Parksley Nat. Bank v. Parks, Record No. 1989.

• Decision Date: 09 January 1939
• Docket Number: Record No. 1989.
• Citation: 172 Va. 169
• Parties: PARKSLEY NATIONAL BANK, ETC. v. PRESTON D. PARKS AND WIFE, ET ALS.
• Court: Virginia Supreme Court

Page 169

172 Va. 169

PARKSLEY NATIONAL BANK, ETC. v. PRESTON D. PARKS AND WIFE, ET ALS.

Record No. 1989.

Supreme Court of Virginia, Richmond.

January 9, 1939.

Present, Campbell, C.J., and Holt, Gregory, Browning, Eggleston and Spratley, JJ.

1. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Failure to Claim Interest as Badge of Fraud — Case at Bar. — In the instant case, a suit to set aside a deed of trust executed by appellee, conveying his real estate in trust to secure a debt claimed to be due by him to his wife, appellant bank, to which the husband was indebted, contended that the failure of the wife to claim interest was a badge of fraud. The wife testified that she did not expect interest and that if she had required interest, it would necessarily have been used for the family, since her husband was trying to establish himself in farming, the income from which all went to the family's use.

Held: That there was no merit in appellant's contention.

2. REFERENCE AND COMMISSIONERS — Report — Weight on Appeal. — While the report of a commissioner does not have the weight given to the verdict of a jury on conflicting evidence, it is entitled to respect, if his judgment is supported by the testimony, and unless it is clear that he has erred.

3. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Transactions Closely Scrutinized. — As a general rule, transactions between husband and wife must be closely scrutinized to see that they are fair and honest, and not merely contrivances resorted to for the purpose of placing the husband's property beyond the reach of his creditors.

4. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Presumptions and Burden of Proof. — In a contest between a wife and her husband's creditors, the burden of proof is upon her to show satisfactorily the bona fides of a transaction between her and her husband. While, in all such cases, the presumptions are against the wife, and in favor of the creditors, the presumptions may be repelled.

5. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Effect of Actual Loan by Wife to Husband. — Where it is shown that a wife has actually loaned her money to her husband, upon his express contemporaneous promise to repay the loan, she becomes his creditor to the same extent as any other person advancing the money under like circumstances, and it is as much the duty of a husband to be just to his wife as to other persons.

6. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Conveyance by Husband in Payment of or as Security for Loan Made by Wife. — A conveyance of a husband's property, either in payment of a loan made to him by his wife, or as security for such a loan, with a promise of repayment by him, is a valid conveyance, and not subject to successful attack by his other creditors.

7. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Evidence Showing Valuable Consideration for Conveyance — Case at Bar. — In the instant case, a suit to set aside a deed of trust executed by appellee, conveying his real estate in trust to secure a debt claimed to be due by him to his wife, the wife produced a private record, or small memorandum book, in which she claimed to have entered, on or about the date of the transaction, a list of stocks turned over to her husband, and the value according to the then current market quotations. Both the husband and the wife testified that there was a distinct and unequivocal agreement between them that the amounts represented by the securities were actual loans, and not gifts or advances. The dealings of the husband with the bank were such as to give it full notice that the husband was securing advances from his wife and the bank chose to regard him as solvent and sufficiently able to repay the loan made by it to him and relied upon the husband's assurances. The deed of trust was not executed until the husband believed that his debts to the bank had been placed with an attorney for collection. It was executed and acknowledged by the husband on the night of the same day it was drawn, and was recorded in the clerk's office at nine o'clock the following morning.

Held: That the evidence was not sufficient to convict either the husband or wife of fraud and was sufficient to repel the presumptions against the wife by virtue of the circumstances surrounding the execution of the deed of trust and its recordation, and consequently supported the decree holding that the deed of trust was given upon a valuable consideration and without fraudulent intent.

