Sudbrock v. Kroener

On or about March 7, 1932, Frank Sudbrock, as plaintiff, instituted suit against Elizabeth Kroener, as defendant on a promissory note for $600, dated March 23, 1927, and due one year thereafter, to recover the principal sum thereof with interest.

Elizabeth Kroener filed an answer and cross-complaint, by which cross-complaint she prayed judgment against

Frank Sudbrock, at about that time, took Mae L. Sudbrock to a bank and exhibited to her certain of his possessions, including a certificate of deposit issued by the bank and two promissory notes for $100 each, made payable to Frank Sudbrock. At the time of their marriage Mae L. Sudbrock relied on the promise of Frank Sudbrock to turn over to her his property as agreed. At the time of. the marriage the notes and certificate of deposit were payable to Frank Sudbrock. On or about October 21, 1932, the certificate of deposit was turned in to the bank and a new certificate of deposit was issued by the bank payable to Frank Sudbrock in the sum of $2,750. On or about December, 1932, this certificate of deposit was turned in to the bank and a new one issued for the same amount, made payable to Frank Sudbrock and Mae L. Sudbrock, as joint tenants. Frank Sudbrock objected to the certificate of deposit so issued being made payable to him and his wife as joint tenants, and returned same to the bank, whereupon, and at his request, the bank canceled said certificate and issued another in the same amount made payable to Mae L. Sudbrock on or about December 27, 1932, and on the same day Frank Sudbrock indorsed said two notes and delivered them to Mae L. Sudbrock. The certificate of deposit and notes were retained by Mae L. Sudbrock. The sheriff

The question presented on this appeal is whether or not the transfer of the property by Frank Sudbrock to Mae L. Sudbrock prior to the levy thereon by the sheriff was such a performance of an oral antenuptial agreement as to avoid the statute of frauds and the provisions of section 3442 of the Civil Code.

An agreement made upon consideration of marriage other than a mutual promise to marry is invalid unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged. (Sec. 1624, subd. 3, Civ. Code.)

Marriage, from the earliest period of the common law, has ever been held to be a sufficient consideration for a conveyance of land, and such conveyances have ever been regarded as being entitled to as full protection as conveyances made on the most ample pecuniary consideration. (Otis v. Spencer, 102 Ill. 622 [ 40 Am. Rep. 617 , cited in 41 A. L. R. 1164 ]; Cohen v. Knox, 90 Cal. 266 , 273 [ 27 Pac. 215 , 13 L. R. A. 711 ].

However, such is not the question here presented. At the time of the transfer of the certificate of deposit and two promissory notes, the marriage had already been consummated and the transfer was made in the carrying out of an oral antenuptial agreement and not in consideration of marriage, even though the marriage was agreed to and the marital relation entered into on the oral promise that such transfer would, in fact, be made. Until the marriage was consummated the claimant herein (Mrs. Sudbrock), wife of Frank Sudbrock, had the right to exact from him a written agreement, and thus avoid the

In Hughes v. Hughes, 49 Cal. App. 206 , 211 [193 Pac.144, 145], the court says:

“The fact that the parties were afterward married does not operate to lift the bar of the statute. ‘A promise made in anticipation of a marriage, followed by a marriage, is the exact case contemplated by the statute. It is plain that the marriage adds nothing to the very circumstances described by the statutory provision which malees a writing essential; in fact, until a marriage takes place, there is no binding agreement independent of the" statute, so that the marriage itself is a necessary part of every agreement made upon consideration of it which the legislature has said must be in writing.’ ” (Citing cases.)

See, also, Peek v. Peek, 77 Cal. 106 [ 19 Pac. 227 , 11 Am. St. Rep. 244 , 1 L. R. A. 185 ]; Trout v. Ogilvie, 41 Cal. App. 167 [ 182 Pac. 333 ].

In the proceeding in which this appeal was taken the court found in part as follows:

“That at the time the agreement was made by the said Frank Sudbrock and Mae L. Sudbrock in March, 1932, and at various times thereafter, said- Mae. L. Sudbrock did not know that Elizabeth Kroener was a creditor of said Frank Sudbrock; that on the 22nd day of August, 1932, when said Frank Sudbrock and Mae L. Sudbrock were married said Mae L. Sudbrock did not know that Elizabeth Kroener was a creditor of said Frank Sudbrock; that at the time of the making of said prenuptial agreement and at the time

The transfer of said certificate and notes was a valid transfer unless inhibited by the provisions of section 3442 of the Civil Code, which reads:

“In all cases arising under section twelve hundred and twenty-seven, or under the provisions of this title, except as otherwise provided in section thirty-four hundred and forty, the question of fraudulent intent is one of fact and not of law; nor can any transfer or charge be adjudged fraudulent solely on the ground that it was not made for a valuable consideration; provided, however, that any transfer or encumbrance of property made or given voluntarily, or without a valuable consideration by a party while insolvent or in contemplation of insolvency, shall be fraudulent, and void as to existing creditors.”

