Case Name: Stark et al. v. Lamb et al.
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1906-10-10
Citations: 167 Ind. 642
Docket Number: No. 20,568
Parties: Stark et al. v. Lamb et al.
Judges: 
Reporter: Indiana Reports
Volume: 167
Pages: 642–648

Head Matter:
Stark et al. v. Lamb et al.
[No. 20,568.
Filed October 10, 1906.
Rehearing denied January 11, 1907.]
1. Fraudulent Conveyances.—Setting Aside.—Joint Debts.— Legal Remedy against Part of Debtors.—A creditor cannot resort to equity to set aside a fraudulent conveyance of one joint debtor and subject the property conveyed to the payment of’his claim, where he has an adequate legal remedy for the collection of his claim from other joint debtors, p. 645.
2. Fraudulent Conveyances.—Setting Aside.—Legal Remedy against Joint Debtor.—Special findings in a suit to set aside a fraudulent conveyance, showing that defendant fraudulently transferred his property to himself and wife; that he thereby became insolvent; that such transfer was made without consideration, and that the defendant’s joint obligor was discharged in bankruptcy from the payment of such debt, support a conclusion of law that such conveyance should be set aside, p. 645.
3. Same.—Setting Aside.—Subsequent Bankruptcy of Solvent Joint Debtor.—The insolvency of defendant’s joint debtor, subsequent to defendant’s fraudulent conveyance of his property, does not preclude the plaintiff creditor from setting aside such conveyance and subjecting defendant’s property to the payment of his debts, p. 645.
4. Same.—Evidence.—-To set aside a conveyance as fraudulent, the plaintiff must prove facts which either directly or by inference show that such conveyance was made with a fraudulent intent, p. 646.
5. Execution.—Property Liable to.—Exemptions.—Evidence.— Prima facie all property of a debtor is subject to execution; and therefore proof that the conveyance in question was voluntary and without consideration, or made with fraudulent intent, establishes a prima facie case. p. 646.
6. Fraudulent Conveyances.—Sales.—Exempt Property.—A debtor’s conveyance cannot be set aside as fraudulent, where his property is not subject to execution, being exempt by law. p. 647.
7. Same.—Setting Aside.—Exemptions.—Presumptions.—Where the proof shows that the debtor had less than the amount of property which he might claim as exempt, the presumption is that he claims such exemption, and it is the duty of the court to find that such conveyance was not fraudulent, p. 647.
8. Same. — Setting Aside. —• Exemptions. — Evidence.—General Denial.—Under the general denial to a suit to set aside a conveyance as fraudulent, evidence is admissible to show that the defendant’s property at the time of the conveyance was not subject to execution,' and therefore the conveyance was not fraudulent, p. 647.
9. Same.—Exemptions.—Special Findings.—The absence of a special finding that the alleged fraudulent conveyance covered property which was exempt by law, leaves a presumption that the court in finding that the conveyance was made with intent to defraud his creditors, found such fact in view of the law giving such creditor a right to transfer his exempt property without being subject to the imputation of fraud, p. 648.
From Elkhart Circuit Court; James S. Dodge, Judge.
Suit by Ellington C. Lamb against Henry Stark and others. From a decree against Henry Stark and wife, they appeal. Transferred from Appellate Court under §1337u Burns 1901, Acts 1901, p. 590.
Affirmed.
James L. Harman and Edward B. Zigler, for appellants.
Perry L. Turner, for appellee Lamb.

Opinion:
Montgomery, J.
Appellee Lamb brought this suit to collect a promissory note executed by Milo W. and Henry Stark, and to set aside, as fraudulent, certain conveyances of real estate. Milo Stark was adjudged a bankrupt pending the litigation, and the action dismissed as to him. Appellants answered by general denial, and, at their request, the court made a special finding of facts, in substance as follows: Milo and Henry Stark executed the note August 19, 1901, which now amounts to $223, and at the date of the note Henry owned real estate as described, and Abbie N. Stark was his wife. Henry continued to own the real estate until April 27, 1903, when he and his wife conveyed the same to David Lingman, who on the same day, without consideration, reconveyed it to Henry and his wife. On April 27, 1903, and continuously after-wards, Henry was and remained a resident householder of Elkhart county, Indiana, and had no property, other than said real estate, subject to execution. At the date of said conveyances Milo Stark owned property of the value of $2,682, and was indebted to the amount of $550, but on September 11, 1903, he was insolvent and subsequently adjudged a bankrupt and duly discharged in bankruptcy. Said conveyances- were made to protect said Abbie N. Stark in the possession and use of the whole of said real estate, and with intent to defeat and defraud the creditors of said Henry Stark. The second conclusion of law stated upon such facts is as follows: "Said conveyances, from the defendants, Henry Stark and Abhie N. Stark, to David Lingman, and from said David Lingman to the defendants, Henry Stark and Abbie N. Stark, are each fraudulent and void as against the plaintiff, and should be set aside."
It is alleged that the court erred in this conclusion of law, and argued that in the absence of a finding that Milo Stark as well as Henry was insolvent at the time the fraudulent conveyances were made this conclusion cannot be sustained. It is a familiar principle that resort to a court of equity may not be had, so long as an adequate legal remedy exists. In the application of this rule it has been held by this court that, so long as a legal remedy exists against one or more joint debtors, equity will not extend its relief and set aside a fraudulent conveyance of another of such debtors at the instance of the common creditor. Eller v. Lacy (1894), 137 Ind. 436. See, also, Geiser Mfg. Co. v. Lee (1903), 33 Ind. App. 38.
It is specifically found that Henry Stark was insolvent at the time of making the conveyances attacked, and at all times since, and that the deeds were without consideration and made with fraudulent intent. Milo Stark was solvent at the time the deeds were made, but became insolvent a few months afterwards, and was subsequently adjudged a bankrupt and discharged from his financial obligations. It is therefore plain that appellee Lamb must collect his debt from the real estate in controversy, or lose it. The circumstance that Milo Stark was solvent at the time the fraudulent conveyances were made, does not make them any the less fraudulent,
and the rule forbidding a premature resort to equity was not intended to take away a right of action and deny a salutary remedy, but merely to limit their exercise to cases of actual necessity and thereby prevent unnecessary litigation. No substantial reason is shown why appellee should not avail himself of the remedy sought in this suit, but, on the contrary, it is entirely clear that without equitable interference he would be wholly without relief.
The conclusion of law is supported by the facts found, and the judgment is affirmed.