Reaves v. Coffman

Hart, J., (after stating the facts.) It is a well settled principle of equity that trust funds wrongfully converted may be followed into other property as long and as far as they can be identified. Dyer v. Jacoway, 42 Ark. 186. But we do not think that the testimony establishes that the lots in question in the present case were purchased .with the funds belonging to the minors’ estate. The testimony adduced by the defendants shows that the lots in question, were given to the defendant, Mollie C. Reaves, in 1900 by -her father, Robert H. Krantz, and that he afterwards, on the 3d day of February, 1903, executed a deed to her for the same. The testimony also shows that; while the consideration recited in the deed was $200, the real consideration was the love and affection he bore his daughter. To. overcome this positive testimony, the plaintiffs introduced proof of declarations of D. M. Reaves, the husband of Mollie C. Reaves, made in 1905, to the effect that he had purchased the lots in question in 1900 and had had the title to the same made in the name "of his wife. Mollie C. Reaves was a party to the suit, and the declarations of her husband were not competent testimony against her. Kirby’s Digest, § 3095, sub-div. 4; Brooks v. Hamby, 86 Ark. 448. The burden of proof was upon the plaintiffs, and they have failed to establish that the lots in controversy were purchased by the defendant D. M. Reaves. A preponderance of the testimony does establish that in 1900, while the guardianship was pending in the probate court, D. M. Reaves built a house upon the lots with the consent of his wife, and that thereafter it became their homestead. Plaintiffs contend that the whole of the means with which the house was built was furnished- by D. M. Reaves. But the uncontradicted testimony shows that Robert H. Krantz furnished a part of the lumber, that a son of D. M. Reaves did most of the carpenter work,, and that D. M. Reaves only furnished materials of the value of $450. The evidence establishes the fact of his indebtedness-to his wards at that time, and to the extent of the $450 there is-a charge upon the lots in question in their favor. Morris v. Fletcher, 67 Ark. 105. The present case is distinguished from that of Pullen v Simpson, 74 Ark. 592. In that case at page 596 the court said: “As Simpson had a perfect right to devote this money to homestead purposes, the creditors have no complaint that it is put into a homestead in which he had a right of occupancy, instead of one in which he had title.” Sec. 3, art. 9, of our Constitution is as follows: “The homestead of any resident of this State who is married or the head of a family shall not be subject to the lien of any judgment or decree of any court, or to sale under execution or other process thereon, except such as may be rendered for the purchase money or for specific liens, laborers’ or mechanics’ liens for improving the same, or for taxes or against executors, administrators, guardians, receivers, attorneys for moneys collected by them and other trustees of an express trust for moneys due from them in their fiduciary capacity.” It follows then that D. M. Reaves could not claim his homestead, whether one by right of occupancy or one in which he had title, as exempt from the judgments obtained against him by his wards, and that the judgments obtained by them in the circuit court were a lien on his interest in the homestead. Appellants as his sureties, having paid off the judgments, were entitled to be subrogated to the rights of the wards. Carroll County Bank v. Rhodes, 69 Ark. 43; Meyer Bros. Drug Co. v. Davis, 68 Ark. 112. The testimony shows that the notice of the pendency of the suit was filed as required by statute before the purchase by the defendants Graves. Hence they are not bona ñde purchasers, and are not entitled to protection. Acts of 1903, p. 118, Kirby’s Digest, § 5149. The chancellor erred in finding that the lots in controversy were the property of D. M. Reaves and in rendering a decree fixing a lien on them for the amount of the judgment of the plaintiff. His decree should have been to fix a charge on them for the $450 furnished by D. M. Reaves and used in erection of .the house. The decree is reversed, and the cause remanded with direction to enter a decree in accordance with this opinion.