Robertson v. Wade

• Decision Date: 07 October 1933
• Parties: ROBERTSON v. WADE et al.
• Court: Tennessee Court of Appeals

68 S.W.2d 487

17 Tenn.App. 457

ROBERTSON v. WADE et al.

Court of Appeals of Tennessee, Middle Section.

October 7, 1933

Certiorari Denied by Supreme Court Jan. 27, 1934.

Appeal from Chancery Court, Giles County; Thos. B. Lytle Chancellor.

Suit by D. D. Robertson, receiver of the Citizens' Bank of Pulaski against T. B. Wade, Jr., and others, wherein the Northwestern Mutual Life Insurance Company filed a cross-bill. From the decree, complainant appeals.

Affirmed and rendered.

R. E Lee, of Pulaski, for appellant receiver.

J. L Jones and D. R. Wade, Jr., both of Pulaski, for appellee Mrs. Wade.

CROWNOVER Judge.

This was a suit to set aside as fraudulent a mortgage executed by the husband, T. B. Wade, Jr., to his wife, Mrs. Annie White Wade, to secure an indebtedness of $63,977.07.

The original bill in this cause was filed by the receiver of the Citizens' Bank of Pulaski against T. B. Wade, Jr., and wife, Mrs. Annie White Wade, and others, for the recovery of a decree against T. B. Wade, Jr., on approximately $13,000 of notes due said bank, and to have set aside as fraudulent a trust deed executed by Wade conveying to his wife all of his property, real and personal, to secure to her an indebtedness of $63,977.07, and to have an equitable lien declared in favor of said bank on certain live stock included in said trust deed. The bill further prayed that same be sustained as a general creditors' bill, for attachment and injunction and the appointment of a receiver.

Mrs. Annie White Wade answered and denied the allegations of the bill, and alleged that she had inherited from her parents an estate of considerable size which she had always held separately and operated as her separate estate; that her husband had never reduced her personal property to his possession or tried to exercise any control over it; that out of her estate she had loaned money to her husband in an amount in excess of the amount of the note secured by the deed of trust, which amounts he had promised to repay; that said deed of trust was executed to her in good faith for the purpose of securing said indebtedness. She further stated that at the time of the execution of said trust deed she had no knowledge of the fact that her husband had attempted to pledge to the bank certain live stock conveyed to her by said deed of trust.

T. B. Wade, Jr., answered and denied all fraud, and alleged that each and every item secured in the trust deed represented moneys that he had borrowed from his wife with intention to repay. He admitted his indebtedness to the bank.

It was agreed in writing by the parties that the cause should be heard by the chancellor upon oral testimony adduced in open court in accordance with chapter 119 of the Public Acts of 1917, Code, § 10564.

The Northwestern Mutual Life Insurance Company filed its answer and cross-bill, praying for a decree against T. B. Wade, Jr., for the amount of its mortgage, $26,000, interest, attorneys' fees, and expenses, against said land covered by the deed of trust to Mrs. Wade, and for sale of the land to satisfy same.

Said tract of land of 756.63 acres was sold under order of the court and bid in by the said insurance company for $30,000, the amount of its debt and cost.

The cattle in the hands of the receiver were sold under orders of the court. After payment of all expenses and commission, there was left in the hands of the receiver $1,941.42, which is the total amount involved in this suit.

The chancellor found and decreed that so much of complainant's bill as alleged that the deed of trust executed by the defendant T. B. Wade, Jr., for the benefit of Mrs. Annie White Wade, was fraudulent or voluntary, was fully met and denied by the answer and not sustained by the proof, and he thereupon adjudged and decreed that to that extent the bill be dismissed. He found and decreed that no fraud was perpetrated upon the complainant or other creditors by Mrs. Wade either by the execution or the acceptance of said mortgage; that Mrs. Wade had no knowledge or notice that the said T. B. Wade, Jr., had attempted to pledge said live stock in the various notes executed by him to said bank, and that the lien of her deed of trust was superior to the equitable lien attempted to be created by said notes; that the purpose of said T. B. Wade, Jr., in executing said instrument was to perpetrate a fraud on the bank and to hinder and delay his creditors. He rendered decree for the receiver against T. B. Wade, Jr., for the amount of said notes in favor of the bank, and decreed for other claims filed. And ordered a reference to the master to ascertain and report the amount of damage sustained by Mrs. Annie White Wade on account of the suing out of the injunction in this cause, the issuance and levy of attachment and sale of the live stock by the receiver.

