54 W. Va. 450 | W. Va. | 1903
Lead Opinion
Assimiing that the court properly overruled the demurrer to the bill in this cause, the sole question is whether the lower court properly held that certain real estate, owned by Mary E. Gillispie and situated in the town of Addison, Webster Count}1-, was purchased for her by her husband, who is insolvent, in fraud of his creditors, or by her with money so fraudulently furnished by him. Mrs. Gillispie seeks to overcome the presumption which legally arises against her by showing that the lot was bought by her with money of her own, money given-to her by her father, money loaned to her by her father, money borrowed by her from her brother-in-law and money made by her in keeping boarders, selling milk and butter &c. The two adjoining lots cost four hundred and twenty-ñve dollars. The first was conveyed to her by Benjamin Hamrick and wife, by deed dated August 18, 1894, in consideration of two hundred dollars, of which one hundred dollars was paid in cash and the balance, due in one year, secured by a lien reserved in the deed. The other lot was conveyed to her by the same parties, by deed dated October 16, 1897, in consideration of two hundred and twenty-five dollars, the deed reciting the receipt of the purchase money. On the first lot so purchased, there has been erected a dwelling house. The contract price for it was six hundred and twenty-five dollars, exclusive of the painting which cost seventy-five dollars, and the chimneys and flues, costing seventy-five dollars. Other improvements were put upon the property including a cellar, costing, as stated by Mrs. Gillispie, sixty-two dollars, a barn costing sixt}'-five dollars, a well costing forty dollars, á pump fifteen dollars, and a fence fifteen dollars. The total cost of property and improvements was about one thousand, three hundred and ninety-seven dollars. Mrs. Gillispie says she obtained the money with which this property was bought and improved in the fol-lowing amounts and from the following sources: Money she had ivhen married, June, 1894, fifty dollars; gift from her-father twenty dollars; from Pavid Morton note twenty dollars;
In support of her contentions and testimony, I. W. Skidmore says he furnished her the money which she claims he furnished. Delbert Gillispie testified that he loaned her said sum of one hundred and fifty dollars and Benjamin Hamrick testifies that he loaned her the two hundred dollars which she says she borrowed from him. She repaid him one hundred dollars with the last one hundred dollars she received from her father, Skidmore. It is not denied that she kept boarders, although it is not admitted that she received from that source the amount she claims to have made thereby, nor that the profit realized was so large as she claims it was. Moreover, it is contended that her table was largely supplied from the store of her husband, although she says she had a good garden and kept cows. An effort is made to show that her father’s circumstances were not such as to have warranted such liberality on his part toward his daughter.
While he owns real estate assessed as containing three hundred and fifty-eight acres, valued at one thousand, three hundred and six dollars, it appears that the principal part of it is wild land and only about seventy-five acres of it are cultivated. In tire year 1890 he was assessed with personal property amounting to five hundred and seventy-four dollars, including two horses valued at ninety dollars, twelve head of cattle valued at one hundred and sixty-three dollars, and thirty-one head of sheep valued at thirty-
Other facts bearing upon the question of the bona fieles of the transaction between Mrs. Gillispie and her husband, necessitates the traversing of a good deal of ground. In 1892 the Arm of D. M. Miller & Co., engaged in timber and mercantile business, was composed of D. M. Miller and J. M. Gillispie. After-wards and before the dissolution of the co-partnership, J. M. Gillispie and his co-dcfendant, Mary E. Gillispie, intermarried. The business of the firm was conducted by Miller and Gillispie. They had a store at Co wen, Webster County, under the personal supervision of Miller, and another at Addison under the personal control of Gillispie. Delbert Gillispie was a clerk in the store at Addison. He was a brother of J. M. Gillispie and, after