Atkinson v. Solenberger

Buchanan, J., delivered the opinion of the court. One of the objects of the proceedings in this cause was to set aside a deed executed February 14, 1894, by John W. Solenberger to his son Noah W., as trustee for Barbara, the latter’s wife, and to subject the lands conveyed to the payment of a debt evidenced by a judgment against Noah W., upon the ground that the lands conveyed were in fact purchased and paid for by the husband and the deed executed to the wife, without consideration passing from her, and was so made for the purpose of defrauding the husband’s creditors, and that she had notice of such intent when the conveyance was made. Another object of the proceedings was to subject other lands than those conveyed by the deed of February 14, 1894, and the value of services rendered by the said husband for his wife Barbara. This cause was heard with the cause of Joseph W. Solenberger, Admr., v. Noah W., his wife and others, and a decree entered refusing to set aside the conveyances attacked, charging Barbara, the wife, with the value of her husband’s services, and crediting her thereon with the amount which the court deemed necessary for the reasonable support of the husband and family during that period. From that decree this appeal was taken. The first error assigned is to the action of the court in refusing to set aside the deed of February 14, 1894. This suit was instituted in December, 1903, nearly nine years after the conveyance of February 14, 1894, was recorded. The beneficiary in the deed claims in her answer that her husband was indebted to her, and that the consideration of three thousand dollars for which he executed his bonds to his father, the grantor, was for the debt which he owed. It is conceded in the brief of the appellees that there is “nothing in the record apart from the averment of the answers and the recital in the deed that the consideration — 670 — of $3,000 was paid by said trustee, i. e., out of her separate estate; but it does appear that her trustee had used her money to an amount greater than the consideration named.” The evidence relied on to show that the trustee (husband) had used his wife’s money is the depositions of the husband and the wife, taken in the cause of Joseph W. Solenberger v. Noah W. Solenberger, in the year 1904, two years before that case and this were ordered to be proceeded with and heard together. These appellants were not parties to that suit, and are not affected by the evidence taken in it. The effect of hearing the cases together was not to make the two one cause. “The parties,” as correctly stated in 8 Cyc. 608, “in one suit do not become parties to the other, and their rights still depend or turn on the pleadings, proof and proceedings in the respective causes. The issues remain precisely as they were, and are to be determined exactly as if the cases had been heard separately. In short, the consolidation (in equity) merely operates to carry on together two separate suits supposed to involve identical issues, and is intended to expedite the hearing and diminish the expense.” See also, Daniel’s Ch. Pr., Note 3, p. 797, (5th Am. Ed.) Judge Lurton’s (now Justice Lurton) opinion in Toledo, &c. Ry. v. Continental T. Co., (C. C. A.) 95 Fed. 497, 506. Having failed to establish by clear and satisfactory evidence, or even to show at all, that any such indebtedness existed from the husband to the wife, the conveyance to her is without consideration and merely voluntary as to her. But as this suit was not instituted until more than five years after the recordation of the deed, the right to have it set aside merely because it was made to the wife without consideration deemed valuable would be barred by the statute of limitations. Code, sec. 2929. But the appellants not only allege that the conveyance as to the grantee was voluntary, but that the lands were — 671 — purchased and paid for by the husband and the conveyance made to his wife for the purpose of hindering, delaying and defrauding-his creditors, and that she had notice of such intent. If this allegation of actual fraud be sustained by the evidence, section 2929 has no application to the case. Flook v. Armentrout, 100 Va. 638, 42 S. E. 686; Snoddy v. Haskins, 12 Gratt. 363. It appears from the answer of the wife to the bill of Joseph W. Solenberger, a copy of which is filed with the bill in this case, that at the time the conveyance was made she knew that her husband was insolvent, as did his father, the grantor, and that the husband could not hold property because of his financial condition; that the grantor urged her to purchase the land, and said that he would accept time bonds of her husband for $3,000 in consideration and satisfaction of the purchase price of the land. There is no claim made in the answer that her husband was indebted to her, or that she whs furnishing any part of the consideration, directly or indirectly. The answer further states that her husband had paid at that time $900 on account of the purchase price, evidenced by the bonds. It thus appears that the wife knew that her husband was insolvent at the time the conveyance was made to her and that he and not she was to pay the purchase price of the lands conveyed. Both the husband and the wife knew when the conveyance was made that he was providing for her at the expense of his creditors — that he was doing what he had no right to do. This is not a case where money or property is received from an insolvent donor by one who has no reason to suspect such insolvency and without any purpose to defraud the creditors of the donor. In such a case, the transaction being merely voluntary, it is as to the donee constructively fraudulent and must be attacked within the five years; but where the donee has knowledge of the