Michigan State Bank v. Kern ( 1915 )

Bird, J.

Defendant George W. Kern purchased a stock of general merchandise from one Guy Rueter, in Onondaga, Ingham county, in March, 1911, for the sum of $4,700. He paid Rueter $2,700 in cash, and gave him his promissory note payable in one year for the balance of the purchase price, amounting 'to $2,-000. Subsequently Rueter sold the note before due and for value to complainant. When the note became due, Kern refused to make payment. Suit was instituted by complainant, and a judgment for damages and costs was obtained against defendant George W. Kern for $2,043.10. An execution was taken out and levied upon certain real property situate in the village of Delton, Barry county, the title to which stood in the names of Kern and his wife. This bill was then filed in aid of execution seeking to have the conveyance set aside as having been made in fraud of creditors. The chancellor granted the relief prayed, and defendants have appealed therefrom to this court. They insist that complainant has failed to establish the fact that the transfer of the real estate was fraudulent as to creditors.

It appears that the real estate involved consists of lots 14, 15, and the south half of lot 13 in the village of Delton; the improvements thereon are three store buildings and a dwelling; that the title thereto stood in the name of George W. Kern at or about the time the indebtedness was incurred; and that it was after-wards conveyed by the ordinary form of warranty deed by George W. Kern to himself and Nettie, his wife, and so recorded. Complainant concluded that this action upon the part of defendant Kern placed the legal title of the realty beyond the reach of an execution creditor, and for this reason it seeks in this action the aid of a court of equity.

It has recently been held by this court that such a deed creates a tenancy in common, and not one by the entirety. Wright v. Knapp, 183 Mich. 656 (150 N. W. 315). See, also, Pegg v. Pegg, 165 Mich. 228 (130 N. W. 617, 33 L. R. A. [N. S.] 166, Am. & Eng. Ann. Cas. 1912C, 925). After the deed took effect, George W. Kern became a tenant in common with his wife, Nettie. His interest as tenant in common was subject to levy and sale upon execution. 3 Comp. Laws, § 9167.

In view of the fact that the case has been heard and determined on the chancery side of the court, and in view of the further fact that it does not clearly appear from the testimony that the separate interest of George W. Kern in said property, after deducting the homestead interest, is of a value sufficient to satisfy the judgment and costs, complainant’s bill will not be dismissed.

The sheriff of Barry county will be advised to proceed to sell the undivided one-half interest of George W. Kern in the premises levied upon, excepting therefrom the homestead interest of defendants, and should insufficient funds be realized upon the sale thereof to satisfy the execution,. the complainant may proceed to sell the remainder thereof, except the homestead. Defendants will recover their costs in this court.

Brooke, C. J., and Kuhn, Stone, Moore, and Steere, JJ., concurred with Bird, J.