Warner v. Dove

Miller, J., delivered the opinion of the Court. The complainants, alleging themselves to be creditors of William T. Dove, filed a bill in equity to vacate and annul three deeds by which certain land in Montgomery County, in this State, was conveyed to 1ns wife Ann W. Dove, and to subject the same to the payment of their claims. The first deed is from Haight and wife, dated May 12th, 1862, conveying about fifty acres for the consideration of §1,800; the second from Jackson and wife, dated October 17th, 1862, conveying about sixty-two acres for the consideration of §1,375, and the third from Knock and wife, dated September 4th, 1864, conveying about fifty-eight acres for the consideration of §900. The bill charges that these several pieces of land were purchased and paid for with the money of the husband and not of the wife, and that he falsely and fraudulently, and with intent to delay, hinder, cheat and defraud the complainants and his other creditors procured the same to be conveyed by the several vendors to his wife by the deeds above mentioned. There can be no doubt of the right of these creditors to the remedy they seek, provided the allegations of their bill are sustained by sufficient proof. The defendants, Dove and wife, answered separately, but their answers were not read in evidence, and we can take no further notice of them than to see that they each deny and put in issue the charge that the property was purchased with the husband’s money, and also the charge of fraud, and that the answer of the wife neither admits nor denies the indebtedness [584] of the husband to the complainants as charged in. the bill. There are several grounds on which the decree below dismissing the bill must be sustained. 1st. There is no proof as against Mrs. Dove, the grantee in the deeds, of the indebtedness of her husband at the time these conveyances were made. The answer of the husband is not evidence against her, and the judgments confessed by the husband in 1867 on the claims of the complainants are not proved. Mere short copies of these judgments Avere filed as exhibits Avith the bill but were not proven under the commission, and that certainly is not sufficient proof of the husband’s indebtedness as against the answer of the Avife silent on the subject. Eyler & Matthews vs. Crabbs, 2 Md., 154. Nor would the Amluntary confession by the husband of judgments on these claims in 1867, long after these deeds were executed, prevent the Avife, the grantee therein, from denying the existence or validity of the claims, or relying upon the fact that they were barred by limitations before the judgments Avere confessed. Niller vs. Johnson, 27 Md., 6; McDowell vs. Goldsmith, 24 Md., 230. 2d. But apart from technical objections of this character, the decree may well stand upon broader and firmer grounds. As to the third deed, of the 4th of September, 1864, the proof is clear that Mrs. Dove borroAved the money from Mr. Lyddane, to pay for the land thereby conveyed, AA'hich she applied to that purpose; and the testimony shoAA's beyond question that no money that ever belonged to her husband Avas in any Avay directly or indirectly expended in this purchase. There is therefore no ground on which that deed can be assailed. With respect to the íavo other deeds of May and October, 1862, the most favorable point from Avhich they can be assailed by the appellants, is to consider them as mere voluntary settlements by the husband on his Avife, he having furnished the whole purchase money or given it to her at some time prior to their respective dates. Viewed in this light and assuming the husband’s indebtedness charged in the [585] bill to be proved, how stands the ease? By the law of this State, as it now is and was at the time of these transactions, (and there is no proof in this record that the law of the District of Columbia is different,) a husband has the right and can make a valid gift of money or other property to his wife, provided it be not “in prejudice of the rights of his subsisting creditors.” So far as the record discloses, the only debt he owed at the date of either of these two deeds, was that due to the complainants, "Warner, Miskey & Merrill, which consisted of a draft for $867.T?¡%, due in September, 1862, and on which $201.II/-tr, was paid in December following, and an open account of $399.TY¡r. The debt to Riggs & Co., was not contracted until the 30th of March, 1863. Now it is very clearly shown by the testimony that for many years prior to this time and up to June, 1863, when he retired, Mr. Dove had been extensively engaged in large and profitable business operations of various kinds in the city of Washington; that he had large dealings with merchants in that city and in Baltimore, New York and Philadelphia, including this firm of Warner, Miskey & Merrill, with whom he had dealt extensively from 1858 or 1859; that when ho’quit business he was regarded as perfectly solvent, and his credit was good for any amount, at least for $50,000; that he left in the hands of a collector and former clerk, book-accounts and notes, all of which, others as well as himself, supposed to be good and available to an amount exceeding $13,000, with directions to collect the same and first pay therefrom all his debts; that he then thought himself quite easy in his circumstances, with ample means to pay every debt he owed and leave a surplus, the interest of which would support him ; that these claims have not since been collected chiefly by reason of the inattention of his agent, and also because during the war many of his debtors left the city and could not be found until the claims against them were barred by limitations; that during the time he was thus engaged in business he and his family lived comfortably, and he from time to [586] time gave his wife money, from which a prudent woman, as she was proved to have been, could have saved more than enough to pay the consideration money of these two deeds. It does not appear that -he ever owned any real estate and it is very evident this firm did not trust- him with reference to his ownership of any such property, but solely on account of the business in which he was engaged, his personal credit and the personal assets or means they supposed he might have accumulated or was making in his business operations. If during the time he was thus engaged in successful business and prior to the purchase of these pieces of land, he was in the habit of giving money to his wife, which she saved and subsequently applied in this way, or if he gave it to her outright at the date of each of these deeds, we could not, on all the proof before us, say suc-h gifts were in prejudice of the rights of existing creditors or infer therefrom an intention on his part, or a fraudulent collusion between himself and his wife, to cheat and defraud such creditors. So if we regard the transaction as a purely voluntary settlement on the wife and an investment of his money in this mode for her benefit, the proof in our opinion is quite sufficient, to relieve it from the presumption of fraud arising in such cases where any preexisting indebtedness is shown to exist, and to gratify the requirement established by the decisions of this Court under which deeds of that character can be sustained. The evidence in our judgment shows beyond reasonable doubt that the husband at the time of these gifts was in prosperous circumstances, unembarrassed and possessed of ample means consisting of the same kind of property that he had when the debt to this firm was contracted, to pay all the debts he then owed, and that the settlement was a reasonable one. He had remaining of such property and assets more than ten times the amount of this, the only pre-existing debt. It is to be observed, this is not a case where a party possessed of real estate and also of assets of this description conveys the former, which is unincumbered, visible, tangible and easily accessible to ere [587] ditors, in settlement upon his wife and family and leaves his creditors to resort to the latter, where their remedy might be more precarious and difficult, and the property, at all events, less readily and conveniently accessible to their claims. A conveyance of that character would of necessity operate to hinder and delay creditors in the collection of their debts, and for that reason would be void though enough might be shown to remain for their eventual satisfaction, as was decided by the Chancellor in Bullett vs. Worthington, 3 Md. Ch. Dec., 99. Here personal assets, debts, book-accounts and notes due him were the only property the husband had.— Where one thus situated takes a small sum from the profits of an extensive and lucrative business, and buys land which he causes' to be conveyed to his wife, it is a very different thing, in view of the rule as to the sufficiency of his remaining means to pay debts, from a direct conveyance or settlement of real estate which the party possessed at the time he contracted his debts. The bona jides of such a transaction and the sufficiency of his remaining means to satisfy existing creditors, must be judged by the character and nature of the property and means he then had, and so judging and applying the rule, we are well satisfied the proof in this case has placed the transactions complained of, if regarded simply as voluntary gifts or settlements, beyond the reach of successful attack. (Decided 2d February, 1871.) Decree affirmed.