helbing, 134 Cal. 676, 679 (1901). Here, the Menjivars have not alleged that they as the transferors of the 2007 notes and trust deeds entered into the 2007 refinancing transactions with the intent to hinder, delay or defraud their creditors.
This has been the rule in California for a long time, well before California enacted the UFTA: " It is well settled that it is the motive of the grantor, and not the knowledge of the grantee, that determines the validity of the transfer." Bush & Mallett Co. v. Helbing, 134 Cal. 676, 679, 66 P. 967 (1901). Here, the Menjivars have not alleged that they as the transferors of the 2007 notes and trust deeds entered into the 2007 refinancing transactions with the intent to hinder, delay or defraud their creditors.
The control of the property after the alleged sale . . . [was] amply sufficient to raise a prima facie intendment of fraud in the transaction." ( Id., at p. 332; accord, Southwick v. Moore (1923) 61 Cal.App. 585 [ 215 P. 704]; Bush Mallett Co. v. Helbing (1901) 134 Cal. 676 [ 66 P. 967]; see also Kemp v. Lynch (1937) 8 Cal.2d 457 [ 65 P.2d 1316]; Sheean v. Michel (1936) 6 Cal.2d 324 [ 57 P.2d 127].) Plaintiff, however, contends that the foregoing cases cited in opposition to the rule of a conclusive presumption of fraud are distinguishable from the case herein.
While the burden of proof would be on the creditors alleging fraud, nevertheless, if established and found, their right to complain and to enforce their claims is made out. ( Bush Mallett Co. v. Helbing, 134 Cal. 676 [ 66 P. 967]; Franck v. Moran, 36 Cal.App. 32 [ 171 P. 841].) [3] The respondent urges that appellants could not have attached the property or subjected it to their claims while it was in the possession of the executor and therefore the sale to respondent, even conceding it to have been fraudulent, produced no injury or damages.
of his adversaries ( Di Nola v. Allison, 143 Cal. 106 [101 Am. St. Rep. 84, 65 L.R.A. 419, 76 P. 976]; Sears v. Willard, 165 Cal. 12 [ 130 P. 869]). [12] Also where a plaintiff claims under an execution sale he must show as against a stranger to the judgment that the judgment debtor had title or possession at the date of the lien or execution sale ( Robinson v. Thornton, 102 Cal. 675, 681 [34 P. 120]; Reilly v. Wright, 117 Cal. 77 [48 P. 970]). Appellants further claim that plaintiff being at most a subsequent creditor of Stockwell, is not under the facts one of the class who could attack the transfer to Mrs. Greenleaf. [13] It is the general rule that the only creditors who can complain are those who were creditors at the time of the alleged fraudulent transfer, or those subsequent thereto who were intended to be defrauded; but to make a voluntary conveyance void as to subsequent creditors it must be made with the intent of fraudulently preventing them from enforcing their claims ( Bush Mallett Co. v. Helbing, 134 Cal. 676 [ 66 P. 967]; Franck v. Moran, 36 Cal.App. 32 [ 171 P. 841]). Otherwise subsequent creditors cannot complain ( Kane v. Desmond, 63 Cal. 464; Scales v. Holje, 41 Cal.App. 733 [ 183 P. 308]). [14] But it is also the rule that though the nominal title to property be conveyed to another, it is nevertheless liable for the debts of its owner ( Scott v. Keane, 87 Md. 709 [42 L.R.A. 359, 40 A. 1070]; Wetherill v. Canney, 62 Minn. 341 [64 N.W. 818]; McKey v. Cochran, 262 Ill. 376 [104 N.E. 693]; Spencer v. Davis, (Tex. Civ. App.) 298 S.W. 443; Jamison v. Mississippi etc. Trust Co., (Mo.) 207 S.W. 788; Ward v. Marie, 73 N.J. Eq. 510 [68 A. 1084]; Benedict v. Benedict, 261 Pa. St. 117 [104 A. 581]; Menken Co. v. Brinkley, 94 Tenn. 721 [31 S.W. 92]), upon the principle that one cannot be the equitable owner of property and still have it exempt from his debts (27 Cor. Jur., Fraudulent Conveyances, sec. 344, p. 600; McColgan v. Magee, Inc., 172 Cal. 182 [Ann.
" Respondent quotes largely from the case of Bush Mallette Co. v. Helbing, 134 Cal. 676 [ 66 P. 967]. This was an action in which a deed was made May 15, 1893, by the defendant Louis Helbing to his wife Louise Helbing, when plaintiff was not a creditor of the defendant Helbing.
Hemenway v. Thaxter, 90 P. 116, 150 Cal. 737, 741. It is the general rule — and it is so stated in the note of the Code commissioners to section 3439 — that subsequent creditors, like existing creditors, may impeach a voluntary conveyance that is made for the purpose of defrauding them. See Ann. Cas. 1914A, 602, note; Schell v. Gamble, 95 P. 870, 153 Cal. 448; Bush Mallett Co. v. Helbing, 66 P. 967, 134 Cal. 676, and cases cited. Here it is alleged that the conveyances in question were made for the purpose of hindering and delaying, not only the original holders of these notes, but also their assigns.
A deed without consideration may be void as made with the specific intent to enable the grantor to defraud future creditors. ( Schell v. Gamble, 153 Cal. 448 [ 95 P. 870]; Bush Mallett Co. v. Helbing, 134 Cal. 676 [ 66 P. 967].) Whether such intent is shown is a question of fact and not one of law. (Sec. 3442, Civ. Code.)
To this rule, however, there is the well-recognized exception that a deed of gift which is fraudulent in its inception and made with intent to enable the grantor to defraud a future creditor, is as to such person void. ( Bush Mallett Co. v. Helbing, 134 Cal. 676 [ 66 P. 967].) This exception is based upon the fact that if the debtor secretly and without the knowledge of one with whom he contracts an indebtedness transfers his property without consideration, knowing that the creditor in dealing with him relies upon his ownership thereof, it constitutes actual fraud, and upon a showing of such facts such transfer may be annulled.
In the present action the defendant, First Trust and Savings Bank, pleaded and proved in detail the foregoing facts, and the court found the transaction out of which grew the plaintiff's asserted lease to be fraudulent from its inception and said lease to be void. A closely analogous case to the case at bar is that of Bush Mallett Co. v. Helbing, 134 Cal. 676, [ 66 P. 967], wherein the supreme court held a similar transaction to be fraudulent and void. Upon the authority of that case the judgment and order are affirmed.