Ayers Nat. Bank of Jacksonville v. Barber

• Decision Date: 02 April 1919
• Docket Number: No. 11975.,11975.
• Citation: 287 Ill. 182,122 N.E. 533
• Parties: AYERS NAT. BANK OF JACKSONVILLE et al. v. BARBER et al.
• Court: Illinois Supreme Court

287 Ill. 182

122 N.E. 533

AYERS NAT. BANK OF JACKSONVILLE et al.

v.BARBER et al.

No. 11975.

Supreme Court of Illinois.

Feb. 20, 1919.

Rehearing Denied April 2, 1919.

Error to Appellate Court, Third District, on Error to Circuit Court, Morgan County; Frank W. Burton, Judge.

Action by the Ayers National Bank of Jacksonville and another against William Barber and others. A decree rendered for plaintiffs was reversed on error by the Appellate Court (207 Ill. App. 590), and plaintiffs bring error. Judgment of Appellate Court reversed, and decree of circuit court affirmed.

Bellatti, Bellatti & Moriarty, of Jacksonville, for plaintiffs in error.

Hardin W. Masters and Thomas D. Masters, both of Springfield, for defendants in error.

DUNCAN, C. J.

On January 26, 1916, the plaintiffs in error, the Ayers National Bank of Jacksonville and Elmer J. Henderson, filed in the circuit court of Morgan county a bill in aid of two executions, in which William Barber, Anna M. Barber, Pearl Frost, James E. Barber, Grace W. Barber, Lizzie Heminghaus, and Clara Heminghaus were made defendants. The bill was finally dismissed as to Lizzie and Clara Heminghaus, and as finally amended it charged that the Ayers National Bank of Jacksonville on May 12, 1915, obtained a judgment in the circuit court of Morgan county against William Barber for $2,026.20; that Elmer J. Henderson on May 17, 1915, obtained a judgment in the same court against Barber for $1,107.16; that executions were duly issued on said judgments, respectively, May 16, 1915, and May 20, 1915; that prior to the date of said judgments Barber was the owner of a certain 120 acres of land in said county, described in the bill; that on April 14, 1915, the indebtedness for which said judgments were afterwards entered being in existence, Barber made a pretended conveyance of said land to Pearl Frost, and that Pearl Frost thereafter made a pretended conveyance of said land on the same date to Anna M. Barber, wife of William Barber; that both of said conveyances were without consideration and were mere shams, made to defraud the plaintiffs in error out of their just demands and to prevent the levy of said executions on said land, and that said land is now held by Anna M. Barber in trust for William Barber; that it appears from a certain agreement entered into between William and Anna M. Barber, of the same date as the conveyances, that she, in consideration of the conveyance to her of the land, assumed an indebtedness due from William Barber to Lizzie Heminghaus for $2,300 and one due from him to Clara Heminghaus for $1,080, but that, in fact, no such indebtedness existed; that from the agreement it appears that part of the pretended consideration for the conveyance of said premises to Anna M. Barber was a conveyance of her own property, a certain 5-acre lot and building thereon located in Jacksonville, to James E. Barber, brother of William Barber, and Grace W. Barber, wife of James, in pretended extinguishment of a pretended debt of William to James of $4,000, but that, in fact, there was no such indebtedness; that by said last conveyance James E. Barber, a man of little or no financial worth, became seized of said house and lot in trust for the use of William Barber; that James E. and Grace W. Barber mortgaged said house and lot to Mary H. and Oliver Hodgson for $1,000; that Anna M. Barber is a woman of little or no pecuniary responsibility; that William Barber has no real estate other than the premises aforesaid held in trust for him, or other property, and refuses to satisfy the executions aforesaid. The prayer of the bill is for relief against the defendants thereto; that the conveyances from William Barber to Pearl Frost, and from Pearl Frost to Anna M. Barber, and from Anna M. and William Barber to James E. and Grace W. Barber, may be set aside and declared null and void as to plaintiffs in error; that James E. and Grace W. Barber be required to turn over to plaintiffs in error the $1,000 borrowed from the Hodgsons; that the parties be restrained from disposing of or incumbering any of the premises in question, and that the sheriff be directed to levy the executions issued on said judgments upon the premises conveyed, and that he sell the same as the property of William Barber. There is also a prayer for general relief.

