Stamper v. Stamper

• Decision Date: 06 January 1949
• Docket Number: 28514.
• Citation: 83 N.E.2d 184,227 Ind. 15
• Parties: STAMPER v. STAMPER.
• Court: Indiana Supreme Court

83 N.E.2d 184

227 Ind. 15

STAMPER v. STAMPER.

No. 28514.

Supreme Court of Indiana

January 6, 1949

Appeal from Lake Superior Court No. 4, Lake County Homer E. Sackett, judge.

Edgar J. Call, of Gary, and Dean J. Call, of Evansville, for appellant.

Blaz A. Lucas and Ellis C. Bush, both of Gary, for appellee.

YOUNG Judge.

The property involved in this appeal had been used by appellee for many years as his home. Appellant was his daughter and lived with him. There was a mortgage upon the property which was foreclosed and the property sold at a sheriff's sale. Appellee had owned other real estate in Gary which likewise had been mortgaged and sold upon foreclosure and there were deficiency judgments against him aggregating about $8,000.00.

Appellee negotiated with the man who had purchased his home property at foreclosure sale to buy it back and found that because of the judgments against him it would be necessary if he were to borrow money on the property with which to pay all or part of the repurchase price, to take the title in the name of someone other than himself. To obtain money with which to buy back his home appellant negotiated an F. H. A loan of $2,400.00 with a Gary bank, to be secured by mortgage upon the property when purchased. The bank declined to make the loan to appellee because of his age and because he was unemployed, but agreed to make it to his daughter, the appellant.

Appellant signed the note and mortgage and appellee and his wife signed the note, so that when the transaction was completed appellant, appellee and his wife and the property were all behind the loan. About $425.00 additional money was necessary to complete the repurchase and this was borrowed in the name of appellant upon a second mortgage negotiated by appellee. The purchaser at foreclosure sale deeded the property to appellant, and there was evidence from which the court could well have believed that this conveyance was made at the request of appellee, and that at the time it was made appellant agreed that she would deed the property to her father at any time he desired it. Appellant and appellee and his wife continued to live in the property and appellee collected the rents from a part thereof which had been rented. Appellee paid the $425.00 mortgage and the installments upon the $2,400.00 mortgage as they became due and made improvements to the property aggregating $3,000.00 in value.

At the time the property was conveyed to appellant it was worth, subject to the mortgages thereon, less than appellee's statutory exemption. Appellant continued to hold the title to the property until the statute of limitations had run against the liens of the judgments against appellee. Thereafter at a time when appellant was about to join the Women's Army Corps appellee asked appellant to convey the property to him and she refused. Thereupon appellee brought action against the appellant asking that a trust be declared in said real estate in his favor and that he be adjudged the true owner thereof and that a commissioner be appointed to convey same to plaintiff. The case was tried and the court decreed that appellee was the owner of the real estate involved and ordered appellant to make conveyance thereof to appellee within five (5) days and appointed a commissioner to make such conveyance if appellee failed to do so. A motion for a new trial was overruled and this appeal was taken.

The real question here involved is whether, under the circumstances described, a court of equity will aid appellee.

Appellee claims that a trust in his favor resulted when title was placed in the name of his daughter. Section 56-606, Burns' 1943 Replacement, reads as follows:

'When a conveyance for a valuable consideration is made to one (1) person, and the consideration therefor paid by another, no use or trust shall result in favor of the latter; but the title shall vest in the former, subject to the provisions of the next two (2) sections.'

The second section thereafter provides that the section of the statute last above quoted 'shall not extend to cases * * * where it shall be made to appear that, by agreement, and without any fraudulent intent, the party to whom the conveyance was made, or in whom the title shall vest, was to hold the land or some interest therein in trust for the party paying the purchasemoney or some part thereof.' § 56-608, Burns' 1943 Replacement.

The decision of the trial court in this case was in favor of the appellee and we must therefore accept the facts disclosed by the evidence, and all reasonable inferences therefrom, most favorable to the appellee. There was evidence from which the trial court could have believed, and evidently did believe, that there was an agreement upon the part of appellant to hold the real estate here involved in trust for her father. It is true that the money with which the property was repurchased after foreclosure sale was obtained from loans and mortgages made in the name of appellant, but they were negotiated by appellee and he and his wife signed the notes and paid them and the court could reasonably have inferred from all facts that the money used in the repurchase of property was in substance and in fact provided by appellee and not by appellant, even though the transactions by which the money was obtained were, in part, conducted in appellant's name.

