Court Opinion

ID: 6965525
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:53:13.108748+00
Date Added: 2024-06-11T16:08:35.683331
License: Public Domain

Mr. Justice Craig delivered the opinion of the Court: The question presented by this record is, whether the conveyance to Ellen E. Dorsett, of lot 2 and the west half of lot 3, which are more particularly described in the bill, was fraudulent as against the two creditors who obtained judgment on their respective claims against Daniel H. Dorsett. The law is well settled that a voluntary conveyance of property by a husband to his wife, where the husband is insolvent or indebted beyond his ability to pay, will be regarded as fraudulent as against existing creditors. (Moritz v. Hoffman, 35 Ill. 553; Patterson v. McKinney, 97 id. 41; Marmon v. Harwood, 124 id. 106.) So, also, a voluntary conveyance made by the husband to the wife, if made with a view of becoming indebted and with a fraudulent intent, may be impeached by subsequent creditors. On the other hand, a conveyance from a husband to his wife when the husband is solvent, and the gift is a reasonable provision according to the state and condition in life of the husband, will be sustained. In Bridgford v. Riddell, 55 Ill. 261, Yazel v. Palmer, 81 id. 82, and Faloon v. McIntyre, 118 id. 292, the rule is declared that a voluntary conveyance can only he attacked by creditors in existence at the time the conveyance was made,—that subsequent creditors can not inquire into the validity of the transaction. The same doctrine is recognized in Jackson v. Miner, 101 Ill. 550. The two deeds which the complainants seek to impeach were executed, one on August 3, 1885, and the other on the day following, and the principal question of fact before the circuit court was, whether Daniel H. Dorsett was at that time insolvent, or so heavily involved that he was not able to pay his existing liabilities. Upon this question much evidence was introduced by the respective parties, and the testimony is somewhat contradictory. Several witnesses called on behalf of the complainants gave it as their opinion that Dorsett was, at the time the deeds were executed, insolvent; but the facts before the court, in our judgment, when properly'considered, establish the contrary. We shall not refer to all the evidence in detail, as that is not necessary; but we shall content ourselves with alluding to a few leading facts in the case, which, in our opinion, fully sustain the decree of the circuit court and the judgment of the Appellate Court affirming the decree. The property involved cost in the neighborhood of $12,000. About the same time this purchase was made, Dorsett puiv chased, in his own name, property at Oak Park which cost about the same amount. Prior to the purchase, Ellen E.Dorsett bad advanced to her husb.and, on different occasions, of her own money, which she had received from her father’s estate, from $4000 to $5000. She also paid an incumbrance on the property of $960. From the fall of 1883 to the fall of 1886 Dorsett was a stockholder and principal member in the Chicago Pipe and Paving Company, and in the spring of 1885 Dorsett entered into a contract with the Chicago Sectional Electric Underground Company and Elisha Gray for the construction of a system of underground conduits in Chicago. For the purpose of completing this contract, Dorsett had arranged with the Pipe and Paving Company for the use of its factory, upon certain agreed terms. J. E. Burdock had an interest in this contract, with Dorsett. The contract was completed about the first day of September, and the profits realized amounted to over $60,000, the entire amount of which, except some $9000, belonged to Dorsett. During the time the work was being done under this contract, Dorsett was compelled to borrow money, and was somewhat involved until the contract was completed, but after the completion of the contract he had ample means to pay all liabilities, and had a surplus to invest in the Oak Park property of $30,000. Burdock, a witness-called for complainants, testified that upon the completion of this contract, September 1, 1885, he and Dorsett, the two parties composing the firm of Dorsett & Co., were solvent, and could then pay their debts at any time. In 1883, Dorsett commenced doing business with the Commercial National Bank in Chicago, and continued to do business with the bank for several years. Henry F. Eames was-president of the bank, and in his testimony he now thinks that Dorsett was then insolvent. But in 1885 the Commercial National Bank loaned Dorsett $8000 or $10,000 on his own paper. Eames knew of no suits being brought against him from 1885 to 1887, or judgments rendered against him. He also testified