Hoxie v. Price , 31 Wis. 82 ( 1872 )

Oole, J.

We have but little doubt about the facts of this case. The evidence, we think, fully supports the conclusion reached by the court below, that the conveyances mentioned in the record from the defendants, Price and wife, to House, and by the latter to Mrs. Price, and also the patent from the state to Mrs. Price of the forty-acre tract on section twenty-two, were fraudulent and void as to the creditors of Price. It is true that Price and wife both testify that these lands were jmrchased by Mrs. Price, and paid for out of her separate estate, long before the note to Reynolds was given. But Price is most successfully impeached, and his testimony is entitled to no credit whatever. And Mrs. Price gives a most unsatisfactory account of the way she acquired so much property as to be able to pay for the Payton farm, and also these lands conveyed to her by her husband, out of her separate estate. This court has held that, where the wife has a separate estate, she may deal wit.h her husband ; may loan him money and take a transfer of property from him in payment thereof; and she doubtless might buy property of him, where the transaction is fair and honest, and where it appears that the husband does not convey it to her merely for the purpose of covering it up and placing it beyond the reach of his creditors. But, on account of the great facilities which the marriage relation affords for the commission of fraud, these transactions between husband and wife should be closely examined and scrutinized, to see that they are fair and honest,- and not mere contrivances resorted to for the purpose of placing the husband’s property beyond the reach of his creditors. (See Beard v. Dedolph, 29 Wis., 136.) This is obviously the only safe rule to be adopted, when we come to examine these business transactions and transfers of property from the ' husband to the wife.

Now it appears that, when Mrs. Price's first husband enlisted in the army, they were quite poor and destitute. He lived on forty acres of land in a small log house ; had only three or four acres improved; owned a cow; and often worked out to get means to support his family. He was in the army only about six months, when he died. About a year after his death, she married the defendant Price. At this time, she would have us believe that she had not only supported herself and child, but had accumulated and realized from the sale of the forty-acre tract, her husband’s back pay, bounty money, her pension, etc., a sum sufficient to enable her to buy and pay for a hundred and sixty acres of land which she obtained through the conveyance from her husband, and also the Payton farm, for which she paid $1,200 in 1868. The statement seems to us improbable. We do not believe that she purchased and paid for these lands, conveyed to her by House, out of her separate estate. In the language of the court below, the testimony on the part of the defendants is so unsatisfactory in itself, and is so far contradicted by the evidence of the plaintiff, that we have no hesitation in concluding that these conveyances and the patent were means really resorted to for the purpose of placing the property of the defendant Samuel Price beyond the reach of his creditors, and that Mrs. Price never purchased and paid for these lands out of her separate estate. And therefore, assuming, as we think we must do upon the evidence, that these eonveyanc3s are fraudulent and void as to the creditors of Price, the question then arises, whether the plaintiff can maintain this action to set them aside. To my mind this is the only point of difficulty in the case. The plaintiff is the purchaser at the sheriff’s sale and the holder of the certificate, but will not be entitled to a deed until twenty-seven months from the 5th of March, 1870. And, this being his relation to the property, the question is presented, whether he cari maintain a suit to set aside the patent and deeds made thus for a fraudulent purpose, and to enjoin Mrs. Price from conveying it away or in any manner encumbering the real estate so as to endanger his rights. We are inclined to the opinion that he can.

It is, however, claimed by the counsel for defendants, that the action is prematurely brought; that the plaintiff is not entitled to the aid of a court of equity to remove these fraudulent conveyances, but that he should wait until he procures the sheriff’s deed, and then bring his action of ejectment to recover the property. This might be an adequate remedy, provided Mrs. Price continued to hold the title. But suppose in the meantime she should convey the land to an innocent purchaser, for a valuable consideration, who has no notice of the fraudulent character of these conveyances. Would not the plaintiff then be remediless, and lose the benefit of his lien ? It appears to us that he would. It is quite true that it appears from the evidence that the sheriff’s certificate has been placed on file in the register’s office of the proper county. But the judgment in favor of Reynolds and against Price et al, upon which the execution, issued, was obtained long subsequent to the conveyances sought to be set aside. A purchaser, therefore, from Mrs. Price would not be affected with notice by the record of the existence of this certificate, it being subsequent in date to the conveyances from Price and wife to House, and from the latter to his grantor; and, if he should record his deed before the conveyance from the sheriff to the plaintiff was placed upon record, he would, within the doctrine of even the New York later decisions, hold the estate. Ely v. Wilcox, 20 Wis., 524, and authorities cited in the opinion of Mr. Justice DownjsR. Consequently, in the event of a sale and convey-anee by Mrs. Price before the plaintiff obtained his deed from the sheriff, the lien created by the execution sale would be destroyed. Eor it must be borne in mind that the judgment against Price et al. was not docketed in the office of the clerk of the circuit court of Outagamie county, so as to become a lien upon these lands, until the 7th of January, 1870, while the sheriff’s certificate was not filed in the register’s office until the 15th of March of that year. But the deed from Price and wife to House was executed and duly recorded on the 6th of December, 1867, and that from House to Mrs. Price was made and recorded on the 12th of June, 1868. So that a purchaser from Mrs. Price, without actual notice of the defect in her title, who should record his deed before the sheriff’s deed was placed upon record, would hold the estate as against the plaintiff. See Wood v. Chapin, 13 N. Y., 509. And this being so, it seems to us the plaintiff is entitled to an injunction restraining Mrs. Price from disposing of the property, and to have these fraudulent conveyances canceled upon the record. Otherwise his rights, as we have already said, may be lost or destroyed by a conveyance from Mrs. Price to an innocent purchaser for a valuable consideration. The case would therefore seem to come under the familiar head of equity, where the court exerts its jurisdiction to restrain the fraudulent acts of a party, which threaten to endanger a security, and to restrain sales which would be inequitable and operate as a fraud upon one who has acquired a lien upon the property. This doctrine is recognized in the cases of Avery v. Judd, 21 Wis., 262, and Phelan v. Boylan, 25 id., 679, as well as by some of the authorities cited on the brief of the counsel for the plaintiff in the present case.

Eor these reasons we think the judgment of the circuit court is correct, and must be affirmed.

By the Court.— Judgment affirmed.