Pease v. Shirlock

The opinion of the court was delivered by TYLER, J. The defendant’s counsel insisted on the trial in the court below that the plaintiff when he rested had not made a prima facie case, and moved for a non-suit, which motion was denied. The first question presented by the exceptions is whether the conveyance by William Shirlock and wife of their farm to their son, the defendant Frank Shirlock, was fraudulent and void as to the grantor’s creditors. The farm conveyed was worth $1,700 to $2,200, of which from $700 to $800 was in the dwelling-house and shed attached. The grantor’s debts at the time of the conveyance, as subsequently shown by the report of commissioners, amounted to about $1200, for the payment of which he reserved [625] property to tlie amount of only $81. The grantor took a mortgage back, conditioned for the support of himself and wife during their lives, which support the defendant furnished. The deed and mortgage were executed Feb 29, 1888. William Shirlock died April 17th following, and his wife August 11, 1890. On the 21st day of August, 1S89, Frank Shirlock executed and delivered a mortgage of the premises to William Martin, as security for a debt due from him to Martin. This action was brought May 15, 1890, by the administrator of William Shirlock in behalf of his crditors, under section 2162, R. L., which is as follows: “When there is a deficiency of assets in the hands of the executor or administrator, and when the deceased person made such fraudulent conveyance of real estate in his lifetime, the executor or administrator, may commence and prosecute to final judgment, any proper action or suit, in law or equity, for the recovery of, and may recover for the benefit of the creditors, such real estate, and may also, for the benefit of the creditors, sue and recover for goods, chattels, rights, or credits, fraudulently conveyed by the deceased in his lifetime.” That the conveyance falls within the provision of this section, and of sections 1955 and 1155, that the deed and mortgage were fraudulent and void as to William Sliirlock’s creditors, and that in a proper action this administrator may recover a part of the land sufficient to pay the debts, admits of no serious doubt for the reason that the conveyance was operative to place substantially all the grantor’s property beyond the reach of his creditors. That this was done with such intent on the part of the grantor, and that that intent was known to the grantee, must have been found by the jury under the charge of the court, for the exceptions state that the jury were fully instructed, and in a manner to which no exception was taken, concerning the facts they must find and the law governing the plaintiffs right of recovery. It was decided in Crane v. Stickles, 15 Vt. 252, that a conveyance of all the debtor’s property without making provision for the payment of' debts, was fraudulent and void as to creditors. Prout v. 52 Vt. 451. It is 'well settled that a debtor is bound to [626] reserve from a conveyance of this kind ample property for the payment of his debts. Church v. Chapin, 35 Vt. 223; Foster v. Foster, 56 Vt. 540 ; Kelsey v. Kelley and Wife, heard at the last general term and referred to by counsel, is in line with these cases. The second question is whether, in an action of ejectment, the plaintiff could recover an undivided interest in the entire premises irrespective of the homestead. The arguments of counsel on both sides have proceeded upon the ground that there was a homestead interest in this farm, exempt from attachment when the action was commenced, and there was no exception to the charge of the court on this subject, which was in substance that, as William Shirlock acquired title to a homestead interest, the conveyance of the same to the defendant was valid, and that he was entitled to hold the same as against his father’s creditors, because if William had held the title at the ■time of his death his widow would have held it as against his ■creditors. But the plaintiff’s counsel contend that by the fraudulent conveyance the plaintiff and defendant became tenants in ■common of the entire premises, and that as the defendant was in possession of the whole, claiming title, the plaintiff may recover in ejectment according to his right. On the other hand the defendant^ counsel insists that the interests of the plaintiff and defendant in the demanded premises were not common but separate, that of the defendant being in the homestead, and that of the plaintiff in the residue of the farm; that the homestead was the defendant’s absolutely, and that the administrator had no undivided interest in it, and no right of action for any interest; that the line should first have been found between the homestead and the other part of the farm,- if any action of law wotdd lie, which he denies. It is true that until the necessity arises to sever the homestead and set it out by metes and bounds, it exists only as a right. It is not an aliquot part of the entire premises, but an inchoate [627] interest of the value of $500 in certain parts thereof. Sec. 1894, B. L. is as follow's : “The homestead of a housekeeper or head of a family, consisting of a dwelling-house, out-buildings, and the land used in connection therewith, not exceeding five hundred dollars in value, and used or kept by such house-keeper or head of a family as a homestead, shall, together with the rents, issues, profits and products thereof, be exempt from attachment and execrition, except as hereinafter provided.” Therefore the statute locates the homestead in‘the dwelling-house. It makes the dwelling-house and out-buildings the homestead and exempts them from attachment if they do not exceed $500 in value. If they exceed that sum then only so much as is of the value of $500 can be set .apart for that purpose. If they fall short, then land used in connection with them must be added to make up the value to $500. In. this case the dwelling-house was worth from $700 to $800, so that a part of it, suitable for a habitation, and of the value of $500, was absolutely exempt as a homestead. In that part ¥m. Shirloek’s creditors had no interest. Neither they nor the plaintiff, as the. representative of their, interests, could be tenants in common with the defendant in the homestead. Lindsey v. Austin, 60 Vt. 627. On this ground the defendant’s motion for a nonsuit should have been granted. By the terms of the statute under which this action is brought, the conveyance was fraudulent and void only as to the grantor’s creditors and should be disturbed only so far as it is necessary to satisfy their claims. In a case where the estate thus conveyed was worth, say $5,000, and the debts of the grantor were but a few hundred dollars in amount, it would be a severe construction of the statute to hold the whole' conveyance void. If "Win. Shirlock had owed no debts, the conveyance of his farm to his son would have been valid, and in the circumstances of this case, no reason can be assigned why the conveyance should not be held valid except as to creditors. Bassett v. St. Albans Hotel Co., 47 Vt., 313. [628] Then, was tlie interest which the plaintiff was entitled to recover in the demanded premises such as could be reached by means of an action at law ? The statute provides that the administrator may have any proper action or suit in law or equity for a recovery of the real estate fraudulently conveyed. A case can readily be conceived of in which an action at' law would be the appropriate remedy, as where the estate conveyed was unincumbered by a homestead and the whole was insufficient to pay the debts of the grantor; but here, the homestead being uneliminated from the other real estate, we are unable to see how ejectment or any other action at law can meet the exigencies of tlie case. By a proceeding in equity, a part of the land, sufficient to pay the debts, could be sequestered and sold, and the title to the remainder vest undisturbed in the hands of the defendant. Spaulding v. Warner, 59 Vt. 646 ; Lindsey v. Austin, supra. Judgment reversed, and cause remanded.