Appeal from Circuit Court, Columbia County. Donald L. Kalberer, Judge.
George VanNatta, St. Helens, argued the cause for appellants. On the brief were VanNatta & Petersen, St. Helens.
Charles E. Hodges, Jr., Portland, argued the cause and filed the brief for respondent.
This is a suit to set aside certain conveyances of real property on the ground the conveyances were made to defraud creditors. A decree was entered in favor of plaintiff, and defendants appeal.
Phillip Popham, an 86-year-old man, lived with his brother Alfred on a 20-acre place owned by Phillip
near Clatskanie in Columbia county. Sixteen acres of the parcel had been acquired by Phillip in 1957 for $4,500. Four acres, which are contiguous to the 16 acres but separated by a very small stream, were purchased by Phillip in 1963 for $225.
On May 5, 1965, Phillip, while driving his uninsured automobile, was involved in a collision with another vehicle. On May 12, 1965, an adjuster for the company insuring the persons injured in the accident called upon Phillip and advised him that a claim was being made against him. Phillip denied liability.
The next day, May 13, Phillip conveyed the four-acre parcel to Alfred for $100. The deed was recorded on the same day.
Approximately two months later, Phillip conveyed the balance of the land to his brother Alfred. The deed was not recorded until May 16, 1966, after the death of Phillip. Apparently there was no monetary consideration paid by Alfred for the conveyance.
Phillip died in September, 1965.
Sometime in 1967 Alfred conveyed the four-acre parcel to his daughter, defendant Alvesta Thompson, as a gift.
In May, 1967, an administratrix was appointed for Phillip's estate. Actions by the parties injured in Phillip's accident were filed against the estate, and judgments in the amount of $18,000 were entered against the estate in May, 1968.
In July, 1970, Alfred sold two acres of the remaining 16 acres for $1,500 to defendant Donald Prouty, who subsequently sold it to Alfred's daughter, defendant Alvesta Thompson, for $3,000 in December, 1971.
The suit herein, which was filed on September 10, 1971, seeks to set aside the two conveyances from Phillip to Alfred and the conveyance of the two acres from Alfred to defendant Prouty in July, 1970, on the grounds the conveyances were made in fraud of creditors.
Defendant Alfred Popham alleged in his answer that the total property was exempt as a homestead. Defendant Alvesta Thompson also alleged that the property was exempt as a homestead and that Donald Prouty, from whom she purchased the two acres in 1971, was a bona fide purchaser of the two acres from Alfred Popham.
The trial court, in deciding for the plaintiff, found:
"1. There was never a valid conveyance by Phillip M. Popham to Alfred Popham of the properties in question, as there was never a valid delivery of the deeds.
"2. Even had there been completed conveyances I find that the conveyances were an attempt to avoid the claims of creditors and therefore voidable.
"3. Phillip Popham never claimed the properties in question as a homestead and that exemption would belong to the estate if there were someone to claim it and there is not (ORS 116.590, now repealed).
"4. The defendant, Donald C. Prouty, purchased the property from Alfred Popham for valuable consideration and without notice of any outstanding claims against the property. Mr. Prouty's subsequent sale to Alvesta Thompson, niece of Phillip Popham and daughter of Alfred Popham, one of the defendants herein, was for a valuable consideration but was with notice of the claims and in fact the sale was because of the present suit."
Defendants Alfred Popham and Alvesta ...