Drew v. Corliss

The opinion of the court was delivered by ROSS, Ch. J. The only question for consideration regards the liability of the trustee. Before service of the writ upon him he had conveyed to him by a deed from the defendant and his wife a farm and certain personal property. He neither paid anything nor agreed to pay anything for the property conveyed. The commissioner reports : “The conveyance was made to the trustee in trust, but for whom there is no proof, except what appears from the trustee’s disclosure. The counsel for the defendant claims that the disclosure of the trustee is proof of the fact that he held the prop [655] erty conveyed to him in trust for the wife, but I do not so-find.” Just what the commissioner means by this finding is uncertain. He may mean that the disclosure is inadmissible-proof, or insufficient proof to establish that fact, or that it contained nothing tending to establish it. We áre inclined to think he meant the last, because he says there was no-proof for whom the trust was except what appears in the disclosure. There being no other proof, if the disclosure tended to establish that the trust was in favor of the wife, he ought to have so found. We think the disclosure contained evidence that was admissible and which tended to establish that the conveyance was for the benefit of the wife. When the conveyance was being made the defendant and wife said that the defendant owed her for borrowed money — which is found to be true — that the property conveyed really belonged to her, that years before the defendant undertook to convey it to her but did not do so in a legal way, and that the deed was given in trust for the money he owed her. What they then said accompanied, was explanatory and part of the act being done and was admissible in evidence as a part of the res gestae. If for this purpose the conveyance was not a general assignment for the benefit of creditors, it was for the benefit of the wife, one creditor. If the defendant owed his wife an honest debt, as the commissioner has found he did, he had the right to convey the property to the defendant in trust, to be used for the payment of such debt. He had the right to prefer the payment of that debt over that of plaintiffs, whether their debt was secured or unsecured. The property conveyed to the extent of the wife’s debt, and to that extent only, by such conveyance would be placed beyond the reach of the plaintiffs. By proper proceedings they could avail themselves of the excess, if any, for the payment of their debt. If the conveyance was understood by all the parties to it, including the wife, to be a mere cover to prevent the property from being attached and taken for the payment of the debt [656] •due the plaintiffs, and to take care of the defendant, it would be fraudulent and void. But if the defendant made the conveyance, moved thereto by a purpose to take care of himself, as found by the commissioner, and if the wife and trustee did not make or take the conveyance for such purpose, but for the honest purpose of holding and using the property conveyed for the payment of the debt which the defendant owed her, they could hold the property although such holding prevented the plaintiffs from attaching and taking it for the payment of such notes as did not enter into the foreclosure suit. Lyon v. Rood, 12 Vt. 233 ; Root v. Reynolds, 32 Vt. 139; Leach v. Francis, 41 Vt. 670. If the trust should be found established, unless it should be further found that the wife and trustee made and took the conveyance only for the purpose of taking care of the defendant, and not for the honest purpose of securing the payment of -the defendant’s debt to her, then the trustee has nothing in his hands which the plaintiffs could hold, until the wife’s •debt is paid. The commissioner submitted, as we construe his report, to the court whether the trustee’s disclosure was evidence to establish the trust in favor of the wife. Hence the question is properly before this court. Neither the county ■court nor this court can find any facts from this evidence. It can only determine that it was proper evidence to be received and weighed by the commissioner, tending to establish the trust in favor of the wife. The case .must therefore be reversed and be sent back to have this evidence considered by the commissioner. It is his province to. say what weight may be given to it. It is contended that the facts foundb3rthe commissioner do not show any indebtedness from the defendant to his wife. We think otherwise. He finds that she let him have money from time to time, some of which he had not repaid her. This is finding that the husband received it as her money, and not as belonging to him by marital right. He also finds that the defendant used this money'for [657] his own purposes and converted it to his own use, “ but I find that there was an agreement .that the husband should pay the money back to her.” He also says the money so had and not repaid amounted to $1,500, January x, 1892. The fair construction of all his findings is that the husband’s agreement to pay the money so received was made at the time he received the money, because he received it as her .money. Hence on the facts found the husband owed the wife a debt for the payment of whifch the property in the trustee’s hands could be holden. As the case must go back for further findings in reference to whether the trust was for the payment of the wife’s debt, the other points made in argument are of minor importance. No claim is made that the trustee can be held for the real estate conveyed. We do not think the facts found show that any of the personal property came into the trustee’s hands except what he turned over to his tenants, Salter & Son. ' The trustee was not a purchaser or consumer of any of this personal property, nor is it found that he had converted any of it into money. No money judgment could be rendered against him for it. At most the judgment should be that he should deliver to the sheriff the specific articles, to he sold on the execution against the defendant. The corn, corn-fodder and india wheat raised in the summer of 1891 had been fed to the stock, some if not all of which would be delivered to the sheriff if the trustee is liable therefor. The trustee never became indebted to the defendant in any way for any of this property. It is only through the rights of the defendant except for his fraud, if there was fraud in the conveyance, against the trustee, that the plaintiffs cán hold any of the property. If the conveyance is void because of fraud, the trustee holds the personal property as a naked depositary. After service he would be bound to care for' and use the personal property deposited in his hands with rea [658] sonable care and prudence. . If in the exercise of such prudence any of it should be converted into money, it would be the duty of the trustee to receive and account for the money. To that extent a money judment could be rendered against him. But the case does not show that the trustee had converted any of the personal property received into money. 'Judgment reversed and cause remanded.