Court Opinion

ID: 6593592
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:00:04.484148+00
Date Added: 2024-06-11T12:15:19.545886
License: Public Domain

GR®en, Jud&e:
The question, upon which the decision in this case must depend, is largely a question of fact. And as the conclusion, I have reached, is the reverse of that of the Circuit Court, I have deemed it proper in the statement of the case to give the facts and the evidence, which is contradictory, at considerable length. The undisputed facts of the case are, that on September 10,1878, the plaintiff recovered against the defendant, B. B. Timmons, a judgment lor $173.67 with interest thereon from September 9,1878, and costs amounting to $10.15, on which judgment execution was promptly issued and returned — “ No property found.” — Not a cent was paid on *450this judgment till after the institution of this suit. About two* and a half years thereafter on April 5,1880, A. 0. Imlay conveyed to his sister, J'oseiihine E. Timmons, wife of B. B. Tim-mons, and one of the defendants in this suit, a small building-lot in the town of St. Mary’s in Pleasants county, West Virginia, containing about one seventh of an acre, to build house upon. The consideration named in this deed was $110.00 cash. Almost immediately after this conveyance was made a dwelling-house worth about $1,000.00 was put up on the lot; and Timmons and his wife lived in it. This suit was brought not long afterwards to set aside the deed and to subject the house and lot to the payment of the aforesaid judgment, on the ground, that the deed was fraudulent and void because made to hinder, delay and defraud the creditors of Timmons, the plaintiff asserting and attempting to prove, that the lot was purchased with and the house built out of funds furnished by the said Timmons. This was denied by the defendants; and they endeavored to prove, that not a cent of B. B. Timmons’s money was used either to buy the lot or build the house. The court below so held and dismissed the plaintiff’s bill and rendered a decree against him for costs. This is the decree appealed from by the plaintiff.
Before considering this question upon the evidence I will state a few legal propositions, which will aid us in reaching a correct conclusion, as to whether or not the defendants were guilty of a fraud in obtaining the conveyance of this lot to be made to the wife and in the building of the house upon it.
First. A fraud upon creditors consists in the intention to prevent them from recovering their just debts by an act, which withdraws the property of the debtor from their reach. (McKibbin v. Martin, 64 Pa. St. 352; Ala. Ins. Co. v. Pettway, 24 Ala. 544). It is often said, that fraud must be proved and is never to be presumed. This is true, only when understood as affirming, that a contract or conduct apparently honest and lawful must be treated as such, until it is shown to be otherwise by evidence either positive or circumstantial ; but fraud may be inferred If om facts calculated to establish it; and fraud should be so inferred, when *451the facts and circumstances are such as to lead a reasonable man to the conclusion, that an attempt has been made to withdraw the property of the debtor from the reach of his creditors with the intent to prevent them from recovering their just debts; and, if prima facie such fraudulent attempt is thus established, it may be regarded as conclusively established, unless it is rebutted by facts and circumstances, which are proven. (Martin v. Rexroad, 15 W. Va. 512; Knight v. Capito, 23 W. Va. 644; Kane v. Weigly, 22 Pa. St. 179.) That this proposition may be clearly understood, I will cite some remarks of Black, O. -J., in the case last above cited. On page 183 he says:
“ It is said, fraud must be proven and is never to be presumed. This proposition can be admitted only in a qualified and limited sense. But is often urged at the bar, and sometimes assented to by judges, as if it were a fundamental maxim of the law universally true, incapable of modification and open to no exception; whereas it has scarcely extent enough to give it the dignity of a general rule, and as far as it does go it is based on a principle, which has no more application to frauds than to any other subject .of judicial in■quiry. It amounts but to this : That a contract honest and fair on its face must be treated as such, until it is shown to be otherwise by evidence of some kind positive or circumstantial. It is not true that fraud can never be presumed. Presumptions are of two kinds, legal and natural. Allegations of fraud are sometimes supported by one and sometimes by the other, and are seldom, almost never, sustained ■by that direct and plenary proof, which excludes all presumption. * * * * * When creditors are about to be cheated, it is very uncommon for the perpetrators to proclaim their purpose and call in witnesses to see it done. A resort to presumptive evidence therefore becomes absolutely necessary to protect the rights of honest men from this as from ■other invasions. Upon such evidence the highest criminal punishments are inflicted, and the most important rights of property constantly determined. Praiid in the transfer of goods or lands may be shown by the same amount of proof, which would establish any other fact in its own nature as likely to exist. In any case the number and cogency of the *452circumstances, from which guilt is to be inferred, are proportioned to the original improbability of the offence. The frequency of fraud upon creditors, the supposed difficulty of detection, the powerful motives, which impel an insolvent man to conceive it and the plausible casuistry with which it is sometimes reconciled to the consciences even of persons, whose previous lives have been without/; reproach; these are the considerations, which prevent us. from classing it among the grossly improbable violations of moral duty; and therefore we often presume it from facts, which may seem slight. Besides, when a man, who knows himself unable to pay Ills debts, disposes of his property for a just purpose, he can easily make and produce the clearest evidence of its fairness. * * * * It is no. hardship upon an honest man to require a reasonable explanation of every suspicious circumstance; and rogues-are not entitled to a veto upon the means, employed for their detection.”
