Harris v. Carlson
| Decision Date | 29 September 1925 |
| Docket Number | No. 36532.,36532. |
| Citation | 201 Iowa 169,205 N.W. 202 |
| Parties | HARRIS v. CARLSON ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Cherokee County; William Hutchinson, Judge.
Action in equity by the trustee in bankruptcy of the defendant Olof Carlson, to set aside a conveyance of land by him to his wife and codefendant. From a decree for the plaintiff, the defendants appeal. Reversed in part; affirmed in part.William Mulvaney, of Cherokee, for appellants.
Molyneux, Maher & Meloy, of Cherokee, for appellee.
In 1901 the appellant Olof Carlson purchased the land in controversy, and it was conveyed to him. He continued to hold the title until October 20, 1921, when he conveyed it to his wife, the appellant Anna Carlson, for a stated consideration of $16,000 subject to a mortgage of $13,000, which the grantee assumed. On November, 15, 1922, Olof Carlson filed a voluntary petition in bankruptcy, and appellee is the trustee in bankruptcy of his estate. The action is by the trustee to set aside the conveyance of the land to the wife, Anna Carlson, as being in fraud of creditors. The claims allowed against the estate amount to about $18,000, and the assets to about $1,800.
It is the claim of appellants that the conveyance was made in satisfaction of a debt owing by the husband to the wife for money loaned by her to him and that, in any event, 40 acres of the land was the homestead of the appellants at the time of the conveyance to her and continued to be such homestead, and is exempt to her. The questions presented are largely ones of fact.
I. The evidence on the part of appellants tends to show that Anna Carlson had $500 at the time she was married and received $1,000 from her father and brother at that time; that later her father gave her about $1,000 at different times, and she inherited $400 from his estate, to which a brother added $400; and that she inherited $1,800 from a brother, all of which amounts she turned over to her husband. It is the aggregate of these sums, with interest, which it is claimed by appellants constituted the consideration for the conveyance of the land to the wife.
[1] We are of the opinion the evidence establishes a fraudulent purpose on the part of the appellant Olof Carlson in making the conveyance. The land is situated in Cherokee county, and the appellants resided in O'Brien county, and Olof Carlson did business at banks and with merchants in the latter county. He was indebted to a considerable amount at the time of the conveyance, and contracted further indebtedness thereafter. He owned no other real estate. The deed was of record in Cherokee county, but those with whom he dealt in O'Brien county had no actual knowledge of it, and credit was extended to him, both before and after the conveyance, in reliance on his ownership. The evidence shows that, after the conveyance to his wife, he continued to represent that he was the owner of the land. After the execution of the deed, he made a property statement, for the purpose of obtaining credit at a bank, in which he included the land in question, stating that he owned it, the title was in his name, and it was worth $40,000. He testified that the land was not included in the statement when he signed it, but the statement itself contains irrefutable evidence to the contrary. The statement showed his debts to exceed the value of his personal property by over $500 and it was only by including $27,000 as the value of the land above the mortgage that a net worth of $26,455 was shown. Still later, at a time when his son was a tenant on the land in question, for the purpose of giving the son credit at the bank, he executed a written waiver of a landlord's lien on the property of the son in favor of the bank in which he stated that the farm was his. There are other circumstances which support our conclusion.
[2] But the wife, if a creditor of her husband, had a right, acting in good faith, to secure payment of her debt, although thereby the claims of other creditors would be defeated, and even knowledge that her husband was actuated by a fraudulent purpose would not avoid the conveyance to her if she acted in good faith for the purpose of securing payment of her claim, and not for the purpose of aiding the fraud. Rosenheim v. Flanders, 114 Iowa, 291, 86 N. W. 293;Steinfort v. Langhout, 170 Iowa, 422, 152 N. W. 612;Keosauqua State Bank v. Hartman, 184 Iowa, 961, 169 N. W. 339;Ford v. Ott, 182 Iowa, 671, 164 N. W. 629;Halloran v. Halloran, 195 Iowa, 484, 192 N. W. 418;Grant v. Cherry (Iowa) 201 N. W. 588;Barks v. Kleyne, 198 Iowa, 793, 200 N. W. 439.
[3] Was the wife a creditor of the husband?
“Where the wife allows the husband to take and use her property for the support or use of the family or otherwise, without an agreement on his part to pay her therefor, the relation of debtor and creditor does not exist, and a conveyance made on account of the use of such property is voluntary and invalid as against other creditors.” Carr v. Way, 141 Iowa, 245, 119 N. W. 700.
See, also, Romans v. Maddux, 77 Iowa, 203, 41 N. W. 763;Carbiener v. Montgomery, 97 Iowa, 659, 66 N. W. 900;Moore v. Orman, 56 Iowa, 39, 8 N. W. 689;Shaw v. Manchester, 84 Iowa, 246, 50 N. W. 985. There was no note or other written obligation to repay.
[4] We are constrained to say, notwithstanding the testimony of the appellants to the effect that the amounts turned over to the husband by the wife were loans, that the money was given to the husband for such use for the benefit of the family as he might see fit, and with no agreement, or expectation on the part...
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