13 Fla. 117 | Fla. | 1869
delivered the following opinion:
The property in dispute hei’e is six hundred acres of land hi Leon county and certain town lots in the City of Tallahassee. The conveyances to this property are in the name of the wife. Appellee, a creditor of the husband, claims 'that the consideration for the purchase of this property was the money of the husband; that her testator was a creditor of the husband at the time of the purchase or when the property was paid for by him;' and that in either event, 'under the circumstances of the case, it should be declared assets in the, hands of the husband’s administrator, to be applied to the payment of his debts. The legal title to this
The first question therefore presented for our consideration is one of fact. Did the purchase money for this property proceed from the husband ? Was it his ? After a most careful consideration of the evidence'in the record, it is-orár conclusion that nothing as to this point is established except-that the husband paid the money for all of this property, alleging at the time that he paid the money, that it ivas Ms wife’s, and that he made the purchase as the agent of Ms wife. The argument of the administrator of the wife and the creditor of the wife is, that it is established by the evidence that at the time of these payments she had separate property in the custody and control of the husband, which was more than sufficient to pay the purchase money, and that when this is the case, the declarations of the husband-made at the time of the purchase to the effect that he pm-chased with her funds, together with the fact that the deed is in her name, should make a prima facie case in favor of those who claim through her. It will be unnecessary to stated
It is in proof that the wife carried on a millinery business •la.iier own name in 1844 or ’45, and perhaps in the years $846 and ’41. This business the witnesses think was profitable. There is nothing in the record which connects the profits of this business with the purchase money. The pur'eliase was. made ten years after this business ceased, and only a part of the price was paid in cash. The amount of hílese earnings is not shown, nor does it appear that any of hílese moneys ever reached the hands of the husband. Our conclusion is that the evidence fails entirely to connect these fearnings with the purchase money of this property. No question of law arises therefore in reference to them. It is unnecessary to determine whether the earnings of the wife under these circumstances remained her’s, or whether they became her husband’s. The only other source from which ii'is claimed that the wife derived a separate property was through a gift of personal property by Lowell Holbrook in 1841 or 1842. At this time the common law prevailed in this State. At common law the property of the wife was divided into two general classes : her general property, and .lier separate estate. The great difficulty in this matter is hot as to the rules of law applicable to each class—they are settled and defined. The difficulty is in determining t,b> which cla|SS any particular piece of property may- belong. Iphe .goods and personal chattels of the wife, which were finally beneficially possessed by her in her own right, at the time of her marriage, and such other goods and personal chattels as came to her during her coverture, belong to the ■$kst class, and these at common law vested absolutely in the 'husband. The separate property of the wife is that of which ehe has the exclusive control, independent of her. husband, and the proceeds of which she may dispose of as she pleases. ‘A gift of personal property during coverture to the wife is Resumed, in the absence of testimony to the contrary, to be
The witness, Berry, testifies that he knows that the slaves were bought by Mr. Holbrook and given to Mrs. Berry. The witness, Elagg, testifies that he knew the slaves were bought in the manner stated, and that Mr. Holbrook presented them to Mrs. Berry “ as her own separate property.” These answers are in response to this interrogatory: “Do you or not know that Mrs. Berry had a separate estate of her own in certain property, and if so,- of what did it consist ?” Upon the cross-examination these witnesses are asked': “How do you know these slaves were .the separate estate?” The answer of one of the witnesses is: “I know that the slaves were bought by Mr. Holbrook and given to Mrs. Berryand the answer of the other is: “I know that Holbrook did not buy them to hold them, but only for the purpose of presenting them to Mrs. Berry. I know that the slaves were given to her, and supposed they remained her own separate property, as I never heard that she conveyed them to her husband or to any one else.”
The direct examination seems to refer the question of law as to whether this was the general or separate estate of the wife to the witnesses, and their answer, that it was given as separate estate, is nothing more than an opinion of the witnesses upon a question of law, the witness at the same time saying nothing by which it is made to appear that the gift was accompanied by any instrument or unequivocal decía
"We now reach the principal question in the case: Is this a voluntary post-nuptial settlement which can be sustained against the claim of the appellee, or is it a settlement made under such circumstances as requires a Court of Equity to set it aside, and declare the property subject to the claims of the creditor?
