Court Opinion

ID: 4914831
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:07:37.350138+00
Date Added: 2024-06-11T08:13:50.012478
License: Public Domain

Malone, Circuit Judge:
I. Admitting and considering the testimony of Sarah E. Raulerson to communications and transactions between her and her deceased husband, Hardee Rauleraon, is assigned as error. This testimony is insufficient to change the conclusions we have reached, and *86considering it under tbe circumstances of this case is harmless to the plaintiffs; and for this reason we deems it unnecessary to decide the question of the competency of this witness. Therefore we express no opinion as to her competency to testify to these communications and transactions.
II. Decreeing that the deed made by Reed F. Tillis- and Annie E. Tillis to Sarah E. Raulerson, dated July 26th, 1884, was made in good faith, and for a valuable-consideration, and was free from fraud, is also assigned as error. A proper determination of this assignment; will necessitate a review of the evidence relative to this-conveyance. Upon examining this evidence we discover' that Hardee Raulerson purchased the property-described in this deed from Reed F. Tillis on the 2d. of April, 1884, at the price of $160, and paid $40 thereof in cash out of copartnership moneys, and satisfied the balance of $120 by crediting the indebtedness of Reed F. Tillis to the copartnership therewith, and entered the transaction upon the copartnership books.. These books show that Reed F. Tillis was credited with, $160, the purchase price of this property, and the property was debited with $40, cash paid to Reed F. Tillis, and $120 credited to his indebtedness, making $160. Reed F. Tillis and his wife, for the consideration above-stated, and at the request of Hardee Raulerson, made-the conveyance in question to Sarah E. Raulerson. Afterwards, on October 1st, 1884, Hardee Raulerson charged himself with $160, the purchase" price of this-property, on the copartnership books, and ten days-thereafter joined with Ambrose, his copartner, in the-assignment for, the benefit of their creditors. Prior to- and during these several transactions, Raulerson &- Ambrose were indebted to these plaintiffs, and in fail*87ing circumstances. It is evident that Raulerson purchased this property with partnership funds and had the title thereto conveyed to his wife. Under these circumstances, if he had taken the title to himself, a trust would have resulted to the partnership. Perry on Trusts, 127. And taking the title in his wife can not defeat this trust. It is contended, however, that the title to this property was transferred to Mrs. Raulerson in liquidation of the individual indebtedness of her husband, Hardee Raulerson, to her. The testimony does not support this contention. This property was impressed with a resulting trust in favor of the partnership, when purchased by Raulerson with partnership funds, and became an asset of the partnership; and his transfer of it to his wife in payment of his individual indebtedness to her, without the consent of his copartner, was a fraud upon the copartner, and did not divest the title of the partnership. Cannon vs. Lindsey, 85 Ala. 198, 3 South. Rep. 676; Brewster vs. Reel, 74 Iowa, 506, 38 N. W. Rep. 381; Hartley vs. White, 94 Penn. St. 31. Therefore we are of the opinion that this property is subject to a resulting trust in favor of the copartnership of Raulerson & Ambrose and their creditors.
III. Decreeing that the deed from Hardee Raulerson to Sarah E. Raulerson, dated May 30th, 1884, was made in good faith, and was free from fraud; is also assigned as error. This is a conveyance made by the husband directly to the wife, without the intervention of a trustee, and, under the strict rule of- the common law, is void. Therefore it is necessary to ascertain whether it was made for such consideration and under such circumstances as will commend it to the favorable consideration of a courtof equity, and induce that *88court to uphold it. If made upon a good and meritorious consideration, is free from fraud, and does not interfere with existing rights, a court of equity will sustain it. Waterman vs. Higgins, 28 Fla. 660, 10 South. Rep. 97. Adverting to the testimony relative to this deed, we discover that at the time of its execution Raulerson •& Ambrose were not only indebted to the plaintiffs in the several-sums as stated in the bill, but were also in failing circumstances, if not wholly insolvent. Under these circumstances the burden was on Mrs. Raulerson to prove a consideration for the deed not materially disproportionate to the value of the land conveyed to her, and the conveyance being from her husband, a clearer and fuller measure of proof was required than if the transaction had been between strangers. Post vs. Stiger, 29 N. J. Eq. 554; Medsker vs. Bodebrake. 108 U. S. 66, 2 Sup. Ct. Rep. 351; Horton vs. Dewey, 53 Wis. 410, 10 N. W. Rep. 599; Fisher vs. Shelver, 53 Wis. 498, 10 N. W. Rep. 681; Wedgworth vs. Wedgworth, 84 Ala. 274, 4 South. Rep. 149. Mrs. Raulerson has failed to establish a valuable consideration for this deed, with that measure of proof which is required in such cases; and in the absence of such proof we must conclude that this was a voluntary conveyance by the husband to the wife, and fraudulent as to these plaintiffs. Alston vs. Rowles, 13 Fla. 117.