Complainant excepted to that part of the decree sustaining the trust deed to Annie White Wade, and appealed to this court and has assigned errors as follows:

(1) The court erred in failing to hold that all of the personal property belonging to Mrs. Annie White Wade passed, under the common law, to her husband, T. B. Wade, Jr., and that therefore said trust deed which conveyed away all of his property when he was insolvent was voluntary and made without consideration.

(2) The court erred in decreeing that T. B. Wade, Jr., was indebted to Mrs. Annie White Wade in the sum of $63,977.07.

(3) The court erred in adjudging and decreeing that the fraud perpetrated by T. B. Wade, Jr., was not participated in by Mrs. Annie White Wade, and in not holding that she had knowledge or notice of the pledge of the live stock.

(4) The court erred in failing to adjudge and decree that the bank had an equitable lien on said live stock by reason of the pledge of same to secure said notes, which lien was superior to the rights of Mrs. Annie White Wade.

Mrs. Annie White Wade and T. B. Wade, Jr., were married in 1899. Mrs. Wade's father, George S. White, died in 1907. Mrs. Wade inherited from his estate $30,000 or $32,000 in cash and notes. Several years later her mother died, and she inherited an estate of considerable value; the total value of her inheritance from her father and mother being $108,000 or $109,000.

In 1908 Mrs. Wade purchased with her inherited funds a farm known as the "Stacy Place," in Giles county, taking title in her own name. She had this place cultivated on shares, receiving her share of the crop, disposing of it and depositing the proceeds to her own credit in the bank. Some of the crops she sold to her husband, T. B. Wade, Jr.

Mrs. Annie White Wade kept a bank account in her own name in which she deposited all her funds. She executed notes to the bank in her own name and paid them out of her own account.

T. B. Wade, Jr., in 1907 purchased a farm of 756.63 acres in Giles county, known as "Clifton Place," which became the family home.

Mrs. Wade through the years checked on her own bank account in payment of notes owed by T. B. Wade, Jr., lien notes on Clifton place owed by him, debts of his for operating expenses of the home and farm, general expenses of the family, etc., and made checks direct to him, to the amount of as much as $50,000, as shown by exhibits in the record. These checks are signed "Annie White Wade," and show on their faces what they are for, but do not show that they are loans to T. B. Wade, Jr., with the exceptions of five small checks, amounting to $97, issued between December 2, 1931, and January 14, 1932, which checks show that they were issued for money loaned by Mrs. Wade to T. B. Wade, Jr., and a certain check issued by her to pay certain notes executed by Wade to the bank for which Wade gave her his note for $3,202.19 on November 29, 1911.

On January 15, 1929, Wade and wife mortgaged Clifton place to the Northwestern Mutual Life Insurance Company for $26,000.

T. B. Wade, Jr., operated the farm at Clifton place and raised cattle. He executed a number of notes to the Citizens' Bank of Pulaski and was indorser on other notes. Four of Wade's notes undertake to pledge cattle to the bank as collateral to the notes, but the bank did not take possession of the cattle, and they remained at Clifton place.

The Citizens' Bank closed its doors and ceased to be a going concern on June 26, 1931, and a receiver was appointed. Wade was given notice to pay his indebtedness.

On February 5, 1932, T. B. Wade, Jr., executed to Mrs. Annie White Wade a note for $63,977.07 and a deed of trust conveying all of his real and personal property of every kind to secure the said note.

The bank filed its bill seeking to have decree against Wade and others for said hereinabove mentioned indebtedness and to have the deed of trust set aside for fraud, and to assert a lien upon the live stock.

Mrs. Wade on October 22, 1931, wrote a check payable to T. B. Wade, Jr., for $400 for nine registered shorthorn heifers; on August 15, 1931, a check for $450 for fifteen shorthorn calves; on October 27, 1931, a check for $183.10 for five sows, one boar, and thirty-one shoats; and on October 26, 1931, a check for $101 for two mules. On January 1, 1929, she executed a note for $4,500 to T. B. Wade, Jr., for sixty shorthorn cows and one shorthorn bull, and made payments on same with checks. But in this suit she abandoned the sales and claimed the stock and cattle under the deed of trust.

1. Complainant contends that all of the money inherited by Mrs Annie White Wade came into her possession prior to the Married Woman's Emancipation Act, and that under the common law the possession of the wife in personal property was the possession of the husband, therefore this money was the property of the husband, T. B. Wade, Jr., and could not be the subject of loans by ...