These remarks seem to me to be just and clear; and they explain the true meaning and scope of this firstlegal proposition.
Second — Transactions between father and child, brother and sister, husband and wife or between others, between whom there exists a natural and strong motives to provide for a dependent at the expense of honest creditors, if such transaction is impeached as fraudulent, may be shown td be-fraudulent by less jiroof, and the party claiming the benefit of such a transaction is- held to a fuller and stricter proof of its justice and fairness, after it has been shown to be prima facie fraudulent, than would be required, if the transaction was between strangers. (Knight v. Capito, 23 W. Va. 644, 645;. Bump on Fraud. Gonv. 3d Ed. 57, 58, 59- and authorities-cited.) This proposition seems to be a necessary conclusion from the opinion of Judge Black in Kaine v. Weigly, above quoted. For, as stated by him, “when a fraud is sought tobe established in any case, the number and cogency of the circumstances, from which guilt is to be inferred, are proportioned to the original improbability of the offence;” and of course-when the transaction is between near relatives or connections, as; father and child, or husband and wife, there is a *453strong motive naturally to provide at the expense of honest creditors, where the protector is embarrassed or insolvent, and of course the improbability of a fraud on creditors for this purpose is diminished, and the evidence necessary to establish it is correspondingly diminished.
Third. — When a wife purchases land or other property, the burden is upon her to prove distinctly, that she paid therefor with-funds not. furnished by her husband. Evidence, that she purchased, amounts to nothing, unless it is accompanied with clear and full proof, that she paid for it with funds furnished by some one other than her husband. In the absence of such proof the presumption is, that her husband furnished the means of payment. (Stockdale v. Harris, 23 W. Va. 499; McMasters v. Edgerton, 22 W. Va. 673; Rose v. Brown, 11 W. Va. 122; Core v. Cunningham, 27 W. Va. 206; Herzog v. Weiler, 24 W. Va. 203.)
Fourth. — Improvements put upon real property of the wife in fraud of creditors of the husband can be followed by them on to the premises where they are put; and the realty can in favor of such creditors be charged to the extent of the value of such improvements. (Rose v. Brown, 11 W. Va. 137; Core v. Cunningham, 27 W. Va. 709).
Fifth. — A transfer of property either directly or indirectly by an insolvent husband to his wife is justly regarded with suspicion ; and unless it clearly appear to have been entirely free from wrong intent to withdraw the property from the husband’s creditors; or the presumption of fraud be overcome by satisfactory affirmative proof, it will not be sustained.
Let us now consider the evidence in connection with these well settled principles of law and determine, whether the house and lot should have been subjected to the payment of the balance due on the plaintiff’s judgment against B. B. Timmons. When this lot was conveyed to his wife, and while the house was being built, he was carrying on a grocery business in an adjoining county in partnership with another person. He owned individually no visible property. All that he was worth was his interest in the said partnership and such debts as might be due, he having been carrying on the business for a short time prior to the formation of the *454partnership. This partner owed Timmons $521.15 for which Timmons held his note given probably, at the time the partnership was formed. What other debts were due him does not appear, probably very few. He was evidently a man of small means, the execution on the plaintiff’s judgment having been returned “ no property found. ” His wife lived at her father’s in St. Mary’s, and he visited her every two or three months. Her father’s family consisted of two sons, herself and perhaps an adult unmarried daughter, who had been or perhaps was then teaching school. This family was poor, having no visible property except the house, in which they lived, and were supported by the daily labor of the father and the two sons, they being all rough carpenters. Timmons’s wife had no separate estate, and her husband being a poor man, she lived with' her father. In 1879, it was concluded to break up this arrangement and that her husband should purchase a small lot in the same village and build a house on it; and, as he was in debt, it was concluded that the deed for the lot should be made to his wife. Accordingly a part of the material for the house was purchased in 1879 of Jones & Haines. This lumber cost $104.00; and her brother, A. O. I ml ay, who was married and lived in the same village, acted as agent in making the purchase of this lumber, the money, he' says having been given to him by Timmons’s wife