Court Opinion

ID: 8264082
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:58:43.993299+00
Date Added: 2024-06-11T16:43:16.958799
License: Public Domain

GOODE, J.
(after stating the facts) — The first point made against the judgment is that the court below erred in refusing to instruct that if, on account of rents and profits he had received from her land, defendant owed the garnishee when the goods were sold, more than the alleged consideration she was to pay for a two-thirds interest in the stock, and it was agreed between the garnishee and defendant that the consideration for her purchase was a credit to be entered on what the defendant owed her, then the plaintiff could not recover unless it appeared that the defendant had transferred the stock with the intention of hindering and delaying his creditors and the garnishee participated in the fraudulent purpose. What was shown in regard to this land matter was that in 1866, the garnishee inherited from her father a one-third interest in 320 acres of land. Her brother, the plaintiff, and a sister inherited the other two-thirds. When Goss married her in 1869, he went into possession of her interest, and during hisi partnership with Vandeventer in farming and stock raising, the land was used in the business. Mrs. Goss’ interest was treated as a part óf her husband’s contribution to the capital of the firm. When the partnership ceased business in 1893, and a division of assets occurred, the garnishee’s interest was sold or traded to Vandeventer and she joined in the deed. The only evidence even remotely relating to the claim Mrs. Goss now prefers against her husband for the rents and profits of the land is, that in 1893, when the firm of Goss & Vandeventer quit business and the land was divided, Goss said she “should have her part.” There was no allusion to the rents he had received, and the expression quoted can hardly be taken as referring to rents. The natural inference is that Goss meant his wife should receive her part of what was paid or given in exchange *323for the land. As the law stood at the time of their marriage, the defendant was entitled to the rents and profits of his wife’s land (not settled to her sole use) though the rents were not subject to his debts. Therefore he cannot be held to have become indebted to the garnishee from the bare fact that he collected the rents and profits of lands she owned when they were married. [Arnold v. Willis, 128 Mo. 145, 30 S. W. 517; Dyer v. Wittler, 89 Mo. 92, 14 S. W. 518.] We concede that he might have waived his marital right to the use and profits of the land in favor of his wife, but there is no evidence that he did so. In truth, there is no evidence whatever in the record that Goss owed his wife anything on account of the land matter, or on any other account; or that she understood he did. Those long past transactions appear to have been seized on as a makeshift consideration for the transfer of the merchandise to the garnishee. The conclusion is that if she promised to pay defendant $1,597.02 for a two-thirds interest in the merchandise, she owed him the whole sum when garnisheed and must answer to plaintiff as his judgment creditor, unless there is some valid ground for holding otherwise.
It is insisted that even if the transfer of the merchandise to the garnishee was wholly voluntary and without any consideration, it was valid against the exising creditors of Goss unless he was insolvent at the time the transfer was made or made it with an intent to hinder his creditors; and that as there was evidence to prove he was solvent, the issue was for the jury and the court erred in directing a verdict. No doubt, the mere fact that an individual was indebted is not, in this jurisdiction, sufficient to conclusively brand a voluntary conveyance of property as fraudulent. It is presumptively so and the burden is on the donee to establish its validity. Whether or not it will be treated as fraudulent, depends on the aggregate value of his assets as compared with what he owed. [Fehlig v. Busch, 165 Mo. 144, 65 S. W. 542; Walsh v. Ketchum, 84 Mo. 427, 430; *324Bump, Fraud. Con. (21 Ed.), pp. 285, 286.] If Ms indebtedness was slight in comparison with his property and after the conveyance he had ample resources left to pay his debts, the conveyance was not necessarily fraudulent ; and under those circumstances, whether it was so or not would depend on the intention of the donor. [Grimes v. Russell, 45 Mo. 431; Walsh v. Ketchum, 84 Mo. 427; Updegraff v. Theater, 57 Mo. App. 45.] Though a man is indebted in a small amount if he has large assets, he may mate a reasonable provision out of his substance for a wife or child, if he does so in good faith, and with no intention to hinder his creditors, and the transfer does not operate to hinder or delay them. These principles are invoked by counsel for the garnishee, and on them is rested the proposition that the court erred in refusing to instruct as requested by the garnishee, and in taking