Hubbard v. Little

BIRD, V. C.

On bill to set aside conveyance.

L. D. Hagaman, H. A. Fluok, and J. H. Voorhees, for complainants. R. S. Kuhl, for defendants.

BIRD, V. C. The questions to be determined arise upon a creditors' bill. They have a judgment at law, and find their course obstructed, as they allege, by a fraudulent conveyance made by one of the defendants, transferring the title to certain real estate to his wife. The defendant Little was surety upon a promissory note given to the complainants. Upon maturity, the note was not paid. Suit was commenced thereon, and process of summons served upon the defendant by leaving it at his residence, he being absent from home; so that his wife had knowledge of the pendency of the proceedings at law before Little himself. Before judgment was obtained, Little conveyed the title to the house and lot in question to his wife. It is alleged by the defendants that the conveyance was for a valuable consideration, and was also bona fide.

First, let us consider the question of consideration. The defendants were married in 1848 or 1849. Soon thereafter they agreed to purchase a lot in Pennsylvania, and to build thereon a dwelling-house. Such dwelling-house was erected, at a cost of about $300. The title was taken in the name of Wilson Little, the husband. It is said by the defendants that the consideration money was paid (for the lot itself, which was $76, and for the erection of the house, which was $300) by Mrs. Little out of her own separate estate. She insists that she had, at the time of her marriage, money which was given to her by an aunt, with whom she had been living, to the amount of at least $300. In her testimony she puts this at different amounts, varying from $300 to about $600. She earned, she says, also, other moneys, but no definite amount has been stated by her. Whether the sums were more or less, I think, is quite immaterial; the important fact being that the title was taken in the name of the husband, and he thus allowed to make appropriation and use without objection or restraint of the wife's alleged separate estate. This I call attention to as important, not because of this as an isolated instance, in their early married life, of such use and appropriation, but because it was so frequently permitted and done thereafter as to be characteristic of their business intercourse throughout many years of their married life. The Pennsylvania lot was owned by them until 1855, when it was sold for $590.

Soon after the sale of this lot in Pennsylvania, a lot was purchased in New Jersey for $635. This purchase was made at an executor's sale of real estate; and, like the case in Pennsylvania, the title to this was taken in the name of the husband. A part of the consideration was paid in cash, which was the proceeds of the sale of the lot in Pennsylvania; the balance of the consideration being secured by mortgage. There is nothing to show but what this also was a plain and distinct appropriation or application of the money, which the wife alleged to be hers, by the husband to his own use, without objection or restriction upon the part of the wife. They lived upon this property until 1860; up to which time the husband, by his labor and money, made improvements upon it and increased its value. In 1860 they made conveyance of the title to one L. Bonham for $1,175; being $775 in cash, and $400, the amount of the mortgage which the husband had given to secure a portion of the purchase money. This shows that the lot had nearly doubled in value. This last conveyance was made and delivered in February. Bonham held the title until April, 1861, when he conveyed it to Mrs. Little for a like consideration. During the year the Littles remained in the house, and paid one year's rent; no account being made of the period of time between the sale in February, 1860, and the first of April of that year. When Bonham paid the consideration money, he delivered it to Little himself, but Little passed it immediately over to his wife. It is said that she kept the $775 in her own possession that year, but just where or how she kept it she was unable to make appear. Sheused the same money, it is said, when she took the title from Bonham. Mr. Little continued to occupy the same premises until the year 1866.

It is worthy of note that when this conveyance was made to Bonham, in 1860, Little was threatened with suit by his father-in-law. This property he continued to improve until 1866, when it was exchanged for the property which the complainants now seek to bring under the lien of their judgment. In 1870, Little greatly improved the last-named property by putting valuable and permanent buildings thereon. These cost him at least $2,000. He put his own labor and time in these improvements, as well as his own money. He and his wife and daughter all say, under oath, that Mrs. Little gave him money from time to time, which he also used in paying for these improvements. How much money he received from her cannot be determined with any certainty. She had the $775 in February, 1860. This she paid back to Bonham when she took title to the property. In 1863 Mr. Little entered the army, and received as bounty $700, which he says he gave to his wife, and which she says she loaned to one W. This money they took up from W., both being present at the same time; and this, they insist, or a large portion of it, she advanced to him for the purpose of making these improvements, but I am unable to determine whether all or not, and equally unable to determine what part. From the time of the taking of title to this house and lot in question until these improvements were made, and from thence until 1874, they lived upon the premises, and enjoyed them.

During all these years, from 1849 to the year 1874, there was no accounting—no settlement of any kind whatever—between these parties, Mr. and Mrs. Little. There is nothing to show that either one was under any pecuniary obligations to the other at any time, or in any manner. There never was so much as a receipt taken, given, or asked for; nor even a memorandum in writing kept by either one. May 11, 1874, Mr. Little, it is said, gavea writing in pencil to Mrs. Little in these words:

"Frenchtown, May 11, 1874. $1,800 dew Jane M. Little from "Wilson Little."

After this, (May 11, 1874,) Mrs. Little claims that she advanced other sums of money to her husband, but to my mind the testimony respecting such advancements is uncertain; that is to say, uncertain whether they were advancements to Mr. Little himself, or to a son-in-law through Mr. Little. As the case stands, both complainants and defendants offer a written instrument in these words:

"Frenchtown, November 8, 1882. $300, boried, Jane M. Little.

