Case ID: miss_83/html/0601-01.html
Source: Caselaw Access Project
Author: {"author": "Truly, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James M. Graham v. Martha A. Morgan.
    1. Fraudulent CONVEYANCES. Husband and wife. Suit agaAnst vendor. Notice to vendee.
    
    The fact that a husband had been sued by another creditor at the time he conveyed property to his wife, in satisfaction of a debt due her, is not alone sufficient to charge her with' notice of his intent to defraud other creditors in so doing.
    2. Same. Intent to prefer wife.
    
    A conveyance from a husband to his wife, in satisfaction of a preexisting valid indebtedness is not fraudulent as to his creditors where the value of the property conveyed does not exceed the amount of the debt, although the husband designed to prefer his wife.
    From the chancery court of Oovington ..county.
    Hon. Stone Deavours, Chancellor.
    Mrs. Morgan, appellee, was complainant in the court below; Graham, appellant, was defendant there. The facts were these:
    In 1900 Thomas B. Morgan, husband of appellee, was the owner of the lands in .controversy. He was indebted to one Nicholson, who brought an attachment suit against him in the circuit court of Covington county. The attachment issue was tried at tbe January term, 1901, on a plea in abatement, and resulted in a verdict and judgment in favor of defendant. Tbe issue on tbe merits was then continued until tbe next term of tbe court. In May, 1901, Tbomas B. Morgan conveyed all this property to Mrs. Morgan, bis wife. Afterwards, at tbe next term of tbe circuit court judgment was rendered against Morgan in favor of Nicholson in tbe case above mentioned. Execution was issued on this judgment, and levied on tbe lands involved in tbis suit, and sold by tbe sheriff to appellant, James M. Graham. In October, 1901, Mrs. Morgan filed her bill in tbis cause in tbe chancery court against Graham, alleging that she was tbe real owner of tbe lands described in her bill, and that Graham bad some sort of claim to tbe lands which was a cloud upon her title, and asked for tbe cancellation of same. Graham answered tbe bill, and made bis answer a cross bill, in which be alleged that on tbe 24th day of May, 1901, Morgan, tbe bus-band of appellee, was tbe owner of tbe lands in question, and that on that day be made a fraudulent conveyance of tbe land to bis wife, Mrs. Morgan; that on tbe said day be was indebted to Nicholson in tbe sum of $500, and was also indebted to others; and that, in order to defeat bis creditors and tbe said Nicholson, be pretended to convey tbe lands in question to bis wife, Mrs. Morgan. Erom a decree granting tbe relief sought by Mrs. Morgan, tbe complainant, and dismissing tbe cross bill, defendant, Graham, appealed to tbe supreme court.
    
      N. O. Hill, for appellant.
    Tbe record is pregnant with facts going to show tbe attempt to defeat Nicholson. Mrs. Morgan stated they, meaning her husband and herself, were afraid they would have to “scratch around and get up tbe money to pay the debt, but they wouldn’t pay unless they bad to.” She stated to two different parties that they wouldn’t pay if they could help it. Morgan asserted that it was not a just debt, and be wouldn’t pay unless be bad to do it; told Nicholson be would sell all be bad and put the money in bis pockets and leave him (Nicholson) with the “bag to bold/’ which threat the record shows was carried into effect.
    The transaction was a bald fraud, and should not be upheld by the courts.
    
      R. L. Dent, on the same side.
    The conveyance from Thomas B. Morgan to his wife, appel-lee herein, was a scheme to cheat and defraud creditors, and especially defeat the payment of the Nicholson judgment, under which the property was sold to the appellant, and it is null and-void except as to the homestead described in the answer to defendant’s cross bill. We concede that Morgan had the right to convey his homestead, the same being exempt from execution.
    The conveyance from husband and wife, especially such conveyance as this, should be looked upon by a court with an eye of scrutiny, and the husband should not be allowed to fraudulently convey his property to his wife and thereby defraud creditors. We do not contend that the relationship between these parties is of itself sufficient to establish fraud, nor is the insolvency of Morgan sufficient; but we do contend that these facts, when considered along with the suspicious circumstances proven in this case, furnish satisfactory proof of fraud. Renney v. Willias, 89 Mo., 139. The time of the transfer of the property in question, the same being just before judgment rendered, the consideration paid or alleged to have been paid and the actual value of the property at the time of the alleged transfer, the acts of the parties, and their statements relative to defeating the payment of this debt, constitute sufficient facts and circumstances to make out conclusively a very strong case of fraud in the transfer of the property in question.
    Very slight circumstances, apparently trivial in themselves, when joined with other facts, may afford irrefragable proof of fraud. Bigelow on Fraud, 4-76; Vigus v. 0’Brcmnon, 118 Ill., 334.
    