the issues from the jury. This contention consists badly with the pleadings. The garnishee was called on to answer regarding her title to the stock of goods.bought from her husband and the consideration she paid for it; and, instead of answering that her husband was unembarrassed by debts at the time and in good faith voluntarily transferred the stock to her as a gift, she answered that she bought it and paid a valuable consideration; stating the form in which the payment was made, which we have already related. In his reply, the plaintiff traversed the issue thus tendered and alleged that the transfer of the merchandise was without consideration and made to defraud the plaintiff. In view of the issues, perhaps the proposition now invoked by appellant’s counsel regarding Goss’s right to transfer the goods to her without consideration, cannot rightly be considered. But it is always preferable to dispose of cases on their merits and, as we think the proposition unsound, we will answer it. The argument for the garnishee on this branch of the case is that if Goss was solvent at the time of the transfer, and acted in good faith, the transfer was valid. Insolvency of *325the grantor will render such a conveyance voidable at the suit of existing creditors; but bare solvency, in the commercial use of that word, will not always validate it even when the motive was honorable. For the transfer to stand against the claims of.existing creditors, it must appear that when made, the grantor was in unembarrassed circumstances and possessed ample property, after the transfer, to meet his obligations. Though it may be shown by a nice calculation that his remaining assets somewhat exceeded his indebtedness, this is not enough to establish the validity of the transfer. It must be shown affirmatively that what he had left, would yield at a forced sale enough to meet his liabilities and the costs of collecting them by process. Now, solvency is generally understood to mean that a person is able to pay his debts as they mature. [Moore v. Carr, 65 Mo. App. 64.] The term is used, too, in a sense importing that one’s property is adequate to satisfy his obligations when sold under execution. Only clear solvency in the latter sense will unhold a voluntary conveyance against preexisting debts. [Potter v. McDowell, 31 Mo. 62; Eddy v. Baldwin, 32 Mo. 369; Land v. Kingsberry, 11 Mo. 402; McDonald v. Cash, 45 Mo. App. 66.] An examination of the decided cases will demonstrate that rarely, or never, has a voluntary transfer of property by a debtor been upheld against his creditors, except when the circumstances of the debtor, at the date of the conveyance, clearly established that the transaction would not endanger, hinder or delay the collection of his obligations,, but that his remaining assets were unquestionably ample to meet them. [Bump, Fraud. Con. (21 Ed.), secs. 254 to 263 inclusive. Updegraff v. Theaker; Walsh v. Ketchum and Fehlig v. Busch, supra; 14 Am. and Eng. Ency. Law (2 Ed.), p. 307 and citations. And see the'elaborate opinion in Van Wyck v. Seward, 18 Wend. 375, 391 wherein the law of the matter is gone over thoroughly on principle and authority.] In a case not dis*326tinguishable from this one, the above rules were declared by the Supreme Court. [Potter v. McDowell, supra.]
We will next consider what the evidence shows regarding the financial condition of appellant’s husband in February, 1900, when he transferred his stock of goods; and in making this inquiry we will accept as true the testimony of Harry M. Goss, which is the most favorable to the contention that the defendant was unembarrassed at the time, and greatly exceeds the other estimates of his means. That witness showed, at most, available assets amounting in round numbers, to $8,750. The merchandise given to his wife (her two-thirds of the stock) was invoiced at $1,597; and, deducting that sum, Goss had left $7,153 of miscellaneous property, largely farming implements and farm products. Plaintiff’s action for $25,000 was pending at the time, and it resulted in a judgment for over $5,000. Goss owed at least three other debts whose amounts are not stated; and it seems that suits were pending against him for one or more of them. Under these circumstances, and considering the nature of Goss’s assets, and the prices at which such property sells under execution, the conclusion is palpable that he was in embarrassed circumstances, threatened with judgments and that after the gift of merchandise to his wife, he was left without amide assets to meet his liabilities to creditors, including plaintiff. The transfer was bound to hinder and delay his creditors in collecting their debts and therefore the court did not err in holding the transfer void in law at plaintiff’s instance.
We have said nothing regarding Goss’ intention in disposing of his personalty in 1900, but it is scarcely to be doubted that it was to evade payment of his debts. The judgment is affirmed.
Blcmd, P. J., and Nortom, J., concur.