Chaney v. The Gauld Co.

• Court: Idaho Supreme Court
• Writing for the Court: SULLIVAN, C. J.
• Citation: 152 P. 468,28 Idaho 76
• Decision Date: 09 October 1915
• Parties: EDNA A. CHANEY, Respondent, v. THE GAULD CO., a Corporation, et al., Appellants

152 P. 468

28 Idaho 76

EDNA A. CHANEY, Respondent,
v.
THE GAULD CO., a Corporation, et al., Appellants

Supreme Court of Idaho

October 9, 1915

INJUNCTION-REAL ESTATE-CONVEYANCE OF-WIFE'S SEPARATE PROPERTY - SUFFICIENCY OF EVIDENCE - TITLE IN HUSBAND - CREDIT GIVEN HUSBAND - PLAINTIFF'S NEGLIGENCE OR CARELESSNESS - FRAUD ON CREDITORS - CONSTITUTIONAL AND STATUTORY CONSTRUCTION-COMMUNITY PROPERTY.

1. Where an injunction is sought to prevent the sheriff from selling at sheriff's sale land standing in the name of the debtor to satisfy a judgment obtained against him for merchandise sold and delivered to him, and the wife of the debtor claims the land as her separate property, the trial court ought not to receive secondary evidence to establish the wife's claim unless it is made to appear that the best evidence cannot be had of the fact that the money paid for such land was money that belonged to her. Her oral testimony ought not to be received where the drafts, checks or bank-books can be produced on the trial, they being the best evidence that such money belonged to her. However, proper objections should be made to the introduction of secondary evidence.

[28 Idaho 77]

2. In cases of this kind the plaintiff should be required to produce proof, clear, convincing and satisfactory, that the land involved is her separate property.

3. Where the husband procures credit upon a financial statement of his assets and liabilities and lists the real estate of his wife, which stands in his name, as property belonging to him, the wife is estopped to assert and claim her title to such property as against the creditors of her husband, which credit was obtained by reason of the fact that she permitted the title to the land to remain in her husband.

[As to estoppel of wife, who permits husband to retain record title to her realty, to deny such title against one extending credit to him, see note in Ann.Cas. 1914C, 1066.]

4. If the true owner of land permits the title thereof to remain in her husband and he procures credit because of his apparent ownership thereof, under such facts the law is well settled that where one of two innocent parties must suffer through the fraud of a third, the loss should fall upon the one who by his own act created the circumstances which permitted the fraud to be perpetrated.

5. As a rule, real estate purchased with money borrowed by the wife during the existence of the community is community property, and the wife in such a transaction occupies no different position from what the husband would had he borrowed the money and purchased the real estate.

6. Under the provisions of sec. 2676, Rev. Codes, all property of the wife owned by her before marriage and that acquired afterward by gift, bequest or descent or that she shall acquire with the proceeds of her separate property shall remain her sole and separate property.

7. Sec. 2680, Rev. Codes, provides that all other property acquired after marriage by either husband or wife, including the rents and profits of the separate property of the husband and wife, is community property, unless by the instrument by which any such property is acquired by the wife it is provided that the rents and profits thereof be applied to her sole and separate use.

8. All property acquired by either spouse during coverture is presumed to be community property, and the burden of proof rests upon the party who asserts it is separate property to show such fact by a preponderance of evidence.

[As to what is community property, see note in 126 Am.St. 100]

APPEAL from the District Court of the Seventh Judicial District, in and for Canyon County. Hon. Ed. L. Bryan, Judge.

Action to enjoin the defendants from having sold at sheriff's sale certain lands claimed by the appellant. Judgment for plaintiff. Reversed.

Judgment reversed and cause remanded. Costs awarded to appellants.

L. M. Lyon, for Appellants.

The written documents or papers were the best evidence. (Keane v. Pittsburg L. Min. Co., 17 Idaho 179, 105 P. 60.)

"All evidence which shows upon its face that better remains behind is secondary." (17 Cyc. 465, and numerous citations.)

The burden was upon the respondents (husband and wife) to establish the good faith of the transaction between them. (Bates v. Drake, 28 Wash. 447, 68 P. 961.)

The wife must show that the property was purchased by her out of her separate estate. (20 Cyc. 604; Robson v. Hamilton, 41 Ore. 239, 69 P. 654.)

And such proof must be "clear, convincing and satisfactory." (Mendenhall v. Elwert, 36 Ore. 375, 52 P. 22, 59 P. 805, and cases cited; Kalinowski v. McNeny, 68 Wash. 681, 123 P. 1074.)

