Mehlhop v. Pettibone

The following opinion was filed February 7, 1882: Cassoday, J. By the statute of Iowa, in evidence a married woman may receive grants or gifts of property from her husband without the intervention of trustees, and may convey her interest in real estate the same as other persons. Sections 1192, 1207, Iowa Code. Section 2206 of their code also provides that “a conveyance, transfer or lien, executed by either husband or wife, to or in favor of the other, shall be valid to the same extent as between other persons.” See Blake v. Blake, 7 Iowa, 46; Shields v. Keys, 24 Iowa, 298. Such being the law of that state, there can be no question but that Mrs. Pettibone had the legal capacity to convey the Dubuque lots to her husband. See Jones v. Brandt, 10 N. W. Rep., 854. By that conveyance she divested herself of all title in those lots, valued at $2,700, and vested the same absolutely in her husband. This being so, there can be no question but that she absolutely parted with a full and adequate consideration for the Waukesha lands purporting to be conveyed to her by her husband. Did she get title thereto by that conveyance? The land was in Wisconsin. She and her husband, at the time of the conveyance, were domiciled in Iowa. The agreement for the exchange of lands, and the deeds, were made and delivered in Iowa. Is the giving and taking of the deed to the Waukesha lands to be governed by the law of Wisconsin or Iowa? If the law of Iowa is to control, then the statute of that state clothed her with the legal capacity to take title directly from her husband,-and the same would be. valid at law. Counsel for the appellant insists that, as all transactions took place ¡in Iowa, the laws of that state must control in determining the [655] validity of the acts of the parties, and several cases in this court are cited in support of the contention. None of the citations, however, seem to meet the question here presented. That question is, whether the laws of Iowa, removing the disability of husband and wife in regard to their making conveyances to each other valid at law, is limited to conveyances of lands in Iowa, or extends to any lands owned by either in any state. In other words, does the disability to contract with or convey directly from one to the other, imposed by the laws of some states upon its citizens, extend to those outside of its limits, whenever they attempt to convey lands within its limits? Is the capacity of the parties, as well as the formal execution and validity of the conveyance, to be governed by the law of the place where the land is situated? The question is an interesting one, but as it was not discussed, and its determination is not essential to this decision, we refrain from considering it at this time.. The respondent’s contention will appear in its most favorable light by assuming, for the purposes of this case, that the laws of Wisconsin must control. It has frequently been held by this court that a deed based upon an adequate consideration, directly from the husband to the wife, is good in equity. Putnam v. Bicknell, 18 Wis., 333; Hannan v. Oxley, 23 Wis., 519; Beard, v. Dedolph, 29 Wis., 136; Fenelon v. Hogoboom, 31 Wis., 172; Carpenter v. Tatro, 36 Wis., 297; Dayton v. Walsh, 47 Wis., 118; Horton v. Dewey, 53 Wis., 410. There would seem to be no good reason why contracts, .when bona fide, made for such conveyance, based upon a valuable and adequate consideration, should not be specifically enforced in equity. 1 Bish. L. M. W., § 719; Livingston v. Livingston, 2 Johns. Ch., 537; Wolfe v. Ins. Co., 39 N. Y., 49; Hunt v. Dupuy, 11 B. Mon., 285. In Hannan v. Oxley, supra, it was held that “such a deed' cannot be impeached in equity, by heirs, on the ground that it-was made in consideration of property of the wife which'belonged in law to the husband.” In Beard v. Dedolph, supra, [656] tills court went still further, and held that where a wife had a separate estate, and in exchange for a part of it took a note directly from her husband, and payable to him, she thereby, and as incident to her power to contract with reference to her own estate, acquired a good title to the note at law. Fenelon v. Hogoboom, supra, was an action for unlawful conversion, but the chattel mortgage from the husband directly to the wife was held good at law. Whether the same rule would obtain in case of real property it