David Adler & Sons Clothing Co. v. Hellman

• Decision Date: 09 June 1898
• Citation: 75 N.W. 877,55 Neb. 266
• Court: Nebraska Supreme Court
• Parties: DAVID ADLER & SONS CLOTHING CO. ET AL. v. HELLMAN ET AL.

55 Neb. 266

75 N.W. 877

DAVID ADLER & SONS CLOTHING CO. ET AL.

v.HELLMAN ET AL.

Supreme Court of Nebraska.

June 9, 1898.

Syllabus by the Court.

1. In an action, by creditors of an estate in which there is a deficiency of assets to meet debts, to set aside alleged fraudulent conveyances of property during his lifetime by the deceased to the party executrix of the estate, and to subject such property to the payment of debts of the deceased, the executrix is incompetent, under the provisions of section 329 of the Code of Civil Procedure, to testify as to the transaction or agreement from which the conveyance originated.

2. The testimony of an attorney, who was present as advisor of one or both parties, as to the conversation between them, or disclosures then made, may not be suppressed on the ground that the disclosures were confidential communications, or privileged, in an action between the parties or their personal representatives.

3. The dower right of a wife in the real estate of her husband, while inchoate, is not a possessory right, but is a present, subsisting right or interest, of a legal character, and can only be extinguished by the voluntary release or act of the wife, or operation of law. Butler v. Fitzgerald, 61 N. W. 640, 43 Neb. 192;Wylie v. Charlton, 62 N. W. 220, 43 Neb. 840.

4. The wife may make her release of her dower interest, or by signature to a mortgage that it be subjected to the lien and operation thereof, matter of forceful consideration for the conveyance to her of other property.

5. In an attack on a conveyance by creditors as fraudulent, in this state, the question of the intent with which the conveyance was made is one of fact, and not of law. Comp. St. § 20, c. 32.

6. If a conveyance of property by a husband to his wife is sought to be avoided by creditors for its fraudulent character, the burden of proof is on the wife to establish the bona fides of the transfer.

7. As a general rule, “insolvency” means that the party whose business affairs are in question is unable to pay his debts as they become due in the ordinary course of his daily transactions. Buchanan v. Smith, 16 Wall. 308.

8. “Insolvency” may mean the inadequacy of a man's funds or property to pay his debts.

9. A man may make a gift to his wife or relatives, if he retain sufficient property, subject to execution, at the then fair valuation, to satisfy all his debts; and that he has made such gift under such circumstances does not of itself, as evidence, stamp or establish the transfer fraudulent as to creditors.

10. Held, that the evidence in the present case sustained a finding of the bona fides of certain transfers or property from a husband to his wife.

11. As a general rule, premiums paid for life insurance in favor of a wife and children, or either, cannot be recovered by creditors, as made in fraud of their rights, though the debts were existent at the times of such payments.

12. If a wife allows her husband to retain the title of property to which she is entitled in her own right, and use it to obtain credit, as against the enforcement of a debt which a creditor was influenced by the husband's apparent (and in the transaction asserted) ownership of the property, to allow him to contract she may be estopped to claim the property.

Appeal from district court, Douglas county; Duffie, Judge.

Action by the David Adler & Sons Clothing Company against Maria Hellman, executrix of the will of Meyer Hellman, deceased, and others. The First National Bank of Omaha and others intervened as plaintiffs. The action was dismissed as to the interveners, and judgment rendered for plaintiff. The interveners and defendants appeal. Affirmed.

Warren Switzler, Connell & Ives, and Simeon Bloom, for appellants.

Montgomery & Hall, for appellees.

HARRISON, C. J.

