Battle v. Rock

• Decision Date: 14 January 1926
• Citation: 144 Va. 1
• Parties: BATTLE AND WIFE v. ROCK.
• Court: Virginia Supreme Court

Page 1

144 Va. 1

BATTLE AND WIFE v. ROCK.

Supreme Court of Virginia, Richmond.

January 14, 1926.

1. FRAUDULENT AND VOLUNTARY CONVEYANCES — Suits to Set Aside — Sections 5184-5186 of the Code of 1919 — Existing and Subsequent Creditors — Case at Bar. — The instant case, a suit to set aside a conveyance by a husband to his wife, was brought under section 5186 of the Code of 1919, allowing suits to be brought to set aside fraudulent deeds before the plaintiff has established his claim at law, and giving a lien from the time of bringing the suit. Section 5184 applies to cases of actual fraud, in which case the transaction therein referred to is avoided both as to existing and subsequent creditors. Section 5185 applies to voluntary conveyances, etc., or those made in consideration of marriage, and in this case the transaction, so far as it relates to creditors, is avoided only as to those creditors "whose debts shall have been contracted at the time" the conveyance was made. In the instant case, therefore, if the complainant was entitled to the relief prayed, it must be because his debt was contracted before the deeds were made to the wife and also that the deeds were "not upon consideration deemed valuable in law," and for the purpose of this case, it might be assumed that the debt of complainant was in existence at the time the deeds were made to the wife, and the validity of the deeds, therefore, depends upon whether founded upon a valuable consideration furnished by the wife.

2. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Presumptions in Favor of Creditor — Burden of Proof. — In a contest between the creditors of an insolvent husband and the wife over a conveyance from the husband to his wife, the presumptions are in favor of the creditors and not of the wife, and the burden is upon the wife to show by clear and satisfactory evidence the bona fides of the transaction.

3. HUSBAND AND WIFE — Husband and Wife as Witnesses — Suit to Set Aside Conveyance by Husband to Wife as Fraudulent — Presumptions. — Prior to the adoption of the Code of 1919 neither the husband nor wife could testify in a suit by creditors of the husband to set aside a deed of the husband to the wife, as in fraud of creditors, but now both are fully competent and the case is not within the purview of section 6209 of the Code of 1919, requiring corroboration. The former presumptions were not removed, but husband and wife were no longer disqualified to testify as to the facts of the transaction.

4. FRAUDULENT AND VOLUNTARY CONVEYANCES — Deed by Husband to Wife — Good Faith — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed by a husband to his wife, the husband was an honest but ignorant negro in whom his wife seemed to have had implicit confidence and to whom she entrusted the transaction of her business affairs. The purchase money for the property in question, in the instant suit, was paid at one time and the deed therefor made at another. Both husband and wife were present when the money was paid but neither was present when the deed was executed. Both say that the deed was to have been to the wife alone, and that the error in making it to them jointly was not discovered for some time, when steps were taken to correct this mistake, resulting in the deed in question, from the husband to the wife, of the property. Husband and wife were corroborated by other witnesses.

Held: That from the testimony there was no doubt that the first deed was to have been to the wife alone.

5. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Trusts — Wife's Money Invested by Husband in His Own Name. — The principle upon which voluntary conveyances are held void as to existing creditors is that a man should be just before he is generous, but it is as much his duty to be just to his wife as to other persons. There is no generosity in investing a wife's money according to her direction, and if he does so and takes title in his own name, he will be held to be a trustee for her benefit. But the trust must be clearly established.

6. FRAUDULENT AND VOLUNTARY CONVEYANCES — Deed by Husband to Wife — Alleged False Statements of Consideration — Case at Bar. — In a suit to set aside a deed by a husband to his wife as fraudulent, the deed recited that the consideration was $1,150. The deed was made to correct a mistake in a prior deed of the property which was made to the husband and wife jointly, whereas, it should have been to the wife alone. The consideration for this deed to the husband and wife jointly was $2,300 and when the husband released the legal title to her of a half interest he stated the consideration as $1,150.00, just one-half of the consideration paid for the whole.

