Irwin v. Dugger

Hart, J., (after stating the facts). It is the settled rule of this court that the finding’s of fact made by a chancellor will not be reversed on appeal unless they are against the preponderance of the evidence. It is true that transactions between a husband and wife affecting the rights of creditors, especially where the husband is insolvent, are to be scrutinized with care in passing upon the question of good faith, and the burden is upon the wife to show her good faith. Bunch v. Crowe, 134 Ark. 242. This court has also frequently decided that a wife who- allows her husband to use her property for a long time as his own land will not be allowed to claim it as against his creditors. Cowling v. Hill, 69 Ark. 350, and Goodrich v. Bagnell Timber Co., 105 Ark. 90. In the case at bar it was satisfactorily established that the east part of the lot in question was paid for by Mrs. Dugger with her own means and for her own benefit. The same is true with regard to the purchase of the west part of the lot by the son. The record does not show that these deeds were executed for the purpose of giving J. E. Dugger a fictitious credit, or that they were withheld from record for that purpose or for the purpose of enhancing his assets and thus to enable him to contract debts which he could not pay. On the contrary, all the parties deny that the deeds were withheld from record and concealed in order to avoid impairing J. E. Dugger’s credit. There is nothing to show that the plaintiff or the other creditors of J. E. Dugger were induced to give credit to him on the, faith that he owned the storehouse or lot in question. The mere fact that the deeds were not recorded is not of itself sufficient evidence of such fraudulent purposes as to constitute fraud in law. Such act is of course a circumstance tending to impeach, the want of good faith of the parties. In testing the good faith of the transaction it is necessary to consider the particular situation of the parties and the intent as indicated by all of the facts and circumstances in the case as well as the direct testimony of the witnesses. These conveyances were executed, by J. E. Dugger to his wife and son the latter part of May, 1917, and the plaintiff brought suit against him on August 25, 1917. Dugger testified that he owed a part of this sum at the time he made the conveyances. The evidence does not disclose that the plaintiff or any other creditor of J. E. Dugger, furnished him credit on the faith that he owned the lot in question and the house situated thereon, and the shortness of time that elapsed between the conveyances to his son and wife and the institution of a suit by the plaintiff on his indebtedness negatives the idea that the conveyances were in fraud of his creditors. It follows that the decree will be affirmed.