Case ID: ohio-st_26/html/0298-01.html
Source: Caselaw Access Project
Author: {"author": "Rex, J. White, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David W. Oliver v. Charles L. Moore and Lydia C. Moore.
    Where an insolvent husband, who in equity is indebted to his wife, advances money, intended as a gift to her, to discharge the wife’s estate from a mortgage debt, the wife, not being guilty of actual fraud, can not, at the suit of other creditors, be compelled to account for the money so advanced, until her claim against her husband is first satisfied.
    Motion for leave to file a petition in error to reverse the judgment of the District Court of Hamilton county.
    The original action was brought by the plaintiff in error, in the Court of Common Pleas of the county above named, against the defendants in error, to subject certain lands, the-legal title to which are in Lydia C. Moore, the wife of Charles L. Moore, to the payment of a judgment recovered by the plaintiff in error against the defendant, Charles L. Moore, in the Superior Court of Cincinnati, at its January-term, 1867, for $18,105.20, and which lands, the petition avers, were purchased and paid for by Charles L. Moore, who, at the time, was insolvent, and who procured the conveyance to be made to his wife, Lydia C. Moore, for the purpose of defrauding his creditors. It is also averred in the petition that the defendant, Charles L. Moore, has nopropei-ty subject to levy on execution out of which the plaintiff’s judgment can be satisfied.
    The defendant, Lydia C. Moore, answered, denying specifically the several allegations of the petition, except that averring the indebtedness of her husband to the plaintiff; setting up the indebtedness of her husband to her on account of moneys loaned; and averring that, after deducting all the payments that had been made to her, or that had been made on her account by her husband, he is still indebted to her; and, further, that she acquired title to the real estate described in the petition in good faith, and without fraud, at a time when her husband was solvent, and is entitled to hold the same free from all claims on the part of her husband or of his creditors.
    Erom the judgment rendered in the action in the Court of Common Pleas, an appeal was taken to .the District Court, where the cause was again tried, and a judgment rendered, which was afterward reversed by this court at its December term, 1872, on the petition of the plaintiff in error, and the cause remanded to the District Court for a new trial.
    At the April term, 1874, of the District Court, the cause was again heard upon the pleadings and evidence, and at the request of the plaintiff the court stated its conclusions of fact and of law separately.
    The conclusions of fact found by the court were :
    “ First. That the defendant, Charles L. Moore, was, at the time of the filing of the petition herein, and now is, in debted to said plaintiff, as stated in said petition, in the amount therein stated, upon a judgment of the Superior Court of Cincinnati, rendered at the January term, a. d. 1867, and has no property wherewith to satisfy said judgment, as is in said petition averred; that the debt for which the judgment was recovered was contracted by Moore on the 16th of December, 1865.
    “ Second. That on the 4th of October, 1865, the defendant, Charles L. Moore, bought the premises first in the petition described, for his wife, the said Lydia C. Moore, of Earran, for the sum of $13,000—one-third cash, and the balance in one and two years with interest, secured by a mortgage; that there was then an existing mortgage upon the said premises, made by Earran to a Mr. Terry, for $6,220. Subsequently, on the application of Mr. C. L. Moore, the husband of Mrs. Lydia O. Moore, the terms of the payment were changed to cash, $2,163.60, and the individual unsecured notes of Charles L. Moore, as follows: one for $1,000, at three months; one for $1,500, at four months; one for $1,500, at five months, and one for $2,000, at six months; and said C. L. Moore then promised said Earran to pay the said mortgage debt to Terry. That Eai'-' ran, by deed duly executed on the 19th of October, 1865, conveyed said premises to said Lydia C. Moore, in fee, subject to the mortgage to Terry for $6,220, which deed contained this statement: ‘ Which mortgage, Lydia C., wife of Charles L. Moore, agrees to assume and pay as part consideration of this conveyance.’ That Mrs. Moore then went into possession of said property, and is yet in possession thereof. This conveyance and the payment in cash and by notes therefor were gifts by said C. L. Moore to his wife, and so received by her; and that said C. L. Moore was then solvent.
    “ Third. That Moore paid.off the mortgage debt to Terry by paying $1,797.19 on the 2d of October, 1866, and the further sum of $3,800 on the 29th of November, 1866; these payments were then intended as gifts to his wife, and at the time of these payments said Moore was insolvent.
    “ Fourth. That on the 5th of May, 1855, Mrs. Lydia C. Moore loaned her husband $970 in cash; and on the 29th of May, 1856, a further sum of $1,067.81; and on the 29th of May, 1857, a further sum of $1,164.81, being money received by her from her father’s estate; that no part of the same, or any interest thereon, has been paid, except as hereinafter stated.
    
