Yost v. Hudiburg

70 Tenn. 627 | Tenn. | 1879

McFaeland, J.,

delivered the opinion of the court.

The allegations of the bill are, that on the 13th February, 1865, the complainant recovered a judgment for $829.35 and costs, against the defendant, A. S. Hudiburg, in the Circuit Court of Knox county, upon a note of which complainant was endorser for value. Four several executions issued on the judgment, to-wit: on the 18th April, 1865; 16th November, 1867; 19th March, 1868, and 31st March, 1871; that the net sum of $32.15 was realized by the sale of some land and paid on the judgment. The balance remained unpaid, the last execution having been returned nulla bona. That on the 28th of August, 1874, William Coffman conveyed to the defendant, Mrs. Leanah Hu-diburg, the wife of the defendant A. S. Hudiburg, in consideration of $3,500, a house and lot in Knoxville. The bill charges, upon information and belief, that the consideration of this conveyance was the money or means of the said A. S., and that the purchase was made by him but the title taken to his wife, to defraud the creditors of said A. S. Hudiburg. The prayer of the bill is for satisfaction of the complainant’s judgment, by a sale of the property referred to. In an amended bill, it is charged that Hudiburg and wife had conveyed the property to Thos. L. Williams, in trust to secure a debt of $1,000 to Mrs. Emily G. McCorkle, but the property was of value sufficient to satisfy both claims. The answers on oath are •waived. The answer of Hudiburg and wife admit the ■conveyance of the property by William Coffman to Mrs. Hudiburg, but deny that the consideration paid was the money or means of said A. S. Hudiburg, and proceed to give in detail the history of the transaction, by which it was claimed that Mrs. Hudiburg became possessed of the means to pay for the purchase from Coffman as follows: In 1859, A. S. Hu-burg became the owner of a half interest in a house and lot on Cumberland street in Knoxville. Between that date and 25th September, 1862^ Mrs. Hudiburg saved ■of her own earnings a few hundred dollars, with which, with the consent of her husband, she purchased the other half interest in the lot on Cumberland street. In the mean time said A. S. Hudiburg had purchased a lot on Market Square and built a house upon it, and to pay his indebtedness upon the last named prop•erty, Mrs. Hudiburg agreed to join her husband in a sale of the property and that he might use her part ■of the proceeds, upon his promise to convey to her an interest in the'Market Square property in proportion to the amount of her money used in paying for the same. Accordingly the Cumberland street property was sold on the 30th of April, 1863, for' $2,000, and the money used by said A. S. Hudiburg as stated, but he neglected to make to Mrs. Hudiburg the promised conveyance of an interest in the Market Square property until the 14th of May, 1873, when he conveyed to her a two-thirds interest in said property, the conveyance being made in pursuance of said agreement, and upon the assumption that her money paid two-thirds of the original costs. Said A. S. Hudiburg had, however, previously disposed of twelve feet of the lot and had placed several incumbrances upon' the remainder. This caused Mrs. Hudiburg to become apprehensive, and at her request the conveyance of the two-thirds interest of the remainder of the lot was made to her. The lot had in the mean time greatly appreciated in value, and the twelve feet previously sold off, the incumbrances on the lot, and an execution against A. S., were about sufficient to consume his interest, and to prevent a sacrifice the lot was sold for $6,000; out of the price, the indebtedness of A.. S. upon the lot was extinguished, and the balance went to the purchase of the lot from Coffman conveyed to Mrs. Hudiburg and involved in the present case. Such-is the history of the transaction in the answer, supported by the several conveyances referred to. The complainant filed a transcript of the record of his judgment from the Circuit Court, which was excepted to by the defendant, and held by the Chancellor to be competent evidence against Mrs. Hudiburg only for the purpose of proving the rendition of the judgment and a consequent indebtedness from that date. The cause was heard without other evidence except the transcript of certain other chancery records, which were considered as read, but which do not appear to contain anything very material. Had the answer stopped with a simple denial of the allegation that the money or means of A. S. Hudiburg paid for the property purchased from Coffman, the onus would have . been upon the complainant to prove the allegation; but the answer having gone further, the complainant is entitled to the benefit of all the admissions; and while in the present attitude wfe must take the history of the transaction as stated in the answer, yet he is at liberty to draw any legitimate inference from those statements, even though it be to establish the existence of fraud in the face of the general denials of the answer.

It is argued that as none of the conveyances are attacked by the bill except the deed of Coffman to Mrs. Hudiburg, the other conveyances must be taken as free from fraud, and that it is sufficient to show that Mrs. Hudiburg purchased from Coffman with means derived from the sale of the other lot held by her under a deed valid, because not attacked. But we are of opinion, that as the defendant has undertaken to show how Mrs. Hudiburg became possessed of the means, if we can see from the entire history-of the transaction that it originated in fraud, it will not be allowed to stand, although the other conveyances are not attacked. As the defendants set up these other conveyances, they must show that they are valid and bona jicle. The money with which Mrs. Hudiburg made her first purchase in 1862 was in law the money of her husband, and it was therefore in the nature of a voluntary settlement upon the wife, and by presumption of law was fraudulent as to existing creditors, unless it be shown the husband had ample means besides for the payment of his debts.

It appears from the record of the Circuit Court, that the complainant commenced his action in 1859, three years before the conveyance was made. While this record may not be evidence against Mrs. Hudiburg for all purposes, we think it is legitimate to show that the suit was pending when the conveyance was made, and that the judgment was recovered upon a claim then in existence. This being so, there is nothing to rebut the presumption that the conveyance was in fraud of the existing debt. It is not shown that said A. S. retained other means to pay his debts. This being so, Mrs. Hudiburg acquired no rights, as against creditors, from the sale of property thus conveyed. And again, it is a remarkable fact and hardly consistent with the bona fides of these transactions, that said A. S. Hudiburg used the proceeds of the sale of the first lot, and did not remember or comply with his promise to convey an interest in the other lot to his wife for ten years, and until after several executions upon complainant’s judgment had been returned not satisfied. It too often happens that these promises are only remembered or complied with when the creditors of the husband are about to reach the property. Again, Mrs. Hudiburg and her husband became joint owners of the first lot, purchased for a few hundred dollars. In the end the husband loses everything and the wife becomes the owner of all that is left. This remarkable event has not been explained to our satisfaction. Without further comment, we are of opinion that the complainant is entitled to relief. The decree of the Chancellor will be reversed and a decree rendered for the complainant, subject to the claim of Mrs. McCorkle, which neither party controverts.