Slater v. Bielsky

Plaintiff, surviving husband of Mary Slater, deceased, sued her estate and her incompetent daughter, Rena

The court found that a confidential relationship existed between plaintiff and decedent as husband and wife; that as to the first cause of action, the Brooks Avenue property "was not transferred to plaintiff’s deceased wife by the plaintiff to defraud creditors” but that decedent fraudulently induced plaintiff to deed the same to her as her separate property by representing to him that upon her death the property would become plaintiff’s; that with reference to the second cause of action, the consent of plaintiff to transfer the Avenue 19 property to their names "without being in joint tenancy” was obtained through the exercise of fraud upon him by decedent; and in connection with the third, the court found that certain United States savings bonds were purchased by the decedent from community funds which were held without consent of plaintiff in her name alone and in the names of decedent and Rena Wolfson. Judgment was entered on the findings cancelling the deeds of November 8, 1948, and February 2, 1944, and adjudicating all of the United States savings bonds as community property. Defendants appeal from the judgment contending that the findings are not supported by the evidence, particularly with reference to—the transfer of the Brooks Avenue property to protect the parties from creditors’ claims,

Predicating their first claim of error—that the evidence does not support the lower court’s finding that the Brooks Avenue property was not transferred to plaintiff to defraud creditors—upon plaintiff’s testimony that in 1948 his furniture business needed money and decedent suggested he transfer the property to her for "convenience sake," and the testimony of Jean Finn that plaintiff thought her suggestion that he transfer the property to his wife “in the event any creditor went after” him, was a good idea, appellants argue that the evidence of fraud is clear and the general rule that a conveyance in fraud of creditors vests title to the property transferred in the grantee except as against the creditors of the grantor (Estate of Xydias, 92 Cal.App.2d 857 [ 208 P.2d 378 ]; Ramirez v. Hartford Acc. & Indem. Co., 29 Cal.App.2d 193 [ 84 P.2d 172 ] ; Tognazzi v. Wilhelm, 6 Cal.2d 123 [ 56 P.2d 1227 ]) applies.

It is not clear from appellants’ brief what kind of fraudulent conveyance with relation to creditors they claim exists. In most cases, actual intent to defraud creditors must be proved (Civ. Code, § 3439.07) which, because of difficulty of direct proof, consists of inferences from circumstances surrounding the transaction and the relationship and interests of the parties; solvency is not material if the intent of the debtor to hinder or delay creditors is shown (Fross v. Wotton, 3 Cal.2d 384 [ 44 P.2d 350 ]; Maguire v. Corbett, 119 Cal.App.2d 244 [ 259 P.2d 507 ]). However, a transfer without a fair consideration by an insolvent person, or one who will thereby be rendered insolvent, is fraudulent as to creditors without regard to his actual intent to defraud (Civ. Code, § 3439.04), in which ease insolvency is not only material but defined in section 3439.02, Civil Code. Other types of fraudulent conveyances recognized by statute include transfers made by one engaged in a business for which his remaining capital is “unreasonably small” (Civ. Code, § 3439.02), or when the transferor intends to, or believes, that he will incur debts beyond his ability to pay as they mature (Civ. Code, § 3439.06). Appellants have failed to develop their argument beyond advancing the application of the general rule that a transfer in fraud of creditors binds the transferor. However, the record before us contains no evidence of insolvency of plaintiff as defined in section

The question of intent on the part of the grantor which makes a conveyance in fraud of creditors void, is one for the trier of the fact (Knapp v. Elliott, 81 Cal.App.2d 667 [ 184 P.2d 934 ]; Fross v. Wotton, 3 Cal.2d 384 [ 44 P.2d 350 ]; Abbey v. Zimmerman, 12 Cal.App.2d 311 [ 55 P.2d 903 ]; Maguire v. Corbett, 119 Cal.App.2d 244 [ 259 P.2d 507 ] ; Heffernan v. Bennett & Armour, 110 Cal.App.2d 564 [ 243 P.2d 846 ] ; Menick v. Goldy, 131 Cal.App.2d 542 [ 280 P.2d 844 ]). The evidence does not show, and the findings properly

At the trial various witnesses testified on both sides creating factual conflicts in the evidence. Its weight and the credibility of the witnesses were for the trier of fact; with its determination in these matters we will not interfere. As they had a right to do, the jury, and ultimately the trial court, accepted the testimony of plaintiff’s witnesses as against that of those testifying on behalf of the estate.

