Moody v. Beggs

• Decision Date: 01 March 1921
• Citation: 33 Idaho 535,196 P. 306
• Parties: ANNA M. MOODY, as Administratrix of the Estate of E. H. BEGGS, Deceased, Appellant, v. ANNA E. BEGGS, Respondent
• Court: Idaho Supreme Court

196 P. 306

33 Idaho 535

ANNA M. MOODY, as Administratrix of the Estate of E. H. BEGGS, Deceased, Appellant, v. ANNA E. BEGGS, Respondent

Supreme Court of Idaho

March 1, 1921

HUSBAND AND WIFE-FRAUDULENT CONVEYANCE-CROSS-EXAMINATION.

1. A conveyance from the husband to the wife of all the husband's property, the consideration being a debt alleged to be due from the husband to the wife for moneys received from the wife, cannot be sustained against creditors at the time of such conveyance by evidence that the wife has turned over to her husband a large amount of her separate funds to be used by him in his business enterprises, when there is no showing of an agreement either express or implied that he would repay her.

2. If a wife places her separate funds in the hands of her husband to be used in his business enterprises and he so uses them through a long period of time and then conveys to her all of his property in consideration of the moneys that he has received from her, when he has a large amount of indebtedness outstanding, if such conveyance is questioned by the creditors the burden is upon the wife to show clearly that at the time she placed her moneys in the hands of her husband they were so placed under conditions that made him her debtor; and in the absence of such proof by her, her title must fail.

3. In the trial of an action involving such a title to real property as is claimed by the wife in this case, the trial court should permit a thorough cross-examination of the wife to determine whether or not the moneys that she claims to have placed in the hands of her husband have been repaid to her.

4. Held, in this case, that no indebtedness from the husband to the wife was shown, and therefore there was no consideration for the deed.

APPEAL from the District Court of the Third Judicial District of the State of Idaho, for Ada County. Hon. Carl A. Davis, Judge.

Action to set aside deed from husband to wife. Judgment for defendant. Reversed.

Judgment reversed and a new trial ordered. Costs awarded to appellant.

Chas M. Kahn and Ira E. Barber, for Appellant.

Where the wife claimed to have loaned the husband money with which to buy property and which property he had controlled and managed and dominated for a long term as his own, the unsupported testimony of the wife was held to be insufficient to sustain a judgment awarding her the property. (McDonnell v. Jones, 25 Idaho 552, 138 P. 1123.)

"When a deed is shown to be voluntary as to existing creditors then the burden of proof rests on the donee to establish the circumstances which will rebut fraudulent intent--for such conveyance is presumptively fraudulent." (Scharff v McGaugh, 205 Mo. 344, 103 S.W. 550; Cartwright v. West, 155 Ala. 619, 47 So. 93; James v. Malloy, 76 Ark. 509, 89 S.W. 472; Harkness v. Smith, 3 Idaho 221, 28 P. 423; California etc. Min. Co. v. Manley, 10 Idaho 786, 81 P. 50; Dill v. Carver, 70 Wash. 103, 126 P. 86; 20 Cyc. 462, 463, note 98; Wooten v. Steele, 109 Ala. 563, 55 Am. St. 947, 19 So. 972; 20 Cyc. 511-516.)

A conveyance from husband to wife for a nominal or fictitious consideration, or in consideration of natural love and affection, will not be supported as against creditors. (20 Cyc. 522, 523, note 40; Radley v. Riker, 80 Hun, 353, 30 N.Y.S. 130.

While a debt due from husband to wife may be a sufficient consideration for a conveyance where advances are made without any promise to pay at the time, it will not sustain such a conveyance as against creditors. (20 Cyc. 527, note 61; Templeton v. Cook, 69 Ore. 313, 138 P. 230; 20 Cyc. 529, note 74.)

Where the wife advances money to the husband without any promise to repay the same or under such circumstances as not to create the relation of debtor and creditor at the time of such advancement, it is no consideration against his creditors for a subsequent conveyance to her. (Reeves v. Slade, 71 Ark. 611, 77 S.W. 54; Vietor v. Swisky, 200 Ill. 257, 65 N.E. 625; Hoffman v. Henderson, 145 Ind. 613, 44 N.E. 629; Woods v. Allen, 109 Iowa 484, 80 N.W. 540; Bailey v. Kansas etc. Co., 32 Kan. 73, 3 P. 756; Diggs v. McCullough, 69 Md. 592, 16 A. 453; Kuhn v. Stansfield, 28 Md. 210, 92 Am. Dec. 681; Sykes v. City Sav. Bank, 115 Mich. 321, 69 Am. St. 562, 73 N.W. 369; Wake v. Griffin, 9 Neb. 47, 2 N.W. 461; Cole v. Lee, 45 N.J. Eq. 779, 18 A. 854; First Nat. Bank of Albuquerque v. McClellan, 9 N.M. 636, 58 P. 347; Clift v. Moses, 75 Hun, 517; Grabill v. Moyer, 45 Pa. 530; New South etc. Assn. v. Reed, 96 Va. 345, 70 Am. St. 858, 31 S.E. 514; Maxwell v. Hanshaw, 24 Va. 405; Le Saulnier v. Krueger, 85 Wis. 214, 54 N.W. 774.)