the marriage of the latter, boarded with him, as did also the wife of Delbert Gillispie, part of the time. On the 27th day of January, 1896, the firm was dissolved by the death of Miller. After that event the plaintiff herein, Rachel F. Miller, the widow of D. M. Miller, and J. M. Gillispie, formed another co-partnership under the firm name of J. M. Gillispie & Co. and continued the business until in March, 1897, when the new firm was dissolved. The dissolution agreement provided that Gillis-pie should take the stock of goods and store accounts of the firm, pay all debts of the firm, due or to become due, and secure to the plaintiff the payment of one-half of the surplus. An invoice showed the assets at that time to be about seven thousand, six hundred dollars, of which the stock amounted to four thousand, two hundred dollars and the accounts to three thousand, four hundred dollars. Gillispie continued the business at Addison until in January, 1898, when he made an assignment for the benefit of his creditors, whose claims amounted to several thousand dollars in excess to the amount realized from his assets. He admits that the business of the firm as first composed was profitable and that the new firm made a little money during the first year, but nothing the second year, and he claims the business, after the retirement of Mrs. Miller was crippled by reason of G. A. Lynch, administrator of D. M. Miller, deceased, and agent of Mrs. Miller, having taken from him accounts amounting to about two thousand five hundred dollars, in
The debt which is sought to be collected by this suit was originally contracted by the firm of D. M. Miller & Co. One note was for two hundred dollars, dated October 26, 1895, and payable to the order of C. 0. Miller. The other was for one hundred dollars, dated December 14, 1895, and payable to the same person. On the 35th day of April, 1896, the firm of J. M. Gillispie Ik Co. took up the two notes and gave in lieu thereof their own note for three hundred dollars, payable to C. C. Miller. This note was part of the firm indebtedness, assumed by Gillispie in the dissolution agreement. In May, 1898, F. J. J-Iively, to whom the note had been assigned, recovered a judgment against Gillispie and Mrs. Miller, as partners, and after-wards enforced payment thereof in a chancery suit by the sale of a lot belonging to Mrs. Miller, the plaintiff in this suit.
During the time covered by the purchase of the lots by Mrs. Gillispie and the making of the improvements thereon, as here-inbefore set out, she had dealings in the store of Miller & Co., Gillispie & Co., and J-. M. Gillispie, relating directly to her transactions in reference to the purchase and improvement of this property. Part of the purchase money of the lots was paid by J. M. Gillispie to Hamrick, but Mrs. Gillispie and he say she furnished the money and he acted as her agent. She claims to have had an account at the sioie, carried on a separate book, which has not been produced, and that she paid her grocery account at the store, but sajes it amounted to but very little, fifty or sixty dollars in 1896, and thirty-five or forty dollars in 1897. She admits that the six hundred and twenty-five dollars, the contract price for building the house, was paid to Brooks Watson, the contractor, partly in merchandise from the store of D. M. Miller & Co. and partly in money. Watson’s store account, including part of the lumber, as having been received from “Harris boys” and charged as two hundred and sixteen dollars
There is some evidence bearing directly upon the question of good faith toward creditors on the part of the defendants. Minnie Gillispie lived with the defendants while they were building the house and for a short time before. She testifies that she heard J. M. Gillispie say to his wife they were going to buy the lot, and that he asked his wife to pay fifty dollars on it, and said, if she would do so, he would pay the balance. She further says Mr. Gillispie wanted the deed made to her, fearing something might happen, as it. was while they were in the store, and there was a possibility of their breaking up and leaving them without a home. Mrs. O. E. Lynch says she resided at Addison at the time the Gillispies were married and that they boarded with her for a short time after they were married, and that at the time Mrs.
