Harris v. Carlson

Vermilion, J. In 1901, the appellant Olof Carlson purchased the land in controversy, and it-was conveyed to him. He continued to hold the title until October 20, 1921, when he con-veyed it to his wife, the appellant Anna Carlson, for a stated consideration of $16,000, subject to a mortgage of $13,000, which the grantee assumed. On November 15, 1922, Olof Carlson filed a voluntary petition m bankruptcy, and .appellee is tne trustee in bankruptcy of his estate. The action is by the trustee, to set aside the conveyance of the land to the wife, Anna Carlson, as being in fraud of creditors. The claims allowed against the estate amount to about $18,000, and the assets to about $1,800. It is the claim of appellants that the conveyance was made in satisfaction of a debt owed by the husband to the wife for money loaned by her to him, and that, in any event, forty acres of the land was the homestead of the appellants at the time of the conveyance to her, and continued to be such homestead, and is exempt to her. The questions presented are largely ones of fact. *171 I. The evidence on the part of appellants tends to show that Anna Carlson had $500 at the time she was married, and received $1,000 from her father and brother at that time; that later her father gave her about $1,000 at different times, and she inherited $400 from his estate, to which a brother added $400; and that she inherited $1,800 from a brother, all of which amounts she turned over to her husband. It is the aggregate of these sums, with interest, which it' is claimed by appellants constituted the consideration for the conveyance of the land to the wife. We are of the opinion that the evidence establishes a fraudulent purpose on the part of the appellant Olof Carlson in making the conveyance. The land is situated in Cherokee County, and the appellants resided in O’Brien County, and Olof Carlson did business at banks and with merchants in the latter county. He was indebted to a considerable amount at the time of the conveyance, and contracted further indebtedness thereafter. He owned no other real estate. The deed was of record in Cherokee County, but those with whom he dealt in O’Brien County had no actual knowledge of it, arid credit was extended to him, both before and after the conveyance, in reliance on his ownership. The evidence shows that, after the conveyance to his wife, he continued to represent that he was the owner of the land. After the execution of the deed, he made a property statement, for the purpose of obtaining credit at a bank, in which he included the land in question, stating that he owned it, that the title was in his name, and that it was worth $40,000. He testified that the land was not included in the statement when he signed it, but the statement itself contains irrefutable evidence to the contrary. The statement showed his debts to exceed the value of his personal property by over $500, and it was only by including $27,000 as the value of the land above the mortgage that a net worth of $26,455 was shown. Still later, at a time when his son was a tenant on the land in question, for the purpose of giving the son credit at the bank he executed a written waiver of a landlord’s lien on the property of the son in favor of the bank, in which He stated that the farm was his. There are other circumstances which support our conclusion. *172 • But the wife, if the creditor of her husband, had a right, acting in good faith, to secure payment of her debt, although thereby the claims of other creditors would be defeated; and even knowledge, that her husband was actuated by a fraudulent purpose would not avoid the conveyance to her if she acted in good faith for the- purpose of securing payment of her claim, and not for the purpose of aiding the fraud. Rosenheim & Son v. Flanders, 114 Iowa 291; Steinfort v. Langhout, 170 Iowa 422; Keosauqua State Bank v. Hartman, 184 Iowa 961; Ford v. Ott, 182 Iowa 671; Halloran v. Halloran, 195 Iowa 484; Grant v. Cherry, 199 Iowa 164; Barks v. Kleyne, 198 Iowa 798. Was the wife the creditor of the husband? “.Where the wife allows the husband to take and use her property for the support or use of the family or otherwise, without an agreement on his part to pay her therefor, the relation of debtor and creditor does not exist, and a conveyance made on account of the use of such property is voluntary, and invalid as against other creditors * * Carr v. Way, 141 Iowa 245. See, also, Romans v. Maddux, 77 Iowa 203; Carbiener v. Montgomery, 97 Iowa 659; Moore v. Orman, 56 Iowa 39; Shaw & Kuehnle v. Manchester, 84 Iowa 246. There was no note or other written obligation to repay. We are constrained to say, notwithstanding the testimony of the appellants to the effect that ihe amounts turned over to the husband by the wife were loans, that the money was given to the husband for such use for the benefit of the family as he might see fit, and with no agreement, or expectation on the part of either, that it should be repaid; that she was not the creditor of her husband; and that the conveyance to her was voluntary, and invalid as against the trustee in bankruptcy of the husband. Anna Carlson testified, on a prior occasion in the bankruptcy court, that she was giving the money to her husband to help them along in their business. When asked if she expected him to pay it back, she said: “I don’t know as I had any expectations at that time; I just simply thought it was helping us along. ’ ’ She testified that she did not know what her husband did with the money; that it went into use for the family, for the *173 home; that she did not keep any records of the money she turned over to her husband; that it was an understood thing that it was to go into the making of a home for them. This is not only the admission of a party to the record, the present claimant of the land, but is directly contradictory of much of her testimony on the trial. She also testified on the trial below: “I don’t know as there was really any promise made.” There is some claim on the part of appellants that the money of the wife was used to pay for the land. The claim is not borne out by the record. The wife testified that a deposit to her husband’s credit in a bank in February, 1902, of $1,640, which was used by him on the following day in paying a note given at the time the land was purchased, came from her, and that the bank’s records showing a different source were wrong. She only claimed to have loaned her husband $5,100. She testified that $1,500 of this was loaned shortly after their marriage in 1885; that $1,000 was received from her father at different times during his life, and the remainder came from the estate of her father, and from her brother in 1906, and from another brother’s estate in 1905. She also testified that the money received at the time of her marriage was not deposited in a bank by either her or her husband; that she carried it in her pocket while she had it, and he carried it until he used it. II. The appellants lived on a rented farm in O’Brien County until about the time the petition in bankruptcy was filed. Anna Carlson testified on the trial: "I don’t*know just when the petition in bankruptcy was filed.' We had a large share of our stuff there, though, when the petition in bankruptcy was filed. We quit sleeping at the Mc-Carroll farm [the rented farm] after the middle of November, and the main part of our stuff was moved to this quarter section by the middle of November;'but we continued to stay nights at the McCarroll place after the middle of November.” Actual occupation of the premises as a home is required, except in cases of temporary absence, to support a claim of homestead; mere use or cultivation is not sufficient. Davis, Moody & Co. v. Kelley, 14 Iowa 523; Maguire v. Hanson, 105 Iowa 215; Blue v. Heilprin, 105 Towa 608. It is clear that there was no such actual *174 occupancy of the land in question as a home by appellants as would constitute any part of it a homestead prior to the incurring of the indebtedness to the creditors represented by the trustee. Section 2976, Code of 1897 (Section 10155, Code of 1924). By Section 70e of the Bankruptcy Act (30 Stat. at L. 565, Ch. 541, Sec. 70; U. S. Comp. St., Sec. 9654), it is provided that: “The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided * * *.” III. The decree required the appellants to account for the rents and profits of the land for the season of 1922, and judgment was rendered against them for $1,280. Without express-an °PÍnÍ°n as 1° the right to SUCh a judgment upon a proper showing, we find no evi- r xr sr 07 denee in the record to' sustain it. There is testimony as to the rental value of lands in the vicinity, but no showing as to the rental value of the land in question, or that it was similar to other lands in the vicinity. The judgment of $1,280 is reversed, and otherwise the decree is affirmed, with costs. — Reversed in part; affirmed in part. Faville, C. J., and Stevens and De Grape, JJ., concur.