Appellee claims that her testator was a creditor at the time of the payments made by the husband for this property. It is unnecessary to state the rule applicable to such a case, until we determine whether she was a creditor. Had this been a conveyance, would it have been void under the statute ? The language of the statute as to fraudulent conveyances is, that such deeds, made with the intent to hinder^ delay or defraud “ creditors or others of their just and lawful actions, suits, debts, accounts, damages, demands, penalties or forfeitures, shall be from henceforth as against the persons or body politic or corporate, his, her or their heirs, successors, executors, administrators and assigns, and every of them so intended to be delayed, &c., deemed, held, adjudged, and taken to be utterly void, frustrate, and of none effect.” Lord Mansfield has said of this statute, that it could not receive “ too liberal a construction or be too much extended in suppression of fraud,” (2 Cowp., 432,) and the courts both in England and the United States have given a most liberal construction to the term “ creditors ” in the statute. The relation of creditor and debtor, within the meaning of this statute, has been assigned to cases in which there was nothing more than a contingent liability arising from express contract, and to cases where, at the time of the
The lots in Tallahassee were purchased in December, 1853. The bill alleges that the payments were made after the death of Rowles, which happened in the year 1855. The answers of the administrator of the wife and the administrator of the husband, (parties not having any personal knowledge of the matters alleged,) simply deny all the allegations of the bill. The proof is first a mortgage of the lots
As to the six hundred acres of land the proof is thus: There is a mortgage to E. Houstoun, adm’r, executed by the husband and wife in April, 1856, to secure a promissory note of that date, given by the husband, the wife, and J. H. Alston, for the sum of $2,008, payable January 1, 1857.
The witness, Houstoun, from whom this land was purchased, testifies, that a part of the purchase money was paid in cash, the balance in sundry payments, and that probably part of the amount was taken out in goods. We know nothing of the amount paid for this land beyond what is stated, nor can we ascertain with any certainty the date of payment. The land was paid for, however, and in the absence of testimony, the presumption is that the note was paid upon the first of January, 1857, when it became due. Having fixed the date at which the last payment was made, and stated all the evidence in reference to each purchase, it remains to determine whether Kowles or his executrix is shown by the testimony to occupy at this date the position'
The right to have an account upon dissolution is a common right. It belongs to the surviving partner, as well as the representative of the deceased partner. If this simple right, independent of the state of the account or the question of indebtedness, is something which makes a prima facie case of fraud at common law or under the statute, then neither party could make a purchase of property for a wife or child, or a voluntary conveyance; either of the parties may be a defendant to a bill for an account. Each of them has this equity; but upon which the liability rests, in order to make a'voluntary settlement prima facie fraudulent under the statute, depends upon the state of the account, the question of actual indebtedness, and not upon the mere duty to account. The mere duty to account, independent of the question of indebtedness, cannot give a motive to defeat the claims of creditors. It is the indebtedness or Liability, contingent or fixed, which, in contemplation of law, is the basis of the presumption of fraud. If a partner is liable, whether it be to a joint creditor or to his copartner, his liability is a fixed not a contingent liability, like that of a guarantor or endorser of a note, which last is a liability, whether the contract is performed by the maker of the note or not. Partnership is a simple confidential relation like
There is no analogy between this case and the cases of contingent liability before alluded to, where the grantor is a covenantor, a co-obligor, a co-surety, an indorser, or guarantor. It would be carrying the doctrine to an unreasonable extent to hold, that proof of an admitted indebtedness by the surviving partner in 1861, established the existence of that debt in 1853, ’54, ’55 or ’57, because of the fact that he had the custody of the goods as surviving partner from 1855 to 1861, and was a member of the firm from 1850 to 1855. An ordinary contract of copartnership is not one in which money is secured to be paid by one partner to another. The action is not brought upon this contract. That which creates the indebtedness is the act of drawing more than his share, and this is the date which should be established with reasonable certainty. In the contract of partnership, there is a mutual pledge of the skill and capital of the parties to carry on some business in which there is to be a community of interest, a division of the nett profits. If a liability accrues, it cannot be referred to the relation of copartners as the direct proximate and fundamental cause .in the degree, and to the extent that the bond is the foundation of the liability in case of an obligor, or a note in the ease of a co-surety, indorser or guarantor. (Roberts on Fraud. Con., 459, 461.) So in case of tort, the proof must
My conclusion in reference to this matter is, that the plaintiff has failed to show that her testator was a creditor of R. H. Perry in 1853, ’54, ’55 or-’56 or ’57, or that such circumstances are established as would create a presumption of fraud in the payment made for this property at that time, or would' justify a Court of Equity in following and appropriating the funds. The'position of the plaintiff is that of a subsequent creditor. A subsequent creditor in case of a purchase, it has been held, has not such equities as a subsequent creditor in case of a conveyance, (1 Dana, 547); but if in this case we should grant an equal equity to him, it would not, in my judgment, justify the decree.