      
      McIntosh Brothers, for appellee.
    The purchaser here bought in good faith, and if the court should decide that 'Morgan transferred the property in question to avoid the payments of his debts, yet the proof shows that Mrs. Morgan bought for value and without notice of the fraud, and the decree therefore is right. Ladnier v. Ladnier, 64 Miss., 368. Morgan appropriated the means of his wife with her consent and procured deeds to the property to be made to himself instead of his wife without her consent. When he had sold a 'large part of the property his wife learned of what he had done and demanded payment, or that a deed be made to her for the remainder. No error can be predicated of this transaction. Kaufmanv. Whitney, 50 Miss., 103, and this conveyance to Mrs. ■Morgan by her husband should be tested by the same, rule as al •conveyance by him to a stranger. Virtuer v. Humphreys, 14 Smed. & M., 130; McAllister v. Honea, II Miss., 256; Goyer v. Wildberger, II Miss., 438.
   Truly, J.,

delivered the opinion of the court.

The sole question presented by this record is whether appellee participated in or was cognizant of the fraudulent intent of her husband towards his other creditors in mating the deed of the .property to her. It is probably true that but for the suit then •pending of Nicholson v. T. B. Morgan (husband of appellee), and the probability of judgment being obtained by Nicholson, the property would not have been conveyed at the time it was. .But assuming this to be true, it is not of,itself sufficient to show that appellee was a party to any fraud. Tinder uniform decisions of our court, a husband, though insolvent, has a right to prefer his wife and protect her interest by conveying his property to her, even though by so doing his other creditors are defeated of their rights, and even though the conveyance is made on account of the pendency of suits by other creditors against him; the only condition being that there must be existing between husband and wife a valid indebtedness equal to the fair value of tbe property conveyed. In Savage v. Dowd, 54 Miss., 732, it is said: “If Madry (tbe busband) was tbe debtor of bis wife to tbe full value of tbe land, it was lawful for bim to convey it to ber in payment of tbis debt, even tbougb bis object was to prefer ber to Mrs. Dowd (bis creditor), who was endeavoring to get a judgment against bim.” Upon tbis record it appears evident that there was a legal pre-existing indebtedness to appel-lee from ber busband: there is no dispute upon tbis point. At tbe time that T. B. Morgan, tbe busband, purchased tbe property be informed bis vendor that tbe purchase was made with tbe money of bis wife’s, although tbe deed was taken in Ms own name. It further appears, and is likewise undisputed, that be obtained other moneys from bis wife, tbe appellee, and used at least a large portion of it to pay off incumbrances on tbe property now involved. Appellee denied all knowledge of any fraudulent intent on tbe part of ber busband; all knowledge of any indebtedness due by bim to others; and, so far from concealing, stated on several occasions all of the facts surrounding tbe conveyance of tbe property to ber by ber busband, and gives a reasonable explanation of ber action in demanding tbe conveyance of tbe property to ber. As a question of fact, tbe chancellor decided that tbe indebtedness due appellee by ber bus-band equalled tbe full value of tbe land conveyed, and that ap-pellee was not proven to have been guilty of any fraud, and we see no reason for disturbing bis finding. Under tbe established doctrine in our state, we think tbe chancellor was right in sustaining tbe conveyance to appellee, and in ordering tbe sheriff’s deed, under execution sale, to appellant, to be cancelled as a cloud upon appellee’s title. McAllister v. Honea, 71 Miss., 256, 14 So., 264; Tuteur v. Chase, 66 Miss., 476, 6 So., 241, 4 L. R. A., 832, 13 Am. St. Rep., 577; Savage v. Dowd, supra; Kaufman v. Whitney, 50 Miss., 103; Ladnier v. Ladnier, 64 Miss., 368, 1 So., 492.

Affirmed.