Court Opinion

ID: 6579585
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:37:11.926827+00
Date Added: 2024-06-11T15:57:13.691378
License: Public Domain

FosteR, J.
Shall the title of the farm purchased by the defendant, Stephen A. Cooke, on the l-±th of April, 1870, be allowed to remain in his wife, Lydia A. Cooke, the other defendant, to whom it was then conveyed, or shall it be transferred to the plaintiff, trustee in insolvency, to the end that it may be made available- in payment of the debts of said Stephen A. Cooke ? The Superior Court seeks the advice of this court in answering this question.
*571The plaintiff insists that as between husband and wife there was no sufficient consideration to uphold this conveyance, and that it cannot be supported on that ground.
The defendants were married in 1838, and resided in the state of Michigan, subsequently, for about eight years. During that, time Mr. .Cooke received and used in his business money belonging to his wife, amounting to about $250. Fro'm Michigan they removed to Rhode Island, and while residing there, about the year 1847, he received of her money the further sum of about $300, and afterwards about $200 more. These sums make up the whole consideration, so far as there was a valuable one, moving from the wife to the husband, to support this conveyance. For a long time prior to the purchase of the property in question, Mr. Cooke contemplated and intended that the money so received by him should, at some time, be restored, but no note or other obligation was given for the money, and no account or memorandum of it was made by either party.
The laws of this state, and probably of most or all of the states, recognize the separate property of married women, and protect that property from the husband’s creditors. It does not appear to us that these several sums of money were regarded by the parties at the time as the sole and separate estate of the wife, in such sense that when received by the-husband the relation of debtor and creditor was created between them. We do not think that this deed to the wife can be sustained on the ground of a valuable consideration which had previously thus passed from her to her husband. We reach this result without taking’ into account the great inadequacy of the consideration, such as it was, to the value of ■ the estate conveyed.
Can the title of Mrs. Cooke to this property be vindicated, regarding it as a voluntary conveyance to her from her husband?
What was his pecuniary condition at the time of the conveyance ? He was in business as a boot and shoe dealer, and considering his resources, was largely in debt. He had real estate worth, above the incumbrances, $3,850, and his *572bills receivable, fixtures, and stock in trade, per inventory, amounted to about the sum of $9,850. His debts were $7,775.
This was certainly not a very encouraging show to warrant a man in making, or procuring to be made, a voluntary conveyance to his wife of property, worth from three to four thousand dollars, to secure it to her. True, his assets, on paper, exceeded his liabilities by that sum and more. But while debts obstinately refuse, until paid, to diminish a single unit in the aggregate; in fact, while they swell in amount, day by day, in the column of interest, it is universal experience that assets, especially when consisting of remnants of stocks of merchandise, diminish each day in value; oftentimes in a rapidly increasing ratio. On the 5th of September, 1871, less than seventeen months from the time of this conveyance, Mr. Cooke makes an assignment under our insolvent law. His debts were then $11,479.98, and his assets but $8,500.
But it is said that the debts which existed at the time that this conveyance was made, have since, with one exception, been paid; and that a voluntary conveyance can be impeached only by those who were creditors at the time ; not by subsequent creditors.
This principle clearly has no application where there has been a continued, unbroken indebtedness. The debts are ow¿d, though they maybe due to new creditors. It is a most unsubstantial mode of paying a debt, to contract another of equal amount. It is 'the merest fallacy to call such an act getting out of debt. From the time of this conveyance Mr. Cooke continued to bo in debt, and at the time of this assignment that indebtedness had largely increased. His means of payment had even more largely diminished. That diminution, we think, may be largely due to the difference between his stock at inventory prices, and the cash proceeds of actual sales.
The conveyance of this estate to Mrs. Cooke cannot be sustained against the claims of creditors. Actual fraud is not imputed to Mr. Cooke in the finding; of course we impute none. It is the established policy of our law to hold a man’s *573property subject to the payment of his just debts, and to regard every conveyance, prejudicial to creditors, not founded on adequate consideration, as fraudulent, no matter what ties of blood or affection may have prompted the conveyance. We recognize the natural and moral obligation to provide for a wife and children ; but this obligation must not be discharged at the expense of one, to say the least, certainly as high ; that of paying debts. A remark of the Master of the Rolls, in the case of Taylor v. Jones, 2 Atk., 603, is worthy of remem brance : “ Though I have always a great compassion for wife and children, yet, on the other side, it is possible that if creditors should not have their debts, their wives and children may be reduced to want.”
We advise the Superior Court to pass a decree in conformity with these views, and if it be necessary for the plaintiff to amend his bill, in order to conform to the finding, we advise the allowance of such an amendment.
In this’ opinion the other judges concurred; except Carpenter, J., who did not sit.