Blake v. Hansen

This is an action to set aside conveyances to a wife and to subject the land to a judgment against the husband. Upon the trial of the action the court found the issues in favor of the defendants. Plaintiff appeals.

[1] The judgment which plaintiff is seeking to collect was obtained against defendant Ferdinand Hansen and others on March 17, 1932, for $11,616.26, in an action upon an executor's bond. When this bond was executed in June, 1930, Ferdinand Hansen owned a quarter section farm in Clay county, mortgaged for $2,500, a dwelling in Wakonda occupied by defendants as their homestead, and a small amount of personal property. On or about October 10, 1931, Ferdinand Hansen received a letter from plaintiff's attorney demanding a settlement of a claim alleged to have resulted from a breach of the bond and stating that, if payment was not made, action would be instituted upon the bond. On October 19, 1931, and December 21, 1931, he executed deeds to his wife, conveying an 80-acre tract in each deed. An action upon the bond followed, resulting in judgment against the sureties. After execution had been issued and returned unsatisfied, the instant action was commenced to set aside the deeds on the grounds that they were made without consideration and for the purpose of defrauding creditors.

The court found that the transfers of the land subject to the mortgage rendered the grantor insolvent, but that the conveyances were made for a full and fair consideration and made for the purpose of paying and satisfying an antecedent debt due from the husband to the wife and in making the transfers they acted in good faith. It appears from the evidence that defendants, Ferdinand Hansen and Mary C. Hansen, were married in 1889; that in 1891 she sold to her husband 4 horses, 20 head of cattle, and other personal property of the agreed value of $1,800, which she acquired from the estate of her former husband; that in 1905 the wife loaned to the husband $1,200, which he applied upon the purchase price of a 40-acre tract of land; and in the year 1910 the wife conveyed to him at the agreed price of $3,340 her interest in land which she inherited; and that she received no notes and held no written evidence of these transactions. Both testified that at the time of the making of the loan and transfers there was an agreement expressed that the wife was to receive payment therefor together with interest. The husband at the time of the execution of the bond justified in the amount of $25,000, but it does not appear that this was done with the knowledge of the wife. Appellant contends that the evidence is insufficient to support the findings of the trial court to the effect that there was a definite agreement for repayment.

[2] In Churchill Alden Co. v. Ramsey, 50 S.D. 73, 208 N.W. 406, 407, this court said: "In view of the relation between husband and wife, the law does not imply, merely from the receipt by the husband of the proceeds of sale of property standing in the wife's name, a promise on his part to repay or replace the same, as it might between strangers. There must be either an express promise to repay, or such attendant circumstances as affirmatively establish the fact that the husband and wife in the particular transaction dealt with each other as debtor and creditor." We think that it can fairly be said under the evidence in this case that Mrs. Hansen was a creditor to the extent of the value of the real estate and that the conveyances were made to her in pursuance to an oral agreement to repay. A debtor in failing or insolvent circumstances may prefer one creditor, notwithstanding it may be to the exclusion of others; and this rule may include the wife of the debtor who is a creditor. Churchill Alden Co. v. Ramsey, supra.

In Meloy v. Kell, 53 S.D. 388, 220 N.W. 863, 864, wherein the facts were similar to those in the instant case, this court said: "Whether J.W. Meloy was honestly indebted to respondent was a question of fact for the trial court to determine. The trial court found that she was such a creditor, and that she paid full consideration for the premises. The trial court was not bound to accept as true the testimony of respondent and her husband merely because there was no other direct evidence concerning it. * * * It was the duty of the trial court to find on this point on the whole evidence, including all the conduct of respondent and her husband and all the facts and circumstances shown, and in the light of its judgment as to credibility. Where the credibility of witnesses enters into a finding of the trial court as a controlling factor, only the most convincing circumstances will justify this court in reversing the same."

A review of the entire record does not convince us that the findings of the trial court are against the clear preponderance of the evidence.

The judgment and order appealed from are affirmed.

CAMPBELL, WARREN, and RUDOLPH, JJ., concur.