seems unnecessary here to determine; for this is a bill in equity, and, the wife having parted with full consideration, the defense is certainly equitable, and must prevail unless the transaction was tainted with fraud. Can we say, upon the evidence before us, that such was the fact? Whatever may have been the rule at common law, the statute of this state makes the question of fraudulent intent in making such conveyances, “ a question of fact, and not of law.” Section 2323, R. S. The burden of proving, as a matter of fact, that the conveyance was made with the intent to defraud creditors was upon the plaintiff. Hyde v. Chapman, 33 Wis., 392; Barkow v. Sanger, 47 Wis., 500; Graham v. Railroad Co., 15 West. Jur., 69, and the numerous authorities cited in the note. Here there is no specific finding of fraudulent intent, but we think we are justified in finding such intent -on the part of Bronson Pettibone as a fair inference from the evidence. But can we find such intent on the part of Mrs. Pettibone? The court finds that the’exchange was made by the wife, “ at the simple request of said Bronson Pettibone, solely to comply with such request.” This finding goes to the full extent of the evidence. There is no evidence to show that the wife was aware of her husband’s insolvency, or that he was in embarrassed circumstances, or even indebted to the plaintiff or any one at the time; but the contrary. It is true, she seems to have acquiesced in the exchange as he suggested. But she must have known that she was parting absolutely with all title [657] to the Dubuque property, valued at $2,700, and getting nothing in exchange but the "Waukesha lands. There is nothing to show what the value of those lands was, but she had seen them, and we must presume that she had some notion of their value and was satisfied to make the exchange. Can we infer an intent to defraud upon her part from her passivity, and the mere fact that the transaction was between husband and wife? We have recently held, in cases above cited, that such transactions should be subjected to close scrutiny, but we are unwilling to hold that they are presumptively fraudulent from the mere relation of the parties. In order to avoid a sale as being in fraud of creditors, both parties must be connected with the fraudulent design. Sterling v. Ripley, 3 Pinney, 155; Hopkins v. Langton, 30 Wis., 379. The same rule prevails in the courts of Iowa. Fifield v. Gaston, 12 Iowa, 218; Steele v. Ward, 25 Iowa, 535; Preston v. Turner, 36 Iowa, 671; Drummond v. Couse, 39 Iowa, 442; Kellogg v. Aherin, 48 Iowa, 299. The rule seems to be universal. Leach v. Francis, 41 Vt., 670; Partelo v. Harris, 26 Conn., 480; Ewing v. Runkle, 20 Ill., 448; Violett v. Violett, 2 Dana, 323; Foster v. Hall, 12 Pick., 89; Bryne v. Becker, 42 Mo., 264; Bancroft v. Blizzard, 13 Ohio, 30; Splawn v. Martin, 17 Ark., 146; Governor v. Campbell, 17 Ala., 566; Ruhl v. Phillips, 48 N. Y., 125; Jaeger v. Kelley, 52 N. Y., 274. It is thus established that before a conveyance, made.by a grantor with the intent to defraud his creditors, will be set aside as against the grantee, it must be made to appear that such grantee participated in or had knowledge of such intent. The evidence here being insufficient to establish such knowledge or intent on the part of Mrs. Pettibone, and she having parted with full value in exchange for the deed of the Waukesha lands, there would seem to be no equitable grounds for setting the same aside. This is especially so, since it is well established that she could not reclaim the Dubuque lands conveyed to her husband; for, as between the parties, such conveyance was valid, [658] even if they both intended to defraud the husband’s creditors. Jones v. Lake, 2 Wis., 210; Eaton v. White, 2 Wis., 292; La C. & M. Railroad Co. v. Seeger, 4 Wis., 268; Fargo v. Ladd, 6 Wis., 106; Schettler v. Brunette, 7 Wis., 197; Reynolds v. Vilas, 8 Wis., 471; Janvrin v. Maxwell, 23 Wis., 51; Clemens v. Clemens, 28 Wis., 637; Dietrich v. Koch, 35 Wis., 618; Gunderman v. Gunnison, 39 Mich., 317. Whether the value or proceeds of the Waukesha lands could be followed by the plaintiff, in a court of equity, into and made a chargé upon the Dubuque lands, is a question not before us for consideration. By the Court.— The judgment of the circuit court is reversed, and the cause is remanded with directions to dismiss the complaint.