State Bank of Woolstock v. Schutt
| Decision Date | 10 March 1916 |
| Docket Number | No. 30560.,30560. |
| Citation | 156 N.W. 762,174 Iowa 583 |
| Parties | STATE BANK OF WOOLSTOCK v. SCHUTT ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Wright County; C. E. Albrook, Judge.
Suit in equity in the nature of a creditors' bill to subject certain real estate, the title to which is in the defendant Emma Schutt, to the payment of certain judgments rendered in plaintiff's favor against C. A. Schutt. The bill was dismissed, and plaintiff appeals. Affirmed.Birdsall & Birdsall, of Clarion, for appellant.
McGrath & Archerd, of Eagle Grove, for appellees.
The plaintiff bank, having recovered judgments against the defendant C. A. Schutt to the amount of about $8,000, brings this action to subject to the payment thereof a certain quarter section of land held in the name of Emma Schutt, who is the judgment debtor's wife. The facts elicited on the trial are brief and uncomplicated. The only witnesses examined were the defendant Emma Schutt and Christian Schutt, who is the father of C. A. Schutt, the judgment defendant. The testimony of these witnesses was to the following effect: That something more than a year prior to the recovery of the judgments above mentioned, but after C. A. Schutt had become financially embarrassed, the father of C. A. Schutt, who was then the owner of a certain quarter section of land in Wright county, conveyed it by warranty deed to his said daughter-in-law. The recited consideration for such transfer was $17,600. On the same day Emma Schutt paid to the grantor the sum of $1,000 in money, and in addition thereto gave her promissory note for $12,000 secured by mortgage on the land. C. A. Schutt, the judgment defendant, united with his wife in the execution of the note and mortgage. Emma Schutt was the sole grantee named in the deed. In the body of the deed following the granting clause, and before the covenants of warranty, is another clause reading as follows:
“In consideration of this deed, the parties of the second part, Emma Schutt and C. A. Schutt, hereby relinquish all their rights and interests in the Christian Schutt estate.”
There is evidence tending to show that at the time of the conveyance the land was of the reasonable value of $20,000. There is nothing in the record tending to show that prior to said conveyance the judgment debtor or his wife had any right or interest, legal or equitable, in the land in controversy, and whatever title they or either of them now has is referable to the deed above mentioned. The grantor is a man of foreign birth, and his testimony respecting the circumstances of the conveyance is somewhat confused by his inability to freely express himself in English words, but, fairly construed, he says that he offered to sell the land to his son's wife for considerable less than it was worth, and expressed his willingness to convey it to her for $13,000. The son, C. A. Schutt, said he could not buy it for he had no money, but his wife asked and was given time to consider it until she could see her father, and later accepted the offer. The transaction was then consummated by the execution and delivery of the deed, the giving of the note and mortgage, and the making of the cash payment. The grantor insists that he knew nothing of the clause in the deed by which his son and wife relinquished their right to any inheritance from him, and avers that the value of the land in excess of $13,000 was considered by him as a gift to the grantee. The grantee concedes, however, that she received the deed knowing it included said clause and understood its purport, but asserts herself to have been the real purchaser of the land, and is now the owner thereof in her own right.
[1][2] I. The appellant first argues that the evidence, meager as it is, discloses enough to warrant and require the inference that the insolvent husband was the real purchaser, and that the title to the land was taken in the wife's name to hinder, delay, and defraud his creditors. The ground thus taken is untenable. It may be conceded that the debtor's father desired by this conveyance to assist the insolvent son and his family, and to do this in a manner which would not expose the property given or conveyed to any hazard of subjection to the payment of the son's debts. In that there was no fraud. He was under no obligation to pay his son's debts, and, if he saw fit to give the land to his son's wife or to sell it to her at less than its real value, he neither defrauded nor assisted in defrauding the son's creditors. On the contrary, if he thereby provided or secured to the debtor's family a means of support or protection against impoverishment at the hands of an unfortunate or incompetent or spendthrift husband, it is an act to be commended rather than condemned. Wells v. Kindler, 96 Neb. 233, 147 N. W. 687.
[3][4][5] It is suggested, if we understand counsel, that while this might be true as to gifts or voluntary conveyances to the wife, yet, the deed having been made to the wife as upon a contract of purchase for a stated consideration, there is a presumption that such consideration was furnished or paid by her husband. No precedent for a holding as broad as counsel here states it has been called to our attention, and, if it ever prevailed, it was as a rule of evidence, the reasons for which no longer exist in this state, where the wife, equally with the husband, may buy and sell and transact business generally as freely as if she were unmarried. True, where relatives or members of the same family have business dealings together which may result in detriment to the creditors of one of the parties, the court will scrutinize the transaction closely to ascertain its real character, but the mere fact of relationship between a buyer and seller carries with it no presumption of fraud. Giving this case candid consideration, we find nothing therein to justify the inference that C. A. Schutt was the real buyer of the land, or that the wife holds the title in secret trust for his benefit. So far as shown, the only...
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