Roberts v. Bodman-Pettit Lumber Co.

• Decision Date: 04 November 1907
• Citation: 105 S.W. 258,84 Ark. 227
• Parties: ROBERTS v. BODMAN-PETTIT LUMBER COMPANY
• Court: Arkansas Supreme Court

105 S.W. 258

84 Ark. 227

ROBERTS v. BODMAN-PETTIT LUMBER COMPANY

Supreme Court of Arkansas

November 4, 1907

Appeal from Mississippi Chancery Court; E. D. Robertson, Chancellor affirmed.

Decree affirmed.

J. T Coston, for appellant.

1. Not only does a purchaser from an insolvent debtor in discharge of an antecedent debt stand in a more favored position than a purchaser for a present consideration, but the fraudulent intent of the grantor with reference to other creditors will not affect the title of the purchaser, unless he participated in the fraud. 20 Cyc. 472; 49 Ark. 22; 60 Ark. 433; 61 Ark 455; 81 N.W. 63. An insolvent husband, when justly indebted to his wife, may, without fraud, prefer her claim to that of others. 88 S.W. 879.

2. Where the conveyance is in discharge of a bona fide pre-existing debt, the burden is on the party attacking the title to show that the consideration was grossly inadequate and that the grantee participated in the grantor's fraudulent design. 46 Ark. 551; 64 Ark. 187; 31 Ark. 167; 38 Ark. 427; 63 Ark. 22; 16 N.W. 50; 9 S.E. 43; 13 N.W. 891; 14 S.E. 61; 61 Ark. 454.

3. The burden resting upon appellant to show the payment of the consideration, and her testimony that she did not take the conveyance for the purpose of aiding her husband in placing the property beyond the reach of creditors, etc., is uncontradicted. This testimony should be accepted as true. 63 Ark. 461.

J. D. Block, for appellee; F. H. Sullivan, of counsel.

1. Because of the intimate relations of husband and wife, transactions of the kind in question in this case are, and ought to be, regarded with suspicion, and the burden is upon the wife to establish by proof the perfect good faith of the conveyance. 76 Ark. 254. Every presumption is against her, and she must prove the existence of the demand, to discharge which the husband has made the conveyance, by clear and satisfactory proof. 56 L. R. A. 857.

2. To support a preference by an insolvent debtor, it is not only necessary to prove a bona fide debt, but also that the debt shall not be largely disproportionate to the value of the property transferred. 26 Ark. 265; 56 Ark. 417; Bump, Fr. Cony. § 173; 20 Cyc. 500; 68 Ark. 167; 84 Ala. 274; 37 Fla. 78; 2 Leigh (Va.), 48; 66 P. 807; 56 L. R. A. 829, note; 54 F. 696; 53 Mo.App. 493; 70 Tex. 47.

OPINION

MCCULLOCH, J.

Appellee Bodman-Pettit Lumber Company, as judgment creditor of one S. Roberts, instituted this suit in equity against appellant, Julia Roberts, who is the wife of said S. Roberts, to cancel and set aside a conveyance of certain lands in Mississippi County executed to appellant by her husband, and to have the said lands subjected to the payment of the judgment. The chancellor granted the relief prayed for, so far as the land involved in this appeal is concerned, and the defendant, Mrs. Roberts, appealed to this court.

S. Roberts and G. G. Roberts, husband and son respectively of the defendant, were engaged in the saw-mill business in Mississippi County under the firm name of S. & G. G. Roberts. They entered into a contract with plaintiff for the sale of the output of the mill; and plaintiff agreed to advance money to them for use in operating the mill. Pursuant to this contract, plaintiff advanced about $ 2,100 to them from July, 1899, up to December 21, 1900, when further advances were refused for the reason that the debtors were not cutting any lumber to amount to anything, and were not making payments on what they owed plaintiff. At the time of these transactions S. Roberts owned the land in controversy (11,200 acres), and the defendant owned other tracts of timber lands in the same locality aggregating 600 acres which had been conveyed to her by her husband. S. Roberts, in the years 1891 and 1898. The two principal officers of plaintiff company testified that when they extended credit to S. & G. G. Roberts the latter represented to them that all these lands belonged to them. This is denied by G. G. Roberts in his testimony, but as the chancellor doubtless accepted the testimony offered by the plaintiff as the truth of the matter, and as his conclusion is not against the preponderance of the testimony, we also accept it as true. It appears also from the testimony that the defendant allowed S. & G. G. Roberts to cut timber from her land in operating the mill business. It appears also from the testimony that Mrs. Roberts owned the mill which she permitted her husband and son to operate in their own names.

On May 18, 1901, S. Roberts, while indebted to plaintiff as aforesaid, conveyed the lands in controversy to his wife, and it is undisputed that he and his son were then and have continued to be insolvent. They owned no other property.

This deed of conveyance recites a cash consideration of $ 800, but the defendant undertakes to show that the real consideration for the conveyance was the satisfaction of four notes for $ 200 each executed to her by her husband and son for money furnished them some years before (date not given) to operate a planing mill and hub factory at...