U.S. Fidelity & Guar. Co. v. Shoul

• Decision Date: 29 December 1931
• Docket Number: 13.
• Citation: 157 A. 717,161 Md. 425
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. SHOUL ET AL.
• Court: Maryland Court of Appeals

157 A. 717

161 Md. 425

UNITED STATES FIDELITY & GUARANTY CO. v. SHOUL ET AL.

No. 13.

Court of Appeals of Maryland

December 29, 1931

Appeal from Circuit Court of Baltimore City; Joseph N. Ulman, Judge.

Suit by the United States Fidelity & Guaranty Company against Sarah V. Shoul and others. From an order sustaining a demurrer to the bill, plaintiff appeals.

Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, OFFUTT, and SLOAN JJ.

C Damer McKenrick, of Baltimore (Bartlett, Poe & Claggett, of Baltimore, on the brief), for appellant.

Ernest Volkart, of Baltimore, for appellees.

PATTISON J.

The appellant, the United States Fidelity & Guaranty Company, on July 15, 1930, filed in the circuit court of Baltimore city its bill of complaint, alleging therein that it was a creditor of James Doyle, one of the appellees; and that while he was so indebted to it, Doyle and wife, in fraud of his creditors, executed unto one Elizabeth Miller a deed conveying unto her, without consideration, certain real estate located in the city of Baltimore; and that simultaneously therewith Elizabeth Miller conveyed said real estate to Sarah V. Doyle, wife of James Doyle.

The facts alleged in the bill are substantially as follows: On September 25, 1920, the appellant, as surety, executed what is known as a tax abatement bond, in the penalty of $5,500, which bond guaranteed payment to the United States of America of certain taxes alleged to be due the government by Doyle. At the time of the execution of the bond, Doyle executed an instrument of indemnity, agreeing to save the appellant company harmless against all loss by reason of the execution of said bond. At this time Doyle was the owner, in fee simple, of certain real property located in the city of Baltimore. On September 22, 1921, Doyle, without consideration therefor, conveyed this property to Elizabeth Miller, one of the appellees, who, simultaneously with the execution of the deed to her, conveyed said property to Doyle's wife, Sarah V. Doyle. Both deeds were recorded on the following day. Sarah V. Doyle divorced her husband in 1923, and married Lawrence Shoul.

The acknowledgment to the deed from James Doyle and wife to Elizabeth Miller was taken by the grantee, Elizabeth Miller, a notary public; while the acknowledgment to the deed from Elizabeth Miller to Sarah V. Doyle was taken by one duly authorized to take such an acknowledgment, and not a party to the deed. The appellant had no actual notice of these deeds until October, 1929.

James Doyle, as alleged in the bill, failed to pay the taxes due the government, for the payment of which the bond had been executed, and the appellant, when called upon by the government, paid the same. The appellant, being unable to collect from James Doyle the amount so paid by it, instituted suit therefor against Doyle in the circuit court for Baltimore county, and on the 10th day of May, 1926, recovered judgment against him for the amount paid by it for and on his behalf.

On January 19, 1931, an amended bill was filed by which the court was asked:

First. That Sarah V. Shoul be enjoined and restrained from incumbering or transferring said property until a decree be passed in the cause.

Second. That the deeds from James Doyle and wife to Elizabeth Miller, and from Elizabeth Miller to Sarah V. Doyle, be annulled and vacated, and that the property described therein be declared to be impressed with the lien of the plaintiff's judgment.

A demurrer filed to the bill was sustained, and the appeal in this case is from the ruling of the court thereon.

The property in this case is treated by the appellant as having been acquired by the wife from her husband through and by the deeds above mentioned; and is therefore subject to the provision of section 1, article 45, of the Code of Public General Laws Supplement 1929, of this state, wherein it is provided "that no acquisition of property passing from one spouse to the other, shall be valid if the same has been made or granted in prejudice of the rights of subsisting creditors, who, however, must assert their claims within three years after the acquisition of the property or be absolutely barred."

It is evident that the meaning of this section of the Code is that a deed conveying property from one spouse to the other must be "attacked within three years from the date of its recordation," Stieff Co. v. Ullrich, 110 Md. 629, 73 A. 874, 875, or from the time "the creditor had notice of it or had some knowledge which put him on inquiry." James v. Murray, 142 Md. 108, 120 A. 376, 378.

In this case, the appellant, a creditor of Doyle, did not have actual notice of the deeds through which the wife...