Scott v. McCraw, Perkins & Webber Co.

Smith, J. Appellee was the plaintiff 'below, and alleged in its complaint that on the 27th day of March, 1914, it recovered a judgment against .appellant, Dr. S. A. Scott, for the sum of $2,303.29, with interest, and that the suit on which this judgment was obtained was filed on the 16th' of June, 1913, and that in anticipation of the filing of this suit, Doctor Scott had executed a voluntary 'Conveyance to his wife to lot No. 10, in block No. 9, of Sheldon’s Addition to the city of Little Bock. The date of the deed to Mrs. Scott was October 21, 1913. Before the date of the submission of this cause, the complaint was amended to allege that on the.day of June, 1913, appellant Doctor Scott had executed a deed of trust in favor of his wife to certain other property there described, and that this conveyance was a voluntary one for the fraudulent purpose of enabling appellants to cheat, hinder and delay appellee in the collection of its just demand, against Doctor Scott. After appellee had recovered judgment against Doctor Scott in ¡the original suit, he prosecuted an appeal to this court, and appellee prosecuted a cross-appeal, and we have only recently handed down an opinion upon that appeal. See Scott v. McCraw, Perkins & Webber Co., 119 Ark. 133. Upon the trial of the cause brought to uncover the property alleged to have been fraudulently conveyed by Doctor Scott to his wife, and for her use and benefit, the court found that the said deed and the deed of trust were voluntary conveyances executed for the fraudulent purpose of defeating appellee in the collection of its judgment, and it was there decreed that if said judgment was not paid within five days, together with the interest and all costs, that the property there uncovered should be sold by the clerk of the chancery court as commissioner named for that purpose. Appellants complain alike of the action of the 'court in decreeing said conveyances to be fraudulent, and of the court’s action in decreeing ia sale-of said land by the commissioner named for that purpose, and it is now urged that in no event should said lands be sold by -the commissioner of the court, but that a sale thereof, if made at all, should be made under an execution duly levied upon said property. (1) We think the court erroneously found that the deed from appellant 'Scott to his 'wife for the said lot No. 10, block 9, was fraudulent. The facts appear to be that Doctor Scott had but little, if any, property of his own at the time of his marriage, but that his wife acquired, through her father,- a very valuable estate. That the health of .appellant’s wife had failed -and she was brought to Little Rock for treatment, whereupon the said lot which adjoined -the homestead was purchased. The proof appears reasonably 'certain that the initial cash payment of one-third made at the time of the purchase of this lot was advanced by Mrs. Scott’s father, -and that it was intended that the title to the lot should be taken in her name. It also appears reasonably certain that the remaining payments were made with funds belonging to his wife, and he testified that, although these remaining payments were made after the deed had been taken in Ms own name, it was understood and agreed that when the purchase money had been, paid, and the vendor’s lien for the purchase money had been satisfied, he should then 'convey said lot to his wife, and that he did so convey it to her within ten days after the last of the purchase money had been paid. (2) But the facts appear to be otherwise with reference to the lands described in the deed of trust, which recited that it had been executed for the purpose of securing .an indebtedness of $16,000 due by appellant to Ms wife. We think the chancellor’s finding that this convey.ance was a voluntary one and was executed for the purpose of putting the property beyond the reaoh of 'ap-pellee is not contrary to the preponderance of the evidence. It was alleged and admitted that appellant Scott conveyed in this deed of trust all of his property, and if the conveyance is a valid one, it renders him wholly insolvent. Mrs. Scott owned extensive and valuable farming land in Chicot County, Arkansas, and the town of Eudora was laid off on her land, .and appellant received large sums of money from the rent of these lands and from the sale of lots in the town of Eudora. Appellant bought and sold real property on an extensive scale, and while some of ¡his investments proved to be profitable, he lost money on most of them. During this time appellant Scott had accounts in several banks, some of which he kept in the name of his wife, but .all of these accounts were subject to his check, and were drawn upon in the name of his wife by him, and no attempt appears to have been made to keep any separate account of the money received from the rent or sale of any of his wife’s property, .and there is nothing to indicate that the use which he made of his wife’s money w.as intended as .a loan, 'and no notes were ever given, nor was there other evidence that these transactions were loans, although, the use of this money extended over a period of about nine years; The proof •shows that on the 5th of June, 1913, .an attorney representing appellee called on appellant Scptt at his home in the city of Little Bock, and demanded payment of the sum due .appellee, but failing to get satisfaction, notified appellant iScott that suit would be filed against him at once to collect the account. On the 10th of June thereafter, the deed of trust conveying the property in question to Mrs. Scott was filed for record .in Chicot County, 'and on the 18th day of June thereafter the same instrument was filed for record in Pulaski County. And while the proof does not show the value of the property so conveyed, it is admitted that it embraced everything owned by appellant Scott. In the case of Waters v. Merit Pants Co., 76 Ark. 254, it was said : “It is settled ¡by the decisions of this -court that an insolvent husband, when justly indebted to his wife, may, without fraud, prefer her -claim to that of other creditors, and make valid appropriation -of his property to pay it, even though the result be to deprive other -creditors of the means to satisfy their claims. But such transactions between husband and wife are viewed by the courts with suspicion, iand the perfect good faith of th-e transaction must be established by proof. Where the wife asserts, as a consideration for conveyance of his property to her, a claim of debt against her insolvent husband for money loaned to him many years previous, no note or other written evidence of an agreement to repay being shown to have been executed, -and the alleged debt having become stale by long lapse of time, as iii this case, her bare statement should be corroborated iby some other -evidence of the existence of a valid debt, before the courts can accept it in support of the conveyance.” There is no evidence of this indebtedness except that of appellant, and as has been said, there was no note or other writing evidencing its existence. Appellant dealt with the property in question as his own, and it formed in part at least the basis of the credit extended him. Goodrich v. Bagnell Timber Co., 105 Ark. 90. Nor do we think any error was committed by the court in ordering the sale of the property which had been uncovered by the decree of the court. In the case of Merchants & Farmers Bank v. Harris, 113 Ark. 111, it was said: ‘ ‘ The chancery court having acquired jurisdiction for the purpose of setting aside the fraudulent conveyance, should not only grant the relief prayed for in that respect, but should proceed to enforce the lien by ordering the land in controversy sold to satisfy the judgment in favor of appellant. The chancery court, having -assumed jurisdiction for one purpose, will retain it for all -and grant all the relief, legal or equitable, to which the parties are entitled. See Apperson v. Ford, 23 Ark. 746; Apperson v. Burgett, 33 Ark. 328; Cribbs v. Walker, 74 Ark. 104; Dugan v. Kelly, 75 Ark. 55; Dickinson v. Arkansas City Imp. Co., 77 Ark. 576.” (3) We think, however, that an unreasonably short time was allowed to appellant in which to pay the judgment, and that under the circumstances more than five days should have been allowed for this purpose, and that the decree of the court below must be reversed on that account. Likewise, the decree in so far as it adjudges the conveyance of the said lot No. 10, block No. 9, to have been fraudulent is reversed, but as to the property described in the deed of trust, the decree is affirmed. The cause will be remanded with directions to the court below to enter a decree in accordance with this opinion. McCulloch, C. J., disqualified and not participating.