Benson v. Burgess
| Decision Date | 24 June 1932 |
| Docket Number | 41319 |
| Citation | 243 N.W. 188,214 Iowa 1220 |
| Parties | W. J. BENSON et al., Appellants, v. A. W. BURGESS et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Monona District Court.--ROBERT H. MUNGER, Judge.
This proceeding, in the nature of a creditor's bill, was commenced by the plaintiffs, W. J. Benson, J. A. Gray, Mary A. Gray and Clarissa M. Benson, to subject to the payment of their judgments against the defendant A. W. Burgess, certain property the title to which was in the name of the defendant Helen A. Burgess. The district court found in favor of Helen A. Burgess and entered a judgment accordingly. From that judgment and decree, the plaintiffs appeal. Affirmed.
Affirmed.
C. J Thurston, for Appellants J. A. Gray and Mary A. Gray.
C. E Cooper, for Appellants W. J. Benson and Clarissa M. Benson.
Prichard & Prichard, for Appellees.
The Citizens State Bank of Onawa was organized during the year 1916. This bank failed in the year 1921, and its assets were thereafter liquidated by a receiver. At the time the Citizens State Bank closed its doors, it owed, among others, two obligations involved in the present controversy. These indebtednesses were held respectively by the First National Bank of Council Bluffs, and Monona County, Iowa. Notes apparently were discounted by the Citizens State Bank of Onawa to the First National Bank of Council Bluffs. Such notes were endorsed not only by the bank, but also guaranteed by the plaintiffs-appellants W. J. Benson and J. A. Gray and the defendant-appellee A. W. Burgess.
So, when the Citizens State Bank closed, it was necessary for the guarantors to pay the First National Bank of Council Bluffs the amount due on the discounted notes. Monona County, Iowa, became a depositor in the Citizens State Bank of Onawa upon the condition that a sufficient bond be given to secure the deposit. Accordingly, a bond was executed to Monona County by the appellants W. J. Benson and J. A. Gray and the appellee A. W. Burgess and others. Consequently, when the bank closed, it was necessary for the guarantors to pay the county's deposit. A. W. Burgess, the appellee, did not pay any part of either obligation. Therefore, it became necessary for the appellants W. J. Benson and J. A. Gray to satisfy not only their own obligations, but those of the appellee A. W. Burgess as well. Thus the appellants W. J. Benson and J. A. Gray satisfied both the obligation which the Citizens State Bank owed Monona County and the First National Bank of Council Bluffs.
When these obligations were thus paid by the appellants W. J. Benson and J. A. Gray, they received assignments thereof. Apparently the appellant Mary A. Gray obtained some interest through assignment in the claim for subrogation against A. W. Burgess. Likewise, the appellant Clarissa M. Benson received a similar claim.
The appellants paid the indebtedness to Monona County and the First National Bank of Council Bluffs in February, 1926. Thereafter suit for contribution was commenced by the appellants, W. J. Benson, J. A. Gray, Mary A. Gray, and Clarissa M. Benson, against the appellee A. W. Burgess. These appellants, on September 11, 1930, obtained a judgment in contribution against the appellee A. W. Burgess. An execution was duly issued on the judgment, but returned by the sheriff unsatisfied because no property could be found in the name of the appellee A. W. Burgess. Believing that they had located property in the name of the defendant-appellee Helen A. Burgess which in fact belonged to the appellee A. W. Burgess, the appellants commenced the present action October 22, 1930, to set aside certain conveyances made by A. W. Burgess to Helen A. Burgess on the theory that the same were without consideration and in fraud of creditors.