afterwards, or perhaps it might have been given to him as such agent before ; but it is entirely (dear from our third legal proposition above stated, that the money, with which this lumber was bought, must be regarded as furnished by her husband, neither her father nor either of her brothers nor any other person pretending to have given it to her. Some time afterwards, in April, 1880, her married brother conveyed this lot to her for $110.00 in cash, as the deed states, and as he testifies. This $110.00, another brother testifies, was given to her by himself out of money, which he had earned; and her husband testifies, that he knew nothing of this till afterwards, when he visited his wife. These statements ' are, it seems to me, clearly untrue. A. 0. Imlay testifies, “ that he supposed it was her money, but he did not ask her, and he did not know where she got the money. ” And he says the same about *455the money, she gave him ($104.00) to buy lumber with or to repay him for lumber which' he had bought. Can it be believed, that thus receiving from his sister in a short time more than $200.00, when he knew she had no separate estate and was doing nothing but was living with her father, who was a poor man and, as he says himself, had nothing to give her, he made no enquiry, as to where she got the money, unless he knew, that she received it from her husband, who was engaged in business as a partner of Shoefeldt ? Oan it be believed, that her brothers, who also lived in their father’s house and helped support the family by days’, labor, gave her this $110.00 ? He testifies, that he gave it to her to buy this lot with out of his earnings as a day-laborer; but he does not tell us, why he gave it to her, whether he owed it to her or not. All he says is u He did not know, that her husband had any right or interest in this money, which he paid to his wife. ” It seems to me incredible, that aman, who probably as a day-laborer never had $110.00 at one time, should give, as I suppose he means .to be understood, to his married sister this amount of money at one time to buy a lot, upon which to build a house, when her husband was engaged in business and was far more able to buy a lot and build a house than he was. The truth, I presume, is, that the husband, B. B. Timmons, sent him the money for his wife and he handed it over to her to buy this lot, if it be true, that she paid for it.
The third legal proposition laid down above requires, that the presumption in such a case is, that the money was furnished by her husband; and the presumption can be rebutted only by clear and full proof, that she paid for it with funds furnished by some one other than her husband. I do not deem the testimony of her brother, that he furnished her the money, as “clear and full proof.” On the contrary it seems to me very unsatisfactory proof; especially when it appears, that she is not called as a witness to prove this fact, and that it clearly contradicts her own statement in her answer, “that this lot was paid for by herself out of some money she then had, but the greater part of said sum was paid by her father and brother for her.” The depositions of her father and of the brother referred to were taken ; and *456they contradict this statement in her answer. It would seem, that, after the answer was hied, the story about this $110.00 was changed, and the pretence was set up by her brother, A. 0. Irnlay, that she paid in cash the whole of this $110.00 at one time, the money having been given to her by another brother for that purpose. The statements in reference to this money made in the answer and those made in the depositions taken'by the defence are all obviously false, and these being false, the legal presumption in the absence of clear and full proof to the contrary, that her husband furnished her this money, must be regarded as the real truth.
Of course the statement in her husband’s deposition, that he never heard of this transaction and did not know about this intended purchase, till he came home afterwards, is utterly false. Lumber to build ' a house on this lot had been bought with money furnished by him months before this deed was made to his wife. There is not even a pretence, that the $104.00, with which that lumber was bought, was furnished by any one else. Her father and brother in their depositions do not pretend, that they or any one of them ever gave her any money except the $110.00, with which it is pretended she bought the lot. They do say, that they gave her their labor in the building of the house; and that is doubtless true. But it is clearly proven, that her husband paid for a part of the labor on the house ; and as she had no money or income, and her father and brothers gave her no money, of course her husband furnished her with all the money, which she in person or through her father or brothers paid to other workmen for labor on the house.
