Wallace v. Penfield - 106 U.S. 260 (1882)
U.S. Supreme Court
Wallace v. Penfield, 106 U.S. 260 (1882)
Wallace v. Penfield
Decided November 27, 1882
106 U.S. 260
1. A deed which a man caused to be made to his wife for lands whereon they resided will not be set aside at the instance of his subsequent creditors, it appearing that at its date, and when he paid for the lands and the improvements which he afterwards erected thereon, his property largely exceeded his debts, and that there was no intent to defraud.
2. A misdescription of the lands will not defeat the wife's right to them, to the exclusion of those creditors, there being no doubt as to the lands intended to be conveyed.
The First National Bank of Quincy, Illinois, recovered against William Y. Williams and others, in the Circuit Court of Lewis County, Missouri, three judgments -- one on the 10th of May, 1873, upon their note dated June 19, 1871, and the others on the 5th of March, 1874, upon their notes dated, respectively, June 3, July 3, and July 19, 1471.
The La Grange Savings Bank of Missouri recovered, May 12, 1873, in the same court, against him and others, two judgments, upon their two notes -- one for $1,635.25, dated Aug. 14, 1871; the other, upon a note, dated Feb. 1, 1872.
Upon these various judgments executions were issued, and levied upon a tract of land in that county, containing forty-two acres, which Williams and his family occupied as their residence. The legal title to it was at that time in his wife, it having been conveyed to her by deed dated Feb. 11, 1868, and duly filed for record on the 24th of that month. The deed did not accurately describe the metes and bounds of the property intended to be conveyed, and, in order to correct the description, another deed was made to her on the 13th of December,
1871, and duly filed for record on the 6th of the succeeding month. The property so levied on, with all the improvements thereon, was sold at public auction, and Uri S. Penfield became the purchaser at the sum of twenty-five dollars, "in trust for the use and benefit of the execution creditors." It was by the sheriff conveyed to him accordingly. As to the balance due upon the judgments, the executions were returned unsatisfied.
This suit was commenced on the 30th of June, 1875. It proceeds upon these grounds: that Williams purchased and paid for the property with his own means, and caused the title to be placed in the name of his wife with the fraudulent intent to hinder and delay his creditors; that after the conveyance, he being insolvent, and in expectation of contracting future debts, and with intent to hinder, delay, and defraud his creditors, existing and future, and for the purpose of placing his means beyond their reach, did, to their injury, and with her knowledge, consent, and approval, make, solely by his own means, valuable, permanent, and expensive improvements on the land; that she accepted the conveyance with knowledge and notice of the fraud imputed to him, and confederated with him to cheat and hinder his creditors by withholding from them as well the land as all the moneys invested in improving it.
The prayer of the bill is that the conveyance to her be declared inoperative against his creditors; that the title to the land be vested in Penfield, in trust for the execution creditors, and the possession thereof adjudged to him for their use and benefit, and that if the deed cannot be declared inoperative, as to creditors, then that the amount expended by Williams in improving the land be declared a charge and an encumbrance thereon in their favor.
The material allegations of the bill are denied in the answer of Williams and wife.
The circuit court, upon final hearing, decreed that all the right, title, and interest of Williams and wife in the land be, without further conveyance, vested in Penfield in trust for the banks, and that possession be forthwith delivered to him. From that decree this appeal was taken.