IV. Decreeing the deed from Hardee Raulerson and wife to P. W. W. Sparkman, dated September 24th, 1884, and the, deed from P. W. W. Sparkman to Sarah E. Raulerson, dated May 31st, 1885, were made in good faith, for a valuable consideration, and were free from fraud, is also assigned as error. Both the consideration and the bona fides of these deeds are dis*89puted. The deed from Raulerson and wife purports to convey the real property therein described to Spark-man for a consideration of $500 paid by him, and the deed from Sparkman purports to convey the same real property back to Mrs. Raulerson for a consideration of $500 paid by her. But upon adverting to the testimony, we discover that Sparkman paid Raulerson no consideration, and Mrs. .Raulerson paid Sparkman none. Indeed, no valuable consideration whatever passed from the grantees to the grantors to support these deeds, although a valuable consideration is expressed in both of them. The deeds were wholly voluntary, and were simply the means used to transfer the title to this property from Raulerson to his wife. At the time of these transactions Raulerson & Ambrose were indebted to the plaintiffs in the several sums of money as stated in the bill, and were insolvent. Under these circumstances Raulerson’s voluntary transfer of this property to his wife was fraudulent and void as to his .existing creditors, unless the property therein conveyed was exempt from the demands of such creditors. Gear vs. Schrei, 57 Iowa 666, 11 N. W. Rep. 625; Triplett vs. Graham, 58 Iowa, 135, 12 N. W. Rep. 143; Boulton & Co. vs. Hahn, 58 Iowa, 518, 12 N. W. Rep. 560; Adams vs. O’Rear, 80 Ky. 129; Wiswell vs. Jarvis, 9 Fed. Rep. 84; 8 Am. & Eng. Ency. of Law, 765, note 1. And the intervention of Sparkman to effect such transfer will not give it validity; for what can not be done directly can not be done indirectly. 8 Am. & Eng. Ency. of Law, 761. There is nothing in the pleadings to indicate that any part of the property embraced in this deed was the homestead of Hardee Raulerson and exempt from his debts, but the testimony shows that some part of it was oc*90cupied and used by bim and his family, of which he was the head, as a homestead. We are unable to ascertain from the testimony a description of the lands and tenements which were thus occupied and used. The homestead being exempt from the demands of creditors, a voluntary conveyance of it could not be fraudulent as to them; hence this conveyance is valid as to the homestead, but void as to the other property not embaced in the homestead.
Y. Allowing Alonzo B. Cushman to retain $1,140 for his services and expehses as assignee, and directing him to pay the balance in his hands, amounting to-$334.36, to the general creditors of Raulerson & Ambrose pro rata, is also assigned as error. The deed of assignment is legal on its face, and the testimony disclosed no fraud or illegality in its inception or execution. The allowance to the assignee, as compensation for his services and expenses, is shown by the testimony to be reasonable, and the direction to pay the balance in his hands to the general creditors pro rata accords with the terms of the assignment.
There are other assignments of error which we deem it unnecessary to notice, because they are embraced in those which have been considered.
The appellees conte'nd that none of these plaintiffs, except Claflin, had reduced their claims against Raulerson & Ambrose to judgments against George H. Ambrose, as the surviving partner, at the commencement of this suit, and for that reason can not obtain any relief in a court of equity. This is a suit by the creditors of a partnership against the administrator of a deceased partner to enforce the payment of a partnership debt out of his estate. No action at law will lie; hence the principle that the creditor must exhaust his *91remedies at law before lie can successfully invoke the aid of equity, does not apply to this case. Courts of equity have exclusive jurisdiction in cases of this character; and the creditor of the partnership can sue the administrator of the deceased partner in equity at his option, without first suing the surviving partner at law. Fillyau vs. Laverty, 3 Fla. 72.
The decree adjudging the deed of Tillis and wife tO' Mrs. Sarah E. Raulerson, and the deed of Hardee Raulerson to Sarah E. Raulerson, and that from Hardee Raulerson and wife to P. W. W. Sparkman, and from P. W. W. Sparkman to Sarah E. Raulerson, to be valid and free from fraud as against complainants* is hereby reversed with directions that the court ascertain, in accordance with its practice, what portion of the premises embraced in the deed from Raulerson to Sparkman was the homestead of Raulerson at the time of said conveyance; and that upon its ascertainment that the bill be dismissed as to it; and further* that a decree be entered subjecting the other property mentioned in said deeds to the demands of complainants, and in other respects the decree is affirmed.