178 Iowa 89 | Iowa | 1916
The defendants are husband and wife. At different times, beginning October 7, 1907, and ending December 19, 1910, Charles Wolford borrowed money from the plaintiff bank and evidenced by promissory notes the debts so created. On the date last named, he gave the bank his note for $5,000, including therein renewal of several loans theretofore obtained by him. Later, plaintiff brought an action on this note, and procured judgment against Charles Wolford for $5,713 and costs. Thereafter, plaintiff instituted this suit in equity, alleging that the judgment was unpaid, and that Charles Wolford had no property in his own name upon which a levy of execution could be made, and asked that the lien of such judgment be established upon certain described lands, legal title to which was held by Millie Wolford. In support of this demand, it was alleged that Charles Wolford was formerly the owner and holder of such title, but had conveyed the same to his wife in fraud of his creditors. It was also further alleged that the wife, by permitting the title and apparent ownership of the lands to remain for a long time in’her husband, thereby giving him an appearance of financial responsibility, was estopped to assert title in herself as against plaintiff, who, on the strength of such appearance, had extended credit to her husband.
It appears in evidence that, for several years, Charles Wolford held the legal title to the land in question, together with certain other tracts aggregating about 368 acres. On December 9, 1909, he conveyed to his wife an undivided half of said land. On March 13, 1911, he quitclaimed to his wife the other undivided half of the larger part of the property, stating in the deed that it was “executed in pursuance of an agreement theretofore entered into between the grantor and grantee for the purpose of making partition of the lands
The issues joined in this ease present two questions: First, Was the conveyance of title from Charles Wolford fraudulent or collusive for the purpose of defrauding his creditors! and, second, even if no fraud was intended, is the wife estopped to set up her title against the enforcement of plaintiff’s judgment?
“It was once the law of the state that a wife entrusting her propérty to her husband must give a record notice of her ownership, or suffer 'its loss, if credit was extended under a misbelief as to ownership. For reasons best known to the legislative power, that law was canceled, thus indicating a more liberal rule as to the management and custody of such property.”
In Payne v. Wilson, 76 Iowa 377, we said:
“Appellants contend that plaintiff, by giving the money to her husband without notice to others of her rights therein, is estopped 'from now making any claim thereto to the prejudice of creditors. But she loaned the money to her husband and thereby became his creditor. ... It does not appear that she has by any act or representation misled anyone to his prejudice. The fact that she knew of her husband’s embarrassment at subsequent times when she attempted,to secure*94 her claims is immaterial, unless she intended by her acts to binder or otherwise defraud the creditors of her husband.”
So, too, in Rockford B. & S. Mfg. Co. v. Mastin, 75 Iowa 112, 114, the court thus states and applies the rule as between the wife and other creditors of the husband:
“We are unable to find from the evidence that Mrs. Mastín had any knowledge that her husband was indebted to any considerable extent, and certainly not that he was insolvent. She so testifies, and there is nothing in the record which will warrant us in disbelieving her. ■ She was a creditor of her husband, and he had the same right to secure or pay her as any other creditor. He conveyed, and she accepted the land in payment of such indebtedness, and it is immaterial if her husband did at the same time sell all the property he had.”
In Bennet v. Strait, 63 Iowa 620, land was bought with the wife’s money, and title taken in the name of her husband. While the title was in this condition, the husband contracted certain debts, after which he conveyed the land to his wife, and thereafter his creditors sought to enforce collection of ■their claims from said property. In denying them such relief, the opinion uses the following language:
‘1 Counsel for appellants insist that, because the title was taken in the name of the husband, and' while thus held the debts were contracted, the wife should be estopped from asserting her equitable title to the land as against the plaintiffs. That the law of estoppel has no application from the mere fact of the husband’s holding the title . . ., see Crouse v. Morse, 49 Iowa 382. ’’
In the case thus cited, the,husband held title to land equitably belonging to his wife, and, after contracting a debt, conveyed the property to his wife, and in holding the property not liable for such debt in her hands, we said:
“It- may well be conceded he was the owner of the real estate, but at the same time ... he was indebted to his wife therefor, or that he held the title in trust for her. In either*95 event he could well convey the property to her, and thereby discharge such indebtedness, or for the purpose of discharging the trust. A full and perfect title would by such conveyance vest in Mrs. Morse, unless a lien had attached to the property before the same was made.”
Had the husband been the absolute owner of the land up to the date of the conveyance to hi;, wife, he could, as we have already seen, have conveyed it to her in payment of his debt to her, and her title would be good against his other creditors, subject only to the condition that there was no purpose on her part to aid in defrauding others This is distinctly held in many of the cases to which we have referred, as well as iu others too numerous to mention. Such being the case, it'would seem inconsistent with sound reason to hold that she occupies any less favorable position when she demands and receives conveyance from him of land which has at all times been equitably her own.
We find nothing in the record on which the charge of fraud can be sustained, and nothing which estops the wife from asserting the title conveyed to her. In view of the natural tendency of members of the same family to aid and protect each other, and the difficulty which a party challenging the good faith of a transaction between them necessarily experiences in proving the facts by disinterested witnesses, the courts will scrutinize such dealings with care to see that they do not cover a fraudulent device to defeat creditors, but the mere fact of tire relationship gives rise to. no inference or implication of bad faith. The legislature having removed the disabilities of the wife and made it'possible for husband and wife to contract with each other and to enforce contract rights against each other, it would be an unwarranted assumption of power by the courts to destroy the value of such right by making its exercise in every case presumptively fraudulent. The correctness of the decree below is not open to reasonable doubt, and it is therefore — Affirmed.