The foregoing statement shows that the first lot was purchased, and the transaction sought to he impeached here was begun, before the debt here sought to be collected was originally contracted. Nearly four hundred dollars had been paid on the contract for the construction of the house prior to the giving of the notes represeting the original debt. This payment was made June 30, 1895, and the first note given to C. C. Miller bears date October 28, 1895, and the other one December 14, .1895. The testimony shows that'the improvements, or at least the house, were completed early in the year 1896, not long after the debt was contracted. The note for one-half of the purchase money of the first lot became due August 18, 1895, but just when it was paid does not appear. The deed for the second lot was dated October 16, 1897, and Benjamin Hamrick’s receipt for the entire purchase money of the two lots is dated October 22, 1897. It seems to be established by the evidence that the improvements were not completed until after the delft was contracted. If Gillispie furnished any of the money it was a gift to his wife, and stands upon the footing of a voluntary conveyance to her, for it is not pretended that she purchased anything from him. As to part of the gift or voluntary settlement, the plaintiff must be treated as a subsequent creditor and as to the
During the period covered by the purchase and improvement of these two lots, J. M. Gillispie undoubtedly handled considerable amounts of money and had the opportunity to secrete in his trunk, in fraud of his creditors and of his co-partner, a considerable sum of money in gold, as stated by Mrs. Lynch. Probably not so much as she testified to, but she says she did not measure or count it. From his own testimony it appears that the firm of D. M. Miller & Co. carried on a considerable business, having assets at the time of the death of Miller amounting to about twelve thousand dollars and owing debts amounting to eight thousand, nine hundred dollars. Gillispie had been in the firm then for about four years. At that time he claims to have been worth about eight hundred dollars. It is not probable that he had been worth more than that at anjf other time of his connec
That the firm of D. M. Miller & Co. was carrying a considerable indebtedness during the period covering these transactions, is certain. Two witnesses testify directly to the declaration of an intention on the part of both Mr. and Mrs. Gillispie to purchase the first lot with' the. money of J. M. Gillispie, except as to fifty dollars of it, and have it conveyed to Mrs. Gillispie for the express purpose of providing a home for themselves against a possible reverse in business. In the absence of any showing to the contrary, the law would make this actual fraud against the creditors of the husband. Those statements arc denied by the defendants, but the circumstances oi practically all of this business having been transacted by J. M. Gillispie, much of the work and materials having been paid for out of the store, and the absence of the account which Mrs. Gillispie claims to have had with the store, all tend to establish the execution of the purpose which these two witnesses say the. defendants declared m their presence. There must be added to this the fact that a business, admittedly solvent in January, 1896, passed under the management of J. M. Gillispie and made money for another year, and became wholly insolvent and indebted to the extent of thousands of dollars in excess of its assets in January, 1898, unattended by any great sudden loss, as by fire, flood or other .inevitable circumstance.
To overcome the presumption of fraud arising from the evidence and the facts shown, the wife must establish her purchase of the property with the means derived from sources other than her husband by full and clear proof. Stockdale v. Harris, 23 W. Va. 499; McMasters v. Edgar, 22 W. Va. 673; Rose v. Brown, 11 W. Va. 122; Core v. Cunningham, 27 W. Va. 206; Herzog, v. Weiler, 24 W. Va. 203; Burt v. Timmons, 29 W. Va. 441; Spence v. Smith, 34 W. Va. 697; Martin v. Warner, 34 W. Va. 182. “In a contest between the creditors of the husband and his wife, owing to the great facility which the married relation affords for the commission of fraud, there is, as -there should be, a presumption against the ha.no -¡ides of the transaction, which the wife must overcome by clear and satisfactory evidence.” Crowder v. Garber, 34 S. E. (Va.) 470. This Court has de-
Enough has been said to indicate clearly that the evidence adduced by Mrs. Gillispie in support of her contentions does not measure up to this requirement. Another familiar principle peculiarly applicable to this case is that “Fraud is to be legally inferred from the facts and circumstances of the case, when those facts and circumstances are of such a character as to lead a reasonable man to the conclusion that the conveyance was made with intent to hinder, delay or defraud existing or future creditors.” Lockhard v. Beckley, 10 W. Va. 87; Livesay v. Beard, 22 W. Va. 585; Sturm v. Chalfant, 38 W. Va. 249. The evidence of actual payment by Mrs. Gillispie is narrowed down, as has been shown, to the testimony of herself and her husband, and numerous cases are found in the reports in which such evidence is held in,sufficient as against facts and circumstances giving rise to the inference of fraud. The'rule'was devised to cover just such cases. But for it, creditors would not often bo able to impeach a fraudulent conveyance.
