207 Ky. 420 | Ky. Ct. App. | 1925
Opinion of the Court by
Reversing.
Appellant Luther commenced this action in the Graves circuit court against Ed Campbell and his wife, Cassie Campbell, upon a note for something more than $900.00, executed by Ed Campbell, and to have a certain house and lot in the town of Wingo, Kentucky, deeded to Mrs. Cassie 'Campbell, adjudged to be the property of her husband, Ed. Campbell, and subject to his debts, in-
In September, 1919, Ed Campbell sold the dormitory property to John Hobson for $3,500.00, Hobson paying him $2,000.00 in cash and executing to Ed Campbell a note for $1,500.00. With $1,500.00 or $1,600.00 of the $2,-000.00 Ed Campbell bought a house and lot in Wingo, taking deed to himself. After keeping it some years he sold it to his sister for $900.00. He became involved financially, having lost money in two or three small ventures. About this time Mrs. Campbell purchased from Mrs. Akers a house and lot in Wingo at the price of $2,500.00 on which was paid the Hobson note of $1,500.00, and the balance was arranged by loans which will hereafter be more fully explained. This is the property in dispute.
It is Mrs. Campbell’s contention that when the dormitory property was purchased she entered into an agreement with her husband, Ed Campbell, by which she was to run the boarding house and earn the money with which to pay for the property and it was to become hers; and, further, that -when the property 'was sold to Hobson it was with the understanding that her husband was acting for her, and as her trustee was to receive and hold the money and note for her use and benefit. The whole litigation revolves around the purchase*, ownership and sale of the dormitory property. The dormitory property cost $1,600.00. As said above, some of the stock in the dormitory company was purchased by Ed Campbell in exchange for a colt. He also traded his horses for stock in the building. His wagon, worth $50.00, was traded for stock. All this property was exempt to him as a bona fide householder. When the last half of the stock was purchased for $700.00 the money was borrowed by Ed Campbell, and two of his neighbors became surety for him on the note.
When Ed Campbell sold the Chandler property in Wingo for $900.00 he deposited $500.00 in the bank and used the other for other purposes. The $500.00 thus deposited was covered by the garnishment of the bank
When the case was submitted the lower court found that the dormitory at Sedalia was purchased by Ed Campbell at the instance of his wife, Cassie, on an agreement that if it could be paid for by her keeping boarders that the property should belong to her; and, further, that it was agreed between the husband and wife that at the time of the borrowing of the $700.00 with which the last half of the stock in the dormitory was purchased, the dormitory should be mortgaged instead of the farm owned by Campbell. The court further found that Ed Campbell purchased certain of the stock in the dormitory corporation with his live stock, but that Mrs. Campbell by keeping boarders raised money with which she repaid him for all he put into the stock. With respect to the sale of the dormitory the court found that Ed Campbell, when approached, referred the matter to his wife, and she agreed to the sale- of it on condition that the purchase money was to be hers and she would use it in purchasing a home in Wingo, where there was a school. And further, that Ed Campbell received the money and note from Hobson in trust for his wife, Mrs. Campbell, and that he used $1,600.00 of it in paying Chandler for the house and lots in Wingo, with her consent, and that Mrs. 'Campbell purchased from Mrs. Akers a house and lot in Wingo, paying the Hobson note of $1,500.00, assuming a $500.00 lien against the property, and executing her note signed by herself and husband for $600.00. The court also found that at the time Ed Campbell was not in debt.
With respect to the $500.00 attached in bank as the money of Ed Campbell the court held it was not subject to the claim of Mrs. Campbell, she having allowed her husband to deposit it in his name and it to remain there until after the contracting of the indebtedness out of which this litigation arose. It is from that judgment that this appeal is prosecuted.
Without going into all of the evidence in detail it will be sufficient to say that it is admitted the dormitory property at Sedalia was purchased by Ed Campbell and the deed made to him. He was the owner of it at that time. Mrs. Campbell contends she was to have the property provided she could make enough money from the boarding house with which to pay for it. In other words, she was to have the right to purchase it from her husband,
An insolvent debtor, as was appellee, Ed Campbell, can not prefer one creditor over another; and when he attempted to pay one creditor, leaving another wholly unpaid, it is such a preferential act and fraud on the unpaid creditor or creditors as vitiated the whole transaction. Kentucky Statutes, section 1910; Adams, Executor v. O’Rear, 80 Ky. 129.
As the judgment must be reversed upon the merits we will not enter into a discussion of the insufficiency of the separate answer of Mrs. Cassie Campbell, to which a general demurrer was overruled.
If it were possible under the state of the evidence we would gladly concur in the judgment of the learned chancellor, but the great weight of the evidence, as we read it, is against his finding, and the judgment must be reversed.
Judgment reversed with directions to enter a judgment subjecting the house and lot in Wingo conveyed by
Judgment reversed.