The doctrine of the Supreme Court of the United States, as announced in the leading case of Sexton vs. Wheaton, (8 Wheat., 229), and as understood by Judge Story, is, that a voluntary conveyance made by a person not indebted at the time, in favor of his wife, cannot be impeached by subsequent creditors upon the mere ground of its being voluntary. It must be shown to be fraudulent in fact, or to be made with a view to future debts. There is nothing in this case to show that the settlement was made with a view to future debts. There is no actual fraud, no want of hona fides established. The evidence shows that in 1844 or ’45, Berry took the benefit of the bankrupt act. That relieved him from debts then existing. Beyond the debts incurred for this property, and'subsequently paid, the evidence fails to establish the existence of a single debt at the date of the deeds or the payments for this property, or at any subsequent time, except the debt of Rowles, and the business of the copartnership is admitted to have been profitable by the bill.
I agree with the ' conclusion of the court, that upon the hearing in the Circuit Court the injunction should have been dissolved and the bill dismissed.
delivered the following opinion:
While there is no difference among the members of the •court as to the proper judgment to be given in this case, there is one position taken in the leading opinion in which I do not concur. That position is that the plaintiff, the -executrix of John J. Eowles, did not stand in the attitude •of a creditor of Berry, the surviving partner, upon the death «of Eowles and the assumption by Berry of control of the partnership assets, in view of the duty and liability to pay the partnership debts, and to render to the estate of Eowles what it was entitled to upon final settlement, within the meaning of the statute relating to gifts or conveyances
made or executed, contrived or devised, of fraud, covin, ■•■collusion or guile, to the end, purpose or intent to delay, hinder or defraud creditors or others of their just and lawful actions,” &e. And while it is conceded that the statute ¡referred to does not control in the case at bar, and that the •case must be governed by the principles of the -common law, •the question suggested may be elucidated by reference to -adjudications upon the statute.
-In my opinion, the estate of Eowles, from the date of his «death, when Berry took possession of all the property and assets of the firm, and assumed and undertook to pay' the partnership debts, and to account to and pay over to the representatives of Eowles whatever the interest of the estate •might be in such effects whenever it should be ascertained, •occupied the position of a creditor of Berry, and was one of ■those whom the statute in question was intended to protect against such gifts, conveyances or settlements as might have •been made or contrived by the surviving partner, to the hindrance and damage of the representatives of the deceased partner, and that a voluntary conveyance or settlement by Berry upon his family, after he so became liable, was prima, facie fraudulent as to the estate of Eowles.
It is not shown that any indebtedness accrued against Berry to the firm or to Rowles during the life time of Rowles.
