Title: Wallace v. Wallace
Citation: 291 S.E.2d 386
Docket Number: 14738
State: west-virginia
Issuer: west-virginia Supreme Court
Date: May 14, 1982

291 S.E.2d 386 (1982) Judith Kay WALLACE v. Eugene Richard WALLACE, Jr. No. 14738. Supreme Court of Appeals of West Virginia. May 14, 1982. Sanders &amp; Austin, William H. Sanders and Derek Craig Swope, Princeton, for appellant. *387 DiTrapano, Jackson &amp; Buffa and P. Rodney Jackson, Charleston, for appellee. HARSHBARGER, Justice: On December 6, 1978, the Circuit Court of Raleigh County awarded Judith Wallace a divorce from Eugene Wallace, Jr., custody of their two young children, $500 per month for child support, and alimony descending from $198 monthly the first year, to none after the fourth year. The court fixed alimony and support money based on Wallace's salary as a computer data process manager. It did not consider other income he had received from stock given to him by his parents in a corporation owned by the parents. Wallace received two disbursements from the business totaling $78,000, used to purchase a home and to support his family. He never participated in operating his parents' business. During a reconciliation period between the first and final separations between Mr. and Mrs. Wallace, he transferred the stock back to his parents, incurring, according to his testimony, a gift tax liability of $17,000. Ms. Wallace alleged that this transfer was fraudulent and void because it was made in contemplation of impending divorce. Wallace testified about his reasons for returning the stock to his parents: His mother's testimony confirmed Wallace's intent: "Fraud" is a generic term, encompassing many different and ever-innovative forms: See also 37 C.J.S., Fraud § 1 (1943); 8B M.J., Fraud and Deceit § 2 (1981); Black's Law Dictionary 594 (5th Ed. 1979).[1] Fraud, accomplished by conveyance, is defined from Elizabethan statutes which declared in substance: See Statute Against Fraudulent Deeds, Alienations, Etc., (St. 13 Eliz. I (1570) Ch. 5), as reprinted in Am.Jur.2d Desk Book, Item No. 207 (1979); 37 C.J.S., Fraudulent Conveyances §§ 2, 7 (1943 and Supp. 1981); 9A Michie's Jurisprudence, Fraudulent and Voluntary Conveyances §§ 3, 4 (1977). W.Va.Code, 40-1-1, adopted much the same definition: So, by common law or statute, Mrs. Wallace must only prove that Wallace intended to diminish his estate, to frustrate her use thereof for calculating support money. Intent to deprive is per se fraud; and proof of such intent establishes a fraudulent conveyance. Whether intent to deprive existed is determined from the specific facts of each case. Patterson v. Patterson, W.Va., 277 S.E.2d 709, 718 (1981). In Goff v. Goff, 60 W.Va. 9, 53 S.E. 769 (1906), a fiancé deeded a large and valuable piece of land to a man friend with whom he had lived and with whom he continued to live, even after his marriage. Applying the *389 predecessor to 40-1-1, the court held that the conveyance was void, and that its alimony award was a lien on the land. This Court has continued to follow and apply Goff. See Smith v. Smith, 110 W.Va. 82, 157 S.E. 37 (1931) (relying on the common law). In Patterson, supra, a husband, after commencing divorce proceedings, conveyed property purchased from the parties' joint earnings, to his daughter by a prior marriage. Interpreting § 40-1-1, we decided that the grossly inadequate consideration paid by the daughter would compel a reasonable person to conclude that he intended to delay or hinder his wife's rights. Id., at 718.[2] A spouse certainly becomes a "creditor" protected by the statute when there is an award of support money against the other party. See United States v. Spangler, 94 F. Supp. 301 (S.D.W.Va.1950), W.Va. Code, 38-3-1, and 48-2-17, wherein an order for alimony, support or maintenance was recognized to be a lien on the paying spouse's estate when filed in the county clerk's records. And courts have recognized that a spouse has a right to protect a potential alimony award or property settlement from improper transfers before marriage, Goff v. Goff, supra, or in contemplation of divorce, Hardy v. Hardy, 228 Ark. 991, 311 S.W.2d 761, opinion modified on other grounds, 229 Ark. 116, 313 S.W.2d 387 (1958). See generally 27B C.J.S., Divorce § 273 (1959 and Supp. 1980); 24 Am.Jur.2d, Divorce and Separation § 727 (1966 and Supp. 1981). Some courts have decided that a spouse qualifies not as a creditor, but as one of the "other persons" mentioned in the statute. See Leonardo v. Leonardo, 251 F.2d 22 (D.C.Cir.1958); Higgins v. Higgins, 219 Ill. 146, 76 N.E. 86 (1905); Crowder v. Crowder, 125 Va. 80, 99 S.E. 746 (1919). However one might label her status, she is one of those protected from acts before, during or after marriage intended to deprive her of part of her husband's estate upon which to base her claim for support. We believe this evidence proved that Wallace intended to diminish his wife's alimony. Patterson, supra; Stauffer v. Kennedy, 47 W.Va. 714, 35 S.E. 892 (1900). Therefore, we reverse and remand for reconsideration of the amount of alimony she should receive. Reversed and remanded. [1] See generally Annot., Gift or other voluntary transfer by husband as fraud on wife, 49 A.L. R.2d 521, 556 (1956); Annot., Wife in respect of her right to maintenance or alimony as within protection of statute or rule avoiding conveyances or transfers in fraud of creditors or persons to whom maker is under legal liability, 79 A.L.R. 421 (1932); Annot., Gift by Husband as Fraud on Wife, 64 A.L.R. 496 (1929); 24 Am. Jur.2d, Divorce and Separation § 727 (1966); 27B C.J.S., Divorce § 273 (1959 and Supp. 1980). But see Oles Envelope Corporation v. Oles, 193 Md. 79, 88, 65 A.2d 899, 903 (1949), where the Maryland Court of Appeals wrote that: "A husband has the right to make a transfer of his property, either with or without consideration, even though he strips himself of all means of supporting his wife, and leaves her without the means of subsistence, provided that he does so in good faith and without intention of defrauding her of her just claims upon him and his estate." [2] Other states also rely on an intent test under the common law to determine the legality of such conveyances. See e.g., Pappas v. Pappas, 164 Conn. 242, 320 A.2d 809 (1973); Hofmann v. Hofmann, 99 Ill.App.3d 526, 54 Ill.Dec. 712, 425 N.E.2d 577 (1981); McDaniel v. McDaniel, 245 Ind. 551, 201 N.E.2d 215 (1964); Grove v. Frame, 285 Md. 691, 402 A.2d 892 (1979); Colburn v. Colburn, 15 Md.App. 503, 292 A.2d 121 (1972).