Case ID: iowa_94/html/0560-01.html
Source: Caselaw Access Project
Author: {"author": "Deemer, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Peninsular Stove Company v. H. C. Roark and J. Roark, Appellants.
    1 Fraudulent Conveyance: money advanced by wife without contract to refay. JR. purchased land in his own name, paying therefor with money furnished by his wife. No agreement was made at any time by which R. was to repay the money so advanced, and, the land being subsequently sold, the proceeds were invested by R. in a firm of which he was a member, but the amount was withdrawn immediately before the firm became insolvent, and was used by R. in the purchase of other land, which he soon after conveyed to his wife. Held, that such conveyance was void as to R.’s creditors.
    2 Homestead Proceeds. A husband and wife sold their homestead, intending some time to acquire a new one with the proceeds of the old; but more than a year after the sale the husband, with the wife’s consent, invested the proceeds of the sale in a firm of which he was a member, and, after plaintiff had obtained a judgment against him for the firm debt, he withdrew an amount equal to that which he had invested and purchased land, which he conveyed to his wife. Held, that the land was not exempt from execution on plaintiff’s judgment as the homestead of the .defendants, under Code, sections 2000, 2001, providing that a homestead may be changed, and exempting the new one to the extent of the value of the old.
    
      
      Appeal from Audubon District Court. — Hon. Walter I. Smith, Judge.
    Saturday, May 18, 1895.
    Creditors’ bill to set aside a conveyance of real estate from defendant H. C. Roark to bis wife, Mary J. Roark, and to subject tbe property to tbe payment of plaintiff’s judgment. From a decree for plaintiff, defendants appeal. —
    Affirmed.
    
      I. L. Staizell for appellants.
    
      Nash, Phelps & Green for appellee.
   Deemer, J.

On June 15,1891, tbe firm of Dawson & Roark, of which defendant H. C. Roark was a member, executed and delivered to plaintiff their promissory note for the sum of one hundred and fifty-one dollars and seventy-seven cents, upon which judgment was afterward rendered against the firm and the individual members thereof. Execution was issued on this judgment on October 26,1892, and returned unsatisfied. .On the twelfth day of October, 1891, one Henshaw conveyed to H. C, Roark the property in controversy, and on June 13,1892, Roark conveyed the same to his wife. It is averred that this last conveyance was without consideration, fraudulent and void as to the creditors of H. O. Roark. It appears from the testimony that prior to the year 1890 the defendants owned a homestead in the town of McCallsburg, which they sold some time during that year, and the proceeds of the sale, amounting to about four hundred dollars, were used by H. C. Roark as an investment in the firm of Dawson & Roark, which was organized early in 1891. The money was used as a part of the capital of the firm until the purchase of the property in controversy from Henshaw, when Roark drew out from the firm fifty dollars in cash and three hundred and fifty dollars in accounts, which he used in paying for or in part payment of the property. Dawson drew out an equal amount about the same time. The firm sold out in March, 1892, and was then insolvent. I£ seems the firm made a disastrous venture in the fall of 1891, which resulted in its financial ruin. The deed from Roark to his wife was without consideration paid at the time, but it is claimed by the defendants that it was the wife’s money which purchased the McCallsburg homestead, and that the conveyance in question was made in consideration of the money so furnished, pursuant to an agreement made when the McCallsburg homestead was sold. The testimony as to the exact consideration for the deed in question is somewhat conflicting. At one time defendant H. C. Roark testified that the deed was made in consideration of a claim his wife held against the firm, and at another he said that he purchased the property pursuant to an agreement had with his wife when he sold the former homestead, and that he bought the property in controversy, and turned it over to her, to satisfy a claim she had against him for the money he received of her, and placed in the business of Dawson & Roark.. The testimony tends to show that the McCallsburg property was obtained in exchange for a team belonging to Mrs. Roark, which she received from her grandmother’s estate; but the property was taken in the name of the husband, and there was no agreement made at the time by which the husband was to return or repay the money furnished. No contractual relations are claimed to exist between them until the time of the sale of the first homestead, and that there was then any other than an agreement to at some time reinvest the money in another homestead we very much doubt. The case, then, in this respect, is much like Romans v. Maddux, 77 Iowa, 203. We do not think there was any consideration for the transfer to the wife.

II. It is contended, however, that the property in suit is the homestead of the defendants, and not subject to execution. That it is so occupied and used must be conceded, but it was acquired after plaintiff’s claim was contracted. Defendants say to this, however, that it was purchased from the proceeds of the former homestead, and is therefore exempt. This presents the only question open to debate in the case.

Code, section 2000, provides that “the owner may, from time to time change the limits of the homestead, * * * or may change it entirely, but such change shall not prejudice conveyances or liens made or created previously thereto, and no such change of the entire homestead made without the concurrence of the husband or wife, shall affect his or her right or those of the children.” Section 2001: “The new homestead to the extent in value of the old is exempt from execution in all cases where the old or former homestead would have been exempt, but in no other nor in any greater degree.” It may be conceded that defendants, at the time they sold the first homestead, intended at some time to acquire a new one of about the value of the old, but, instead of doing this within a reasonable time, the defendant H. C. Eoark, with the knowledge and consent of the wife, invested the money in business, and used it for many months as a part of his investment, in the firm of which he was a member. With it goods were purchased, and credit granted on the strength thereof; While so invested, it or the property acquired was liable to execution or garnishment, and this without reference to the fact that it came from a former homestead. Whatever’ may have been the intention originally, it clearly appears that the defendants abandoned their intention to immediately purchase a homestead, and proceeded to hazard the funds, for a time at least, in a business venture. The case is quite different in its facts from Benham v. Chamberlain, 39 Iowa, 358, and Pearson v. Minturn, 18 Iowa, 36. In each of these cases there was a definite intention to purchase a new homestead with the funds arising from the old, which was never abandoned, and the court found that part of the proceeds of the first was actually used in the purchase of the second. There wras no delay in carrying out the intention, and no credit was given on the strength of the supposition that the homestead right was abandoned. In the case of State v. Geddis, 44 Iowa, 537, it is said: “If a homestead be sold, and the proceeds applied to some other use, no doubt the exemption would cease; but when the sale is made on credit, and with the intention of using the proceeds, when collected, in purchasing another homestead, and the proceeds are not put to any intervening use, they are exempt while thus in transitu, so to speak,from'theoldbomestead to- the new.” This, it seems to us, announces the correct rule, one that is calculated to effectuate the intention of the legislature, and to preserve the right to make an honest and bona fide change of homestead. Applying this test to the case a.t bar, it is clear that the property is not exempt. See, also, Dalton v. Webb, 83 Iowa, 478; Rogers v. Raisor, 60 Iowa, 355. The decree of the istrict court is affirmed.