Helm v. Brewster

• Court: Colorado Supreme Court
• Writing for the Court: [42 Colo. 33]GABBERT, J. (after stating the facts as above).
• Citation: Helm v. Brewster, 93 P. 1101, 42 Colo. 25 (Colo. 1908)
• Decision Date: 03 February 1908
• Parties: HELM v. BREWSTER et al.

93 P. 1101

42 Colo. 25

HELM v. BREWSTER et al.

Supreme Court of Colorado

February 3, 1908

Appeal from District Court, City and County of Denver; Frank T Johnson, Judge.

Action by Hannah E. Helm against Alice M. Brewster and another. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Appellant as plaintiff, brought an action against appellees, as defendants, to subject certain real property, known as 'the Aldine,' standing in the name of the defendant Alice M. Brewster, together with the furniture therein, to the payment of a judgment which plaintiff had obtained against the defendant Albert W. Brewster. The latter defendant had borrowed a large sum of money from the plaintiff, which was the basis for this judgment. Their relation is that of brother and sister. The defendants are husband and wife. Subsequent to incurring the indebtness to his sister, Mr. Brewster conveyed the property in question to his wife. This transfer the plaintiff claims was made for the purpose of hindering and delaying her in the collection of her claim against her brother. The main issue between the parties was the bona fides of this transaction. The trial resulted in a judgment dismissing the complaint, from which the plaintiff appealed to the Court of Appeals. On behalf of the plaintiff it is contended that the testimony bearing on the issues between the parties does not conflict to any material extent, and clearly established that the property in controversy was held by the wife in trust for her husband while on behalf of the defendants it is claimed that the testimony touching the issues tried was conflicting, and as the facts in issue were found in favor of the defendants they cannot be disturbed on review; and, further, that the evidence, without regard to its conflict, clearly established the good faith of the transfers from the husband to his wife. It therefore becomes necessary to review the testimony.

The defendants were married in 1888. About the time of their marriage, or shortly after, the husband purchased the lots upon which the Aldine stands for the sum of $10,500, and erected thereon a substantial brick building or six tenements at a cost of about $40,000. In order to make these improvements he borrowed money at various times mortgaging the property therefor, which finally culminated in a mortgage for $30,000, given in December, 1895, the principal of which was wholly unpaid when plaintiff commenced her action. Between October, 1893, and March, 1896, Mr. Brewster borrowed the money from plaintiff, the indebtedness for which was reduced to judgment in April, 1901. She commenced her action May following. The sum borrowed aggregated $6,500, part of which has been repaid through the sale of collaterals pledged as security, leaving the balance due for which judgment was rendered the sum of $4,706.11. From the time the property was purchased until August, 1894, the defendants, with their children, occupied a brick cottage on one of the lots. From the time the new buildings were completed until the early part of 1894, they were rented to different parties. On this last date they were all rented to one person for the purpose of keeping a boarding house, or family hotel. Part of the furniture used for this purpose belonged to Mr. Brewster, and had cost about $3,000. In August, 1894, he bought out his tenant, paying her for the furniture which she had placed in the property, or allowing her therefor the equivalent of $9,600. From that time until September, 1897, Mr. Brewster, with the assistance of his wife, who devoted all her energies in assisting him, conducted the place as a boarding house. On this date he surrendered the business to her, and transferred to her all the furniture in the six houses. The consideration named in the bill of sale evidencing this transaction was $1,000. Thereafter the wife conducted the business. On the 30th of the same month Mr. Brewster conveyed the real estate to his wife. This included the six new buildings and the cottage above mentioned. The new buildings had been improved by the addition of a common dining room. The deed evidencing this transaction names the consideration at $1,200. It warrants the title, except as against the mortgage above referred to. It is claimed by the defendants that the wife, as part of the consideration for the transfer, assumed the payment of this mortgage and the interest then due thereon, which amounted to the sum of $1,425. It is also claimed that the wife assumed the payment of other indebtedness against the husband in consideration of the conveyance to her, and has, in fact, discharged such indebtedness, but what the arrangement was between the husband and wife with respect to these matters, or what particular indebtedness she agreed to pay, is not at all clear. The wife knew that the husband was indebted to the plaintiff and numerous other creditors at the time of the transfers, and that he had no other means with which to pay his debts than the property transferred to her, because his other property was then incumbered for practically all it was worth. At this time his creditors were pressing him for the payment of their claims. By the transfers there was no apparent change in the possession or use and enjoyment of the property other than that the business was thereafter conducted in the name of the wife, whereas, before, it was conducted in the name of the husband. The consideration for the transfer of the furniture and business was a note for $840, dated April 8, 1894, executed by the husband to the wife. Defendants testify that the note was given for money borrowed by the husband from the wife, which she earned by selling cakes to the Woman's Exchange between 1891 and August, 1894. It appears that during this period the family occupied the cottage above mentioned; that the cakes were baked in this cottage; that the family during this time was maintained by the husband, including the hiring and paying of a servant to do the general housework and care for the children; that the materials for the baking were bought by the husband in connection with the family supplies; that during this time the husband had no other business, and received orders for, and delivered, the cakes to the Exchange, and collected the accounts therefor. Occasionally the husband assisted the wife in preparing and baking the cakes. The books of account in connection with this business week kept by the husband, in which was entered the cost of materials. This was deducted from the gross receipts for the cakes, and the net proceeds turned over to the wife. The note above mentioned was given for a part of the money thus earned, which the husband claimed to have borrowed from the wife. Part of the money (about $600) which the wife claims to have paid the husband, on account of the transfer of the real estate in question, she testifies she obtained from her father.

