213 N.W. 911 | Minn. | 1927
Lead Opinion
The testimony given by Mr. and Mrs. Schiek ran thus: He and she were natives of Germany, where they were married. They came to the United States in 1882. While in Germany, Mrs. Schiek obtained 2,000 marks from her mother and turned the money over to her husband. After coming to the United States, she received 1,000 marks from her mother and gave it to her husband. They settled at Wells, where Schiek conducted a bakery and restaurant. He was also the agent of a Milwaukee brewing company and ran a saloon for a short time. For 30 years Mrs. Schiek did much of the work in the bakery and restaurant. In the year 1898 she received 11,000 marks as her share in her mother's estate and turned it over to her husband. At an earlier date she received $800 on an insurance policy carried by an uncle and gave this money to her husband. The total amount she gave him, with interest from 1898, amounts to more than the value of the property conveyed to their daughter. Mrs. Schiek took no notes from her husband and held no written evidence of these transactions. Her husband never paid her any interest. She testified that she placed the money in his hands "with the understanding I get it back for my children. * * * My husband say he would give it back to me, with interest, and I said I wanted it back for the children." Asked when this occurred, she answered: "It was years ago, and then * * * he said, `I haven't got the money now. I give it to you after a while.'"
The trial court found that if the deeds in question are allowed to stand Schiek is insolvent and cannot pay his debts; that his wife and daughter knew that the effect of the deeds was to make him insolvent; and that the deeds were made without consideration and for the purpose of defrauding his creditors and should be set aside. In reference to the alleged advances of money, the court found that, if any were made, they do not constitute a consideration for the deeds and that an agreement for the repayment thereof had not been proved with the requisite degree of certainty.
If these findings stand, the plaintiff is entitled to judgment. If they are not supported by the evidence, as urged by defendants, there should be a new trial. *287
Section 4 of the uniform fraudulent conveyance act (G.S. 1923, § 8478) provides that every conveyance made by a person who will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent, if the conveyance is made without a fair consideration. Section 8621, G.S. 1923, reads in part as follows:
"Where the rights of creditors * * * come in question, each spouse shall be held to have notice of the contracts and debts of the other as fully as if a party thereto."
We have frequently held that transfers between a husband and wife, whether made directly or indirectly, are prima facie fraudulent as to existing creditors, the burden being on the wife to show by clear and satisfactory evidence that a valuable consideration was paid by her or by someone in her behalf. Minneapolis S. P. Co. v. Halonen,
Payment of an honest debt is not fraudulent under the general statutes against fraudulent conveyances although it operates as a preference, the rule being that a preference by an insolvent debtor of one of his creditors can be avoided only by appropriate proceedings under the bankruptcy law and is not open to attack in an action brought by another creditor. Petersdorf v. Malz,
Hauk v. Van Ingen,
In Bennett v. Bennett,
Citing Second Nat. Bank of Winona v. Donald,
Whether the application of the rule of these cases should lead to a reversal is a close question. Testimony, although undisputed, is always to be considered and weighed in the light of the attending circumstances. There is nothing inherently unreasonable or improbable in the testimony of the Schieks, but there are circumstances which cast doubt on it. The claim is stale. The statute of limitations has run, but that fact alone is not conclusive against the wife, for the husband is under no duty to his creditors to interpose the statute. 27 C.J. p. 641. There is no written evidence of the receipt of the money by the husband upon a promise to repay it. The wife exacted no interest. A large portion of the money was invested in property standing in the name of the husband. He received the rents and profits without accounting for them to his wife. The deeds were made on the heels of the failure of the bank when it became evident that the husband's liability as a stockholder, added to his existing indebtedness, would nearly equal the value of his unexempt property. The daughter conveyed only a life estate to her mother, who is 75 years of age and in poor health. The value of *289 the life estate is probably much less than the amount of money alleged to have been advanced. Putting all these circumstances together and weighing them in the balance with the testimony of the husband and wife, we reach the conclusion that reasonable men might draw the inference that the relation of debtor and creditor between the husband and wife did not exist and was not intended, and that the testimony to the contrary is the result of an afterthought suggested by the failure of the bank.
Order affirmed.
Dissenting Opinion
I am unable to agree with the majority and therefore dissent.