Said property thus claimed to be held by the appellee Helen A. Burgess in fraud of the creditors of the appellee A. W. Burgess may be divided generally into three parts: First, that which was obtained by the appellee Helen A. Burgess with her own funds before she became the wife of the appellee A. W. Burgess; second, that which was received by the appellee Helen A. Burgess as a part of a marriage agreement before she became the wife of the appellee A. W. Burgess; and, third, that which the appellee Helen A. Burgess purchased with her own funds after the marriage. Helen A. Burgess received title to eighty acres of land in Sherman Township, Monona County, Iowa, in the year 1916. That was before she became the wife of the appellee A. W. Burgess. A. W. Burgess and Helen A. Burgess, the appellees, were married August 27, 1922. All the other property involved in this litigation was obtained, with one exception, by the appellee Helen A. Burgess on August 25, 1922, two days before her marriage to the appellee A. W. Burgess, but as a part of the marriage agreement. Such property, according to the description of the parties, involves Onawa town lots, encumbered Woodbury County land, the "Kennebec Township farm" in Monona County, and North American Life & Casualty Company stock. Later, with the accumulations from the foregoing property, the appellee Helen A. Burgess purchased an automobile, made a bank deposit, and obtained certain tax certificates. The realty which Helen A. Burgess purchased after her marriage is known in the record as the "Nord property", in Onawa. This last-named property is now the homestead of the appellees.
It is said by the appellees that the Sherman Township eighty acres of land were purchased by the appellee Helen A. Burgess with her own money several years before her marriage. Therefore she obtained the same legally, for an adequate consideration. Also, it is contended by the appellees that the appellee Helen A. Burgess received the other named property for a valuable and legal consideration. This consideration, except for the aforesaid Nord property, the appellees declare embraces two matters: First, the cancellation of an indebtedness which the appellee A. W. Burgess owed to the appellee Helen A. Burgess; and, second, the agreement of marriage. In the third place, the consideration for the Nord property, purchased by Helen A. Burgess in 1926 after the marriage, is said by the appellees to have been paid for with her own funds. Thus it is maintained by the appellees that the title to the foregoing property is legally in the name of, and owned by, the appellee Helen A. Burgess.
I. The appellee Helen A. Burgess, then Helen A. Allen, earned money by teaching school and performing the duties of the librarian in Onawa. She also received some money from her father. According to the record, she desired to invest this money, and for that purpose consulted the appellee A. W. Burgess, who was a lawyer at Onawa, engaged not only in the law practice, but likewise in the investment business. Mr. Burgess advised her to purchase a farm in Monona County, known in the record as "the Sherman Township eighty".
Accordingly the appellee Helen A. Burgess, then Helen A. Allen, in the year 1916, purchased the land. Title was taken, not in the name of Helen A. Allen, but in the name of Walter Burgess, the father of the appellee A. W. Burgess. An explanation is furnished for this transaction. Apparently the library trustees at Onawa objected to increasing the salary of the librarian Helen A. Allen because they had learned that she had considerable property and did not need an added salary. So, in order to avoid the appearance of possessing property at the time an increase in salary was under consideration, Miss Allen took title to the land in the name of Walter Burgess. Soon thereafter Walter Burgess deeded the farm to the appellee Helen A. Allen, now Helen A. Burgess. Thereafter she paid the taxes thereon and executed a mortgage on the land for the purpose of securing a loan. That transaction occurred before the appellee A. W. Burgess had incurred the indebtedness which is the basis of the present litigation. Likewise this transaction occurred six years before Helen A. Allen and A. W. Burgess were married. While it is true that the appellee A. W. Burgess managed the land, he did so nevertheless as the agent of Helen A. Allen.
Under this record, we are constrained to hold that this eighty acres of land now lawfully belongs to the appellee Helen A. Burgess. It was purchased with her money, and although Walter Burgess at first took title thereto in his name, she soon thereafter obtained the title and now is the legal owner thereof.
II. There naturally is next suggested for consideration the question whether the appellee Helen A. Burgess, formerly Helen A. Allen, paid a valuable consideration for the property which she received from appellee A. W. Burgess on August 25, 1922, two days prior to the time of their marriage on August 27, 1922.
As before explained, the consideration given by the appellee Helen A. Burgess for this property may be divided into two parts: First, $ 3,603 representing moneys which the appellee Helen A. Burgess claims to have previously loaned the appellee A. W. Burgess; and, second, the agreement of marriage. According to the record, there can be little doubt that the appellee Helen A. Burgess formerly loaned the appellee A. W. Burgess the $ 3,603. This obligation apparently was cancelled at the time the appellee A. W. Burgess conveyed the aforesaid property to her. Assuming, however, without deciding, that there is doubt about this transaction, and that this consideration in and of itself would not be sufficient under all the circumstances to support the conveyance without the agreement of marriage, we now proceed to review the marriage contract.
Both appellees testified that a consideration for the...
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