Scott v. McCraw, Perkins & Webber Co.

• Decision Date: 21 June 1915
• Docket Number: 67
• Citation: 179 S.W. 329,119 Ark. 492
• Parties: SCOTT v. MCCRAW, PERKINS & WEBBER COMPANY
• Court: Arkansas Supreme Court

179 S.W. 329

119 Ark. 492

SCOTT v. MCCRAW, PERKINS & WEBBER COMPANY

No. 67

Supreme Court of Arkansas

June 21, 1915

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor reversed in part and affirmed in part,

Decree reversed in part, affirmed in part and cause remanded.

Baldy Vinson, S. M. Wassell and Miles & Wade, for appellants.

1. The court erred in vacating the deed of trust from Doctor Scott to his wife. There was no testimony other than the deposition of Mr. Ketchum, the attorney for appellee. The insolvency of Doctor Scott is not shown, but if conceded, the decree should be reversed on authority of 76 Ark. 252. An insolvent husband, when justly indebted to his wife, may, without fraud, prefer such claim to that of other creditors, even though the result be to deprive other creditors of the means to satisfy their claims. The burden of proof was on appellee. The fraud must be proven. 56 L. R. A. 817, and notes, 824. The recital of a consideration in the conveyance is sufficient proof of consideration until the contrary appears. 4 Ill.App. 112; 31 Md. 240; 116 Pa. 190. Fraud is not presumed, and a conveyance by a debtor to his wife in satisfaction of a bona fide debt raises no inference of fraud. 147 Ind. 417; 64 Mo. 239; 3 Md. Chy. 167; 109 N.C 268. A conveyance of real estate by an insolvent husband to his wife, in fulfillment of an agreement to repay her for real estate sold belonging to her, is not fraudulent as to creditors in the absence of proof of fraudulent intent of both grantor and wife, or knowledge of the wife of the fraudulent intent. 59 N.Y.S. 331; 112 N.C. 180; 46 Ark. 542; 74 Ark. 161; 56 Id. 259; 99 Id. 45; 110 Id. 354; 109 Id. 151.

2. It was error to vacate the deed to Mrs. Scott for lot 10, block 9. The true and equitable title to this has been in Mrs Scott all the time. 47 Ark. 111.

3. It was error to order the sale of the property, especially on such short notice. 1 Head (Tenn.) 385; 18 Gratt (Va.) 739.

Riddick & Dobyns, for appellee.

1. Both the deed of trust and deed were fraudulent and void as to creditors. 20 Cyc. 450; 16 Id. 1064; 41 So. 575; 116 Am. St. 208; 65 S.W. 722; 18 Am. St. 894; 38 Id 656; 76 Ark. 252; 68 Id. 162; 42 S.W. 183; 74 Ark. 161; 86 Id. 225; 56 Id. 73; 76 Id. 509; 96 Id. 531; 101 Id. 573; 73 Id. 174; 25 Pa. S.Ct. 300.

2. There was no error in ordering the property sold. 33 Ark. 328; Ib. 454; 112 N.W. 550; 64 Ark. 656; 76 Id. 553.

SMITH, J. MCCULLOCH, C. J. , disqualified and not participating.

OPINION

SMITH, J.

Appellee was the plaintiff below, and alleged in its complaint that on the 27th day of March, 1914, it recovered a judgement against appellant, Dr. S. A. Scott, for the sum of $ 2,303.29, with interest, and that the suit on which this judgment was obtained was filed on the 16th of June, 1913, and that in anticipation of the filing of this suit, Doctor Scott had executed a voluntary conveyance to his wife to lot No. 10, in block No. 9, of Sheldon's Addition to the city of Little Rock. The date of the deed to Mrs. Scott was October 21, 1913. Before the date of the submission of this cause, the complaint was amended to allege that on the . . . . day of June, 1913, appellant Doctor Scott had executed a deed of trust in favor of his wife to certain other property there described, and that this conveyance was a voluntary one for the fraudulent purpose of enabling appellants to cheat, hinder and delay appellee in the collection of its just demand against Doctor Scott.

After appellee had recovered judgment against Doctor Scott in the original suit, he prosecuted an appeal to this court, and appellee prosecuted a cross-appeal, and we have only recently handed down an opinion upon that appeal. See Scott v. McCraw, Perkins & Webber Co., 119 Ark. 133, 177 S.W. 901.

Upon the trial of the cause brought to uncover the property alleged to have been fraudulently conveyed by Doctor Scott to his wife, and for her use and benefit, the court found that the said deed and the deed of trust were voluntary conveyances executed for the fraudulent purpose of defeating appellee in the collection of its judgment, and it was there decreed that if said judgment was not paid within five days, together with the interest and all costs, that the property there uncovered should be sold by the clerk of the chancery court as commissioner named for that purpose.

Appellants complain alike of the action of the court in decreeing said conveyances to be fraudulent, and of the court's action in decreeing a sale of said land by the commissioner named for that purpose, and it is now urged that in no event should said lands be sold by the commissioner of the court, but that a sale thereof, if made at all, should be made under an execution duly levied upon said property.

We think the court erroneously found that the deed from appellant Scott to his wife for the said lot No. 10, block 9, was fraudulent. The facts appear to be that Doctor Scott had but little, if any, property of his own at the time of his marriage, but that his wife acquired, through her father, a very valuable estate. That the health of appellant's wife had failed and she was brought to Little Rock for treatment, whereupon the said lot which adjoined the homestead was purchased. The proof appears reasonably certain that the initial cash payment of one-third made at the time of the purchase of this lot was advanced by Mrs. Scott's father, and that it was intended that the title to the lot should be taken in her name. It also appears reasonably certain that the remaining payments were made with funds belonging to his wife, and he testified that, although these remaining payments were made after the deed had been taken in his own name, it was understood and agreed that when the purchase money had been paid, and the vendor's lien for the purchase money had been satisfied, he should then convey said lot to his wife, and that he did so convey it to her within ten days after the last of the purchase money had been paid.

But the facts appear to be otherwise with reference to the lands described in the deed of trust, which recited that it had been executed for the purpose of securing an indebtedness of $ 16,000 due by appellant to his wife. We think the chancellor's finding that this conveyance was a voluntary one and was executed for the purpose of putting the property beyond the reach of appellee is not contrary to the preponderance of the evidence. It was alleged and admitted that appellant Scott conveyed in this deed of trust all of his property, and if the conveyance is a valid one, it renders him wholly insolvent. Mrs. Scott owned extensive and valuable farming land in Chicot County, Arkansas, and the town of Eudora was laid off on her land, and appellant received large sums of money from the rent of these lands and from the sale of lots in the town of Eudora. Appellant bought and sold real property on an extensive scale, and while some of his investments proved to be profitable, he lost money on most of them. During...