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EMIL T. THYSELL v. HENRY T. McDONALD AND OTHERS

Minnesota Supreme Court1916-11-17No. Nos. 19,860—(27)
134 Minn. 400

Summary

Holding. The court affirmed the judgment for the defendants, holding that the deed was valid because the son's services constituted adequate consideration, established by evidence that an agreement existed for him to receive "going wages" for his work.

A father conveyed his 160-acre farm to his son, who had worked on the farm for twelve years after reaching adulthood. The son assumed an existing mortgage and the father credited him $3,200 in wages as additional consideration for the deed. After the father's death, the estate's administrator sued to void the conveyance as fraudulent against creditors, arguing the son had no valid claim to wages because no prior agreement for compensation existed. The trial court found that the son's services were rendered under an agreement to pay wages—established through testimony that the son remained to work for "going wages"—and therefore the deed was supported by adequate consideration and valid.

The administrator challenged the trial court's findings and jury verdict. Although the court made certain erroneous statements to the jury about the effect of setting aside the deed, these statements did not prejudice the plaintiff because the homestead portion was beyond the reach of creditors in any event, and the jury's actual inquiry focused solely on whether the deed was executed with intent to defraud—a question unaffected by the incorrect explanations.

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

Key issues

  • Whether services performed by an adult child without a prior express agreement constitute consideration for a conveyance
  • Whether a debt or wage claim can support consideration for a conveyance to an adult child living in the family home
  • Whether trial court errors regarding the effect of a fraudulent conveyance affected the jury's verdict on intent to defraud

Procedural posture

The administrator appealed from the trial court's order denying his motion for amended findings and new trial after a jury verdict and judgment in favor of the defendants.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Taylor, C.

The decedent owned a farm of 160 acres in Clay county upon which he resided with his wife and son, and 80 acres of which was his homestead. The son, the defendant Henry T. McDonald, remained upon the farm and worked for his parents for some 12 years after he became of age. The parents then conveyed the farm to him, reserving to themselves for life the use of certain rooms in the dwelling house, and of certain parts of the barn and granary. The son assumed a mortgage of $1,600 upon the farm, and his claim for wages for his services during the preceding 12 years constituted the remainder of the consideration for the deed. Shortly after the execution of the deed, the father died. Some two years later, plaintiff was appointed administrator of his estate upon the petition of creditors, and thereafter brought this action to set aside the deed as fraudulent and void as against such creditors. At the trial, the question as to whether the deed had been made for the purpose of hindering, delaying or defrauding creditors was submitted to a jury and answered in the negative. The court incorporated this special verdict in its findings, and further found, in substance, that the son purchased the farm in good faith for its reasonable value, and had paid the full purchase price, over and above the mortgage, by applying thereon the sum of $3,200 due him for wages. The court held the deed to be valid and directed judgment for defendants. Plaintiff made a motion for amended findings, and also for a new trial, and appealed from the order denying his motions.

At the time of executing the deed, the decedent owed debts exceeding in amount the value of the property retained by him; and plaintiff in sists that the deed was a voluntary conveyance, without consideration, and void for that reason as against prior creditors. It is well settled that, where a debtor makes a conveyance without consideration and without retaining sufficient other property to pay his then existing debts, such conveyance may be set aside by his creditors to the extent necessary to enable them to apply the unexempt property so conveyed in payment of such previously existing debts. Filley v. Register, 4 Minn. 296 (391); Tupper v. Thompson, 26 Minn. 385, 4 N. W. 621; Underleak v. Scott, 117 Minn. 136, 134 N. W. 731; Sovell v. County of Lincoln, 129 Minn. 356, 152 N. W. 727.

