Foster v. Miller

Opinion op the Court by Judge Dietzman Affirming. In February, 1927, tbe appellant, Mary C. Foster, and ber husband, J. W. Foster, executed their joint promissory note to Lydia Sanders in tbe sum_ of $750, with interest from tbe date of tbe note until paid. Lydia Sanders later dying, tbe appellee, W. A. Moore, was appointed executor of her estate. He brought suit upon the note, and recovered judgment against J. W. Foster. The suit was dismissed as to tbe appellant, Mary C. Foster, because of tbe interposition by ber of tbe defense that she was only surety for ber busband on tbe note, and hence was not liable.. See Kentucky Statutes, 1930 Edition, sec. 2127. Execution issued upon tbe judgment against J. W. Foster and was levied upon a tract of land which bad been conveyed to J. W. Foster by deed from the master commissioner of tbe Butler circuit court in May, 1924; tbe deed being recorded on July 4, 1924. In 1928, J. W. Foster became obligated on a note to Jim Miller in. tbe sum of $300. This obligation was later reduced to judgment, and an execution was issued upon that judgment and also levied on tbe land herein-before referred to. Tbe sheriff being about to sell tbe property under these executions, Mary C. Foster intervened, claiming that tbe land in question belonged to ber and not ber busband, and hence was not subject to tbe executions in question. Tbe proof developed these facts: J. W, Foster, at the time the deed to the land in question was made to him in 1924, borrowed from the_ John M. Carson Banking Company tbe money wherewith to pay for tbe land. At tbe time be borrowed this money, be told tbe bank that his wife would shortly come into possession of certain funds which she bad inherited *49 from the estate of her father, and that she would use that money to pay this note. Mrs. Foster later did pay off this note with her inheritance. Both Mrs. Foster and her husband testify that the master commissioner was directed to make the deed to the property in question to Mrs. Foster, as it was in truth her money that would ultimately pay for it, but that the master commissioner made a mistake in executing the deed to Mr. Foster as he did. They both testify that Mrs. Foster discovered about a year after the deed was made that title had been put in her husband instead of herself, and that she called her husband’s attention to it, and that he promised to make the correction, but that nothing was ever done about it. The evidence further discloses that Mr. Foster after the deed to the land in question had been made to him was to all outward appearances The owner of it. He managed it and took care of it as though he were the owner, and he was reputed in the neighborhood to be the owner. It is in evidence that the two creditors who have reduced their claims to judgment as hereinbefore stated in part extended credit to Mr. Foster because they thought he owned this land. They knew .nothing of Mrs. Foster’s claim. The lower court held that as between Mrs. Foster and the two judgment creditors here involved, they should prevail over her. It decreed that the property be sold, the two executions satisfied, and any residue be paid to Mrs. Foster. She has appealed. The case of Miller v. McLin et al., 147 Ky. 248, 143 S. W. 1008, 1009, is conclusive of the questions here involved. In holding in a situation like that in the case at bar that the wife could not prevail against creditors who extended credit to her husband on the faith that he was the owner of the property standing in his name, and without notice of the fact that the wife had furnished the money wherewith to pay for it, the husband agreeing to put the title in her name but not doing so, the court said: “But this statute [K. S. 2353] cannot be invoked to aid Mrs. Miller in defeating the creditors of her husband, whose debts were in good faith contracted after the conveyances were made to him, without notice of the fact that she furnished the money or that it was agreed the deed should be made to her. This statute is only intended to assist persons pay *50 ing the consideration to reclaim property while it is in the possession of the person who took the deed to himself in violation of the trust, without the consent of the person paying the consideration, or, while it is held by a volunteer or a purchaser with notice of the trust, it does not apply when the rights of creditors or'purchasers in good faith and without notice have intervened.” In the same case, it is also said: “When the wife gives' her money to her husband, and he invests it in land, taking the title to himself, although it may have been agreed between them that the title should be taken to her, her claim will be subordinated to that of the creditors of the husband who are attempting to subject the land to the payment of debts created while the title was in the husband and without knowledge of the equity of the wife.” See, also, Masters v. Masters, 222 Ky. 427, 300 S. W. 894; Foushee v. Foushee et al., 163 Ky. 524, 173 S. W. 1115. As the debts of Foster here in question, and upon which after being reduced to judgment the executions herein issued were created after Foster took title to himself to the land in question, the creditors not having any notice or knowledge of his wife’s latent equity, it follows from what has been said that she must be postponed to the claim of such creditors. The lower court so adjudging, its judgment is affirmed.