Downs v. Miller
| Decision Date | 20 November 1902 |
| Citation | 53 A. 445,95 Md. 602 |
| Parties | DOWNS v. MILLER. |
| Court | Maryland Court of Appeals |
Appeal from circuit court, Washington county, in equity; David W Sloan, Judge.
Action by Harry F. Miller against Lewis F. Downs. From a decree in favor of plaintiff, defendant appeals. Affirmed.
Argued before McSHERRY, C.J., and BOYD, PEARCE, JONES, and SCHMUCKER, JJ.
Lewis D. Syester, for appellant.
Wm H.A. Hamilton, for appellee.
This is an appeal from a decree of the circuit court for Washington county which set aside and annulled a deed made by the appellant, Lewis F. Downs, to his wife, upon the ground that it was so made "in prejudice of the rights of his subsisting creditors." It appears that the appellant was indebted to a partnership trading as Harman & Miller, and located in business at Hagerstown, in this state. This indebtedness was evidenced by three several promissory notes, all of which were transferred to the appellee, to whom a part of the debt was paid, and who for the balance thereof obtained on the 12th day of February 1900, in the circuit court for Washington county, a judgment amounting to $410.30, in the usual form. At the time this indebtedness was incurred by the appellant, he owned and was possessed of a house and lot in Williamsport, Md. This property he had purchased in 1895 for $600, and, to secure this purchase money, had mortgaged it to the vendor for the full amount of the price thereof. On the 8th day of November, 1899, while indebted as aforesaid, and just prior to the obtention of the judgment against him by the appellee, which has been mentioned, the appellant conveyed this property to his wife, Mary Kate Downs; the deed reciting the consideration as "$800.00, cash in hand paid." After obtaining his judgment, the appellee filed his bill in the present suit in the circuit court for Washington county, assailing this deed as having been fraudulently made, and with the object "to hinder, delay, and defraud" the appellee and "other creditors of their just and lawful debts," and charging "that at the time of his making said deed to his wife the said Lewis F. Downs [appellant] was largely indebted and insolvent, and had not the means of paying his debts, apart from the property so conveyed by him." The appellant and his wife answered the bill, and denied that there was any fraud in the making of the deed by the appellant to his wife. All other facts alleged in the bill were either admitted or were not denied. The answer further averred "that the conveyance was made by the said Lewis F. Downs to his wife to secure to her the sum of $561.34, which the said Lewis F. Downs had borrowed from his wife, and for which the said Mary K. Downs held notes of the said Lewis F. Downs for the following amounts: March 13, 1898, $69.35; September 13, 1898, $298.12; October 27, 1899, $193.87; that said conveyance was made to pay back and secure his wife for the money the said Lewis F. Downs had borrowed as aforesaid." The claim is then made that "under the law the said Lewis F. Downs had a right, in law and equity, to protect the claim of his wife, which she had against him, and to treat her as any other creditor of his."
In disposing of the case upon this appeal, and upon the record we have here, it will not be necessary to determine the question whether the claim upon which the defense of the appellant and his wife was based by their answer--that his wife, the grantee in the deed in question, was his creditor as alleged therein--is sustained by the proof. We may assume that the appellant was indebted to his wife at the time of making to her the conveyance here in controversy, and that therefore there was, to the extent of the indebtedness he is able to show, a valuable consideration for the conveyance so made. With this admitted, unless the conveyance was also made bona fide, it cannot be held valid, as against other creditors, even though the consideration be not only valuable, but adequate. Twyne's Case, 1 Smith, Lead.Cas. 1; 1 Story, Eq.Jur. § 369; Glenn v. McNeal, 3 Md.Ch. 349; Chatterton v. Mason, 86 Md. 236, 37 A. 960; Cooke v. Cooke, 43 Md. 522, and cases there cited. The inferences that are afforded against the bona fides of the conveyance here in controversy by the disclosures of the record are, we think, too strong to be resisted. And in dealing with these disclosures, we may do so irrespective of legal presumptions or of any question of the burden of proof. As has been seen, the bill of complaint alleged that at the time of making the conveyance to his wife the appellant was insolvent and largely indebted, "and had not the means of paying his debts, apart from the property so conveyed" to her. The clause of the bill in which this allegation was made was answered evasively by the appellant and his wife. There is no specific denial of the allegation, and the answer contains no suggestion that at the time in question the appellant was possessed of property or means of paying his debts, apart from the property embraced in the deed to his wife. Between the time of the filing of the answer and that of the taking of testimony in the case, the appellant's wife died; but he testified in the cause, and, with full opportunity to show that he had other means or property with which to satisfy his debts, outside of the conveyance to his wife, there is no proof or suggestion that such was the case. All that appears with reference to other means or property is evidence that two judgments, which the bill of complaint alleged that the appellant had confessed at dates subsequent to the conveyance to his wife, and prior to the date of appellee's judgment, had been satisfied with money derived to him from his father's estate. As a showing by the defendants below that the allegations in the bill of the appellant's insolvency, and that he "had not the means of paying his debts, apart from the property" conveyed to his wife, were not true, in point of fact, would have been very material matter of defense to the bill, that neither upon the part of the appellant nor of his wife was there even an attempt at such defense is very significant, and affords the very strong, if not inevitable; inference of the inability of the appellant to deny the allegations in question, and consequently that they were tacitly admitted as true. Under the conditions, then, charged in the bill, the appellant made the deed to his wife, in which it was recited that it was made in consideration of "$800.00 cash in hand paid, the receipt whereof is hereby acknowledged." We need go no further than the answer of the appellant and his wife to the bill of complaint in the cause to find that the consideration named in the deed was pretended and simulated. The answer avers that the deed was made upon a very different consideration from that expressed in the deed. What we have seen was averred in the answer to be the real consideration for the conveyance was altogether different in character, and materially different in amount and value, from the professed consideration recited therein. This is not consistent with bona fides in the transaction. If the deed was really made to repay or secure to the wife money borrowed from her by her husband, the grantor, why was this not made to appear in the deed? And why was it that not even the true amount of the indebtedness claimed to exist was stated as the consideration? And why was the amount exaggerated so as to cover more nearly the full value of the property? And why was the transaction made to appear as an out and out purchase by...
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