Davis v. Yonge

Riddick, J., (after stating the facts.) This is an action by a wife to set aside and cancel a sale of land claimed b)»- her, which sale had been made under an> execution issued against her husband. The execution creditors resist her action on the ground that the land was the property of her husband, and that the title thereto had been placed in the name of his wife in a fraudulent effort to shield it from his creditors. The price which was paid for this land, which was conveyed to the wife, was $400, and this money was obtained by the sale of a tract of 200 acres owned by the husband, and on which was his home, and which he sold for $5,000. But before this sale was made a judgment in favor of Yonge and White, the defendants in this case, had already been rendered against the husband and other sureties on a sheriff’s bond, and this judgment was a lien on the land sold by the husband, subject to the claim of homestead. For this reason, the husband was compelled to give the purchaser indemnity against the enforcement of this judgment in the event it was affirmed by the Supreme Court, to which court the case had. been appealed. The judgment was .afterwards affirmed, but there is nothing in the evidence to explain why the judgment was not enforced by a levy upon this land, upon which the judgment was a lien, to the extent that it exceeded the area allowed by law for a homestead. Counsel for defendants say that, the judgment being a lien on this land, they have a right to follow the proceeds of such lien property, when traced; but we see ho occasion for the application of such doctrine, for the sale of the land by the husband did not affect the lien of the judgment, and the judgment could have been enforced against it as well after the sale as before. There was no occasion to seek relief in a court of equity when there was a plain remedy at law. So the question of a lien on the land sold by the husband can have but little effect on the decision of the case. This is true not only for the reasons stated, but because the larger part of the land sold was a homestead upon which no lien attached by reason of the judgment. But if this land purchased in the name of the wife was in fact bought and paid for by the husband out of his own funds, it would, so far as his creditors are concerned, be regarded as his land, and the wife could not sustain the action to cancel the execution sale without showing that her husband was solvent and able to make the gift, the burden being on her to make out her case. There is no testimony on that point except that of the plaintiff, Mrs. Davis, and her former husband, J. M. Davis, from whom she had been divorced after the land claimed by her was sold at the sale under the execution. The substance of their testimony is that Davis, some twenty years before the sale of his homestead, had obtained from his wife about $1,300, which he had used in paying off judgments that were liens on the same homestead, and when the homestead was sold he repaid her $400 of the money he owed her, and with this money she purchased the land in controversy. Mrs. Davis, in her first deposition, stated the facts substantially as they were stated by her husband, but in a second deposition, being asked to state fully the circumstances under which the $400 were paid to her by her husband, she said that when the homestead was sold to Dennis she refused to sign the deed until her husband agreed to pay her money to buy her another homestead, and that, in compliance with this agreement, he paid her the $400 with which she bought the land in controversy, and that this sum was the only portion of the $1,300 which he received from her that he ever repaid her. After considering all the facts, we are of the opinion that the allegation of the complaint that the property in controversy belonged to the plaintiff is sustained by the evidence. We attach but little importance to the claim of Mrs. Davis that her husband owed her for money obtained from her father’s estate. Conceding that this was true, yet, as the money had been obtained by the husband some twenty odd years before the sale of the homestead in question, and had been, with the acquiescence of his wife, used by them to pay his individual debts, it is now too late for the wife to set up a claim to such money as against the creditors of the husband. It is no doubt just and right for a husband t'o return such funds, however stale the claim may be, if he can do so without infringing upon the rights of his creditors; but an insolvent debtor is not allowed to turn over his property to his wife, and let his creditors go unpaid, under the pretense of settling a shadowy claim for money of his wife which he received and spent many years before. As it would often be impossible for the creditor to dispute such ancient claims, to allow them to be set up in that way against the creditors would furnish an easy way for an insolvent debtor to shield his property from his creditors, while at the same time retaining, all the essential benefits of the same to himself and family. For this reason when a wife allows her husband to use her money as his own for a long period of time, and thus to purchase property with it in his own name, and to obtain credit on the faith of his being the owner of it, she will not be allowed to claim such property as against his creditors. Driggs v. Norwood, 50 Ark. 42. But the relinquishment of dower and homestead rights on the part of the wife upon a sale of the .land by the husband is a sufficient consideration to support a reasonable settlement upon her out of the proceeds of the sale. Baucum v. Cole, 56 Ark. 259. Now, Davis sold his homestead for $5,000, and out of the proceeds, according to the testimony of himself and wife, he paid her $400, a sum that was not so out of proportion to the consideration as to indicate fraud. While the testimony of a husband and wife tending to uphold a transfer of property to a wife against claims of the husband’s creditors might ordinarily be looked upon with some suspicion, as coming from interested parties, yet that is not so here, for Davis and his wife have been divorced, and his testimony may be considered as that of a disinterested witness, for he has now no pecuniary interest in having her retain the land. As the testimony shows that'this land was purchased by the wife, or for her, out of the proceeds arising from the sale of her homestead, and that the amount settled upon her was not unreasonable, this makes out at least a prima facie case in her favor; for, although the money came from her husband, it arose from a sale of property in which the wife had an interest, and upon which, to the extent of the'homestead, the creditors had no lien, and no right to subject to the payment of their debts. Baucum v. Cole, 56 Ark. 259. There is nothing to-overcome this prima facie case made by the plaintiff; for it is not shown that the husband was insolvent, and that the transfer of this property to the wife was colorable only. The mere fact that a judgment for a few hundred dollars had been recovered against the husband as surety on a sheriff’s bond is not sufficient to show insolvency, and no reason is shown why the husband should have desired to have only- a color-able transfer of property made to his wife, or why his creditors ■should be allowed to subject this property of the wife to their debts. We have here, then, the case of a man, not shown to be insolvent, who sells his homestead and the land attached thereto for $5,000, devoting the larger part of it to the payment of his debts, and giving to his wife $400 thereon — not more than one-fifth of the amount for which the homestead proper was sold— with which she purchases, or he purchases for her in her own name, the land in controversy. Settlements of that kind upon the wife have been upheld, even in cases where the husband -was shown to be insolvent. Hershey v. Latham, 46 Ark. 542; Baucum v. Cole, 56 Ark. 259. On the whole case, we are of the opinion that the equities are in favor of the -plaintiff, and that her title should be upheld. Davis v. Insurance Company; 63 Ark. 412; Bertrand v. Elder, 23 Id. 505 ; Stephenson v. Cook, 64 Iowa, 265; Winchester v. Charter, 102 Mass. 272; 2 Bigelow on Fraud, 183. It was shown that the defendants, after they purchased at the execution sale, had paid taxes on the land amounting, with interest, to the sum of $138.06, and we are of the opinion that relief should be granted to the plaintiff on condition that she pay this sum with interest at six per cent, from the date of the decree. For the reasons stated, the judgment of the chancery court will be reversed, and the cause remanded with the direction that a decree will be entered cancelling the deed of defendants as a cloud upon the title of plaintiff; but that so much of the decree as made the taxes paid by defendants and interest thereon a charge on the lands be sustained. It is so ordered. McCurdoch, J., was disqualified.