Opinion
Docket No. 17, Calendar No. 39,218.
Submitted January 5, 1937.
Decided March 1, 1937. Rehearing denied April 27, 1937.
Appeal from Ontonagon; Driscoll (George O.), J. Submitted January 5, 1937. (Docket No. 17, Calendar No. 39,218.) Decided March 1, 1937. Rehearing denied April 27, 1937.
Bill in aid of execution by Northern Hardware Supply Company, a corporation, against Robert E. Anderson and Robert E. Anderson, Jr. Bill dismissed. Plaintiff appeals. Reversed.
Meredith P. Sawyer, for plaintiff.
Carl O. Bay, for defendants.
This is a bill in aid of execution.
On note dated October 24, 1929, in action commenced June 21, 1930, plaintiff had judgment entered March 11, 1931, against Robert E. Anderson for $1,395.34 and costs. Prior to judgment and on December 10, 1930, Anderson had conveyed to his son, Robert E. Anderson, Jr., 280 acres of land, worth about $1,000, for a claimed consideration of $1,500, and on February 2, 1931, Anderson had conveyed to his son Robert 120 acres for a claimed consideration of $1,000.
Plaintiff levied on the land March 27, 1931, commenced this suit May 18, 1931, and on January 13, 1936, defendants filed bond, dated June 23, 1931, for $1,000 to release the levy.
June 26, 1931, Robert E. Anderson, Jr., sold the 120-acre tract with other lands, and in 1933 sold some or all of the 280 acres.
Plaintiff made a prima facie case under 3 Comp. Laws 1929, § 14617. The burden of proof was on defendants to show the bona fides of the transaction.
Defendants claim fair consideration was paid by the son before the levy by way of his paying debts of his father due other creditors and that the purpose of the transfer was to prefer and pay creditors.
As to the 280-acre parcel, the testimony is that the son paid $500 to the father and $1,000 to the latter's creditors. The testimony is very uncertain as to the time of payment because the fact is stated in a general way without specifications as to time. It is doubtful whether, in view of the burden resting on defendants, the testimony would warrant an inference that the payment was made before the son sold the property two years after the conveyance. We need not discuss this further because the 120-acre transaction is sufficient to cover the relief sought by plaintiff.
As to the 120-acre tract, it is undisputed that the son paid nothing to or for the father until after the son made the sale subsequent to plaintiff's levy. He then paid $1,000 to his father's creditors.
It is not claimed the father was solvent and, as no fair consideration, 3 Comp. Laws 1929, § 13394, was given for the property, the conveyance must be held to have been fraudulent regardless of the actual intent of the parties, 3 Comp. Laws 1929, § 13395.
Moreover, the claims that the purpose of conveyance was to conserve property for other creditors and that the conveyance was lawful under the right of the debtor to prefer his creditors are not tenable. The conveyance to the son was not to pay or secure a debt nor does the testimony disclose any understanding or agreement that he should hold or dispose of the property for the benefit of his father's creditors. The contrary appears. The conveyance to him was absolute. The profit or loss on resale was his. The record discloses that he incurred a loss on, the 280 acres and made a small profit on the 120 acres.
The testimony of the value of the 120-acre tract is not satisfactory. The only definite evidence is that the son sold it for $1,200. Plaintiff does not pray to set aside the conveyances as against grantees of the son. It asks decree which will permit enforcement of the bond given in lieu of levy. Under the circumstances, the conveyances must be held fraudulent in law and plaintiff entitled to the relief sought.
Decree dismissing the bill will be reversed and one may be entered for plaintiff in accordance with this opinion, with costs.
NORTH, WIEST, BUTZEL, BUSHNELL, SHARPE, POTTER, and CHANDLER, JJ., concurred.