It was stipulated by the parties that there was no fraud between appellant and appellee in connection with the complained of transaction and for reasons which we will develop later in this opinion we think there was no fraud as against appellee's creditors. Under these circumstances and the statutes above cited and quoted a resulting trust was created in appellant for the benefit of appellee when title to the property involved was placed in her name. Sinclair v. Gunzenhauser, 1912, 179 Ind. 78, 133, 134, 98 N.E. 37, 100 N.E. 376; People's Bank & Trust Co., Exr. v. Mills, 1923, 193 Ind. 131, 137, 139 N.E. 145; Rickes v. Rickes, 1923, 81 Ind.App. 533, 541, 141 N.E. 486; Joyce, Adm'r v. Bocquin, 1926, 84 Ind.App. 188, 192, 150 N.E. 816; Gerace v. Gerace, 1938, 301 Mass. 14, 16 N.E.2d 6, 117 A.L.R. 1459.

Appellant says that it is well settled that courts of equity will not aid one who has purchased property and caused the title thereto to be transferred to another for the purpose of hindering, delaying or defrauding creditors, and that is true. Bellin v. Bloom, 1940, 217 Ind. 656, 660, 669, 28 N.E.2d 53; Ratcliff et al. v. Ratcliff, 1941, 219 Ind. 429, 436, 39 N.E.2d 435; Reed v. Robbins, 1915, 58 Ind.App. 659, 661, 108 N.E. 780; Kitts et al. v. Willson et al., 1891, 130 Ind. 492, 498, 501, 29 N.E. 401; Gable v. Columbus Cigar Co., 1894, 140 Ind. 563, 566, 38 N.E. 474. See also cases cited in Annotation in 117 A.L.R. at p. 1465. But it must be remembered that the property involved in this case, subject to the mortgages thereon, was at the time of transfer to appellant worth less than appellee's statutory exemption. Property exempt from execution is not subject to claims of creditors and the conveyance of such property to a third person for the benefit of the debtor is not fraudulent. Stark v. Lamb, 1906, 167 Ind. 642, 648, 78 N.E. 668, 79 N.E. 895; Marmon v. White et al., 1898, 151 Ind. 445, 449, 51 N.E. 930; Citizens' State Bank of Noblesville et al. v. Harris, 1897, 149 Ind. 208, 212, 48 N.E. 856; Isgrigg v. Pauley et al., 1897, 148 Ind. 436, 438, 47 N.E. 821; Moss et al. v. Jenkins et al., 1897, 146 Ind. 589, 599, 45 N.E. 789; Faurote v. Carr et al., 1886, 108 Ind. 123, 125, 9 N.E. 350; Burdge v. Bolin et al., 1886, 106 Ind. 175, 179, 6 N.E. 140, 55 Am.Rep. 724.

In Stark v. Lamb, supra, the purpose of the action was to set aside an alleged fraudulent conveyance of real estate because the deed was made without consideration and for the purpose of defrauding creditors. It was contended that the value of the property was less than the debtor's exemption and therefore the conveyance was legal. In deciding the case, the following language, 167 Ind. on pages 646, 647, 79 N.E. on page 896, appears:

'It is quite well settled that property exempt from execution is not subject to the claims of creditors, and may be transferred by the owner unaffected by any such claims. The owner having a right to hold property exempt from the demands of his creditors, has an absolute and unhampered right to transfer the same, and in doing so cannot legally be charged with defrauding his creditors or with an intent to do so. Faurote v. Carr, [1886] 108 Ind. 123, 125, 9 N.E. 350; Taylor v. Duesterberg, [1887] 109 Ind., 165, 170, 9 N.E. 907; Barnard v. Brown, [1887] 112 Ind. 53, 13 N.E. 401; Citizens' State Bank [of Noblesville] v. Harris, [1897] 149 Ind. 208, 48 N.E. 856. (Our italics.)

In Isgrigg v. Pauley et al., supra, the following language, 148 Ind. on page 438, 47 N.E. on page 821, appears:

'* * * In Blair v. Smith, 114 Ind. 114, 126, 15 N.E 817, 823 , it was said: 'Property exempt from execution is not subject to any...