To sustain his claim that the deed in controversy was without consideration, plaintiff invokes the rule that a child, remaining in the famity after becoming of age, is not entitled to pay for services rendered, unless the services were performed pursuant to a prior agreement that he should receive compensation therefor. This rule is also well established. McCord v. Knowlton, 79 Minn. 299, 82 N. W. 589; Einolf v. Thomson, 95 Minn. 230, 103 N. W. 1026, 104 N. W. 290, 547; Begin v. Begin, 98 Minn. 122, 107 N. W. 149; Beneke v. Beneke, 119 Minn. 441, 138 N. W. 689, Ann. Cas. 1914B, 381; Knight v. Martin, 124 Minn. 191, 144 N. W. 941; Lansing v. Gregory, 128 Minn. 496, 151 N. W. 277. Where such services have been rendered without a prior agreement for compensation, a subsequent deed, given in payment therefor, is without consideration and may be set aside at the suit of prior creditors of the grantor. McCord v. Knowlton, 79 Minn. 299, 82 N. W. 589. But where such services aie rendered pursuant to an agreement that compensation shall be made therefor, they constitute a valid consideration for a conveyance to the child. Wetherill v. Canney, 62 Minn. 341, 64 N. W. 818; Leqve v. Stoppel, 64 Minn. 152, 66 N. W. 124.

The finding of the court that the sum of $3,200 was due the son for wages, at the execution of the deed, necessarily included a finding that his services were performed under an agreement that he should receive compensation for such services; and the main contention of plaintiff is that such finding is tfot warranted by the evidence.’ Such agreement may be established either by proof of an express agreement, or by proof of facts and circumstances showing that both parties understood that the services were to be paid for; and it need not be shown that the amount of compensation was agreed upon in advance. Einolf v. Thomson, 95 Minn. 230, 103 N. W. 1026, 104 N. W. 290, 547; Beneke v. Beneke, 119 Minn. 441, 138 N. W. 689, Ann. Cas. 1914B, 381; Lansing v. Gregory, 128 Minn. 496, 151 N. W. 277.

Plaintiff called the son for cross-examination, and the following is a part of such cross-examination: “Q. How did you come to remain at home, Henry, after you reached your majority ? A. To work. Q. But what arrangement was made for wages, if any? A. Going wages. Q. You were to receive the going wages? A. Yes, sir.” This testimony brought out by plaintiff himself is sufficient to sustain the finding which he attacks.

Counsel for defendants and the trial court seem to have overlooked the fact that the deed, even if fraudulent as to creditors, would be valid between the parties to it. In questions to witnesses, defendant’s counsel assumed that, if the deed were set aside as to creditors, the entire farm, including the homestead, would revert to the estate and be administered by the probate court the same as if the deed had never been executed, and the court stated to the jury that such would be the fact. The creditors had no claim upon the homestead in any event, and the deed vested title to it in the son, and such title could not be affected by any judgment rendered in this action, even if the deed were fraudulent as to the nonexempt 80. Redmond v. Hayes, 116 Minn. 403, 133 N. W. 1016; Keith v. Albrecht, 89 Minn. 247, 94 N. W. 677, 99 Am. St. 566; Ferguson v. Kumler, 27 Minn. 156, 6 N. W. 618.

Plaintiff duly objected to the line of questions above mentioned; and urges the rulings admitting them, and the remarks of the court to the jury, as error. While incorrect, the question is whether they affected the result and -consequently were prejudicial. Only one question was submitted to the jury: Whether the deed had been executed with intent to hinder, delay or defraud creditors. While the explanation of the effect of the verdict and of the effect of holding the transaction fraudulent might well have been omitted, and, if stated, should have been stated correctly; yet as the court further told the jury that, if the farm reverted to the estate, the homestead would go to the widow for life and to the children after her death, and that the creditors would have no claim upon it, the jury must have understood that the homestead was beyond the reach of creditors regardless of whether the deed was or was not executed with a fraudulent intent. Furthermore, immediately after the explanation referred to, the court stated to the jury that “the only question in this case for you to consider is whether or not the old man intended by this deed to cheat his creditors and that the son knew of this intention or should have known it.” We think no substantial‘prejudice resulted to plaintiff. The matters complained of had no bearing upon the question of the intent with which the deed was made nor upon the question of the consideration for it.

The fact that the parents reserved the use of portions of the buildings does not concern plaintiff as the reservation did not affect the unexempt 80 but was confined to the homestead. Some other questions are raised but do not require special mention. We find no errors requiring a reversal, and the order appealed from is affirmed.