Where the funds of the wife are received and used by the husband with her knowledge and consent, and no evidence of indebtedness is taken by her, or no claim that he is her debtor, is made during a lapse of many years, a conveyance in consideration of such funds will not be sustained, especially where it is made after the husband has become insolvent or greatly financially embarrassed. (20 Cyc. 529, note 74; Wood v. Riley, 121 Ala. 100, 25 So. 723; Hauk v. Van Ingen, 196 Ill. 20, 63 N.E. 705; Brookville Nat. Bank v. Kimble, 76 Ind. 195; Williams v. Snyder (Iowa), 94 N.W. 845; Allen v. Meriweither, 10 Ky. Law Rep. 600; Balz v. Nelson, 171 Mo. 682, 72 S.W. 527; Brownell v. Stoddard, 42 Neb. 177, 60 N.W. 380; Cole v. Lee, 45 N.J. Eq. 779, 18 A. 854; Briggs v. Mitchell, 60 Barb. (N. Y.) 288. Kanawha etc. Bank v. Atkinson, 32 W.Va. 203, 25 Am. St. 806; Hume v. Scruggs, 94 U.S. 22, 24 L.Ed. 51, see, also, Rose's U.S. Notes.)

Where the wife for a long period permitted the husband to handle her money as his own, keeping no account of it, and he never paid any of it back, a judgment setting aside the deed to the wife affirmed. (Goodrich v. Bagnell Timber Co., 105 Ark. 90, 150 S.W. 406; Cowling v. Hill, 69 Ark. 350, 86 Am. St. 200, 63 S.W. 800; Driggs etc. Bank v. Norwood, 50 Ark. 42, 7 Am. St. 78, 6 S.W. 323; Creel v. Cloyd, 151 Ky. 627, 152 S.W. 776.)

"When the husband undertakes to prefer the wife the proof should be clear and satisfactory that the wife has a subsisting debt, one which is to be enforced and payment exacted regardless of the fortunes of the husband." (Siffermann v. Hill, 131 Ill.App. 174; aff. Hill v. Siffermann, 230 Ill. 19, 82 N.E. 338.)

The law requires clear and satisfactory proof of indebtedness between husband and wife. The secret agreement between husband and wife under which she was to have the property cannot prevail as against creditors. (Harrison v. Tourtillott, 148 Ill.App. 576.)

The admission of assessment-rolls, in support of the contentions of defendant as to the value of the properties referred to, was error. This class of evidence is not competent. The county assessor was within reach, and could have been brought to testify and submitted to cross-examination. (Central P. Ry. Co. v. Feldman, 152 Cal. 303, 92 P. 849; St. Louis etc. Ry. Co. v. Magness, 93 Ark. 46, 123 S.W. 786; Lewis v. Englewood etc. R. Co., 223 Ill. 223, 79 N.E. 44.)

Givens & Barnes, Oppenheim & Lambert and Jay M. Parrish, for Respondent.

Whenever there is a true debt and a real transfer for an adequate consideration, there is no collusion, and fraud in its legal sense cannot be predicated thereon, even though the transfer result in a preference; nor does the fact that the creditor obtaining the preference is the debtor's wife operate to change or modify the rule. (Bates v. Papesh, 30 Idaho 529, 166 P. 270; Wilkerson v. Aven, 26 Idaho 559, 144 P. 1105; Coffey v. Scott, 66 Ore. 465, 135 P. 88.)

"If the wife advanced money to her husband, although no time be fixed for payment and no express promise is made to repay, and the circumstances attending the receipt of the money by the husband are such as to show that they dealt with each other as debtor and creditor, the husband may pay or secure the indebtedness by making a conveyance or transfer of property to her." (20 Cyc. 527, note 61.)

"A conveyance in fulfilment of a previous valid agreement between a husband and wife, such agreement being based upon a sufficient consideration, will be upheld as against creditors." (20 Cyc. 529, note 74.)

"A court of equity will never presume fraud when the transaction under their investigation is equally susceptible of two explanations, one of which is consistent with a fraudulent intent, and the other with good faith and fair dealing. In such case, that construction of the acts of the parties which is consistent with good faith and fair dealing will be preferred." (Coffey v. Scott, supra; Hurford v. Harned, 6 Ore. 362.)

DUNN, J. Rice, C. J., and McCarthy and Lee, JJ., concur. Budge, J., did not hear the argument nor participate in this decision.

OPINION

DUNN, J.

The complaint in this case alleges that the plaintiff is the legally appointed, qualified and acting administratrix of the estate of E. H. Beggs, deceased, and that the said E. H Beggs died on or about the twenty-ninth day of July, 1916; that the said E. H. Beggs was at all times up to his death the owner of said real estate described in the complaint, commonly known as the Independent telephone property, situated in Boise; that since her appointment as administratrix she has made a careful examination for assets and estate belonging to the said E. H. Beggs and has been unable to find any assets or estate sufficient to discharge the indebtedness set out in the complaint, and that said estate is in an insolvent condition; that since her appointment as such administratrix the claim of Elizabeth Stewart in excess of $ 3,000 and the claim of Ira E. Barber for $ 3,922.52 against said estate have been allowed by said administratrix and that both of said claims are secured collaterally, but that the collateral securing...