While her lather and brothers in their depositions state, that they gave her a small part of the materials used in building the house, it is clearly proven, that the great mass of the materials was bought with money furnished by her husband. Besides the $104.00 worth of lumber bought of Jones & Haines before the building was commenced her husband bought of the Parkersburg Mill Go. lumber and other materials for the house to the amount of $262.25, and of Jenkins all of the lime, plaster, glass and sash used in building the house. What they cost does not appear, but *457.■after paying for most of the articles he still owed $34.00 for which he gave his note. His purchases of materials alone .are thus proven to have exceeded $400.00, while the money paid by him or out of his funds to laborers on the house is clearly shown to have exceeded $100.00. There was therefore certainly more'than $500.00 of B. B. Timmons’s money invested in the house alone. It is true, that in his deposition he testiñes, that his wile afterwards repaid him for tin's outlay, and that none of his estate was really used in the construction of the house ; but he says, he could not tell, where she got the money to repay him, but supposes her brothers could tell. Their depositions were taken; but they did not know where this money came from; and she, who would certainly have known, fails to testify at all. This statement of her husband’s is obviously a base falsehood. •She never repaid to him one cent of the money, he had invested in the building of this house; for she never had a cent of her own, with which to repay him. By our fourth legal proposition certainly the plaintiff in this cause had a perfect right to charge this house and lot with the payment of his judgment against B. B. Timmons to the extent of at least $500.00, the amount, which he certainly invested in the house. ' I do not doubt, that he invested more than $700.00; but, as the plaintiff’s judgment now unpaid is much less than $500.00, it is unnecessary to ascertain more accurately the amount, which he really invested in the house and lot; as the amount already ascertained is amply sufficient to pay oil the balance of the plaintiff’s judgment with interest and costs.
The next enquiry is: What was the true balance due on the plaintiff’s judgment, when the court below rendered its decree dismissing the plaintiff’s bill on June 16, 1886? Timmons in his deposition states, that he had paid on this judgment $109.70, for which he took the receipts of the plaintiff’s attorney, which he filed with his deposition. There were five such receipts, by which the payments appear to have been made between December 3,1881, and January 13,1882. It is true, these receipts in some cases do not clearly identify the debt, on which the payment was made. One of them for instance states that the payment was made *458on a judgment of Wm. Burt v. B. B. Timmons, in the County Court of Pleasants county; and another states, that the payment was made on a judgment of Burt Sons & Co. v. B. B. Timmons; but, as they are all signed by the attorney, who filed the bill for the plaintiff in this cause, and, as it is not shown, that William Burt had any other judgment against B. B. Timmons, I am opinion, that all those receipts should be allowed as credits on this judgment as of their respective dates. Timmons in his deposition states, that he paid in addition to the sums named in the said receipts $12.00 on this judgment, for which he never took a receipt. He gives no reason for not taking such receipt ; and, as. one of the receipts produced is for $12.00,1 infer, that this, is the payment, for which, he says, he took no receipt; and this inference is, I think, made almost conclusive by his statement in his answer sworn to by bim in June, 1883, that he paid the plaintiff’s attorney for W. Burt at various times the sum of $113.50, for which he took receipts. There being then in less than a year after the last payment was made no claim of any payment, for which he took no receipt, when it is considered that he has shown himself capable of testifying to gross falsehoods when tempted by his interests, it is plain, that no credit should be given him on this judgment except these five receipts. Allowing these credits as of the respective dates on the receipts and calculating the interest on the judgment as stated on its face, the balance due on it on June 16, 1886, when the decree dismissing the plaintiff’s bill was rendered, was $168.48, the payments being little more than enough to meet the costs recovered in the common-law-suit and accrued interest on the judgment.
Instead therefore of dismissing the bill the Circuit Court should in its decree have established this as the amount due on the plaintiff’s debt and should have declared it a charge upon the house and lot and should have' provided for its payment out of the same. I have much difficulty in understanding how any other conclusion could have been reached.
Judge Snyder in Core v. Cunningham, 27 W. Va. 209, says : — “ From the repeated decisions of this Court it seems to me, that suitors and counsel should have long since be*459come aware of the fact, that it requires a great deal more than the raising of a simple doubt or probability to establish the right of a wife to property, which she seeks to withhold from the creditors of an insolvent husband. (Lockhard v. Beckley, 10 W. Va. 87; Hunter v. Hunter, Id. 321; Rose v. Brown, 11 W. Va. 122; McMaster v. Edgar, 22 W. Va. 673; Stockdale v. Harris, 23 W. Va. 499; Herzog v. Weiler, 24 W. Va. 199; Maxwell v. Handshaw, Id. 405; Bank v. Wilson, 25 W. Va. 242.)”
