Fluke v. Sharum

• Decision Date: 26 April 1915
• Docket Number: 343
• Citation: 176 S.W. 684,118 Ark. 229
• Parties: FLUKE v. SHARUM
• Court: Arkansas Supreme Court

176 S.W. 684

118 Ark. 229

FLUKE v. SHARUM

No. 343

Supreme Court of Arkansas

April 26, 1915

Appeal from Randolph Chancery Court; George T. Humphries Chancellor; affirmed.

STATEMENT BY THE COURT.

Appellant brought this suit to set aside certain alleged fraudulent conveyances made by Sam Fluke to Abby Rebecca Anderson, whom he later married and to her, his wife.

Sam Fluke was indebted to Sharum upon a promissory note dated April 1, 1902, for $ 1,400 and interest, who brought suit in the circuit court thereon in December, 1906, and recovered a judgment in July, 1907, for $ 2,199.18, a copy of which was exhibited with the complaint herein.

It is alleged that on the 29th day of May, 1906, Sam Fluke conveyed to Abby Rebecca Fluke the south half of the northeast quarter of section 27, eighty acres, township 18 in range 1, east for a consideration recited in the deed of $ 300, with the fraudulent intent to defeat plaintiff in the collection of his debt, that he had conspired with said grantee, who knew he was largely indebted at the time and in fact paid no consideration for the conveyance and permitted it to be made in a conspiracy with said Fluke, to cheat, hinder and delay plaintiff in the collection of his debt.

As to the northeast quarter of the northeast quarter of said section, it was alleged that Sam Fluke permitted same to forfeit for taxes for the year 1907, that he personally attended the sale of delinquent lands on the 8th day of June 1908, and at the sale became the purchaser of said tract for $ 5.43, and caused the certificate of purchase to be issued to Jule Anderson, the brother of his then wife, Abby Rebecca Fluke. That he later caused said Anderson to transfer the certificate to his wife and on the 22d day of December, 1910 caused a tax deed to be issued by the clerk to his said wife for said tract, all of which, it is alleged was a fraudulent transaction made with the knowledge of his said wife in furtherance of the conspiracy to defeat plaintiff in the collection of his debt.

It is alleged further that Sam Fluke on May 1, 1909, while plaintiff's judgment was in force, fraudulently executed a deed to his wife, Abby Rebecca Fluke, for the southwest quarter of section 23, for a recited consideration of $ 700 which his wife knowingly accepted with the fraudulent intent to defeat the plaintiff in the collection of his debt.

It is further alleged that Sam Fluke and his wife had executed a mortgage to the New England Securities Company of Kansas City upon the southwest quarter of section 23 and the south half of the northeast quarter of section 27, to secure a pretended indebtedness of $ 1,200 and that said deed of trust was executed in furtherance of a conspiracy to defeat the plaintiff in the collection of his debt; that said company knew of the fraudulent conveyances from said Sam Fluke to his wife of said lands.

Defendants answered separately, admitted that the plaintiff had secured the judgment against Sam Fluke; denied that the conveyance to Rebecca Anderson of the eighty acres on the 29th day of May, 1906, was fraudulent or in furtherance of a conspiracy to defeat the plaintiff in the collection of his debt; alleged the consideration paid therefor was adequate and plead the statute of limitations. Denied that the lands were allowed to forfeit and were purchased and conveyed to Abby Rebecca Fluke as alleged and that the last conveyance of the southwest quarter of section 23 was fraudulent and alleged that it was a bona fide sale for a consideration of $ 700, which was an adequate price for the lands at the time thereof and further that said lands were the homestead of defendants and had been since the 26th day of December, 1906, and pleaded lathes.

It was also alleged that the mortgage executed upon the lands was a valid conveyance.

The mortgagee denied all the allegations of the complaint relative to the execution of the mortgage and that the same was in any respect fraudulent, and alleged that it was a bona fide purchaser without notice.

The testimony shows that the note was executed, the suit brought and judgment obtained at the time alleged; that Sam Fluke had no other property than the lands in controversy; that he conveyed the lands to Rebecca Anderson on the 29th day of May, 1906, the fractional southwest quarter of section 23 and the south half of the northeast quarter of section 28, for a consideration of $ 300, recited in the deed and which he testified was paid in cash. That this was some time before he married the said Rebecca; that she had very little property at the time of the marriage and got $ 600 later on the land out of which she paid him $ 100, the balance due. That the timber had been cut from the eighty acres of land and that all the land with the timber on it had only cost $ 5 an acre. Denied having permitted the land to forfeit for taxes and stated that he was out of money and could not help it; that the land was low and wet and he did not have the money with which to redeem it, and his wife had proposed the transfer of the certificate from her brother. Said the land was not worth more than $ 200 now and that when it was forfeited it was not worth one-half that amount.

