Kelley v. Connell, Green & Co. , 110 Ala. 543 ( 1895 )

McCLELLAN, J.

This bill is filed by Connell, Green & Ob. against W. E. Kelley and E. E. Kelley, wife of W. E. The complainants are creditors of W. E. Kelley, and were at the time of the conveyance by a third person of certain land to E. E. Kelley. The bill avers that W. E. Kelley purchased said land, paid for it with his own money, and had the same conveyed to his wife, and that said W. E. was at the time of that transaction insolvent, has since so been and is now. The purpose and prayer of the bill are to set aside said conveyance to Mrs. Kelley-as a fraud upon the complainants as then existing creditors of W. E. Kelley, and to subject said land to the payment of complainants’ debt. The respondents jointly and severally deny directly and circumstantially the averment of the bill that W. E. Kelley paid for the land and had it conveyed to his wife, and allege to the contrary that said E. E. Kelley with her own means paid all that has been paid for said land, and that she still owes a balance of purchase money which is secured by a mortgage upon the same. On the bill and answer, therefore, the issue was squarely presented whether W. E. Kelley paid for said land. Upon this issue the burden of proof that the grantee purchased the land and paid for it with her own funds, or at least with money not belonging to her husband, was upon her, for while in ordinary cases — in all cases except where the relation of husband and wife exists between the debtor and the grantee—it is upon the complainant to prove as matter of fact that the consideration moved from the debtor (First National Bank of Tuskaloosa v. Kennedy, 91 Ala. 470, 472), a distinction is taken where that relation does exist, and it is well established that in such case the presumption is that the consideration moved from the husband, and to overcome this presumption the wife —grantee in the conveyance from the third person— must affirmatively show. that the consideration moved from her, that she paid the purchase money with hex-own funds, and not with the funds of her husband directly or indirectly. Thus, it is said by the Supreme Court of the United States : “Such is the community of interest between husband and wife, such purchases are so often made a cover for a debtor’s property — are so frequently resorted to for the purpose of withdrawing his property from the reach of his creditors and preserving it for his own use — and they hold forth such ‘ temptations for fraud, that they require close scrutiny. In a contest between creditors and the wife, there is and there should be a presumption against her which she must overcome by proof.”—Seitz v. Mitchell, 94 U. S. 580. And this court has fully committed itself to this view.—Booker and Knight v. Waller, 81 Ala. 549; Bangs, Bard & Co. v. Edwards, 88 Ala. 382; Lammons v. Allen, 88 Ala. 417.

The burden thus resting on the grantee, Mrs. E. E. Kelley, in the case at bar was not discharged. She offered no evidence in rebuttal of the presumption that the land conveyed to her by the third person was paid for with the money of her husband, who is debtor to the complainants. On this state of the case, as submitted to the chancellor, the complainants would have been entitled to the relief prayed, but for the claim of homestead interposed by Kelley. This claim was properly and seasonably interposed, and, if proved, entitled him to the land as against his creditors. The chancellor erred in disallowing the same on motion and striking it out. For this error the decree must be reversed.—Kennedy v. First Nat. Bank, 107 Ala. 170.

Judgment of affirmance heretofore entered is set aside, rehearing granted, decree reversed and cause remanded.

Reversed and remanded.