Held: That, the recital of a consideration of $1,150 was not a false statement.

7. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Settlement on Wife for Release of Her Interest in Other Lands. — A settlement made upon the wife in consideration of the release of her interest in other lands of her husband will be upheld against creditors of the husband, if the settlement is not unreasonable.

8. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed by a husband to his wife, it appeared from the evidence that the wife refused to join her husband in a deed to other land unless she received one-half of the purchase money of that land. At that time the husband was not in debt. The husband acceded to the wife and then and therefore she was entitled to one-half of the purchase money. Afterwards, other land was purchased by the husband for the wife and paid for out of her half of the purchase money derived from the former sale, and deeded by him to her.

Held: That the wife furnished from her own means the entire consideration for the latter purchase and that the court erred in setting aside the deeds to her as fraudulent.

9. FRAUDULENT AND VOLUNTARY CONVEYANCES — Personal Judgment for Creditors — Section 5186 of the Code of 1919. — In the instant case, a suit by a creditor to set aside a deed by a husband to his wife, as in fraud of creditors, the Supreme Court of Appeals reversed a decree against the wife in favor of the creditor, and under section 5186 of the Code of 1919 directed the lower court to enter a personal decree against the husband construing section 5186 to mean that if from any cause the result of the suit prove unavailing to any creditor united therein, the court may render a personal decree against the debtor for the amount of the creditor's claim. This feature of the statute is remedial and should be liberally construed, especially as this construction accomplishes the wise end of preventing a multiplicity of suits, terminates litigation, and does no substantial injury to the debtor.

Appeal from a decree of the Circuit Court of Charles City county. Decree for complainant. Defendants appeal.

The opinion states the case.

Hall, Hall & Peachy, for the appellants.

David Meade White and E. V. Farinholt, for the appellee.

BURKS, J., delivered the opinion of the court.

William Battle and Patty Battle were married in 1898. She was then about twenty-one years of age and he was seven years older. He took her to his home near Nashville, N.C., on the farm of J. W. Henry who had "near raised" him. In 1904 they desired to buy a small piece of land adjoining that of Henry for the purpose of making a home. They did not have the money to make the purchase. Mr. Henry loaned them, or one of them, it is not clear which, $95.00, without security, with which to make the purchase. They bought twelve acres and ten poles, which was conveyed to William A. Battle in 1904 for the consideration of $100.00. Henry says this money was repaid to him by Patty Battle. In 1910 they bought two acres adjoining the twelve acres at the price of $75.00. Henry advanced the money for this purchase also, and Patty, or Patsy, as she was called, "worked it out." The deed to this parcel was also made to William A. Battle. They were both hard-working, frugal colored people and stood well in the community. They worked day and night. Patsy took in washing for four or five families in Nashville, N.C. "She washed at night." She did a lot of day labor besides helping her husband on the farm. "She kept chickens, and marketed them and eggs and other produce from the farm," and Mr. Henry testified that he had "heard her speak about she wanted to get her little home paid for." She and her husband kept no separate accounts of their money transactions, and she had implicit confidence in his honesty and integrity. They both testify that they thought the land had been conveyed to them jointly. They were ignorant colored people, and he could neither read nor write. By their frugality and industry they were enabled to greatly improve the land and to erect thereon a dwelling house which in 1920 was valued at $4,000. There was a small store house in the corner of the yard which she attended as far as she could in the day time, and he at night. At the time the farm was bought Battle was making fifty cents a day and sometimes he got as much as $1.50 a day. He was "farming and working a little." She was "washing and ironing for the people in town." It does not appear how much each contributed to the purchase and improvements of the farm, but the fair inference is that they pooled their accumulations and treated the transaction as a kind of partnership, or joint affair, in which each was equally interested. Battle and his wife both testified that they owned the North Carolina property jointly, and she further testified: "I paid one-half of the erection of the house and everything on the property." In March, 1920, they sold their little farm with the improvements thereon to J. G. Henry, son of J. H. Henry, for $7,000 cash. The purchase money was paid by check. The check could not be found, but...