Taylor v. Duesterberg

• Decision Date: 11 January 1887
• Parties: Taylor v. Duesterberg, Adm'r.
• Court: Indiana Supreme Court

109 Ind. 165

9 N.E. 907

Taylor

v.Duesterberg, Adm'r.

Supreme Court of Indiana.

January 11, 1887.

Appeal from circuit court, Knox county.Cauthorn & Boyle, for appellant. Cullop, Shaw & Kessinger, for appellee.

Mitchell, J.

This suit was commenced by Duesterberg, as administrator of the estate of Peter Burway, deceased, to set aside conveyances by which it is alleged Leroy S. Taylor made a fraudulent transfer of his real estate to his wife, Louisa Taylor. The complaint alleges that, at a date prior to the commencement of this action, Duesterberg, as such administrator, had recovered a judgment, in favor of the Burway estate, against James Baker and Leroy S. Taylor, on a note executed by Baker and Taylor to Burway in his life-time, and that, for the purpose of hindering and delaying the collection of such judgment, the defendant, Leroy S. Taylor, had, before the rendition of such judgment, transferred all his property subject to execution, consisting of a certain lot in the city of Vincennes, to his wife, Louisa, without any consideration. The prayer of the complaint is that the conveyance may be set aside, and that the lot be subjected to the lien of the judgment previously obtained. Upon request, the court found the facts specially, and stated conclusions of law thereon favorable to the appellee, Duesterberg.

Mrs. Taylor brings the record here on appeal. It is contended, on her behalf, that the special finding of the court is not sustained by the evidence. The plaintiff's case, as presented in his complaint, proceeds upon the theory that, in accepting the conveyance for the lot which he was seeking to subject to the payment of the judgment, Mrs. Taylor was a mere volunteer. The complaint charges, moreover, that she had notice, at the time the conveyance was accepted, that her husband's purpose in transferring the property was to hinder and delay his creditors. Upon the evidence admitted, we are constrained to the conclusion that the finding of the court that Mrs. Taylor received the conveyance without any consideration, and that such conveyance was a fraud upon the creditors of her husband, is not sustained. That the title to the lot was originally taken in the husband's name is not controverted; and that no consideration was paid by Mrs. Taylor for the conveyance at the time the title was transferred from her husband to her is equally beyond dispute.

There was uncontradicted evidence, however, which established the following facts: The lot was purchased from Charles Graeter in July, 1881, for the consideration of $100. The purchase money was all paid out of money belonging to Mrs. Taylor and her children by a former marriage. The money was all derived from the sale of wheat which had been harvested from a small farm owned by Mrs. Taylor and her children as tenants in common. Leroy S. Taylor did not pay one farthing of the original purchase price. No one, so far as we can discover, claims that he did. At the time the lot was purchased it was unimproved. Subsequently, in September, 1881, a loan of $300 was made from Graeter. This was secured by the note of Leroy S. Taylor, and a mortgage on the lot, in which Taylor and his wife joined. The money borrowed was all used in procuring material and paying for labor employed in the erection of a house on the lot. This incumbrance has not been discharged. William Richardville, a son of Mrs. Taylor, paid for a part of the material used in the improvement of the lot. It does not appear, from any evidence in the record, that Leroy S. Taylor ever furnished any money to make improvements on the lot. The most that is claimed is that he contributed some of his own labor towards the improvement of the property. We have, however, been unable to find any evidence in the record which sustains even this claim. The evidence shows, and the court found, that the lot and improvements were worth $750. The evidence in the record shows that all of Leroy S. Taylor's property, exclusive of that in controversy, was worth $296. Upon the facts disclosed, it cannot, with propriety, be said that the conveyance to Mrs. Taylor was without consideration, and therefore voluntary, nor was such conveyance a fraud upon the creditors of Leroy S. Taylor. He had no interest in the property, except that he held the bare legal title, while the equity of his wife and her children, they having paid the entire purchase price of the lot, was complete. Having taken the title in his own name, without the consent of those who furnished the money, and paid the purchase price, an enforceable trust resulted in their favor against Taylor. He held the title in trust for them from the beginning. The equitable owners were those whose money had been used in paying for the lot. This ownership is the subject of protection in a court of equity. Heberd v. Wines, 105 Ind. 237; S. C. 4 N. E. Rep. 457; Mitchell v. Colglazier, 106 Ind. 464; S. C. 7 N. E. Rep. 199, and cases cited; Hileman v. Hileman, 85 Ind. 1.

That Taylor subsequently borrowed money on the security of the trust property, with which to make improvements upon it, did not defeat or impair the rights of the equitable owners, as respects his general creditors. He paid no part of this incumbrance, so far as appears. That he signed the note for the money borrowed, and secured it by a mortgage on the lot, did not extend or enlarge his right to or interest in the property. Mrs. Taylor's children may have had some cause to complain because the conveyance was made to their mother alone, instead of to her and them jointly, their money having been used with that of their mother's to pay for the lot, but this furnishes no ground upon which the creditors of Leroy S. Taylor can assail the transaction. Their right is to be confined to the actual interest which their debtor had in the property. Prior equitable interests could not be subjected to the claims of creditors. Hays v. Regar, 102 Ind. 524; S. C. 1 N. E. Rep. 386; Wright v. Jones, 105 Ind. 17; S. C. 4 N. E. Rep. 281; Heberd v. Wines, supra;Foltz v. Wert, 103 Ind. 404; S. C. 2 N. E. Rep. 950.

Creditors cannot invoke the aid of the law to prevent a husband from restoring to his wife and her children that which in equity and good conscience he has no right to withhold. Proctor v. Cole, 104 Ind. 373, 383; S. C. 3 N. E. Rep. 106, and 4 N. E. Rep. 303; Lord v. Bishop, 101 Ind. 334. A conveyance will...