South Omaha National Bank v. Boyd
| Decision Date | 28 May 1906 |
| Citation | 97 S.W. 288,79 Ark. 215 |
| Parties | SOUTH OMAHA NATIONAL BANK v. BOYD |
| Court | Arkansas Supreme Court |
Appeal from Lonoke Chancery Court; Jesse C. Hart, Chancellor reversed in part.
Decree affirmed.
A. H Murdock and George Sibly, for appellant.
1. The Nebraska judgment stands unappealed from and unreversed. Under the "full faith and credit" clause of the Federal Constitution, and the repeated decisions of this court, that judgment should have been recognized by the lower court. 52 Ark. 160; 35 Ark. 331; 30 Ark. 469; 47 Ark. 17; 13 Ark. 33. Neither the question of fraud nor want of jurisdiction in the court rendering the judgment is raised by the pleadings or evidence. It stands upon the same footing as a domestic judgment. 11 Ark. 157.
2. Tewksberry and wife have not appeared. The complaint as to them must be taken as true. Under the pleadings and exemplifications of the Nebraska record, a valid judgment exists against Tewksberry. In any event plaintiff is entitled to judgment against his estate, and the circuit court erred in not rendering it. 13 U.S. S.Ct. 614.
3. The judgment is contrary to, and not supported by, the evidence. A voluntary transfer of property while the grantor is unable to pay debts raises a presumption of fraud as to existing creditors. 56 Ark. 73; 50 Ark. 42; 59 Ark. 614; 55 Ark. 59; 23 Ark. 494; 69 Ark. 224; Ib. 350; 66 Ark. 455. The circumstances, relations of the parties and their subsequent conduct in the management of the property warrant the presumption of fraud. 41 Ark. 186. The transfer being voluntary, it is not necessary to show that Mrs. Maxwell participated in the fraud. 46 Ark. 542; 34 P. 1009; 48 P 809. Where one exercises the right to make a gift to wife children or relative, he can only do so by making provision for the payment of debts. 54 U.S. 93; 91 U.S. 479; 52 N.W. 401. Mrs. Maxwell could not convey to Prosser by consent and direction of Tewksberry. 67 Ark. 105; 66 Ark. 419.
4. As to the defendant Sperry and intervener Prosser, it was error to dismiss the complaint for want of equity. Their alleged purchases were made after the institution of this suit, and they can not claim as innocent purchasers. 16 Ark. 175; 12 Ark. 425; 67 Ark. 571; Bigelow on Fraud, 396; 20 Ala. 732; 92 Ind. 310; 29 N.J.Eq. 554. The burden is upon those claiming through Mrs. Maxwell to show that they are entitled to the property by virtue of a good consideration, as against creditors whose debts existed at the time of the transfer to her. 68 Ark. 162; 23 Ark. 494. Appellees were not justified in relying on the abstract. They should have caused a search of the records to be made, and, having failed to do so, must abide the consequences of their own negligence. 60 Neb. 625; 63 Neb. 99.
It was not necessary for appellant to reduce its claim to a judgment in this State before instituting this action to set aside a fraudulent conveyance. 66 Ark. 486. It was error to dissolve the attachment. Kirbys Digest, § § 3310, 3311.
Trimble, Robinson & Trimble, for appellees.
1. The attachment was properly dissolved. The statute under which appellant proceeded has reference solely to domestic judgments. An execution could not be issued on the Nebraska judgment until after judgment thereon in this State. Sutherland, Notes on Const, 565, and citation; 146 U.S. 685; 20 Blatchf. 524; 12 Feb. 376; 13 F. 417.
2. The land sold to Sperry was the homestead of Tewksberry, and not subject to appellant's claim. 52 Ark. 101; 44 Ark. 180; 43 Ark. 429; 57 Ark. 242; 52 Ark. 493; Ib. 547; 31 Ark. 546; 57 Ark. 331. Prosser purchased and paid for his tract before his suit was brought, and the judgment in Nebraska was no lien on lands in Arkansas. 1 Black on Judgments, 2 Ed. 655. Lis pendens does not operate upon parties whose rights were acquired anterior to the commencement of suit. 1 Freeman on Judgments, 4 Ed. 366, § 201. Even if these facts did not exist, the Nebraska judgment would not have been lis pendens in regard to the title. 1 Black, Judg. (12 Ed.), 641; Ib. 633, par. 400.
3. The record not being fully set forth in the transcript, the presumption is in favor of the correctness of the decree. 2 Ark. 14; Ib. 73; 9 Ark. 535; 57 Ark. 304; 58 Ark. 448.
4. The services rendered, and the money expended by Mrs. Maxwell, in the care of Tewksberry, constitute a valuable consideration in the deed to her. 6 Am. & Eng. Enc. Law (2 Ed.), 703; Ib. 719; Ib. 693; 91 Tenn. 163.
George Sibly, for appellant, in reply.
The proof is conclusive that the deed from Tewksberry to Ida Smith was without any consideration whatever. The claim of Mrs. Maxwell shows on its face that it is fictitious and void and made to assist Tewksberry in defrauding his creditors. Her own deposition negatives her contentions that her account was the consideration for the deed, and that Fletcher acted as her agent.
John S. Tewksberry was the owner of a tract of 320 acres of land in Lonoke County--the east half of section 32, in township 2 north, range 8 west--and one George Burke obtained a judgment against him in the sum of $ 3,620 in Douglas County, Nebraska. Said judgment was assigned to appellant, a national banking corporation, and this suit was brought by appellant against Tewksberry and Mrs. Anna M. Maxwell, to whom he had conveyed a portion of the land, to cancel said conveyances and subject the land to the satisfaction of said judgment. It is alleged in the complaint that Tewksberry conveyed the northeast quarter of said section to one Ida Smith in February, 1896, and on March 2, 1898, caused said Ida Smith to convey the same to defendant, Mrs. Maxwell, who was his wife's niece, and that both of said conveyances were made without consideration, and for the fraudulent purpose of cheating and hindering his creditors, and especially appellant in the collection of said debt. The Nebraska judgment was rendered on July 31, 1899, upon a cause of action alleged to have arisen during the year 1887.
Subsequently appellee Frank Sperry was made defendant by amendment to the complaint, alleging that he purchased the southeast quarter of said section from Tewksberry since the institution of the suit, but with full notice of the pendency of the suit. Sperry answered, alleging that said tract was occupied by Tewksberry as his homestead at the time of the conveyance, and that he purchased without actual knowledge of the pendency of the suit.
Subsequently appellee John J. Prosser filed his intervention, claiming that Mrs. Maxwell had sold and conveyed the northeast quarter of said section to him for a valuable consideration before the commencement of the suit, and that he had no notice of the alleged fraudulent design of Tewksberry and Mrs. Maxwell to defeat the collection of the debts of the former. Tewksberry died during the pendency of the cause below, and as to him the cause was revived in name of J. C. Boyd, special administrator.
The cause was heard upon the pleadings and depositions of witnesses, and the chancellor dismissed the complaint for want of equity.
The proof is clear that the southeast quarter of said section was the homestead of Tewksberry, and that he was a married man, and resided upon the same as his homestead at the time he sold and conveyed to Sperry. Therefore the conveyance of that tract was not fraudulent and void as to creditors. Bogan v. Cleveland, 52 Ark. 101, 12 S.W. 159; Pipkin v. Williams, 57 Ark. 242, 21 S.W. 433; Gibson v. Barrett, 75 Ark. 205, 87 S.W. 435.
The tract conveyed to Prosser by Mrs. Maxwell (northeast quarter of the section) stands in a different attitude in the case. It was not a...
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