At the time the partnership was thus dissolved, the survivor took possession of the joint effects, and thus became at once liable to account to the executrix of Rowles for the value of whatever share or interest the latter had iu the assets at the time of his death, over and above the copartnership debts ; and such liability was not in the nature of a contingent, but a fixed, subsisting, present liability, a ground of action ; and if a bill had been at once filed for the purpose of winding up the affairs of the late firm, a court of equity would have directed an account and made a decree for whatever amount was found due the plaintiff after satis
If the surviving partner was a trustee of the partnership effects, I cannot yet discover that this would take the case out of the statute; for if a trustee makes voluntary gifts or conveyances to his family, or confidential friends, to the hindrance of creditors and others, it is in my judgment one
In the case of Jackson vs. Seward, (5 Cow., 67,) a judgment was recovered against William Seward in 1820, the ,-suit having been commenced in 1819, upon a covenant of .guarantee dated before the deed, to-wit: in 1817, and the -defendant had conveyed his property by deed in 1818. The •court held, upon authority, that “ the guarantee stood in a ■relation to William Seward, the guarantor, which entitled ¡him to the protection of the statute. * * Tor our statute for the prevention of frauds is not confined to creditors only, but it avoids all conveyances, &e., devised and contrived with the purpose and intent to delay, hinder or defraud creditors and others of their just actions, &c. * * The question of creditor or not cannot turn on the ground of contingent liability, when considering this act. If it should, all indorsers and sureties would be deprived of its protection. It was said in Twyne’s case, (3 Rep., 82,) and reiterated by the court in Jackson vs. Myers, (18 Johns.,) that the statute extends not only to creditors, but to all others who had cause of action or suit, or any penalty or forfeiture. And it has always been held that the statute was entitled to a liberal construction for the suppression of fraud. The demand in this case, fundamentally, (as expressed by Eoberts on Fraudulent Conveyances, 459,) arose before the conveyance. It arose upon a covenant, prior in date to the conveyance, .for the performance of a collateral, and, if you please, contingent act. But it cannot be said that the covenantor was ignorant of his liability so as to exempt him from the imputation of fraud, under the statute, if he has made a voluntary conveyance.”
Mi*. Senator Spencer, in the leading opinion in the Court of Errors upon the samé case, remarks : “ I am of opinion
Standing in the relation of a creditor of Berry, as I conceive the executrix of Eowles to have stood, upon the facts disclosed in this case, a voluntary settlement by Berry upon his wife of the property described- in the bill was presumptively fraudulent as to the demand of the complainant; and unless it appears that Berry, at the time he purchased and paid for this property, had abundant means left in his possession which might have been subjected to the payment of this debt, thus overcoming and rebutting the presumption of fraud, this property should be subjected to the payment of the plaintiff’s judgment. The. fraudulent intent in such a case is a presumption arising from the fact that a voluntary conveyance or settlement is made when the grantor or donor is indebted, and that his circumstances are such that the conveyance or gift endangers the security of the creditor.
The Supreme Court of the United States, in Hinde’s lessee vs. Longworth, (11 Wheat., 199,) held that a deed from a parent to a child for the consideration of love and affection is not absolutely void as to creditors. It may be so under certain circumstances ; but the mere fact of being indebted would not make the deed fraudulent if it could be shown that the grantor was in prosperous circumstances and unembarrassed, and that the gift to the child was a reasonable provision, according to his estate and condition in life, and leaving enough for the payment of the debts of the grantor. The want of a valuable consideration may be a badge of fraud, but it is only presumptive and not conclusive evidence of it. This agrees with the doctrine of Lord Mansfield in Cadogan vs. Kennett, (Cowper, 434,) and in Doe vs. Rutledge, (ib., 705,) where the question was between a purchaser and a party claiming under a settlement.
The rule in such cases as declared in the case of Iiinde’s lessee vs. Longworth, above quoted, appears to have been generally adopted by the courts in this country.
I have thus far considered the effect of the statute because of the course of the argument, and because the general doctrines involved are properly applicable to the question discussed.
There is no principle better settled than this : that where a party indebted purchases and pays his own money for property, taking the title thereto in the name of a third person, with the intent to delay, hinder or defraud his creditors, a trust results in favor of creditors, and the property sq acquired may be reached by the creditor, at least to the extent of the funds of the debtor invested in it. 1 Cruise’s Dig., tit. xii, chap. 1, sec. 48 ; 1 Atk., 59 ; 2 ib., 71; 2 Ves. & Beame, 388; 4 East, 577; 1 Cranch, 176; 19 Wend., 414; 2 Johns. Ch. R., 405 ; 15 N. Y., 415.
There can be no question in this case that the lands in controversy were contracted for and paid for by R. H. Berry, the surviving partner, and the titles thereof taken in the name of Mrs. Berry.
It may well be, as was insisted by the appellants, that the money thus invested was earned or accumulated by Mrs. Berry, as the result of her own industry and enterprise, but if that were so, it was still lawfully the money and property of the husband.