• In the case before us this “simple doubt or probability” has not been raised. In endeavoring to ascertain, what there was in this case to raise such a doubt I have thought it possible it was raised by certain portions of the evidence, which seemed to me so entirely valueless, that in stating the case I omitted it entirely; but, as counsel for the defendant propounded questions to three -witnesses, in order to prove this omitted matter, I presume, he must have attached some importance to it, and for that reason I will now state it. To two of the workmen on the house other than members of' Mrs. Timmons’s family the question was put: — “ Was it not generally understood in the community, that her father and his sons paid for and built the property in controversy ?” ' And they answered, that they knew nothing about that. But a third workman, who seems to have been engaged only in hauling materials for building, “draying,” as he called it, in answer to the question— “ Have you not always known and been informed of the fact, that her father and brothers built that house for her ?” ' — replied : — “ That was the understanding I had; — that they were building it for her” — and to the question asked of the other two workmen he answered : — “ I was not attending to that part” — and he afterwards said he did not know, who furnished the money to build the house. All, that this evidence tends to prove, is, that Mrs. Timmons’s father and brothers imposed upon one at least of the workmen engaged on the building the impression, that they at their own expense were building the house for her; and that with all their efforts they failed to impose this impression on the other workmen. I can not believe, that this sort of evidence had any weight with the court below, though it was evi-*460clently to some extent relied on by the counsel for the defendant.
I suppose, that the real trouble in reaching correct decisions in these cases is, that the rules of law, which have been laid down, have been misapprehended, though this Court has endeavored to make them clear. Yet some seem still to think and act, as though, to establish a fraud in cases like the one before us, required evidence almost as strong as the evidence required to convict in a criminal prosecution ; and when fraud is established by direct proof or by necessary inference, they seem, to think, that the slightest evidence ought to be regarded as sufficient to explain and rebut the facts, which establish the fraud. It is hoped, that these erroneous views will be abandoned; for, if they prevail, our married woman’s, act and acts- permitting interested witnesses and parties to testify and husbands and wives to testify for each other will be utterly perverted from the purpose, for which these acts were passed; and they will become the fruitful source of fraud and perjury. These acts were not designed, and the courts should not permit dishonest debtors to use them, to defraud their honest creditors and to retain their property for their own use by withdrawing it from their creditors by fraudulent investments of it in the names of their waves. This practice is becoming too common and should be strongly discountenanced by the courts. It can not be effectually checked, so long as the false views of the evidence necessary to establish fraud in such cases and to rebut it, when prima facie established, are abandoned.
It remains only in this case for us to determine in what manner this house and lot shall be subjected to the payment of the plaintiff’s debt, whether by renting out the property or by its sale. It has been contended, that, if the rents of the property will pay the debt in ñve years or in a reasonable time, the property should not be sold. This- suit was not brought simply to enforce the plaintiff’s judgment-lien against real estate. Its real object was to set aside the conveyance of this lot to the debtor’s wife as fraudulent against the plaintiff, a creditor of the husband, and to subject the house and lot-in the hands of the fraudulent gran*461tee, the wife, to the payment of this debt of her husband’s. This could be done, though the plaintiff had not recovered a judgment on his debt. The deed, though fraudulent as to the creditors of the husband, is nevertheless binding on the grantor and on the husband of the grantee. (Murdoch v. Wells, 9 W. Va. 552; Duncan v. Custard, 24 W. Va. 730). Mrs. Josephine E. Timmons holds this house and lot as her own subject to the debts of her husband, against whose creditors this deed may be declared fraudulent. This house and lot, if sold, will be sold as hers and not as the property of her husband. It is therefore not proper in such a case either to convene the husband’s creditors or to rent out the property. The wife in this case therefore has no right to require the house and lot to be rented out to pay the plaintiff ’s debt charged upon it, though it should appear that said debt could thus be paid in less than five years or in a reasonable time. If it was apparent, that the only debt chargeable on the house and lot could be paid in a short time by renting the house, it might be within the discretion of the Court to do so. (Core v. Cunningham, 27 W. Va. 210). In the case before us it would probably take four years’ rent of the house to pay the plaintiff’s debt with the costs. He has already been delayed seven years by the fraudulent conduct of the defendants; and it would be unreasonable to subject him to further and unnecessary delay in order that the defendants might possibly derive some benefit. This house and lot should therefore be sold to pay the plaintiff’s debt and the costs in this Court and in the court below.
My conclusion therefore is, that the decree of the Circuit Court of Pleasants county rendered on the I6th day of June, 1886, should be set aside, reversed and annulled, and the appellant must recover of the appellee his costs in this Court expended; and this cause must be remanded to the Circuit Court of Pleasants county by a proper decree to be therein entered to subject this house and lot to the plaintiff’s claim of $168.48, with interest thereon from the 16th day of June, 1886, till paid and the costs of the plaintiff in this cause both in the Circuit Court and in this Court, and with instructions to enter a proper decree for the sale of said house and lot. *462if the said charge thereupon is not paid in a reasonable time to be fixed by the court below, and to proceed further in the cause according to the principles governing courts of equity.
REVERSED. REMANDED.