8. FRAUDULENT AND VOLUNTARY CONVEYANCES — Husband and Wife — Deed of Trust — Refusal to Direct Sale of Property Insufficient to Satisfy Debt Secured — Case at Bar. — In the instant case, an action by a bank as creditor to set aside as fraudulent, a deed of trust given by a husband to his wife, wherein the trial court entered a decree holding that the deed of trust was made upon a valuable consideration and without fraudulent intent, appellant assigned as error the refusal of the trial court to direct a sale of the real property in the deed of trust described, but admitted that it was insufficient to satisfy the debt secured thereby.

Held: That there was no merit in the contention, since there was no equity in the property for the other creditors of the husband.

9. APPEAL AND ERROR — Remand — Record Insufficient for Supreme Court of Appeals to Dispose of Question — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed of trust executed by a husband to his wife, a commissioner in chancery reported that the creditor bank had received a certain sum from a levy upon and sale of property owned by the husband, in addition to another sum from the sale of other personal property. The creditor bank contended that the latter sum was included in the former, and defendants admitted that if there had been a miscalculation, it could be readily corrected. The trial court reserved judgment on this question, and the record before the Supreme Court of Appeals was not sufficient for that court to render a judgment.

Held: That it was necessary to remand the case for further proceedings and a determination of that particular question.

10. PLEDGE AND COLLATERAL SECURITY — Sale — Advice of Court as to Time and Manner — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed of trust in favor of a wife, the bill of the creditor bank prayed that in view of "economic conditions" and the "stock market situation," the trial court advise the bank when and in what manner the collateral held by it to secure the debt of the husband should be sold. The trial court held that the collateral was subject to the control of the bank to be sold at such time as the bank might deem advisable.

Held: That the trial court, in the performance of its judicial functions, and in the absence of any satisfactory evidence as to the rise and fall in value of the stock, could not have been rightly expected to further advance its judgment on stock market fluctuations.

11. APPEAL AND ERROR — Record — Exhibits — Duty to Certify Original Exhibits to Supreme Court of Appeals — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed of trust executed by a husband in favor of his wife, appellant bank excepted to the ruling of the trial court in directing that only a part of the original exhibits be certified directly to the Supreme Court of Appeals, and that the remainder, comprising forty-two typewritten pages, be copied in the record.

Held: That under section 6357 of the Code of 1936, the trial court should have certified all of the original exhibits to the Supreme Court of Appeals, to be used in the hearing of the appeal.

12. APPEAL AND ERROR — Record — Exhibits — Purpose of Statute Providing That Original Exhibits May Be Used on Appeal. — The purpose of section 6357 of the Code of 1936, providing that original exhibits, instead of being copied into the record, may be used at the hearing on appeal with the same effect as in the court below, is to avoid the expense of making copies and to facilitate appeals, as well as to give the Supreme Court of Appeals an opportunity to see and inspect the original exhibits.

13. APPEAL AND ERROR — Record — Exhibits — Direction of Trial Court That Part Only of Exhibits Be Certified Directly to Supreme Court of Appeals — Case at Bar. — In the instant case, a suit to set aside as fraudulent a deed of trust executed by a husband in favor of his wife, appellant bank excepted to the ruling of the trial court in directing that only a part of the original exhibits be certified directly to the Supreme Court of Appeals, and that the remainder, comprising forty-two typewritten pages, be copied in the record.

Held: That while the action of the trial court did not constitute reversible error, the provisions of section 6357 of the Code of 1936, that original exhibits may be used at the hearing on appeal with the same effect as in the court below, should be observed in the future.

Appeal from a decree of the Circuit Court of Accomac county. Hon. John E. Nottingham, judge presiding.

The opinion states the case.

G. Walter Mapp, for the appellant.

Stewart K. Powell, for the appellees.

SPRATLEY, J., delivered the opinion of the court.

This suit was instituted by the Parksley National Bank to set aside as fraudulent a deed executed by Preston D. Parks, conveying his real estate in trust to secure a debt of $32,438.96, claimed to be due by him to his wife, Margaret N. Parks. Parks and his wife each filed separate answers to the bill denying all fraud, and averring the bona fides of the transaction.

The cause was referred to a commissioner in chancery, who was required, among other things, to ascertain and report whether or not the deed of trust was made upon a consideration deemed valuable in law, or was executed with intent to hinder, delay, and defraud the creditors of the grantor; and...