But there were some ten or more slaves given to Mrs. Berry by one Holbrook, ■who bought them at the bankruptcy sale of Berry’s effects in 1841 or 1842, (and some increase after the gift); but these slaves, as was well urged by respondent’s counsel, became at once the property of Berry, by force of the common law. And then there were a carriage, and horses, and silver plate, &c., all the lawful property of Mr. Berry; and the testimony of H. H. Berry and
The slaves mentioned “ remained with Mrs. Berry during her life,” and -were, with other property, during the lifetime of Berry, and long afterwards, liable to he subjected to the payment of his debts. All this property was acquired, it is said, by or in the name of Mrs. Berrybut it does not appear that it was in any manner secured to her as her separate property.”
Under these circumstances, it does not appear that the purchase of the real estate was made with the purpose or intent to hinder, delay or defraud creditors; nor that it was in Berry’s circumstances an unreasonable post-nuptial provision.
It does not appear, that at the time of the purchase. Berry was embarrassed with debts; and it does appear that be was possessed of enough property, after the payment of the purchase money, to pay the claim now presented, and much more, thus rebutting every presumption of fraud in that transaction. The presumption of fraud arises where ..one being indebted makes a voluntary conveyance or disposition of his property; but it is only a presumption or argument- of fraud, and is overcome by evidence showing that abundant security remained in the possession of the grantor to satisfy the indebtedness.- This is the spirit of the modern decisions. The rule of Lord Hardwicke, and later, that announced by Chancellor Kent, that no circumstances could remove or obviate this presumption, is no longer the prevailing doctrine in England or America.
The fact that, with the close of the late war, all property in slaves was destroyed and lost, cannot affect the question,
There is another matter which, unexplained, has an important bearing upon this controversy. The liability of Berry was incurred about the close of the year 1855. The plaintiff, for six years, appears to have taken no steps towards enforcing this claim, and meantime, she must have been aware, as it seems the public was well advised of the purchase in the name of Mrs. Berry of the lots from Johnson and the plantation from Col. Houstoun. Yet, in January, 1861, Mrs. Rowles, the executrix, instead of pursuing the available property of Berry, of even then endeavoring to subject this land, as now attempted, to the paymfent of her demand, took Berry’s notes, unsecured, and gave a longtime for their payment; meantime, Mrs. Berry, holding the-title to this property, and procured credit, perhaps upon thsfaith of her title, which the plaintiff had declined to attack.
Had the plaintiff any reason to believe or suspect in 1861^. or prior to that time, that the purchase of the real estate was fraudulent on the part of Berry, it was extraordinary that sjie did not insist upon prompt payment, or take prompt measures to secure her claim, instead of extending the credit for five years, without security. Yet she did this, and s©> must have had faith in his ability to pay and in his integrity. It is shown by the testimony, that the purchase of the land was notorious, andfthat the purchase of the plantation was-at public auction, during the year following the death of Mr, Rowles. Eight or ten years elapsed after this, during which time this prosecution was, it is presumed, voluntarily deferred,, while Mrs. Berry was the legal owner of the lands, and the world had a legitimate right to treat with her and extend a pecuniary credit to'her on account of her title. The long delay of the plaintiff in the attempt to subject this property to the payment of her demand is an important circumstance, bo|
If the lien of the judgment creditors of Mrs. Berry can be entitled to any favor, however, even upon the assumption that the plaintiff might have' been entitled to relief as against Mrs. Berry, most certainly her creditors would be entitled to favorable consideration in this case, in view of the fact that the plaintiff has not exercised that diligence that might have been expected from a creditor in her position in prosecuting her supposed remedy.
The decree of the Circuit Court should be reversed and the bill dismissed.
delivered the following opinion:
There was property enough besides the plantation and the house in town, liable for Berry’s debt, to have paid it, and time enough in which to have realized the amount out of that property, without touching the plantation and house; and therefore the taking of the conveyances in the name of Berry’s wife was not an act fraudulent as to this creditor of his.
The judgment of the court is, that the decree in this cause is reversed, and the case is remanded to the Circuit Court of Leon county, for such further proceedings as are consistent with the views expressed by the majority of the court in the opinions herein rendered, and the principles of equity.
A petition for rehearing was filed in this case. The rehearing was denied by the court.