      “Fifth. That in the spring of 1863, the said Lydia C. Moore declining to join in the execution of a deed conveying their homestead, it was agreed between Moore and his wife, that, in consideration of her uniting with him in said deed, she should receive one-third of the purchase-money; that said conveyance was executed by her with him, the consideration being Western Union telegraph stock, and forty shares of said Western Union telegraph stock, then of the value of $10,000, were then transferred to her; that the said forty shares, and forty other shares afterward issued to her by the company, because of her ownership of said .original forty shares, and twenty shares of extension stock also issued to her; which one hundred shares were, on the 28th of December, 1864, of the value of $9,000,. and which one hundred shares were then borrowed by said Charles L. Moore of his wife, and sold by him, and he realized that sum for them; that no part of said $9,000, or any interest thereon, has been paid, except as hereinafter stated.
    “ Sixth. That to repay, in part, the indebtedness aforesaid of Moore to his wife, he bought and paid for, and caused to be conveyed to her, a tract of land from one Applegate, on the 12th of January, 1867, by which she realized $4,001.50, to be credited of that date.on said indebtedness; that for a like purpose said Moore, before the 8th of March, 1867, bought, paid for, and transferred a note of one Looker from which she realized $3,791.25, to be credited of the 8th of March, 1867, on said money indebtedness to her.
    “ Seventh. That on the 1st of February, 1867, said Moore purchased United States bonds to the value of $1,596.50, .and made a gift of them to his wife; and on the 31st of March, 1868, he purchased a note called the Dunlevy note, and gave the same to his wife, amounting to $645.80.”
    Upon the above facts the court found as conclusions of law
    
      “First. That Mrs. Moore, by the delivery of the deed of the 19th of October, 1865, took as a gift executed the equity of redemption in the property conveyed to her by that deed.
    “ Second. That Moore being insolvent when he paid off the mortgage notes to Terry, these payments can not be sustained as a mere gift to his wife; but the mortgaged property, to the extent of these payments, must be subjected to the claims of his creditors.
    “ Third. That at the time of the payment of the mortgage, Mrs. Moore was in equity a creditor of her husband, and in possession of said property by title absolute, as against her husband; her equity is superior to that of the plaintiff, and she ought not to be disturbed until full payment is made to her.
    “ Fourth. That her debt, with interest up to April 6,1874, deducting all the payments made thereon, amounted to $7,859.11; that the amount paid in discharge of the Terry mortgage, with interest up to April 6, 1874, amounts to $8,084.94, being greater than the debt due Mrs. Moore in the sum of $225.83.”
    Whereupon judgment was rendered in favor of the plaintiff for $225.83, and in default of the payment thereof by the defendant, Lydia C. Moore, in sixty days, certain •real estate described in the petition was ordered to be sold to pay the same.
    The plaintiff' excepted to the conclusions of law upon the facts found by the court, and thereupon filed his motion to set aside the findings, judgment, and order for reasons therein stated, which was overruled by the court, and the ruling excepted to by the plaintiff.
    
      Stallo $ Kittredge, for plaintiff in error:
    The claim of Mrs. Moore, instead of being entitled to a preference over the claims of other creditors, is of very-doubtful validity ; and it is very questionable whether the payments of Charles L. Moore could have been upheld, even if they had been made expressly in satisfaction of his wife’s claim for money derived from her father’s estate. Such payments would have been in the nature of voluntary settlements after marriage, in consideration of advances of the wife’s property; such settlements are not regarded with favor either at law or in equity. JReade v. Livingston, 3 Johns. Ch. 487 ; Wicks v. Clark, 8 Paige, 161; Williams v. Thompson, 13 Pick, 298; JLynn v. The Bank of Kentucky, 5 Marsh. 545.
    What would be the doctrine established by the Supreme Court of Ohio if the judgment of the court below were affirmed ? Simply this: that a debtor may give nearly all his property to his wife, down to the point of insolvency ; that thereupon, though insolvent, he may make a fraudulent gift of the rest of his property to his wife, being sure that if his fraud is discovered the court will nevertheless help him out by upholding his gifts, in spite of his express intent to the contrary, as payments of claims of the wife growing out of her advances, perhaps long since forgotten, of property long dealt with as his own.
    
