Cogar v. National Bank of Lancaster

• Decision Date: 10 January 1913
• Citation: 152 S.W. 278,151 Ky. 470
• Parties: COGAR et al. v. NATIONAL BANK OF LANCASTER. [d]
• Court: Kentucky Court of Appeals

152 S.W. 278

151 Ky. 470

COGAR et al. v. NATIONAL BANK OF LANCASTER. ^[d]

Court of Appeals of Kentucky.

January 10, 1913

Appeal from Circuit Court, Boyle County.

Action by the National Bank of Lancaster against Lydia V. Cogar and others. From the judgment, defendants appeal. Reversed, with directions to dismiss.

Chenault Huguely, Robt. Harding, and E. V. Puryear, all of Danville for appellants.

Chas C. Fox, of Danville, and W. I. Williams, of Tulsa, Okl., for appellee.

SETTLE J.

Appellee being the holder of two matured unpaid notes, each for $500 against the appellant George Cogar, a paralytic and person of unsound mind, brought this action March 30, 1910, in the court below, to subject to their payment two certain parcels of ground situated in the city of Danville, particularly described in the petition. The appellants George Cogar, Chenault Huguely, his committee, and Lydia V. Cogar, wife of the former, were made defendants.

The title to the two parcels of ground mentioned is in the appellant Lydia V. Cogar. One of these lots is known as the Russell lot, and was conveyed her by deed from E. B. Russell and wife executed October 1, 1894, for the recited consideration of $6,250; but only a small part of the purchase price was then paid, a note being given by Mrs. Cogar for the remainder secured by a vendor's lien. Of this note it is admitted $4,000 yet remains unpaid. The other lot, known as the Knott property, was by deed from J. Proctor Knott and wife conveyed Lydia V. Cogar April 21, 1902. The consideration expressed in the deed for this conveyance was $6,200 cash in hand paid. It was alleged in the petition that both the Russell and Knott lots were purchased by the appellant George Cogar and paid for by him, and that he caused them to be conveyed to his wife for the fraudulent purpose of cheating, hindering, and delaying his creditors; that the two notes sued on were remnants of a debt of $10,000 for which George Cogar was liable to appellee before the conveyance to his wife of either of the lots in question; and that after his wife took the title to the Russell lot George Cogar expended of his own money in erecting buildings and making other improvements thereon not less than $20,000, which enhanced its value to that amount; and that not less than $8,500 of the money thus applied was expended by him on improvements made on the lot within five years of the institution of appellee's action.

Separate answers to the petition were filed by Mrs. Cogar and the committee of George Cogar, which were later amended. The answers as amended traversed the averments of the petition, pleaded the statute of limitations, and that of Mrs. Cogar, in addition, set up the further defense that within five years next before the institution of appellee's action she, for the purpose of furnishing her husband $10,500 and to repay him what he had expended in improving the Russell lot, borrowed from Messrs. Farris, Quisenberry, and Cheek and delivered to him, by means of a mortgage executed upon the lot, that amount, which sum was appropriated and used by the husband alone. Moreover, that from the time of her purchase of the lot down to the institution of appellee's action her husband used and occupied the lot for the purpose of conducting his business of buying and selling hemp and grain, and that its rental value during that time was not less than $2,500 per year, no part of which was ever paid to or received by her; that, if her lot should be charged with the value of any part of the improvements erected thereon by her husband, such charge should be credited and set off by the rental value of the Russell lot during his incumbency of it, and that the rents so due her for his use of the lot exceeded in the aggregate the value of the improvements he placed thereon.

After the necessary responsive pleadings on the part of the appellee and the taking of proof in the case, the court rendered judgment dismissing the action in so far as it sought to subject to the payment of appellee's debt the Knott lot, but holding that, to the extent that George Cogar had enhanced the value of the Russell lot by improvements made thereon within five years next before the institution of appellee's action, it should, by reason thereof, be subjected to the payment of appellee's debt, which the judgment declared a lien upon the lot subject to the vendor's lien of $4,000 mentioned, and the Farris, Quisenberry, and Cheek mortgage lien of $10,500, and certain other liens, for the satisfaction of all of which judgment had previously been rendered in other actions pending in the same court. From so much of the judgment as subjected the Russell lot to the payment of the appellee's debt the appellants, Lydia V. Cogar and Huguely, committee of George Cogar, have appealed.

As appellee complains of the judgment of the circuit court dismissing the petition as to the Knott lot, we deem it proper to say this was authorized on two grounds: First. As the burden of proof was on the appellee to show that the Knott property was paid for with the money of the husband instead of that of the wife, and there was no competent evidence tending to establish the fact, the presumption must be indulged that the purchase money for the lot was paid by the wife as stated in the deed, and that there was no fraud in the conveyance. In Guthrie v. Hill, 138 Ky. 181 127 S.W. 767, we held that since the enactment of the statute of 1894, known as the "Weissinger Act" (Acts 1894,...