On the question of the value of the real estate there was a conflict in the testimony--some of the witnesses testifying that it was worth from $38,000 to $50,000, while others placed the value at from $25,000 to $35,000. The court ruled that the houses could not be valued separately, but should be estimated as an entire block as transferred. As to the value of the personal property, the court ruled that it must be determined independently of the business in which it was being used, and that its value was only such as it would bring when so sold. On this basis there was testimony to the effect that its value was about $1,000, while another witness stated that, in connection with the business, it was reasonably worth from $6,000 to $7,000. It appears from the testimony that the wife paid much more upon indebtedness against the husband than the consideration named in the instruments evidencing the transfers; in fact, paid something like $3,000 more than she agreed to pay, but that she kept no account or memorandum of the amounts or dates of such payments. It also appears from the testimony of the defendant Brewster that the wife assumed the payment of the taxes on the Aldine; that shortly after the transfer of that property she obtained $490 from her father, which she turned over to her husband on account of the consideration of such transfer, which sum he applied upon taxes against the Aldine, which, according to the testimony, she had agreed to discharge. It also appears from the testimony that, outside of the money which Mrs. Brewster received from her father, the many obligations against her husband which she discharged were paid out of the proceeds of the Aldine, operated by the wife as a boarding house. Persons whom he owned boarded at the house, and their accounts therefor were applied upon the husband's indebtedness. Some of this indebtedness he had incurred in operating the house prior to the transfer to his wife, and some of it was on account of incumbrances upon his other property. With respect to his wife furnishing, or paying, him money on account of the transfers, Mr. Brewster states: 'She was to give me money to pay my bills as I needed it; that is, a certain class of indebtedness that was unsecured that I thought I ought to pay as soon as possible. There was no definite amount named. It was my understanding that she was to furnish money to pay taxes on other property, and help me save it, and anything I needed for unsecured accounts.' Prior to these transfers, according to the testimony of Mr. Brewster, he had maintained his family, consisting of his wife and five children, out of the proceeds of the Aldine when operated by him. Since the transfers the family has been maintained by Mrs. Brewster from the same source. Mr. Brewster says that since such transfers he has had his living out of the house, and has...