Bittinger v. Kasten

Mr. Justice Dickey delivered the opinion of the Court:

It is contended by the appellant that the allegations in the answers of the two Kastens, that Carl Kasten, the husband, bought the original lot held by him with the money of Fredericka, his wife, and took the legal title in his name without her knowledge or consent, whereby he held the same in trust for her, are not responsive to the bill, which required sworn answers, and hence did not amount to evidence, but had to be proved, in order to show her equities, if any, and that without proof of such allegations the arrangement by which the legal title was transferred from the husband tó the wife constituted a gift or voluntary settlement upon the wife, without any consideration to uphold the same as against creditors of the husband.

In the view w?e have taken of the case it is not necessary to decide whether the several averments in the answers are responsive to the bill or not, as, whether that be so or not, the decree dismissing the bill must be affirmed upon another ground. There is neither allegation nor proof of the insolvency of Kasten at the time of his conveyance to his wife. It is neither alleged nor proved that at that time he owed any debts whatever, or had any liability other than that upon the appeal bond in question. Nor is it alleged or proved that at that time he did not have property other than that conveyed to his wife, sufficient to meet the liability upon this appeal bond. In such case the conveyance, though voluntary, must be held valid. A voluntary settlement, otherwise good, will not be rendered invalid by an unsuccessful attempt to prove a valuable consideration. Lucas v. Lucas, 103 Ill. 121 .

The owner of property may at any time give the same to any one he chooses, so long as he thereby injures no then existing creditor, and no subsequent creditor can call it'in question, unless the donor is guilty of an actual fraudulent intent, and such creditor is thereby injured. This follows from his-absolute dominion over his property, and the0mere fact that he may be indebted is not alone sufficient to make a gift or voluntary conveyance by him inoperative. If there is no intention on his part to delay or defraud his creditors, the conveyance is not within the statute. Bump on Fraudulent Conveyances, (3d ed.) page 269, says: “It is not conveyances where a man owes that are prohibited, but conveyances with the intent or purpose to delay, hinder or defraud creditors, ” — citing Lyne v. Bank of Kentucky, 5 J. J. Marsh. 545, Clayton v. Brown, 17 Ga. 217 , Taylor v. Eubanks, 3 A. K. Marsh. 239, and Hunters. Waite, 3 Gratt. 26 . On page 275 the same author says: “The presumption of an intent to delay, hinder and defraud creditors, arising from a voluntary conveyance by a person who is in debt, is not conclusive, for such a conveyance is fraudulent only where it necessarily delays, hinders or defrauds them. * * * Indebtedness, therefore, is only one circumstance from which an inference of an intent to defraud may be drawn, and must be considered in connection with the donor’s estate.” Again, on page 275, he says : “It is accordingly settled that mere indebtedness alone is not sufficient to render a voluntary conveyance void, if the donor has ample means left to pay his debts.” To the same effect may be found various decisions of this court. In Moritz v. Hoffman et al. 35 Ill. 553 , the court say: “No creditor without a lien has any right to complain that, his debtor is giving away property to his wife or children, unless such creditor can establish the fact that he has not retained enough to satisfy existing debts. Such grantor must make himself insolvent by such gifts or conveyances, and to impeach them, fraud must be charged and proved, ” — citing Wyck v. Seward et al. 6 Paige, 62 . In Emerson v. Bemis, 69 Ill. 537 , the court say: “When there is no actúal fraudulent intent, and the gift or provision made by a debtor to his wife or child is a reasonable one under the circumstances, leaving ample property unincumbered for the payment of the party’s debts, not materially lessening their then prospect of payment, the gift or provision will be sustained as valid. ” See, also, Fanning et al. v. Russell et al. 94 Ill. 386 ; Patrick v. Patrick, 77 id. 555; Sweeney et ux. v. Damron et al. 47 id. 450; Mathews et al. v. Jordan et al. 88 id. 602; Lincoln v. McLaughlin, 74 id. 11.

In this case the bill alleges the liability of Carl Kasten to complainant, as surety on an appeal bond, at the time of making the provision in favor of his wife, but does not charge that he was insolvent, or that such provision or gift rendered him insolvent or unable to meet all his legal obligations, or even that he owed any other persons. In the absence of an allegation to that effect, sustained by proof, it can not be presumed that any■ other debts of Carl Kasten then existed. (Tunison v. Chambin et al. 88 Ill. 386 .) As was said in the case of Fanning et al. v. Russell et al. supra: “Here, there is an entire want of evidence on the part of complainants to establish the fact that (Kasten) was insolvent when he executed the deed.” For aught that is shown in the record, Kasten may have retained at the time ample means to have met this only liability shown. His conveyance was made July 19, 1879, and the complainant did not recover judgment on the appeal bond until on August 7, 1882, and the execution was not returned until October 5, 1882. He may have been perfectly solvent in July, 1879, and when he in fact became insolvent does not appear.

Perceiving no error, the judgment of the Appellate Court will be affirmed.

Judgment affirmed.