Hamill v. Augustine

• Citation: 81 Iowa 302,46 N.W. 1113
• Parties: HAMILL ET AL. v. AUGUSTINE ET AL.
• Decision Date: 23 October 1890
• Court: Iowa Supreme Court

81 Iowa 302

46 N.W. 1113

HAMILL ET AL.

v.AUGUSTINE ET AL.

Supreme Court of Iowa.

Oct. 23, 1890.

Appeal from district court, Lee county; J. M. CASEY, Judge.

Action in equity to subject a sum of money due from the defendant railroad company to the payment of certain unsatisfied judgments held by appellants against the defendant Joeffrey Augustine. Decree was entered dismissing plaintiffs' petition, from which they appeal.James C. Davis and Parson & Dolan, for appellants.

Gibson Browne, for appellee Augustine.

Palmer Trimble, for appellee St. Louis, Keokuk & Northwestern Railroad Company.

GIVEN, J.

1. No question is made as to the indebtedness of the railroad company, nor of Joeffrey Augustine, to appellants upon the judgments set out. The sole contention is whether the indebtedness of the company is to Mr. Augustine, or to his wife, Kate Augustine. The indebtedness is upon a contract made with Mr. Sawyer, agent of the company, for boarding furnished on the company's boarding-cars to its laborers. The contract was made, and the business of furnishing boarding carried on, in the name of Mrs. Augustine, but appellants contend that Joeffrey Augustine was the real party to the contract and business, and that his wife's name was used in fraud of his creditors. Prior to the making of the contract, Mr. Augustine had failed in business, and, at the time it was made, was without money, property, or credit, and indebted upon judgments, and otherwise. Mrs. Augustine was also without means, but it is claimed had credit with merchants of Keokuk, where she resided, and that upon this credit she was able to carry on the business. Mrs. Augustine testifies that she knew her husband was in debt, that there was a judgment against him, and that, if he had any property or did business in his own name, they could get out an execution. Being without means, Mr. Augustine solicited a loan of $50 from Mr. Grill, which he made after seeing Mrs. Augustine, and in her name. This loan was paid out of the earnings. The board was furnished on the cars at points distant from Keokuk, and the business was conducted by Mr. Augustine, he hiring help, purchasing supplies along the line, and doing all other things necessary to the management of the business. Mrs. Augustine was not at any time with the cars, and knew nothing as to the business out on the line, except as reported to her by her husband, who she says was serving without any agreement as to compensation. All that she did towards the business was to make some comforts and pillow-slips for use on the cars, and to make some of the arrangements for supplies at Keokuk. “Transactions between husband and wife to the prejudice of the creditors are to be scanned closely, and their bona fides must be clearly established.” Wait, Fraud. Conv. § 300; Fisher v. Herron, 34 N. W. Rep. 365. In Seitz v. Mitchell, 94 U. S. 582, it is said: “Purchases of either real or personal property made by the wife of an insolvent debtor during coverture are justly regarded with suspicion, unless it clearly appears that the consideration was paid out of her separate estate. Such is the community of interest between husband and wife, such purchases are so often made a cover for a debtor's property, are so frequently resorted to for the purpose of withdrawing his property from the reach of his creditors, and preserving it for his own use, and they hold forth such temptations for fraud, that they require close scrutiny. In a contest between the creditors of the husband and wife there is, and there should be, a presumption against her which she must overcome by affirmative proof.” In Hamilton v. Lihtner, 53 Iowa, 470, 5 N. W. Rep. 603, the business was carried on in the wife's name, managed by the...