Reilly" v. Barr.

• Decision Date: 25 June 1890
• Parties: Reilly" v. Barr.
• Court: West Virginia Supreme Court

34 W.Va. 95

Reilly"

v.Barr.

Supreme Court of Appeals of West Virginia.

Submitted June 11, 1890.

Decided June 25, 1890.

1. Fraudulent Conveyances Evidence.

If a conveyance is made by a father-in-law to his son-in-law for land, stating the consideration on the face of the deed to be one thousand dollars, the receipt of which is acknowledged, and the evidence discloses the fact that said consideration was not paid, but that a very small portion of it was paid by crediting an old debt due from the grantor to the grantee, this false recital as to the payment of the consideration will be regarded as a badge of fraud; and, if said deed is impeached by the creditors of said grantor as having been made with intent to hinder, delay and defraud them in the collection of their debts, said son-in-law will be held to stricter proof of the bona fides of the transaction than a stranger would be.

2. Fraudulent Conveyances Evidence.

Where a deed of conveyance is attacked by the creditors of the grantor as having been made and executed with intent to hinder, delay and defraud his creditors, in ascertaining whether or not such fraudulent intent existed in the minds, of the grantor and grantee the court will look to the circumstances surrounding the transaction, circumstantial evidence being not only sufficient to establish such fraud, but on account of the secrecy of such transaction often the only evidence that can be obtained.

3. Fraudulent Conveyances Evidence Onus Probandi.

When it appears that an instrument conveying real estate is impeached as fraudulent by creditors of the grantor, if the evidence discloses the fact that said instrument is false in any material part, the burden of showing that the transaction was fair lies upon the party who seeks to uphold it.

S. B. Hall for appellants cited:

Waite Fraud. Con. 315, 317, 325, 328, 333, 336, 344, 345, 378; 22 W. Va. 586; 23 W. Va. 645; 29 Am. Dec. 401; Code c. 74, 1, 2; 2 Lorn. Dig. c. 24 § 65; 3 Graft. 32; 28 Am. Rep. 704, 721 n.; Bump. Fr. Con. 201-204.

B. McEldowney, counsel for Furbee, cited:

11 W. Va. 229; 28 W. Va. 653; 14 W. Va. 264; 34 W.

Va. 449; 16 W. Va. 626; Bump. Fraud. Con. 56; 15 W.

Va. 444; 6 W. Va. 168.

English, Judge:

This was a suit in equity, brought by M. Reilly, Josephus Clark, and George A. Smith, doing business under the firm name of John L. Smith & Co., against David Barr and others, in the Circuit Court of Wetzel county, for the purpose of having certain conveyances made by the defendant, David Barr, to his son-in-law and co-defendant, Alexander Furbee, on the 15th and 16th days of February, 1884, declared null and void so far as they affect the rights and interests of complainants, and praying for a sale of the property therein described, claiming.that said deeds of conveyance are fraudulent and void as to the plaintiffs and several of the defendants who were creditors of said David Barr at the time of, and anterior to, the date of said conveyances.

It is alleged in plaintiffs' bill that the defendant David Barr owns and holds in fee-simple, in his own name, two tracts or parcels of land in said county, one containing four acres, conveyed to him by one Peter Goen, and the other containing twelve acres, conveyed to him by Isaac Coon; also, that after the debts and liabilities mentioned in the bill accrued, on which judgments were subsequently obtained, but before the rendition of any said judgments, to-wit, on the 15th day of February, 1884, the defendant Barr, being indebted as aforesaid to plaintiffs and to others, conveyed to his son-in-law, Alexander Furbee, a sixteen and one-half acre tract of land lying in said county, for the consideration expressed in said deed of five hundred dollars the payment of which was therein acknowledged in full, and that on the 16th day of February, 1884, the said Barr also conveyed to said Furbee a certain lot in the town of Wileysville, in said county, on which there was then and yet are erected a dwelling-house and store room or house, and that the consideration expressed in the conveyance is also five hundred dollars, the payment of which is also acknowledged in full; that the said tracts of land were all the real estate owned by said Barr in said county or elsewere at the time of said conveyances, and that said Barr was wholly insolvent at the time of said conveyances to said Furbee as aforesaid; that both of said conveyances were made while Barr was indebted to plaintiffs in the sums for which judgments were subsequently obtained against him; and that said conveyances were made for the express purpose of avoiding the effect and lien of said judgments, which said Barr well knew would shortly be rendered against him, and for the purpose of hindering, delaying, and defrauding his creditors generally, and complainants in particular.

