Broughton v. Vasquez , 73 Cal. 325 ( 1887 )

The Court.

—The judgment and order appealed from are affirmed for the reasons given in the former opinion rendered by Department Two.

Thornton, J., and Temple, J., dissented.

The following is the opinion of Department Two above referred to, rendered on the 21st of September, 1886: —

Searls, C.

— This action is brought by the plaintiff, as assignee in insolvency of Felix Anaya, to set aside a deed of conveyance executed by the latter to defendant on the ninth day of July, 1884, of certain lots of land in the town of Modesto, Stanislaus County.

Defendant had judgment, from which, and from an order denying a motion for a new trial, the plaintiff appeals.

Prior to February 27, 1884, there had been business transactions between the insolvent, Anaya, and defendant, Vasquez, on account of which there was a balance of several thousand dollars due and owing from the former to the latter, and which was secured by a conveyance from the former to the wife of the latter of the lots of land here in question, and of other property.

On the last-mentioned day, the parties had a settlement, and Anaya paid to Vasquez fourteen hundred dollars, leaving a balance due the latter of fifteen hundred dollars, for which sum Anaya gave him his promissory note.

The wife of Vasquez, at the same time, conveyed to Anaya all the property theretofore standing in her ñamé as aforesaid, upon a verbal agreement that Anaya, upon going home to Modesto, would execute and deliver to Vasquez, as security for the payment of the promissory note, a deed of conveyance of the two lots of land, the-subject-matter of this action.

Anaya neglected to execute and deliver the deed until the ninth day of July, 1884, when he executed and delivered it to Vasquez, pursuant to his agreement, and as security for the payment of the promissory note.

A few days before the deed was delivered, the buildings upon the lots were consumed by fire; and Anaya at the date of the delivery of such deed was insolvent, and unable to pay his debts.

On the fifth day of August, 1884, and within thirty days after the execution and delivery of the last-mentioned deed, Anaya filed in the Superior Court in and for the county of Stanislaus his petition in insolvency, and thereupon such proceedings were had that he was duly adjudged an insolvent, and the plaintiff herein was duly appointed his assignee.

The cause was tried by the court; and the findings, among other things, established the insolvency of Anaya at the date of the delivery of the deed to Vasquez, but negative the charge that such conveyance was made in contemplation of insolvency, or to give to Vasquez a preference over other creditors, or to prevent the property from passing to his assignee, or from being distributed to his creditors, or to defeat, hinder, or delay creditors, or to evade the insolvent laws, and that Vasquez had no knowledge or cause to believe Anaya insolvent at the date of or prior to the delivery to him of the deed; and generally the findings negative all idea of fraud.

The deed in question is found to be a mortgage given to secure the payment of the promissory note for fifteen .hundred dollars.

We think the findings are supported by the evidence.

Equitably considered, the deed should be treated as though delivered at the time it was agreed to be made, and as a part of the general transaction by which Anaya procured a conveyance of the whole property, with the understanding that he would convey back by way of security the lots in question.

The fact that such agreement to convey existed, though but verbal, independent of all question as to its being enforceable, was a strong circumstance to rebut the presumption of fraud arising from the subsequent failing circumstances of Anaya.

In determining the questions of fraud presented by the pleadings, it was proper for the court to receive testimony touching the relation existing between the parties, the nature of their business transactions, the existence of the prior debt of the insolvent' to defendant, and any other facts tending to elucidate the good faith or fraudulent intention of the parties.

For this purpose, the testimony to which objection was made was admissible.

. Upon a review of the whole case, we are of opinion the findings are supported by the evidence; that they cover all the issues material to the case, and that the conclusions of law are in consonance therewith; that no error intervened at the trial prejudicial to the appellant; and that the judgment and order appealed from should be affirmed.

Foote, 0-, and Belcher, C. 0., concurred.

The Court.

— For the reasons given in the foregoing opinion, the judgment and order are affirmed.