Stated, relative to the conveyance of the southwest quarter in May, 1909, there were two pieces of the land, one owned by his wife which he had conveyed to her before and one by him, all held by tax title, that the description was so indefinite you could not locate either tract and his wife wanted to borrow some money to pay off the other $ 600, so he made the deed for the other tract to perfect the description and so the money could be borrowed. That he got part of the $ 700 that was borrowed. He admitted he had no personal property at the time of the trial and was considerably in debt. Said he got the deed from the chancery court since the last conveyance to his wife of 100 acres, but it was contained in the southwest quarter conveyed. Stated also that he had lived on the southwest quarter of section 23 as his homestead for thirteen or fourteen years, and about seventy acres of it was in cultivation.

Several witnesses testified that the 160 acres, the southwest quarter of the section was worth--the woods land about $ 15 an acre and the cleared land, from $ 35 to $ 40 an acre.

Mrs. Fluke testified that she bought the lands conveyed to her before her marriage and paid $ 300 therefor, cash. She paid $ 200 that she had on hand, received from her father's estate and she was not at that time contemplating marrying Mr. Fluke.

Her testimony was unsatisfactory in explaining how she had gotten the money with which to pay the consideration. She refused to answer several questions. She did not answer any questions relative to the transfer of the certificate of purchase for the lands bought at the tax sale and said she did not remember how much she paid her brother for it, that she paid something, but did not remember how much; that she got some money after mortgaging the other lands.

The lands in controversy were shown to be worth from $ 20 to $ 30 an acre at the time of the trial. Some witnesses put the cleared land at as high a value as $ 30.

One witness testified that the value of the land in 1905 and 1906, was $ 10 and $ 15 an acre and that Sam Fluke desired to sell the lands in 1909 and priced them at $ 25 an acre.

A witness testified that he had asked Fluke about whether he had settled up with Sharum and Fluke replied he had fixed it so the old man could not get it. He had made the stuff over to his wife. That his conversation occurred after Fluke had married his present wife.

There is no testimony relative to the possession of the lands except one witness said he lived about three miles from the Flukes and did not know that Mrs. Fluke owned the land. This witness also said that he had heard Mr. Fluke talking about selling the lands and that he did not know of any lands in that vicinity that could be bought in 1905 and 1906 at $ 2.50 to $ 5 an acre, after the timber was cut therefrom.

The court found in favor of the plaintiff and rendered judgment for the recovery of the amount due on the judgment sued on and declared same a lien on all the lands in controversy, subject to the lien of the New England Securities Co., whose trust deed was held valid. That the conveyances from Sam Fluke to Rebecca Anderson and to Rebecca Anderson Fluke, his wife, were fraudulent and set them all aside; that by reason of such conveyances he rendered himself insolvent and that the southwest quarter of section 23, claimed as the homestead was worth more than $ 2,500 at the time it was transferred by Sam Fluke to his wife Rebecca Fluke, and that she had never at any time held adverse possession of any of the lands conveyed to her, but merely held them in trust for her husband. They were all made in furtherance of the conspiracy to defeat the plaintiff in the collection of his debt, as well as the other creditors of Sam Fluke and that the procedure permitting the forfeiture of the forty acres of land for taxes was but a subterfuge made with the fraudulent purpose of placing it beyond the reach of creditors and decreed accordingly, from which decree appellants appealed.

Affirmed.

J. J. Lewis, W. S. Pope and S. A. D. Eaton, for appellants.

1. While courts look with suspicion upon voluntary conveyances from husband to wife, yet where a valuable consideration passes from wife to husband such transfer is valid. 46 Ark. 542.

The first transfer antedated the marriage, and the burden is on appellee to show not only that the grantor was endeavoring to defraud creditors but that the grantee was cognizant of the fraud and participated therein. 49 Ark. 20; 64 Id. 184, 69 Id. 541; 17 Id. 146; 31 Id. 554; 41 Id. 316; 23 Id. 5...