fact that the donor is insolvent and the natural and necessary effect of the — 672 — transaction is to hinder, delay or defraud the donor’s creditors, it is actually fraudulent, not only as to the donor, but also as to the donee. It is settled law in this State, that in a contest between the existing creditors of an insolvent husband and his wife, touching an alleged purchase from her husband or from another with means furnished by him, the transaction is prima facie presumed to be actually fraudulent and the burden is on the wife to show by clear and satisfactory evidence that the consideration was in good faith paid by her out of her own separate estate, and not by her husband. See Richardson v. Pierce, 105 Va. 628, 54 S. E. 480, and cases cited; 2 Min. Real Prop., sec. 1181, and cases cited in Note 8. The contention of the wife, that the transaction of February 14, 1894, was in fact a gift and not a sale, is in conflict with the averments of her pleadings in this cause, for in them she claims that she furnished the consideration for the conveyance. It is in conflict with her answer in the case of Solenberger’s Admr. v. Solenberger, filed as an exhibit in this cause. In that answer her claim is that the consideration was to be furnished and was in fact furnished by her husband. There is no evidence that the transaction was intended to be a gift, except that the grantor accepted the bonds of his insolvent son without reserving a lien upon the land conveyed. Upon the whole case, we are of opinion that the conveyance of February 14, 1894, was, as to the wife, not only voluntary, but actually fraudulent; that the appellants have not been guilty of such delay in asserting their rights as to bar them from the relief sought; and that the trial court erred in not setting aside the said conveyance as fraudulent and void. Another error assigned is that “the appellees were not entitled to have an exemption or an allowance, for the sup — 673 — port of the family, set off against the amount ascertained to be due for services” rendered by the husband. The commissioner, to whom was referred the question, found that the husband had rendered valuable services to the wife in the management of her property, for which a fair compensation would be six hundred dollars per annum, during the five years preceding the institution of this suit. The commissioner also found that all the means for the support of the husband and the family had been furnished by the wife during the said five years. This support the commissioner estimated as worth five hundred dollars per annum, and credited the same upon the amount he ascertained as the value of the husband’s services. Upon a hearing of the cause, the court sustained an exception to the commissioner’s report, filed by the husband and wife, as to the amount allowed by the commissioner as a proper sum to be credited on the value of the husband’s services for the support of his family, and increased that amount from $500 to $600 per annum. The objection made to the action of the court is not, as we understand it, to the amount allowed by the court for the support of the family, but to any allowance whatever. The allowance is objected to on two grounds: (1) That the husband as the general manager or trustee of his wife’s property was not a laboring man, within the meaning of section 3652 of the Code, which exempts from distress, levy or garnishment the wages of a laboring man, being a householder, not exceeding fifty dollars per month. (2) That an insolvent debtor, whose creditors are subjecting to the payment of their claims the value of his services, is not entitled to an allowance for the support of himself and family when it appears that the means for such support have not been furnished by him. Where a husband renders services for his wife, whether under an express or implied agreement, his creditors have — 674 — the right to subject the value of such services to the payment of their debts, less the amount necessary for the reasonable support of the husband and his family. See Catlett v. Alsop, Mosby & Co., 99 Va. 680, 687, 40 S. E. 34; Penn v. Whitehead, 17 Gratt. 503, 525, &c., 94 Am. Dec. 478; Same v. Same, 12 Gratt. 74, 80, &c. The fact that during the period the husband is rendering services for the wife she supports the family is no reason why, when his creditors are seeking to charge her with the value of his services, she should not be permitted to set off what she has advanced for the reasonable necessary support of the husband and his family during the period she is charged with the value of his services. If the husband himself, under like cireumstaiices, were to sue his wife to recover the value of his services, it is clear that he could only recover from her the value of his earnings or wages in excess of a reasonable support for himself and family. The creditors are entitled to no more. See Catlett v. Alsop, Mosby & Co., supra; Penn v. Whitehead, supra. It is unnecessary to consider the question, whether or not the husband, in this case, is a “laboring man,” within the meaning of section 3652 of the Code, since independent of that section, where creditors are in a court of equity seeking to subject to the payment of their debts the earnings or wages of an insolvent husband in the employment of his wife, they can only subject so much thereof as is in excess of a-reasonable support for himself and family. See authorities cited above. For the error of the trial court in refusing to set aside as fraudulent and void the conveyance of February 14, 1894, the decree appealed from, to that extent, must be reversed and set aside, and in other respects affirmed; and the cause remanded to the circuit court for further proceedings to be had not in conflict with the views expressed in this opinion.