Plaintiffs further allege that up to the loth of February, 1884, the defendant Alexander Furbee was well known in the neighborhood in which he lived for years as a man who was utterly impecunious, and that he was never known or supposed to be possessed of the sum of one thousand dollars, or of any other sum of money beyond what was necessary to keep himself and family, and that said Furbee never paid to said Barr any consideration price whatever for the realty conveyed to him by said Barr by said deeds, and that said conveyances are fraudulent so far as they affect the interests of complainants, and should be so considered. Plaintiff, after exhibiting copies of certain judgments owned by some of the defendants, allege that on the 8th day of April, 1884, the defendant David Barr and wife, by deed of that date, conveyed to defendant R. McEldowney, as trustee, ', the said four and twelve acre tracts of land to secure the defendants Vance, Hughes & Co. in the sum of four hundred and forty-three dollars and twenty eight cents, which amount they allege is yet unpaid; that said tracts of four and twelve acres are of small value, and would not sell for anything like a sufficient amount to discharge the plaintiff's liens.

On the 10th day of June a decree was entered in said cause directing a commissioner to ascertain and report (1) the amount and value, and annual rental value, of any and all realty owned by the defendant David Barr lying in Wetzel county, W. Va.: (2) any and all judgment liens existing against said David Barr, with their respective dates, priorities, and amounts, including interest and costs; (3) the time or date of the contraction by the defendant David Barr of the debts or liabilities for and on account of which the judgments set up in the bill and exhibits were obtained; (4) the date of the conveyances made by said David Barr to the defendant Alexander Furbee, and what actual consideration was paid by said Alexander Furbee to said Barr for the realty conveyed by said conveyances, and from whence the money was derived by said Furbee.

On the 31st of May, 1888, the defendant Alexander Furbee filed his separate answer to said bill, denying any knowledge of the judgments mentioned in plaintiffs' bill as rendered against the defendant David Barr, and disclaiming any knowledge as to when the debts were contracted by the defendant David Barr upon which the judgments named in the bill were rendered, and claimed that at the time he purchased said forty six and one half acres of land, and the property in Wileysville, he did not know that the defendant David Barr was indebted to any person, or that he was insolvent; and he denied that said conveyances were made to him by the defendant David Barr for the express purpose of avoiding the effect and lien of said judgments, and he further claimed that the purchase of the property by him from the defendant Barr was a fair and bona file transaction, and that lie has paid all of the purchase-money for said property. He also denied the allegation in the bill as to his impecuniosity, or that he was never supposed to have so much as one thousand dollars, or any other sum beyond what was necessary to keep himself and family, but claimed that he at all times had all the money he needed. lie further denied that said conveyances to him from the defendant Barr were purely gratuitous and fraudulent, or that said Barr had retained the possession of all of said real estate from the time of said conveyances up to the institution of this suit, or that lie has never exercised any rights of ownership over the same, but claimed that he had at all times since said purchase exercised acts and rights of ownership over the same. He admitted that said David Barr had remained in possession of a portion of said property, but under contract of rent with respondent, and he denied all fraud in the purchase by him from said Barr of the real estate in the bill mentioned.

The commissioner, to whom was referred said matters of account by said decree reported that the defendant Barr was the owner of two tracts of land in Wetzel county one containing twelve acres, and the other four acres, of the aggregate value of three hundred and ten dollars, and that on the 8th day of April, 1884, said Barr executed a deed of trust on said tracts of land to secure to Vance, Hughes & Co. the amount of two notes aggregating the sum of live hundred and forty seven dollars. He also ascertained the date and amount of the judgments obtained by the plain- tiffs and others against the said David Barr, and when the debts were contracted by said Barr upon which said judgments were predicated, ascertaining that said debts were contracted in the months of September and October, 1888, although judgments wTere not obtained upon the same until May, 1884, August, 1884, February, 1885, etc.; and the deeds from said Barr and wife to the defendant Alexander Furbee were made and executed on the 15th and 16th days of February, 1884, for the forty six and one half acre tract of land, and the town lot in the town of Wileysville; the aggregate consideration being one thousand dollars, expressed in said...