It appears herein that during a period of 25 or more years prior to 1892, and inclusive of a few of the earlier months of said year, Meyer Hellman was engaged in business in the city of Omaha as a dealer in clothing,--the greater portion of the time both at wholesale and retail, but during the last five years exclusively the latter. On March 14, 1892, he and his wife, Maria Hellman, executed a deed by which they conveyed to Charles Wise, a relative, a piece of real property (their home) in Omaha, worth about $35,000, which was by the grantee and his wife on the same day conveyed to Maria Hellman. On the same day Hellman executed a will, in which his wife, Maria Hellman was designated sole legatee and executrix of his estate. After his death, which occurred March 29, 1892, the will was duly probated; and Mrs. Hellman qualified, and assumed and performed the duties of executrix. During the month of December, 1891, he had assigned to his wife a policy of insurance on his life in the sum of $5,000. There was of insurance on the life of Meyer Hellman, in the aggregate, $59,500, in all contracts for the payment of which Mrs. Hellman was designated as beneficiary, except one for $5,000, in which the children of the parties were beneficiaries. This action was instituted for the David Adler & Sons Clothing Company in the district court of Douglas county to obtain a decree by which the transfer of the real estate to Maria Hellman, to which we have referred, might be adjudged fraudulent and void, and canceled, and the real estate subjected to the payment of the claim of the plaintiffs (now appellees) against the estate of Meyer Hellman. During the course of the litigation the First National Bank of Omaha, the Nebraska National Bank of the same city, Lowman's Sons, and Simeon Bloom became parties to the suit by intervention. Each sought to have the deed of the real estate to Maria Hellman set aside as fraudulent and void as to creditors of Meyer Hellman, and the property made of the assets of his estate; also, the assignment of the one policy of life insurance; and, further, that all premiums or assessments paid by Meyer Hellman on contracts of life insurance during a period of time it was asserted by the pleading he had been insolvent should be decreed of the estate, and subjected to the payments of the claims against it. At the close of a trial in the district court the interveners were denied any relief, and their petitions dismissed; and the prayer of the petition of the David Adler & Sons Clothing Company was granted. The two banks and Lowman's Sons have appealed from the decree against them, and Maria Hellman has appealed from the decree in favor of the David Adler & Sons Clothing Company. In the bill of exceptions there appears the opinion of the trial court, and therein a clear statement, in substance, of the main facts as shown by the evidence; and, since it also shows the impressions and ideas which the court had gathered from the evidence, we deem it proper to here reproduce it, as follows:

“The defendant Maria Hellman is the widow of Meyer Hellman, who departed this life in March, 1892. For 25 years or more prior to his death, Meyer Hellman had been engaged in the wholesale and retail clothing business in this city; and he acquired a reputation for integrity and fair business methods, which I understand is not questioned by any one interested in this litigation. The amount of capital with which he engaged in business has not been shown, nor does it seem to be material to the issues involved; but at the date of his death, in March, 1892, he was possessed of property of great value, but which, with the exception of that in controversy in this action, and perhaps a few other small pieces, was heavily incumbered. For a few years prior to his death he had engaged, to a considerable extent, in real-estate transactions, and had incurred an indebtedness aggregating over $300,000. While the fact does not clearly appear, it may be fairly assumed that his transactions in real estate had absorbed his ready means to such an extent that he had become a large debtor of the banks; and in the summer of 1891 he had become indebted to the Nebraska National Bank to the amount of about $28,000, and to the First National Bank to the amount of about $80,000. He was also at that time indebted to the various wholesale houses, on merchandise accounts, to quite an amount. And all of these creditors were demanding payment of, or security for, their debts; and two or three of his mercantile creditors had taken judgments for the amount of their claims. He was married to the defendant in 1871, and, while it does not clearly appear, I assume that he was the owner of lots 1 and 2 in Johnson's addition at the time of his marriage. These two lots were inclosed together, and shortly after his marriage he erected a three-story brick dwelling house on lot 1, together with a barn and other improvements; and he occupied the premises with his family from that time up to the date of his death. His widow, the defendant in this action, now occupies it as her home, and she holds the legal title thereto under a deed of conveyance made to her by him shortly prior to his death, in March, 1892. Some time in the summer of 1891, and about the time that one or more of his mercantile creditors had put their claims against him into judgment, negotiations were commenced between Hellman and the officers of the two banks, looking to the securing of his debts to these two institutions by mortgage on his real estate. Prior to and during these negotiations, he had listed his property, and placed an estimated value on each parcel of the same, which list was used during the negotiations. It is conceded that he had planned the making of mortgages on different parcels of his real estate to his different creditors, apportioning the same among them in a manner in which he at the time insisted would afford ample security for all of them. In this plan he had reserved the property in controversy in this suit, which we may call the ‘home property,’ and had insisted that this property should not be incumbered, but should be...