The evidence viewed in the light most favorable to the judgment discloses complete reliance by plaintiff upon his wife and trust and confidence in her handling of the community funds during the 19 years of their marriage; and a well designed and executed secret scheme on her part to gain control of their property that she might dispose of it as she saw fit upon her death. The exact moment at which she conceived this scheme and actively put it into operation is, of course, a question of fact, the determination of which depends upon all of the circumstances surrounding the relationship of the parties during their marriage. Her intent in this connection in 1944 and 1948 when plaintiff executed two deeds, since she is now deceased, must be inferred from her acts, declarations and conduct before, at the time of and subsequent to the transfers of the properties by plaintiff. The decedent, a divorced woman, and plaintiff a widower were married in 1937. For two years thereafter, Rena Wolf-son, a child of decedent’s previous marriage, lived with the parties but was later placed in a private sanitarium. At the outset of the marriage the parties owned nothing; decedent was not employed, but plaintiff, through his efforts in an ice cream distributing business, gradually accumulated a little money. They had a discussion about their finances and decedent suggested to plaintiff that she should handle the money and take complete charge of their financial affairs so she could see to it that they would always be provided for, never again be dependent on charity and that no depression

Without question a confidential relationship over and above that arising out of the normal marital relationship existed between the parties; and it was in this climate in 1944 and 1948 decedent talked to plaintiff about the Avenue 19 and Brooks Avenue properties. Both had been taken in their names as joint tenants; but plaintiff was not aware of the legal effect of joint tenancy when decedent suggested to plaintiff he execute the deeds in question, taking the properties out of joint tenancy and placing one in their names as tenants in common and the other in decedent’s name as her separate property. Prior to his execution of the deed to the Avenue ■' 19 property and for the purpose of inducing plaintiff to deed it to them both, as community property, decedent told him “ (I)n ease one of us dies, and we got to go to a lot of trouble to get the ownership, the other half ownership, and on the community property we wouldn’t have to do this, see, (it) immediately becomes, we become, whichever survivor becomes the owner of the whole place” and that Sam Hozman (lawyer and first husband of Ruth Bielsky, coexecutor of her estate)

Under much the same circumstances, plaintiff deeded the Brooks Avenue property to decedent as her separate property on November 8, 1948. At that time he was engaged in the furniture business and “needed some money.” He told her this, and at various times she gave him funds from the community assets. She was still handling all of the finances and banking the money and paying the bills. Again discussing their affairs, she suggested “(s)upposing you turn over the property to me for convenience sake ...” She told him that Sam (whom she knew plaintiff also trusted) said she shoiüd suggest to him that “she should get the property in her name only”; that as long as they were still married she would be able to do nothing with the property without his name (signature) and he would receive it as survivor at her death; and that Sam told her that according to California law the property would belong to plaintiff if she died first, without expense of probate. Believing her statements plaintiff deeded the property to her, and himself wrote into the deed “Mary Slater, married woman, as her separate property.” Plaintiff did not check on any of her statements to him because he trusted her and relied on her. At no time until after his wife’s death did plaintiff realize the legal effect of these transactions ; and he at no time intended to release to her his interest in either property. That decedent knew her representations were false and she made them to induce plaintiff to execute the deeds as part of her scheme to acquire the property for her own purposes is borne out by her discussions and confidences with others concerning the property and a will, her subsequent secret execution of a will leaving the same to her daughter and, unknown to plaintiff, the purchase of bonds in her name and that of her daughter from community monies. During all of this time and without his knowledge and permission, decedent was secretly purchasing, with community funds which plaintiff had entrusted to her

It is apparent from the evidence that the confidential relationship existing between plaintiff and decedent arose out of more than the mere fact they were married and living together. As to transactions between husband and wife “the rule with respect to confidential relationships obtains and precludes either from obtaining unfair advantage of the other through fraud, mistake or undue influence.” (Dale v. Dale, 87 Cal.App. 359 [ 262 P. 339 ].) The unfair advantage of plaintiff taken by decedent in this atmosphere of trust and confidence is obvious from the evidence; as is the undue influence she exerted upon him.

Appellants argue that in connection with the transfer of the Avenue 19 property, decedent’s misrepresentations were made after plaintiff executed the deed and thus could not serve as an inducement for the conveyance. Neither the record as a whole, nor that portion of plaintiff’s testimony referred to by appellants, alone or read in conjunction with his other testimony, bears this out. The most the latter discloses is that a few days after the deed was executed by plaintiff, decedent told him that she had been advised to have him do so by Sam Hozman. This certainly does not preclude a finding from the other evidence in the record that before he executed the deed she told him that, if he would convey the property to them as tenants in common, it would still remain community property and it would expedite the transfer of the property to the survivor without the expense of probate and taxes.

With reference to the savings bonds the evidence is apparent that when the parties were married they owned nothing; that they had previously been on charity. After working hard in the ice cream distributing business earning

Proof of her deceit and fraud is borne out by testimony that decedent, upon purchasing the bonds did so secretly and without knowledge of plaintiff, placed them, at one time, with the owner of the sanitarium where her daughter was staying and on other occasions with the Bielskys, the coexeeutors of her estate, and put none of them in plaintiff’s name. She took other persons into her confidence concerning the bonds, the transfer of the two properties and her will, but she at no time discussed these matters with plaintiff. It is plain that the welfare of her daughter was foremost in her mind and that it was her desire to see that she was cared for after her death even at the expense of her husband. It is likewise apparent that plaintiff, believing he was making the conveyances for convenience in handling and disposing of the property upon death, at no time intended to relinquish his rights to any of the property.

For the foregoing reasons the judgment is affirmed.

Wood, P. J., and Fourt, J., concurred.