Garner v. Fry

• Decision Date: 26 January 1898
• Parties: GARNER ET AL. v. FRY ET AL.
• Court: Iowa Supreme Court

104 Iowa 515

73 N.W. 1079

GARNER ET AL.

v.FRY ET AL.

Supreme Court of Iowa.

Jan. 26, 1898.

Appeal from district court, Van Buren county; F. W. Eichelberger and M. A. Roberts, Judges.

The plaintiffs are creditors of John W. Fry, who made an assignment February 3, 1894. He had executed a mortgage to his wife, January 1st previous, securing the payment of $3,000, and this action was brought to set aside such mortgage as fraudulent. Decree for defendants, and plaintiffs appeal. Thereafter the plaintiffs applied for an order restraining Mrs. Fry from foreclosing her mortgage, and they also appeal from an order denying such relief. Judgment sustaining mortgage affirmed. Order denying injunction reversed.Mitchell & Sloan, Work & Lewis, and Wherry & Walker, for appellants.

McCoid & McCoid, for appellees.

LADD, J.

The important question presented relates to the execution of a mortgage by Fry to his wife securing the payment of two notes, of $1,500 each. The facts are somewhat peculiar. When married, in 1876, both were without means other than necessary to begin housekeeping. In 1888 there was owing her $110 for millinery and household goods sold in Kansas, for which he gave her a duebill. In 1890 he sold 30 acres of land, the title to which was in her name, and executed to her a note of $600 in payment therefor. In 1892 he had arranged to exchange their homestead and some other property to one Stuart for a farm, which he had in turn sold to Pearson. She refused to sign the deed without having first been paid one-half of the proceeds derived from the sale. This was finally agreed to, the deed signed, and left with a justice of the peace, who was to retain the amount, but, upon its receipt, handed it to Fry, who paid it over to his wife. Thereafter Fry traded for a store building, residence, and stock of goods in Leande, paying therefor in horses and money. He borrowed $1,800 of his wife, with which to purchase goods and use in his business, and as security agreed that the deed of the real estate be made to her. A few days after the deed was so drawn, however, the commercial agencies at Keokuk and Burlington wrote to a notary, Morrison, inquiring if Fry had conveyed his property to his wife. Morrison showed these communications to Fry, and informed him that having the real estate in his wife's name would injure his credit. He then advised Fry and wife that instead of the deed he execute to her a mortgage on the stock of goods, and that, by withholding this from record, his credit would not be injured, and she be fully secured. The deed was made to him, and he agreed to give her a mortgage on the merchandise. But there is no evidence of an understanding that the mortgage should be withheld from record, nor is there any that its execution be delayed till the store was filled up with goods bought on credit. True, she said she would not have taken a mortgage at that time. Then there were few goods in the store, as she explains, and she might well wait till those for the purchase of which he borrowed the money were placed on the shelves. That she repeatedly demanded the execution of the mortgage, and was put off by him, cannot be doubted, if their undisputed testimony is to be credited. In August she loaned him $70, and in October $375, received from the sale of land in her name, and he owed her $132 for produce taken by her on sales of millinery goods, as she conducted a shop in one part of the store. These amounts make up a little more than the $3,000, for which the two notes were given, and to secure which he executed the mortgage in controversy, January 1, 1894. This was not placed on record till February 2d following, but the indebtedness to the plaintiffs had been contracted prior to its execution. For this reason the case does not come within the rule announced in Goll & Frank Co. v. Miller, 87 Iowa, 427, 54 N. W. 443, and Falker v. Linehan, 88 Iowa, 641, 55 N. W. 503. Besides, no agreement not to record is shown. It is insisted the mortgage was dated back. This is only a suspicion, and the evidence is to the contrary. Before this Fry had been paying considerable amounts on his indebtedness, and, if it be conceded that he did not act in good faith, there is nothing in the record to indicate that his wife participated in any fraudulent purpose or was put on inquiry with reference thereto. It does show, however, that she was keen in the care and protection of her own interests, and inclined to overreach her husband in their business transactions.

2. It might well be urged that the $1,800 was obtained from Fry by his wife without consideration. This is true. While the statutes of this state confer on married women the largest freedom in contracting, they stop short of that interest in the husband's property with which the wife is endowed for the protection and well-being of the family. She cannot convey it, as a separate and independent interest, to a third party. McKee v. Reynolds, 26 Iowa, 578;Dunlap v. Thomas, 69 Iowa, 358, 28 N. W. 637. Nor can she convey it to her husband. Linton v. Crosby, 54 Iowa, 478, 6 N. W. 726;In re Lennon's Estate, 58 Iowa, 760, 12 N. W. 736;Shane v. McNeill, 76 Iowa, 459, 41 N. W. 166. The inchoate dower interest may be released, but not bargained and sold. Reiff v. Horst, 55 Md. 42. The statute is not limited to conveyances, but is extended to all contracts. “When property is owned by either the husband or wife the other has no interest therein which can be subject of contract between them. * * *” Code, § 3154. This evidently refers to the interest arising from the marriage relation, such as dower or homestead, and not that derived from some other source. Baxter v. Hecht (Iowa) 67 N. W. 407. It is the policy of the law to foster and protect family unity and harmony, and for this purpose the contingent interest of the husband or wife in the other's property is created, though not such as may, in any event, become the subject of barter and sale between them. In all their dealings each must treat the property of the other as his own, and never pervert the inchoate...