Court Opinion

ID: 6549706
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:23:03.886173+00
Date Added: 2024-06-11T15:56:04.531736
License: Public Domain

Hart, J., (dissenting). The principles of law in regard to fraud in voluntary conveyances is well stated by Mr. Justice Riddick, in the case of May v. State National Bank, 59 Ark., at page 624: “While it is now settled by the repeated decisions of this court that actual fraud must be shown to avoid a voluntary conveyance in favor of a subsequent creditor, yet by this is meant only that, as to the subsequent creditor, an intention to defraud must be proved, while, as to the existing creditor under the same circumstances, it may be presumed, even though the transaction be entirely honest. ’ ’ The court further said that this intention to defraud may be shown by all the circumstances surrounding the transaction, as any other fact may be proved. The record in this case is very large, and it would unduly extend either a dissenting opinion or the majority opinion of the court to recite in detail all the facts proved in evidence. At best, we can only summarize the facts as they appear to us. It is true that Williams became liable on Houpt’s bond, as sheriff and collector, in 1901, to the possible amount of $7,700; but he was released from any liability thereon by act of the Legislature approved March ■ 29, 1901. He conveyed the property involved in the present controversy to his wife in 1901 and 1902. At that time, Williams testifies that he had more than enough property left with which to pay his debts after conveying the lots in question to his wife. At the time he gave his testimony, he said that he did not owe five cents then which he owed when the conveyances were made. Buchanan ran against him for sheriff in 1906, and, of course, it could not be known that there would be a contest as to the result of the election until after the result had been declared. It does not appear/that during the years intervening between the time that Williams made the conveyances to his wife and the date at which Buchanan began the contest against Williams for the office of sheriff that Williams entered upon any business hazardous in itself or likely to result in his insolvency. In other words, to my mind the record does not disclose that Williams made the conveyances to his wife with the view to his being indebted at a future time. The fire occurred February 25, 1905. The undisputed evidence shows that the house was rebuilt on block 97 r,ight after the fire in 1905. Williams superintended the erection of the buildings on this lot and on the other lots previously conveyed to his wife; but this he had a right to do under the authority of Martin v. Banks, 89 Ark. 77. An architect made an estimate of the probable cost of the erection of the building on block 97 and .placed it at $22,000. Williams placed the cost at from $15,000 to $20,000, but, after reflection, fixed it at about $17,000; and this we consider a reasonable amount, taking into consideration his experience in the erection of buildings and the fact that he gave his own services! in the erection of it. Early in 1905, after the fire, he also erected a cottage on block 46, which they used temporarily as a home, and which cost $1,300. The record shows that the house on the lots in block 59 was built in 1905, after the 10th day of August, and cost $13,-500. The home was rebuilt on lot 46 early in 1906 at a cost of $10,000, and $2,000 was expended for furniture. The record also shows that Mrs. Williams obtained $17,-200 from the insurance companies in 1905, after the fire. She deposited a little over $12,000 additional in the bank, $10,000 of which, according to the contention of Buchanan, was borrowed from the Security Bank. Mrs. Williams also got $4,100 from the sale of some property on Benton. Street in Hot Springs. She got $1,500 from the wholesale feed business and $1,000 from a race track concession. This amounted, in round numbers, to about $36,000. In addition to this, Williams says that she got about $5,000 rent from the buildings which were rebuilt after the fire; but this statement is contested by Buchanan. It.is evident, however, that she obtained a considerable amount of money from this source, for it is conceded that the building on block 97 was erected shortly after the fire in 1905, and it is shown that this was a very valuable building for business purposes, and that it was rented as soon as it was erected. This testimony shows that Mrs. Williams had ample means with which to erect the buildings on blocks 97 and 59, and that her money was used for that purpose. In the case of Ferguson v. Little Rock Trust Co., 99 Ark. 45, the court held: “Fraud is never presumed, but must be proved, and this may be done by inference from circumstantial evidence, but no such inference can arise from doing an act warranted by law. “An insolvent debtor may exchange lots which are subject to the claims of its creditors, but upon which they have no liens, for a homestead which is not subject to their claims.” Williams had the right to use his own means in rebuilding the home on lot 46. This property was their homestead and was used as such before and after the fire, which occurred, as above stated, in February, 1905. Pullen v. Simpson, 74 Ark. 592. Moreover, this building was erected in 1906, before the contest for sheriff between Williams and Buchanan had been begun, and Williams could not even anticipate at that time that the result of the election would be contested. It certainly could not be said, in any event, that a lien should be declared upon the property of his wife for the $2,000 which he expended for furniture in their home. This was personal property and never became a part of the realty. McCulloch, C. J., concurs.