that all indebtedness to the bank was taken up in 1887, and in 1886 he gave Dorsett the following letter of endorsement: “Chicago, April 8, 1886. “To whom it may concern—I have known Mr. D, H. Dorsett for many years. He has been a pleasant customer of this bank also for several years. Our business relations have been entirely satisfactory. I believe Mr. Dorsett is entirely responsible for any agreement he may make. I consider him a careful and discreet man, and I believe that he has been quite, prosperous, and is making money in his present business. H. F. Eames, Pres.”' Frank A. Hecht, another of the complainants, on May 26',, 1886, as a member of the firm of Chas. Kaestner & Co., wrote '■the following to a New York house concerning the standing of JDorsett & Go.: “In reply to your favor of the 24th, say we have been building machinery for Dor sett & Co. during past three years, given them credit from $1000 to $8000, and never had any difficulty with them, and our banker, to whom we discounted their paper, said it was always paid before due. Consider them good and shrewd business men, and not likely to undertake anything they can not swing. Our contracts will amount to $6000, for which we expect to carry them four or . five months, or until such time when their new factory begins to turn out conduits. We know there is a large profit in their business, and do not hesitate. to give them credit for any amount they desire. While we do not care to guarantee their ¡account with you, we think it will be a good one. Dorsett’s backing here is of the very best, as near as we can learn, consisting of one of our largest bankers. Have- never asked for a statement, and can give no idea, but consider them good for all they want in our line. Treat this as confidential.” Dor sett testified that in 1885 no creditors were pressing Mm for payment; that he “was solvent three or four times .over,” but he had to borrow money for his New York enterprise, but had something to show for it. He further testified that on the 13th of May, 1885, his account with the Gommer,-cial National Bank showed a balance in his favor of $3880.77, and his bank book, put in evidence, showed that during July, August and September, 1885, there was deposited to his credit $75,859.45. He testified, also, that between June and September, 1885, he deposited at Christoph’s bank, on his private •account, about $50,000, and this is not contradicted by any other evidence we find in the record. During the summer and fall of 1885 Dor sett paid out for the Oak Park property over $30,000. One-half of the property was placed in the name of his wife, and the other half in his own name. The property purchased in his own name, worth from $12,000 to $15,000, stood of record in his name, clear of incumbrance, from 1885 to 1887,—a period of two years. It might happen that an insolvent person would hold for two years unincumbered property of the value of $12,000 in his own name, within a short distance of the center of the city of Chicago, and no creditor attempt to reach the property. But occurrences of that kind, it must be conceded, are scarce. It also appears from the record that in 1887 Dorsett and these complainants organized a new company, and in the organization and distribution of stock the entire indebtedness of Dorsett was liquidated. It is clear from the record that Daniel H. Dorsett was ss speculator. He was largely engaged in contracts for putting, in conduits and sewers in New York, Brooklyn, Minneapolis, Detroit, Chicago, and other cities. His business required the use of large sums of money to enable him to carry out his contracts. But while he was a large borrower, the testimony all shows that he had excellent credit, and furnished men of fine financial standing as endorsers. Moreover, in 1885, 1886 and 1887 he owned property, and by resorting to the courts no reason is perceived why a debt could not, at any time, have been collected from him. John Syme, a witness for appellee, who was book-keeper for the National Subway Company, and knew Dorsett’s financial standing, testified; “He always had financial resources, as far as I know, and I think he was during those years (1884 to 1889) perfectly solvent.” There is other testimony of a like character in the record, but it will not be necessary to refer to it. The circuit court and the Appellate Court have both found' that the evidence is insufficient to show that Dorsett was, at the time the deeds were executed, insolvent, and we are not' inclined, after a full consideration of all the evidence, to hold that those courts have so far misjudged the evidence as to authorize a reversal of the judgment. The judgment will therefore be affirmed. Judgment affirmed.