"If a wife allows her husband to retain the title of property to which she is entitled, and to use it to obtain credit, she is estopped to claim the property as against a creditor who extended credit to him under the belief that the property was his." (David Adler & Sons Clothing Co. v. Hellman, 55 Neb. 266, 75 N.W. 877; Marysville Inv. Co. v. Holle, 5 Kan. App. 408, 49 P. 332; Holland v. Jones, 48 S.C. 267, 26 S.E. 606; Iseminger v. Criswell, 98 Iowa 382, 67 N.W. 289; Peabody v. Lloyds Bankers, 6 N.D. 27, 68 N.W. 92; Kalinowski v. McNeny, supra; Bigelow on Estoppel, 6th ed., 607, 608; First National Bank v. Kissare, 22 Okla. 545, 132 Am. St. 644, 98 P. 433; McNeil v. Tenth Nat. Bank, 46 N.Y. 325, 7 Am. Rep. 341.)

Bowen & Riebeling, for Respondent.

Whenever property is acquired by the husband under an express trust for the benefit of his wife, or upon his agreement to hold the same in trust for her, the property will generally become her separate estate. (21 Cyc. 1383; Goldsberry v. Gentry, 92 Ind. 193.)

Where the title to land bought by the husband with his wife's money is taken by the husband under an oral agreement to hold in trust for her, the trust is valid. (Garner v. Second National Bank, 151 U.S. 420, 14 S.Ct. 390, 38 L.Ed. 218; Stickney v. Stickney, 131 U.S. 227, 238, 9 S.Ct. 677, 33 L.Ed. 136.)

Purchases made with the proceeds of the wife's separate estate become her separate property, and it is immaterial that the conveyance is to the husband. (21 Cyc. 1389.)

"An essential attribute of the wife's separate estate is, that it is not liable for the husband's debts, and she is entitled in equity, to relief by injunction against the levy of an execution thereon by his creditors." (21 Cyc. 1439.)

If a debtor holds the bare legal title to property for another and has no beneficial interest therein, it cannot, in the absence of elements of estoppel, be reached and subjected to the payment of his debts, and therefore a conveyance thereof by him to the equitable owner is not fraudulent as against his creditors. (20 Cyc. 370, and cases cited in note 20; Goldsmith v. Fuller, 30 Neb. 563, 46 N.W. 712.)

SULLIVAN, C. J. Budge, J., MORGAN, J., concurring.

OPINION [152 P. 469]

[28 Idaho 79] SULLIVAN, C. J.

This action was brought to perpetually restrain the sheriff of Canyon county from selling at sheriff's sale the north one-half of the southwest quarter of the northwest quarter of sec. 26, tp. 9 north of range 5, West Boise Meridian, Canyon county, to satisfy a judgment against her husband.

Upon a trial of the case the court made its finding of facts, conclusions of law and entered judgment in favor of the plaintiff, perpetually restraining the defendant, as sheriff, from selling said land. The appeal is from the judgment.

The main contention is that the evidence is insufficient to support the findings and judgment.

It is contended by appellant that the conveyance of said land by the husband, Edward Allen Chaney, to his wife, [28 Idaho 80] Edna A. Chaney, the plaintiff, made and executed the day after the suit was brought against her husband by his creditors, was made to hinder, delay and defraud the creditors and that under the facts of the case the plaintiff is estopped to claim and assert title to said land against the appellant creditor.

It appears from the evidence that the husband of the plaintiff was engaged in the plumbing business at Payette, Idaho, and kept a store there where he had bath-tubs and other plumbing supplies of various kinds for sale. He had purchased plumbing supplies from the defendant company and became indebted to it in the sum of about $ 1,200 and was unable or refused to pay for the same, and a suit was brought against him by the appellant corporation and judgment obtained for about $ 1,100.

When said action was commenced an attachment was issued and levied upon the land involved in this suit, and after judgment was obtained the sheriff was proceeding to sell the same to satisfy the judgment when this action was brought by the wife of said judgment debtor to restrain the sale of said land, on the ground that said land was her separate property, she having made the first payment of $ 2,000 therefor with money borrowed from her father.

The record shows that the deed to said land was taken in the name of her husband, but was not recorded, but kept in his possession until the day after the suit was brought against him by the defendant [152 P. 470] company to recover from him the amount due it for plumbing supplies sold and delivered to him, when he conveyed the land to her.

The plaintiff testified on the trial of the instant case that it was her intention to have the title to said land conveyed to herself, but that the person who drew the deed inserted therein the name of her husband; that some days after such...