Goodrich v. Bagnell Timber Company

• Decision Date: 14 October 1912
• Citation: 150 S.W. 406,105 Ark. 90
• Parties: GOODRICH v. BAGNELL TIMBER COMPANY
• Court: Arkansas Supreme Court

150 S.W. 406

105 Ark. 90

GOODRICH v. BAGNELL TIMBER COMPANY

Supreme Court of Arkansas

October 14, 1912

Appeal from White Chancery Court; John E. Martineau, Chancellor affirmed.

Judgment affirmed.

J. N Rachels, for appellants.

1. The demurrer should have been sustained. The complaint does not allege that George Goodrich became insolvent by reason of the conveyances alleged, nor that there is not yet property belonging to him subject to execution sufficient to pay the plaintiff's demand, nor the issuance of an execution and the return of same unsatisfied for failure to find property on which to levy. 67 Ark. 325 Cyc, 330; 20. 413, 603; 18 Ark 172; Id. 123; 15 F. 541; 134 U.S. 405; 74 Ark. 161; 75 Ark. 127. See also 96 Ark. 531, 538; 29 Ark. Law Rep. 132.

2. Property accumulated with the wife's funds is not subject to the debts of the husband, even though such accumulation is brought about by the business sagacity and management of the husband. 75 Ark. 562; 89 Ark. 77.

3. If Goodrich conveyed to his wife without consideration, still such conveyance was not fraudulent if he retained property sufficient to pay the debts he owed at the time of the conveyance, and plaintiff as one of the creditors could not complain. 96 Ark. 531.

S. Brundidge, Jr., for appellee.

1. The decree should be affirmed for failure of appellant to comply with rule 9 in abstracting the testimony. This court will not explore the transcript for testimony omitted from the abstract. 57 Ark. 305; 89 Ark. 351; 87 Ark. 205.

2. The motion for a stay of proceedings on account of the filing by George Goodrich of a petition in bankruptcy and his having been declared a bankrupt was properly overruled. 103 Ark. 105.

3. By his own admission George Goodrich was insolvent at the time of the conveyance to his wife.

It is elementary law that a conveyance by an insolvent debtor of his property to his wife or other near relative is a badge of fraud. The evidence that the conveyance in this case was fraudulent is clear and convincing. 86 Ark. 230, and cases cited; 68 Ark. 162; 50 Ark. 289.

If land is purchased for a wife and deed taken in the name of the husband, and she allows it to remain so for six or seven years, she would be estopped to claim title as against creditors of the husband. 69 Ark. 350; 71 Ark. 611.

OPINION

WOOD, J.

This is a suit by the appellee against the appellants to set aside certain alleged fraudulent conveyances. The complaint alleged that, in a suit pending between George Goodrich and the appellee, appellee, on the 15th day of December, 1908, obtained a judgment, which, with interest, now amounts to $ 1,200; that during the pendency of that suit and before the judgment was rendered appellant George Goodrich "transferred and conveyed all of his property, both real and personal, of every kind and character, to Mary E. Goodrich, his wife; that at the present time the said George Goodrich does not claim to be the owner of any real or personal property in his own right out of which judgment can be made."

The complaint further sets forth the various conveyances that were alleged to have been made, consisting of real and personal property, and alleged as follows: "Plaintiff states that all of said conveyances were made for the purpose of putting the property of the said George Goodrich beyond the reach of his creditors, and were made for a nominal consideration, and said conveyances were made in fraud of the rights of the plaintiff herein." And, further, "plaintiff charges that all of said transfers were made for the purpose of defrauding plaintiff, and with the fraudulent intent and purpose of placing the property of the said George Goodrich beyond the reach of his creditors."

The appellants demurred, setting up that the complaint "does not state facts sufficient to constitute a cause of action." It does not appear that any ruling on the demurrer was sought or made; but appellants answered separately, admitting that on the 24th day of June, 1905, George Goodrich conveyed to Mary E. Goodrich certain real estate (describing it); denied that the conveyance was made in consideration of the sum of $ 371 mentioned in the deed, but admitted that the sum was given by Mary E. Goodrich at the time, and averred that the property so conveyed was, prior to the conveyance, the sole and separate property of Mary E. Goodrich, the same having been bought and paid for by her, and was held in the name of George Goodrich because of an error in the making of the deed of purchase therefor to him when the property had been purchased and paid for by Mary E. Goodrich.

The answer further denied that any of the transfers were made for the purpose of placing the property of George Goodrich beyond the reach of his creditors.

During the progress of the case appellant George Goodrich moved the court to stay the proceedings for one year, setting up that he had filed his petition in bankruptcy, and that the plaintiff's claim had no priority, and that he would be discharged from the payment thereof by the bankruptcy proceedings. The record shows that the trustee in bankruptcy was made a party defendant in the present suit, and he answered, setting up that he was entitled to all of the assets of appellant George Goodrich as trustee in bankruptcy, and prayed that as such trustee he be allowed to recover the money and property of the appellant George Goodrich. The court overruled the motion to stay the proceedings.

This ruling of the court was correct. The appellee, by its suit to cancel the alleged fraudulent conveyances, instituted about sixteen months before the bankruptcy proceedings were begun acquired a specific lien on the property alleged to have been fraudulently conveyed which would entitle it to a priority in the distribution of the proceeds from the property, and the suit of ...