Since the proviso in said section was added by the legislature in 1895, the effect thereof has been determined by our Supreme Court. In Hemenway v. Thaxter, 150 Cal. 737 [ 90 Pac. 116 ], the court said: “That the conveyance, if voluntary, was in fraud . . . scarcely requires argument. Section 3442 of the Civil Code provides (quoting above proviso). ITemenway admits that by this conveyance he divested himself of all property liable to execution; that he became thereby, and has ever since remained, insolvent. The consequence of this conveyance being, then, to render Ilemenway insolvent, he will be presumed to have intended its natural consequence, from which follows an intent to

The rule is stated in 12 California Jurisprudence, page 1019, section 60, thus: “By express provision, a voluntary conveyance made by an insolvent, or by one in contemplation of insolvency, is now conclusively presumed to be fraudulent as to existing creditors. The insolvency of the voluntary grantor is conclusive of fraudulent intent, and no other facts can control, influence or overcome this presumption. The question of an actual intent is immaterial.” (See, also, Hanscome-James-Winship v. Ainger, 71 Cal. App. 735 [ 236 Pac. 325 ], and cases cited.) Where the transfer renders one insolvent, his insolvency is contemplated by the very act of making the transfer (Knox v. Blanckenburg, 23 Cal. App. 298 [ 152 Pac. 59 ]). Against existing creditors, no one can transfer all his property in consideration of future support so as to defeat any such creditor in enforcing his claim, for under such circumstances the law presumes the act to be done with fraudulent intent,—to hinder and delay the creditor in the collection of his debt. This is by reason of the fact that every person is presumed to know what the direct result of his acts will be (Baxter v. Baxter, 19 Cal. App. 238 [ 125 Pac. 359 ]; Benson v. Harriman, 55 Cal. App. 483 [ 204 Pac. 255 ]. Where the transfer is of all the property owned by the transferor, by the making of the transfer he became insolvent. Hence, that the transfer was in contemplation of insolvency will admit of no doubt. (Southwick v. Moore, 61 Cal. App. 585 , at 590 [ 215 Pac. 704 ], and cases there cited.) In the case of Benson v. Harriman, supra, the Supreme Court, in denying a hearing in that court, said:

“It was an action to recover . .■ . a debt owing by him to plaintiff on agreement. . . . The judgment therein was proof that defendant was indebted to plaintiff on the contract at the time the action was begun. The fact that the debt was for the reasonable value of the services and to that extent unliquidated was immaterial on the question of the right of the plaintiff to maintain this action to set aside the fraudulent conveyance.”

In the ease of Lefrooth v. Prentice, 202 Cal. 215 , at page 228 [ 259 Pac. 947 ], the court says:

“It must be borne in mind that under section 3442 of the Civil Code (quoting the proviso of said section). Under such a showing the fraudulent intent on the part of the grantee of such transfer is immaterial. (Citing cases.) It is also true that in such case the intent to defraud creditors is not required. See Atkinson v. Western D. Syndicate, 170 Cal. 503 , 506 [ 150 Pac. 360 ], where it is said: ‘If these conditions, to-wit, a grant made without consideration by a person insolvent or in contemplation of insolvency, are present, the intent of the grantor is immaterial and the transfer, regardless of the actual intent, is void as to creditors.’ ”

Where the rights of a creditor are involved, the view accepted by all the courts is that a postnuptial settlement in pursuance of an antenuptial agreement is not binding on an existing creditor. ( 41 A. L. R. 1169 .) Where a statute declares an oral antenuptial agreement void, it cannot be validated by a postnuptial contract. To hold that it could be so held valid would announce a doctrine that would, in effect, work a judicial repeal of the statute (Fischer v. Dolwig, 39 N. D. 161 [ 166 N. W. 793 ]; Rowell v. Barber, 142 Wis. 304 [ 125 N. W. 937 , 27 L. R. A. (N. S.) 1140 ]; 27 C. J. 542, sec. 238). If the agreement to make the transfer or conveyance cannot be made the basis of an action to compel the conveyance of the property, because the agreement is void under the statute of frauds, then any conveyance in pursuance thereof is voluntary (27 C. J. 542).

Counsel for respondent rely on the cases of Freitas v. Freitas, 31 Cal. App. 16 [ 159 Pac. 611 ]; Hussey v. Castle, 41 Cal. 239 ; Martin v. Pritchard, 52 Cal. App. 720 [ 199 Pac. 846 ]. These cases are readily distinguishable from the holding herein. In the case of Freitas v. Freitas, supra, there is no question of a creditor involved and hence it is not authority on the rights of an existing creditor at the time of the transfer. The case merely holds that as between the parties, if a transfer is made in conformity with and in pursuance of an antenuptial oral agreement, the same is consummated and the statute, in such instance, has no application. Hussey v. Castle, supra, was decided prior to the amendment to section 3442 of the Civil Code and is therefore not authority on the question here presented since said amendment. In Martin v. Pritchard, supyra, the following

For the foregoing reasons the transfer of the certificate of deposit and notes, in pursuance of the antenuptial oral agreement at a time subsequent to the marriage, did not constitute an executed oral agreement so as to avoid the effect of the statute of frauds. Plence it was not a transfer that could have been enforced after marriage. It was a voluntary transfer without consideration and, inasmuch as it was a transfer of all the property of the transferor, it was in contemplation of insolvency. Elizabeth Kroener, being an existing creditor, the transfer as to her was void.

Judgment reversed.

Barnard, P. J., and Jennings, J., concurred.