      G. D. Coffin, contra .
    The plaintiff’s counsel think that the creditor who files a bill, seeking to charge the land in the possession of Mrs. Moore (who is also a creditor prior in point of time), is to be preferred. In their view, he has a right in equity to take the property from the possession of another creditor equally honest as himself, equally entitled to the protection of a court of equity, and who has lawfully obtained that possession long before any question among the creditors arose, and before the plaintiff’s debt was contracted, and pay his debt to the entire exclusion of the creditor then in possession.
    I think that I do not misrepresent their views; and I submit that tbe bare statement of their views of the equity of such a case carries its own refutation.
    There are some maxims in equity which are applicable to this case:
    “ Where the equities are otherwise equal, precedence in time will give priority of right; or, as Coke expresses it: “ Qui prior est in tempore potior est in jure.” Branch Maxims, 128; 1 Story’s Equity, chap. 3a, sec. 58a; ñlacheth v. Symmons, 15 Vesey, 354; 2 John’s Oh. 603, 608; Mansfield, in Morrison v. Parsons, 2 Taunt. 415 ; Muir v. Schenck, 3 Hill, 228 ; Bean v. Smith, 2 Mason, 273.
    “ Where there is equal equity, the condition of the possessor is the best;” or as Plouden has it: “In cequali jure melior est conditio possidentis.” Branch Maxims, 59; 1 Story Equity, chap. 3a, see. 57a ; lb., sec. 64a; Mitford P. 274; I Eonbl. Equity, bk. 1, chap. 4, sec. 25.
    Broom states this maxim, that “ where the right is equal the claim of the party in possession shall prevail.” Broom Maxims, 684.
    Where either, and certainly where both of these maxims' apply, the equities are unequal, and then the maxim, that ■“ whenever the equities are unequal, there the preference is constantly given to the superior equity,” is to be followed. 1 Story Equity, chap. 3, sec. 58a; 1 Jeremy, 285, 286.
    And the party having priority of right and whose condition is the best must certainly hold the superior equity, and prevail.
    The cases cited by the plaintiff’s counsel are cases where the reception of property by the husband in right of the wife was used as a consideration to support settlements on the wife, years afterward, when there was no valid antenuptial agreement previous to the reducing the wife’s property to his possession. They certainly have no application to this case. Moore received no property in right of his wife; he never reduced this money and stocks to his possession; we set up no settlement on his wife. He became her debtor i'n the manner set forth in the finding of the court, and she is in equity entitled to be paid; and we seek payment of a just and undisputed debt. There can be no doubt about the validity of her claims.
   Rex, J.

The first and second conclusions of law found by the District Court are not only sustained by the facts found, but are also sustained by the principles of law announced by this court, on substantially the same state of facts, in the case between the same parties, reported in 23 Ohio St. 473. The only question, therefore, made in this case, is as to the application to be made of the sum of money paid by Charles L. Moore in satisfaction of the Terry mortgage.

It is claimed by counsel for plaintiff’ that, upon the facts found, the District Court should have ordered the real estate conveyed by Thomas W. Farran to Lydia C. Moore to be subjected to the satisfaction of the plaintiff’s judgment, to the extent of the sum paid in discharge of the mortgage, on the grounds that the sum so paid having been intended as a gift to the wife, and the husband, Charles L. Moore, having, at the time of the payment, been, and now is, insolvent, the gift was a fraud upon the rights of the plaintiff, and therefore the real estate, to the extent of the payment, became subject in equity to the payment of his claim, and also because of his diligence.

The District Court found that Mrs. Moore went into the possession of the real estate in question before the debt on which the plaintiff recovered judgment against her husband was contracted, and continued in possession thereof to the time of the hearing of the case in that court; and that, at the time the debt to the plaintiff' was contracted, and at the time the mortgage to Terry was paid, she was, in equity, a creditor of her husband for moneys loaned to him at sundry times before and on the 28th of December, 3864, in the sum of $12,202.62, no part of which had been paid at the time of the payment of the Terry mortgage.

The findings of the District Court also show that the money loaned by Mrs. Moore to her husband was her absolute property, and was not intended to, and did not, become subject to bis marital rights.

In equity, therefore, her right to the payment of the debt due to her is equal to the right of the plaintiff, or of any other creditor of her husband. 2 Story’s Eq., sec. 1373.

Mrs. Moore’s equity being equal to that of the plaintiff, and being in possession of the property sought to be charged, without any actual fraud, and by title absolute as against her husband, her equity is superior to that of the plaintiff, and she can not be disturbed in her possession until full payment of her claim is made to her.

"We are therefore of opinion that the District Court did not err in its conclusions of law upon the facts found.

Leave refused.

Welch, C. J., and McIlvaine, J., concurred.

White, J.,

dissented. He was of opinion that the supposed equity of the wife, arising out of the loans to her husband, in 1855, 1856, and 1857, of money derived from her father’s estate, ought, as against the creditors of the husband, to be regarded as compensated by the gift of the Farran property in 1865; that, under the circumstances of the case, such alleged indebtedness could not, in equity, be made available against creditors. Hence the case was not one for the application of the maxim, In œquali jure melior est conditio possidentis.

Gilmore, J., also dissented on the same ground.