The defendants, by cross-assignment of error, say the court erred in overruling the demurrer to the bill but it is sufficient. It sets forth clearly and fully the indebtedness of the defendant, J. M. Gillispie, shows the recovery of the judgment against Gillispie and Mrs. Miller and the enforcement of the payment of it out of the real estate of Mrs. Miller in the chancery suit, and with it are filed as exhibits a transcript from'the justice’s docket showing the issuance and return of an execution unsatisfied; a copy of the decree ordering a sale of the real estate of Mrs. Miller and reciting the assignment of J. M. Gillispie; and a copy of the decree confirming the sale thereof. It further alleges that J. M. Gillispie paid the purchase money of the lots and had them conveyed to his wife with intent to hinder, delay and defraud his creditors, and that he procured the improvements to be put upon the property and paid for them with his own money, with the like intent. Thg prayer is that the lots may be held liable for the plaintiff’s debt and sold and the proceeds applied to the payment of it. There .is no allegation of the insolvency of J. M. Gillispie, but the fact appears from the exhibitis. That is sufficient. The exhibits .are parts of the bill. Soldier v. Taylor, 49 W. Va., 104. It is also contended that
Prior to this suit, another had been brought against the defendants by the IIomer-Gaylord Company, to impeach the same transaction on the ground of fraud, and, in that suit, the depositions of Mary E. Gillispie, J. M. Gillispie and Delbert Gillis-pie were taken and filed. These depositions seem to have been filed by the defendants in this suit, as exhibits with their depo-stitions taken herein. “The rule is that depositions taken in one suit cannot be used in another suit unless the parties are the same or are in privity and the subject involved in the suit is also the same.” 6 Ency. PI. & Pr., 579. It excludes the depositions in the former suit for neither the parties nor the subject matter are wholly the same. Another principle having the like effect asserted in Brown v. Johnson, 13 Grat. 644, is that: “A man who cannot be prejudiced by a deposition or proceeding in a suit, shall never receive any advantage from it.” In Brown v. Jackson, an action against one obligor on a joint bond, an attempt was made by the defendant to use a deposition taken in another action by the plaintiff on the same bond against another obligor, and the court held that, under no circumstances, could it be competent evidence. See also Payne v. Coles, 1 Munf. 373, and Chapman v. Chapman, 1 Munf., 398. The plaintiff could not have used these depositions against the defendants except by agreement, or in a limited sense for purposes of contradiction.
But the exception must be treated as waived by failure to insist upon it in the court below. This rule of waiver extends to all exceptions save those going to the competency of the witness, as to which, indeed, no exception is necessary. Hill v. Proctor 10 W. Va. 78; Vanscoy v. Stinchcomb, 29 W. Va. 271; Fant v. Miller, 17 Grat. 187.
For the reasons given, the decree complained of must be re~
Reversed.
Rehearing
UPON HE-IIEAE1NG.
(Dec. 16, 1903).
