Nevers v. Hack

• Decision Date: 06 June 1894
• Docket Number: 16,870
• Citation: 37 N.E. 791,138 Ind. 260
• Parties: Nevers v. Hack et al
• Court: Indiana Supreme Court

37 N.E. 791

138 Ind. 260

Nevers v. Hack et al

16,870

Supreme Court of Indiana

June 6, 1894

From the Lake Circuit Court.

The judgment is affirmed.

C. N Morton, for appellant.

OPINION

McCabe, J.

The appellant, as a creditor of the appellee Angeline Hack, sued her and her co-appellees John M. Hack and Joseph L. Hack, to set aside an alleged fraudulent conveyance to each of the two latter, by said Angeline, and subject the real estate so conveyed to satisfy appellant's debt. Issues were formed on which a trial resulted in a finding and judgment in favor of appellees that appellant take nothing by his suit, and for costs.

The action of the court in overruling appellant's motion for a new trial is assigned for error, and is the only error complained of here. The only grounds assigned therefor in the motion for a new trial are that the finding is not sustained by sufficient evidence, and is contrary to law.

It appears from the evidence, that the alleged fraudulent conveyances were made on the 7th day of October, 1891, and that appellant recovered a judgment against said Angeline, February 19, 1892, for $ 2,637.50, on two promissory notes for $ 1,200 each, executed by said Angeline with another, on March 1, 1890, each due one year after date.

An execution issued on said judgment March 17th, 1892, was returned June 3d, 1892, showing a sale of property of said Angeline, for $ 200, on said writ, and that the sheriff could find no other property, either real or personal, belonging to her and subject to execution. Of the money returned, $ 164.85, the balance of the $ 200 left after the payment of costs, was applied on the judgment. Another execution was issued July 14th, 1892, and was returned August 13th, 1892, by the sheriff, in which return he states that he demanded property of said Angeline, and she thereupon presented a schedule of her property and demanded that the same be set apart to her as exempt from levy and sale; that he caused the property to be appraised, showing its value to be $ 430, and the return then states "which schedule and appraisement are returned herewith and made a part hereof. I therefore return this writ not satisfied." This suit was begun on the 15th day of August, 1892.

There was no evidence to establish the insolvency of the appellee, Angeline, at any time, other than the two returns of the two executions already set forth. It is the settled law in this State, that it must be both alleged and proven, before an alleged fraudulent conveyance can be avoided, that at the time of the conveyance, and at the time the suit is brought, the debtor did not have enough property left, subject to execution, to pay his debts. Pence v. Croan, 51 Ind. 336; Sherman v. Hogland, 54 Ind. 578; Evans v. Hamilton, 56 Ind. 34; Bentley v. Dunkle, 57 Ind. 374; Romine v. Romine, 59 Ind. 346; Deutsch v. Korsmeier, 59 Ind. 373; Price v. Sanders, 60 Ind. 310; Whitesel v. Hiney, 62 Ind. 168; Spaulding v. Myers, 64 Ind. 264; Noble v. Hines, 72 Ind. 12; Bruker v. Kelsey, 72 Ind. 51, and many other cases too numerous to cite.

Counsel for appellant concedes this to be the law in this State, but contends that if the insolvency of the debtor be established, or proven to exist, at the time the suit is brought to avoid the conveyance, that carries with it the presumption that such insolvency existed prior to that time, and extends back to the time when the conveyance was made, and cites in support of that proposition, Lee v. Lee, 77 Ind. 251.

That case, and perhaps some others, among which are Bruker v. Kelsey, supra, and cases there cited, hold that a return of an execution nulla bona shortly before the suit is brought may be sufficient prima facie to prove that the grantor did not have property, at the time the suit is brought, subject to execution, sufficient to pay his debts. But none of them holds that such return is sufficent to prove that he did not have such sufficient property at the time the conveyance was made.

In support of the contention that such return is sufficient, we are referred to Strong v. Lawrence, 58 Iowa 55, 12 N.W. 74, and Carlisle v. Rich, 8 N.H. 44, both of which hold that "where it is found that a debtor is insolvent at the time the judgment is rendered, and is unable to respond to the amount recovered, his insolvency will be considered as extending back beyond a voluntary conveyance of his property made during his indebtedness, unless the contrary is shown."

This doctrine virtually puts the burden of proof upon the wrong party. It in effect amounts to saying to a party charged with a fraudulent conveyance, you must prove yourself innocent before the party preferring the charge is required to prove anything. The first case last above named further says "The party who sets up a voluntary conveyance in opposition to the claims of preexisting creditors, is required to show that the means of the donor, independent of the property conveyed were abundantly ample to satisfy all his creditors." This doctrine...