Wise v. Pfaff

Boyd, J., delivered the opinion of the Court. This is an appeal from a decree declaring a deed from Ella L. Watts and husband to the appellant fraudulent and void,, and appointing trustees to sell the property unless the debt due the appellee be paid as therein provided. Mr. and Mrs. Watts gave the appellee a mortgage on the 26th of May, 1884, for one thousand dollars, on property on Druid Hill avenue in Baltimore. The property was sold on September 15th, 1902, under a decree of the Circuit Court for Baltimore City for $710.

The sale was ratified December 19th and the next day an auditor’s account was filed which showed a deficiency of $551.82, which was ratified on January 2nd, 1903. Subsequently a decree in personam was entered against the mortgagors for the amount of the deficiency, as provided for in the statute. On November 12th, 1900, Mrs. Watts purchased at a trustee’s sale the property in controversy (which is on Woodbrook avenue in Baltimore City) for $510, and it was duly conveyed to her. The deed from Mr. and Mrs. Watts to the appellant is dated June 7th, 1902, the consideration named is “five dollars and other good and valuable considerations,” and it is conveyed “subject to an annual rent of sixty dollars, payable on the first day of June and December.” The bill was filed on the 15th of February, 1903, and alleges that the deed to the appellant is voluntary, made to avoid and evade the liability of the grantors for the balance due by them on the mortgage and note, and for the fraudulent purpose of putting the property beyond the reach of the appellee in order to hinder, delay and defraud her in the collection of her said debt, which intent and purpose was shared in ⁵⁷⁸ by the appellant.

It also alleges that he held the title in secret trust for the use and benefit of Ella L. Watts. In his answer he denies that the deed was voluntary or fraudulent, or that he held it in secret trust for Mrs. Watts, and alleges that he accepted the deed in payment of the sum of $400 loaned by him to her on the 15th of October, 1901. An answer was also filed by Mr. and Mrs. Watts, alleging substantially the same facts. The plaintiff, after proving the mortgage and note, and introducing the record of the foreclosure proceedings, the deed to Mrs. Watts and the one from her and her husband to the appellant rested, as she had made out a prima facie case for relief.

The appellant and a sister of Mrs. Watts then testified, 'but neither Mr. nor Mrs. Watts went on the stand. The plaintiff then offered some evidence in rebuttal and, after hearing, a decree was passed as stated above, which also required the appellant' to pay or bring into Court within thirty days from date the amount of the decree against Mr. and Mrs. Watts, with interest and costs. The mortgage to the appellee had been overdue for some years, and was renewed on the 26th of May, 1901, until May 26th, 1902—at least the time for payment was extended until then. On the 27th of May Mr. Trundle, the appellee’s attorney, notified Mrs. Watts that he was instructed to say that the appellee would not renew the mortgage, as she had use for the money.

Mrs. Watts replied, expressing surprise and asked for six months’ time in which to pay the money. A number of letters passed between Irel- and M,r. Trundle—one on May 29th stating that his client would wait until July 1st, but no longer. Mrs. Watts then' wrote asking him to prevail on the appellee to take the house for the mortgage and on July 7th he replied stating that the appellee declined to do that, but would extend the time for payment until August 4th.

Mrs. Watts wrote again saying that if the property was sold at that time it would not bring six hundred dollars, and urging him to use his influence to get the appellee to take the property. On July 12th he wrote telling her that his client declined to accept the property, but ⁵⁷⁹ said that she would accept five hundred dollars by August 4th and let the balance stand for a year. On August 12th he notified the mortgagors that a decree for the sale of the property had been passed, and unless the amount due was paid by the 20th inst. the property would be advertised. It will be observed that the letter notifying Mrs. Watts that the money must be paid by July 1st was dated May 29th, just a little over a week before the deed was made to the appellant.

Mr. Wise did loan Mrs. Watts the four hundred dollars on October 15th, 1901, as is shown by her note and his check, but the note was payable one year after date and hence was not due for some months after the deed was made. It was also endorsed by two sisters of Mrs. Watts. The appellant testified that when he loaned the money Mrs. Watts offered to give him a mortgage on this property, but he did not care to put her to the expense, and he “let the matter run along. ” He said “They owed me other money besides that, her husband I should say, for a while, and then I asked them if they couldn’t let me have the money and finally they told me they would sell me the property and after thinking it over a while, I finally concluded to accept a deed and just wipe out the amount that they owed me.” He said Mr. Watts owed him $42 on a note, and interest on it for a little over four years, also $52 and interest for about five years, and $48 he gave him on May 23 rd, 1902, to pay taxes and water rent on the Druid Hill avenue property, and they owed taxes on the Woodbrook avenue property for 1901, and a portion of those for 1902. On cross-examination, in answer to the question when Mrs. Watts or either of them offered to give him the deed, he said “sometime during the month of May, I don’t know' whether it was the first part or the latter part.” Mr. Watts is a first cousin of the appellant and was also in his employ.

The appellant said in his testimony that “the $400 was not the consideration as my evidence before showed, that they owed me $585.” So we have three considerations named—$5 and other good and valuable considations in the deed; $400 in his answer which is sworn to, and ⁵⁸⁰ $585 in his testimony. It can hardly be contended that Mrs. Watts could lawfully transfer her property to pay her husband’s debts, at the expense of her own creditors, and therefore the only valuable consideration that can be claimed is the payment of the note of Mrs. Watts for $400. If the transaction was in other respects a bona fide one, it might be conceded that the difference between the actual value of the property and the amount paid for it is not sufficient to show fraud, or a failure of consideration, as there were some taxes due, and perhaps somednterest on the $400, although that is not mentioned. But the appellee having made out a prima facie case, the appellant was called upon to establish the bona fides of the transaction.

His deed on its face showed a money consideration of only five dollars, and there were many suspicious circumstances which required explanation. It would seem to be difficult to reach any other conclusion from reading this record than that the grantors were endeavoring to get this property beyond the reach of the appellee. She had demanded payment of the mortgage by July 1st, through the letter of her attorney dated May 29th. Her letters begging Mr. Trundle to use his influence with his client to get her to accept the property in payment of the mortgage, stating it would not bring six hundred dollars if sold then, and using such expressions “as I have nothing but debt before me for God’s sake do not put any more to my name,” show conclusively that she understood her liability for any deficiency that there might be, as the result of a sale, and that she believed the Druid Hill avenue property would not sell for enough to pay the mortgage.

The relation between the appellant and Mr. Watts was such that there was every probability that he would hear of the position taken by the appellee. Until about the time that the last renewal of the mortgage