This case was decided and the foregoing opinion filed November 22, 1902, and afterwards a rehearing- was allowed. The briefs for appellee, filed upon the re-argument, as well as upon the first hearing, are unusually long, but their contents may be reduced to a few propositions. One is, that the rule which casts upon the wife who claims, in a contest against the creditors of her husband, to have purchased and improved real estate, the burden of proving that the property and improvements were paid for by her with money derived from some source other than her husband, ought to be abolished, because the statute now authorizes a married woman' to carry on business in her own name and to acquire and hold property free from her husband’s control and from liability for his debts. In this connection, it is urged that this rule has been abolished in Virginia by the decision in Catlettt v. Alsop 40 S. E. 34, or that the principles there declared, if followed out, will produce such result. That case seems to liberalize the rules of law to some extent in such contests, but it does not hold that this particular rule, which has been so long the well settled law in all jurisdictions, is to bo overturned. It holds that an insolvent husband may be employed by his wife in the management and conduct of her business, and that his earnings in her employment may be devoted to the support of his family as far as may be necessary for that purpose and his creditors are only entitled to subject, to the payment of their debts, the excess. This Court, long ago, enunciated and applied substantially the same proposition in Boggess v. Richards, 39 W. Va. 567. That is a matter entirely foreign to any question arising in this case. In establishing the presumption of fraud as to transactions between husband and wife, working prejudice to the rights of the creditors of the former, the courts do not assign, as reason therefor, the common law disabilities of the wife. They base it upon the close relation
That part of the opinion which recites that somebody had'to cultivate the garden and the family had to be clothed as well as fed and feed furnished for the cows, has been adverted to in the later briefs as evidence of the application of a false principle. It was not apprehended that this would be construed to mean anything other than an indication of the weakness of the claim that Mrs. Gillispie had realized a large amount of money from keeping boarders with which to pair for the property and improvements. Iiow could she have paid her share of all the expenses of keeping the boarding house, and turned in on the purchase of the property and its improvements all the money taken
The statement in the former opinion that certain depositions, taken in another suit and made exhibits with depositions taken in this suit, do not appear in the printed record, is erroneous. They are in that record and were read and considered under the impression that they were depositions taken in this case. This error is the result of the unusual and peculiar manner in which they are inserted in the printed record. But it signifies nothing. In going bade over the record, they are found to have been marked and considered as carefully as any of the others. Further examination of this record serves to strengthen, rather than to weaken, the conclusion announced in the former opinion. That conclusion was that the evidence offered to show that Mrs. Gillispie paid for the property with her own money was insufficient to overcome the presumption against the good faith of the transaction, as it appeared that practically all the money was actually handled and delivered, by way of payment, by J. M. Gillispie, and not Mary E. Gillispie, and, further, that J. M. Gillispie was, at that time, handling other money than that which Mrs. Gillispie claims to have paid into his hands. The truth of this inference is established, to a moral certainty, by certain facts found in the record and marked on the former examination of it, but, as the result of inadvertence, not stated in the opinion. It appears from Ledger No. 1 of the books of D. M. Miller & Co., as testified to by G. A. Lynch, from the book itself, that J. M. Gillispie was allowed, as 'expenses, from the firm, on the 23rd day of August, 1894, $274.92; on January loth or 17th, 1895, $480.08; on August 29, (year not given,) $207.18; on January 13, 1896, $141.71, making a total of $1,103.89. This amount, which seems to have been withdrawn from the firm by him without anything upon the books to show for what purpose the money was expended, or upon what accounts it was taken out, was used •fpr gome purpose by J, M. Gillispie, from time fo time, while the
Another contention is that, as the house in question was completed late in the year 1895, or early in the year 1896, and the assignment of the husband did not occur until in the year 1898, he was solvent at the time of the purchase and improvement of the property and might have made a valid gift to his wife. This is not the theory of the defense. Both husband and wife testified that the purchase was made by her with her own money. However, it affirmatively appears that the husband’s financial condition was such as to render his inability to make such a gift to his wife without, prejudice to the rights of his creditors perfectly apparent. It is not a case of a wealthy man, or a well-to-do man, having good reason to believe himself able to make a substantial gift to his wife without injuring his creditors, and, therefore, to act in good faith in doing so. Such gift, to be valid, cannot be made under anv other conditions. Hume v. Condon, 44 W. Va. 553.
Finally, it is urged that the court should find that Mrs. Gillis-pie had invested a considerable amount of her own money in the property and its improvements, and become vested with the legal title, whereby the propetv has become her separate estate, and that the amount of her interest in it should be fixed, and then the amount expended in the purchase and improvements by her should be protected and secured to her by the decree; in other words, that an apportionment of the value of the property be made between the wife and the husband’s creditors, as in the case of Humphrey v. Spencer, 36 W. Va. 11, and Boggess v. Richards, 39 W. Va. 576. As this is a ease of actual fraud on the part of the husband, participated in by the wife, the principle
As it clearly appears that money of the husband, in excess of the amount of this debt, and the costs of this suit, was used in the purchase and improvement of the propert)^ the order directed in the former opinion should be entered.