Stockslager v. Mechanics' Loan & Sav. Institute
| Decision Date | 03 March 1898 |
| Citation | 39 A. 742,87 Md. 232 |
| Parties | STOCKSLAGER v. MECHANICS' LOAN & SAVINGS INSTITUTE. |
| Court | Maryland Court of Appeals |
Appeal from circuit court, Washington county.
Bill in equity by the Mechanics' Loan & Savings Institute against Sarah M. Stockslager and others. From a decree in favor of plaintiff, defendant Sarah M. Stockslager, by her committee J. Augustus Mason, appeals. Affirmed.
J. A Mason, for appellant. N. B. Scott, Jr., for appellee.
The object of the bill of complaint which was the beginning of the proceeding before us for review was to set aside a deed executed by William E. Stockslager to his wife, Sarah M Stockslager, conveying a house and lot in Hagerstown, and to subject the property to the payment of the debt due the appellee by him. The indebtedness commenced in 1890 and 1891 on several notes of the firm of J. C. Dayhoff & Co., of which Mr. Stockslager was a member, which were renewed from time to time until December 13, 1893, when there was a balance due on one note, signed by the firm, William E. Stockslager, and J. W. Stonebraker; and on December 27, 1893, other notes were consolidated into one of $2,200, which was given by the firm, with Mr. Stockslager and the other two members as sureties. On May 14, 1894, judgments were entered for the balances due on these respective notes against the firm and the individual sureties, including Mr. Stockslager. The firm of J. C. Dayhoff & Co. became embarrassed, and receivers were appointed on April 7, 1894. Some payments were made by the receivers, and the trustees of one of the firm, who was insolvent, on the judgments, but there is considerable balance still due on them. Unfortunately William E. Stockslager died in May, 1894, and in December of that year his widow was placed in an insane asylum, where she is still confined, and the case on her part was defended by her committee, who was thus deprived of the benefit of the testimony of both parties to the deed, which is alleged to be fraudulent as against the creditors of the husband. The consideration stated in the deed is "the sum of twenty-one hundred dollars heretofore received by him, the said William E., from his wife, Sarah M., Stockslager, and in payment and extinguishment of the debt from the said William E. to the said wife thereby created," and the property was conveyed subject to mortgages amounting to $2,000. It was the only real estate owned by him, and was worth about $4,100,--the consideration named in the deed, including the mortgage debt. The deed was placed on record on the 30th day of December, 1893, just three days after the $2,200 note was given, although it had been executed on November 14th of that year. The testimony also shows that the firm was insolvent, and was being sued in 1893, principally in November. After Mr. Stockslager conveyed to his wife the only real estate he had, he apparently had nothing, and his administrator returned no assets to the orphans' court.
This court has held in a number of cases that a wife may become a creditor of her husband, and it was said in Crane v. Barkdoll, 59 Md. 534, that "if she is, in fact, such creditor, the law regards her rights with as much favor as those of other creditors." But there must be proof of the clearest and most satisfactory character of the existence of the relation of debtor and creditor between them when a husband undertakes to prefer his wife to the exclusion of others. It may be worthy of consideration whether there ought not to be a statute requiring any indebtedness from a husband to his wife to be made a matter of record, within some reasonable time after it is created, in order to affect creditors, as there is no greater opportunity for fraud, or easier means of imposing on third persons, than permitting husband and wife to secretly occupy and continue the relation of debtor and creditor, and then, when the former has become financially embarrassed, to permit him to prefer his wife, and thus possibly provide a home or support for himself, as well as his wife and family. But, even under the law as it now exists, when the bona fides of the transfer is questioned by a creditor of a husband, the burden is on the wife. Hinkle v. Wilson, 53 Md. 287; Levi v. Rothschild, 69 Md. 348, 14 A. 535; Nicholson v. Condon, 71 Md. 620, 18 A. 812. As the supreme court of the United States said, in Seitz v. Mitchell, 94 U.S. 580, which has been quoted with approval by this court in the above cases, and more recently in Manning v. Carruthers, 83 Md. 1, 34 A. 254:
Let us apply those principles to this case. The recital in the deed does not show how or when the debt therein referred to was created. The appellant has attempted to account for it by the introduction of certain notes, signed by William E Stockslager, payable to his wife, and of a number of checks of Mrs. Stockslager on the Mechanics' Loan & Savings Institute, payable to the order of her husband, and indorsed by him. It was also shown that she kept an account in her name with the appellee, beginning with July 21, 1884; the deposits being made quite regularly until August 29, 1887. There was then an interval until July 25, 1891, when she again opened an account, which was continued until 1894. Where the money which was deposited from time to time came from is not shown with any certainty. It is claimed that she kept boarders, and in that way saved it. Matthias E. Kayhoe, her brother, testified that his sister was married in the winter of 1883-84, and that he lived with her until May, 1887 (when he went to Washington), paying board that averaged about $2.50 per week, and that during that time she had three other boarders, but had none for about two years after he left. As she drew the balance of her account on August 29, 1887, by check to G. R. Bowman, which we will refer to directly, any money she may have earned prior to that time is not very material. It is true that during those three years she gave checks to her husband amounting to $204.50, but it is not shown what they were for, and...
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