"Wilson Little."

And both also offer a written instrument in these words:

"$300.

Frenchtown, N. J., December 19, 1882.

"One year after date I promised to pay to the order of Wilson Little three hundred dollars, without defaulcation or discount, for value received.

"S. L. Burgstresser."

Burgstresser is a son-in-law. November 13th, five days after the alleged loan of $300 by Mrs. Little to her husband, the same Burgstresser gave a similar note to Wilson Little to secure the sum of $300; and March 29, 1883, less than five months thereafter, Burgstresser gave another note to Wilson Little for the sum of $300,—making in all the sum of $900, which within the five months were advanced to the said Burgstresser by Wilson Little, $300 of which Mrs. Little claims to have advanced to her husband directly and on his own account.

Matters stood thus, therefore, with the defendants, at the time of the commencement of this suit; that is, Wilson Little, one of the defendants, was the owner of two houses and lots in Frenchtown,—the one in dispute, and another on Fourth street. The cost of the one in dispute was, according to their own estimate, at the time he took the title thereto, about $1,400, towhich he added over $2,000 by way of improvements; to make which improvements it is alleged by both himself and his wife that all of the bounty money, being $700, was used; and that these expenditures were made about the years 1870 and 1871; that in 1874 he gave to his wife the memoranda acknowledging an indebtedness to her of $1,800; that in the months of November and December, 1882, and in the month of March, 1883, he loaned to Burgstresser $900, $300 of which Mrs. Little claims she advanced to him,— showing thus, in brief, the accumulations of a house and lot, at a cost of over $3,400, and money, besides, of Little's, of $600.

Now, with these data, admitting that Mrs. Little had money of her own when they purchased the house and lot in Pennsylvania, and admitting that her husband gave to her the $700 bounty money, and admitting that she received $300 from her father, which she loaned to her husband; can it be said that the conveyance of the lot in question to her by her husband was, in the eye of the law,—creditors being concerned,—for a good and valuable consideration? It is shown from Mr. Little's own testimony that the lot in question, with the improvements thereon, cost him over $3,400. It is agreed between counsel that its present value is between $2,500 and $3,000. Now, can it be said that Mrs. Little paid anything like the one sum or the other for it? Can it be said, under the circumstances, that she had any just claims or demands, in law or equity, upon her husband? The conduct of the parties, under such circumstances, is always important. The action of those who claim to be debtor and creditor, under such circumstances, is an invaluable sign for the guidance of a court. Nothing seems to have transpired at any time before 1874, when the due-bill was given, to signify that Mr. Little was indebted to Mrs. Little. As has been said, if she had money of her own, she allowed him to use it as his own without the slightest accountability. How much she advanced to him is absolutely uncertain, and it is equally uncertain at what precise period of time she made any advancements to him. It seems to be perfectly clear that if she had money, and he wanted it to invest, he controlled it. The same remarks are equally applicable to the $700, except that she had the $700, and that she invested it in her own name, and that she took portions of this, according to the testimony, and paid to her husband; but what proportion—what fixed and certain sum—it is impossible from the testimony to tell.

Now, it is true, that, after the expenditure of more than $2,000 by way of improvements upon this lot, he gave to his wife, May 11, 1874, this due-bill for $1,800. It is true that they ascertained the amount due from him to her then to be $1,800; but, from the testimony, it is equally certain that it could have been more or less with the same facility. By this remark, I mean that it is impossible from the testimony to tell the basis of the calculation which gave them exactly $1,800, or any similar sum. I do not mean to say that at that time Mr. Little had not a right to execute a note to his wife for $1,800. I do not mean to say that, in the law, that would have been binding, or that in New Jersey it could have been enforced by her as against him, or against his executors or administrators. The question that I am discussing is whether such a clear and satisfactory case is presented as would justify the court in upholding this transaction, when the effort is made to sustain this conveyance upon such a consideration. The claim, besides, is one of long standing. Prom 1849 to 1874 it had no character or name. There is nothing to show that it was regarded as a debt in any sense.

My conclusion is that it cannot be said that this was a valuable consideration.

Again, was the transaction bona fide? The testimony shows very distinctly that from the time Mr. Little heard of the proceedings against him to recover judgment he determined not to pay the claim, and repeatedly declared that he never would. Mrs. Little, no doubt, from the evidence, was aware of his determination.The way in which he talked to his neighbors about it, saying that he would never pay, leads me to conclude that it must have been well understood, also, by Mrs. Little. Mr. Little not only declared that he would not pay the complainants, but it is quite certain that he took Mrs. Little to consult with counsel about the method of securing his property against the judgment; for he swears that counsel told him that if he made this conveyance they could not collect the judgment, and that he was told this when Mrs. Little was present. Nor was there any settlement or statement of account when the deed was made, nor were the notes produced and surrendered.

I will advise a deore declaring the deed from Mr. Little to Harry L. Stout, and also the deed from Harry L. Stout to Mrs. Little, fraudulent and void as to the complainants. The sale under the execution on the judgment at law will be clear of these deeds. The complainants are entitled to costs.