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UNITED NORWEGIAN CHURCH OF AMERICA v. STEPHEN CSASZAR AND ANOTHER

Minnesota Supreme Court1919-01-31No. No. 21,066
141 Minn. 459

Summary

Holding. The court affirmed the trial court's judgment, holding that the conveyances were fraudulent transfers made to defraud creditors and that the property may be subjected to satisfy the judgment.

A church obtained a judgment against Stephen Csaszar and another defendant in municipal court for $437.25. Before the judgment was rendered, Csaszar and his wife conveyed property to a third party, who then conveyed it to Mary Csaszar. The church sued to set aside these transfers as fraudulent conveyances and recover against the property to satisfy its judgment. The trial court found the conveyances were made without consideration to defraud creditors and ordered the property subjected to the judgment.

On appeal, the defendants challenged the sufficiency of the complaint and the evidence supporting the fraud finding. The court rejected these arguments. It held that the complaint adequately alleged the existence of a prior debt and the defendants' insolvency, as demonstrated by an unsatisfied execution. The court noted that when a debtor conveys property to a spouse, the burden shifts to the spouse to prove good faith; since the defendants presented no evidence, the trial court properly found the transfers fraudulent.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Sufficiency of complaint alleging fraudulent conveyance
  • Proof of prior debt and debtor insolvency
  • Burden of proof regarding good faith when debtor transfers property to spouse
  • Effect of conveyance through intermediary to spouse

Procedural posture

Defendants appealed from the trial court's order denying a new trial after judgment was entered against them in an action to subject property to a creditor's judgment.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Taylor, C.

Plaintiff recovered a judgment in the municipal court of the city of Minneapolis on August 7, 1915, against defendant Stephen Csaszar and one Edmond Weisz for the sum of $437.25. A transcript of the judgment was duly filed and docketed in the office of the. clerk of the district court of Hennepin county on May 1, 1916, and an execution issued thereon was returned wholly unsatisfied on April 19, 1917.

On August 6, 1914, defendant Stephen Csaszar, his wife, defendant Mary Csaszar, joining with him therein, conveyed a lot in the city of Minneapolis, then owned by him, to defendant Weisz, andon the same date defendant Weisz conveyed the lot to defendant Mary Csaszar. Plaintiff, claiming that these conveyances were made without consideration for the purpose of defrauding creditors, brought this action to subject the lot to the payment of its judgment. The trial court made findings of fact which amply sustain its conclusion that plaintiff is entitled to enforce its judgment against the lot. Defendants Csaszar appealed from an order denying a new trial.

Defendants contend that the complaint does not state facts sufficient to constitute a cause of action. The complaint set forth the judgment, and alleged that it was founded upon a claim which accrued prior to the conveyances in question. Defendants insist that this allegation is defective in failing to state the nature of the debt or claim. We think it sufficient as against the objection that the complaint fails to state a cause of action. The claim that the complaint fails to show the insolvency of the debtor is without merit, for it shows that an execution against him, issued upon this judgment, was returned wholly unsatisfied. The claim that the debt was not contracted on the credit of this lot, for the reason that the judgment debtor did not acquire the lot until after he had contracted the debt, is also without merit.

Defendants apparently contend that there is no sufficient evidence to prove the debt for which the judgment was rendered and hence that there is no evidence of the existence of the debt prior to the date of the judgment. A written obligation admittedly executed by Stephen Csaszar before the making of the conveyances in controversy was put in evidence, and the judgment roll, also put in evidence, shows that suit was brought on this obligation and that the judgment in question was rendered for the amount due thereon. That the debt existed prior to the mailing of the conveyances sufficiently appeared.

Defendants also contend that the finding that the deeds were made in fraud of creditors is not sustained by the evidence, for the reason that plaintiff, after putting in evidence the deeds showing a conveyance of the lot from the debtor, Stephen Csaszar, through a third party to his wife, offered no further evidence to show that the conveyance was fraudulent. No further evidence was required. Ordinarily the burden is on the creditor to show the fraudulent character of the conveyance which he attacks, but where a husband who is in debt conveys property to his wife, either directly or through the medium of a third party, the burden is on the wife to show the good faith of the transaction. Minneapolis Stock-Yards & Packing Co. v. Halonen, 56 Minn. 469, 57 N. W. 1135. Defendants offered no evidence whatever. Consequently the court could not do otherwise than hold the conveyances fraudulent.

The evidence sustains the findings of fact and we find no other matters which require mention.

Order affirmed.