Pearl Frost filed a disclaimer. The other parties to the bill answered the same, denying substantially all the material allegations therein, and alleged that the conveyances were made for full and adequate consideration; that Anna M. Barber obtained good title to the premises conveyed to her, and that she and her husband had a right of homestead therein, and that James E. and Grace W. Barber obtained a good and valid title to the house and lot by reason of said conveyance to them.

The circuit court found that a part of the consideration passing from Anna M. Barber for the conveyance to her of said land was the conveyance she made of the house and lot to James E. and Grace Barber to extinguish a pretended debt owing by William to James for $4,000, but that, in fact, there was no such debt; that such conveyance was a sham and a fraud on the part of William and James, and an attempt to defraud and hinder plaintiffs in error in the collection of their judgments; that therefore the premises so conveyed were held by James E. Barber ‘under a constructive trust in favor of the said William Barber and subject to the lien of the judgments,’ and that James E. and Grace W. Barber had mortgaged the same for $1,000. The court then decreed that the said property was equitably the property of William Barber and held the same subject to said executions, and that James E. Barber should account for the amount that he received by mortgaging the same ($1,000), in the event that the lot subject thereto would not satisfy the debts, and that in the event of any surplus above the amount of the executions the same should be paid to James, and in case of any deficit William should pay the same to plaintiffs in error, and that plaintiffs in error should have judgment therefor. The record was reviewed by the Appellate Court for the Third District on writ of error, and that court held that plaintiffs in error were not entitled to any relief and reversed the decree of the circuit court. The case comes to this court on certiorari.

The only questions raised on this record and argued are whether or not the conveyances by which Anna M. Barber obtained title to the 120 acres of land and James E. Barber obtained title to the house and lot were made in good faith and for an adequate consideration and without intent to defraud plaintiffs in error.

The evidence in the record clearly discloses that Pearl Frost was not substantially interested in the conveyance of the 120 acres of land, but was merely used in the transaction as a means of passing the title of William and Anna M. Barber to the latter. It also discloses that the deeds were made in pursuance of an agreement between William and Anna M. Barber by which William was to sell and convey to her the 120 acres of land and all his personal property, farm implements, stock, etc., for which she agreed to pay him $110 per acre for the land and $600 for all of the personal property, amounting to $13,800. William Barber had, on the day before the deeds were made, obtained a loan on the land for $6,000. With this money he paid off a prior mortgage on the land, amounting to $4,801.78; to the Elliott State Bank his note of $453.76, on which his brother James was surety; for taxes, $94.75; to James E. Barber for work done by him in 1914, $65; for coal bill for his mother, $128.50; on the amount he owed his wife, Anna M. Barber, $300; and the remainder he used in clearing up the expenses of the loan. The agreed consideration for the conveyance of the land and personal property to Anna M. Barber was the assumption by her of the $6,000 incumbrance on the land, the payment by her of two notes of William Barber to Lizzie Heminghaus, amounting to $2,300, and another note by him to Clara Heminghaus for $1,080, all three notes being also signed by Anna M. Barber as surety; also the cancellation of $600 of the remaining indebtedness of William to Anna M. Barber, and the conveyance by her of the house and lot to James E. Barder, valued at $4,000. This left William Barber still indebted to his wife in the sum of $200 according to their calculation, and for that sum he gave her his promissory note. Shortly after the conveyance to her of the land she paid near $2,000 on the three Heminaghaus notes, and is amply able and stands ready to pay the remainder of said notes.

We have examined the evidence with great care, and our conclusion therefrom is that plaintiffs in error failed to establish by any evidence in the record their right to any equitable relief against Anna M. Barber. While the evidence does prove clearly an intent on the part of William Barber by means of said conveyances to hinder, delay, and to defraud the plaintiffs in error in the collection of their judgments, Mrs. Barber was not shown to have participated in that fraudulent intent. The evidence not only failed to show that she had notice of plaintiffs in error's debts against William Barber, but the positive evidence is that she did not have any knowledge thereof whatever, and that she bought the property of her husband to collect the amounts he owed her, and supposed she was assuming all his debts. The proof shows that William Barber owed her $1,100 before he obtained the $6,000 loan and paid her therefrom $300. There is no evidence to the contrary. The showing therefore is that she paid an adequate consideration for the land, when tested by the testimony of plaintiffs in error's own witnesses, some of whom valued it as low as $100 per acre. Besides, by some error in the calculation of the value of the land she paid $180 more for it than the agreed price of $110 per acre. She conveyed...