[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 360 This is a suit to set aside a conveyance of real property made by the husband, Weber A. Hattrem, to his wife, Josephine R. Hattrem. The conveyance is alleged to have been made to hinder, delay and defraud creditors, and particularly the plaintiff. A decree was rendered in favor of plaintiff, and defendant Josephine R. Hattrem appealed.
Defendant Weber A. Hattrem had been appointed administrator of the estate of Andreas J. Hattrem, his deceased father, and on May 7, 1923, applied in writing to plaintiff for an administrator's bond, wherein plaintiff would become surety for defendant, as such administrator. Plaintiff issued the bond, which was approved and filed. Afterwards Agnes J. Hattrem, a sister of defendant Weber A. Hattrem, who resided in Chicago, Illinois, became dissatisfied with defendant's administration of the estate and she instituted proceedings for his removal, with the result that said defendant was, on August 6, 1929, by order *Page 361 of the county court of Marion county, removed as administrator and ordered to file his final account. Ladd Bush Trust company was appointed administrator de bonis non. Weber A. Hattrem on August 31, 1929, filed a final account, and on September 5, 1929, objections to the same were filed by Ladd Bush Trust company and Agnes J. Hattrem. A trial was had upon the issues made by the final account and the objections thereto, and on October 10, 1929, the county court rendered a judgment against Hattrem and the plaintiff, as his surety, for the sum of $6,093.64, and costs. About two months before filing the final account, on June 31, 1929, defendant Weber A. Hattrem made, executed and delivered to his wife, defendant Josephine R. Hattrem, a deed of conveyance of all the real property of record owned by him, which deed is the one sought to be set aside by this court. Plaintiff and defendant Weber A. Hattrem appealed from the judgment of the county court to the circuit court for Marion county, where a trial was had, with the result that on April 3, 1930, the circuit court made and entered a joint and several judgment against defendant Weber A. Hattrem and this plaintiff for the sum of $5,604.64, and $10 costs. On April 24, 1930, plaintiff paid the said judgment in full in the sum of $5,634.04, being the judgment, interest and costs, and thereupon plaintiff, pursuant to section 3-411, Oregon Code 1930, filed notice of subrogation. This suit is brought under section 63-507, Oregon Code 1930, which, in so far as is material, provides that every conveyance or assignment in writing or otherwise of any estate or interest in lands or in goods or things in action, or of any rents or *Page 362 profits issuing therefrom, and every charge upon lands, goods, or things in action, or upon the rents or profits thereof,
"made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts, or demands, * * * as against the persons so hindered, delayed, or defrauded, shall be void."
The testimony of Josephine R. Hattrem shows that from time to time since her marriage to defendant Weber A. Hattrem, she advanced to him several sums of money, and that she gave him the proceeds of the sale of some land her father had given her, amounting to $3,500. This is practically the only definite or certain amount which the evidence shows was advanced by her to her husband. In an indefinite way, and as estimates, she claims she advanced a total of some $12,000 to her husband that he might use the same as a part of his capital in his bond business, Hattrem-Nelson company, and afterwards the Municipal Reserve and Bond company, in which Weber A. Hattrem owned a control. In February, 1929, defendant Weber A. Hattrem sold his bond business to W.A. Tyler, receiving therefor the first four items of real property enumerated in the complaint, and also personal property of the value of $73,000. Executions were issued on the judgment to the sheriff of Marion county and the sheriff of Multnomah county, with instructions to levy on the property of defendant Weber A. Hattrem, neither of the sheriffs being able to find any property subject to execution. The two first executions were returned with certificates endorsed thereon that no property could be found. Afterwards an execution was issued on the judgment and $763.03 was realized thereon on September 23, 1930. The $73,000 of the assets which belonged to W.A. Hattrem was therefore *Page 363 concealed from the creditors, and the result of the conveyance of the real property was to put all of Weber A. Hattrem's visible property out of his name. He testified that after such conveyance he had no property of record. Whatever amount his wife may have advanced for capital and whatever sum the husband contributed himself, the net result was that the real property plus $73,000 was received in liquidation of the venture. The intent on the part of the defendant W.A. Hattrem to hinder, delay and defraud his creditors seems clear.
In August, 1925, the sister Agnes R. Hattrem came from the East and claimed that $5,000 of the deceased father's money in the business of the Hattrems should have increased to $50,000, and wanted to settle for $15,000. In 1929 the sister made trouble for W.A. Hattrem and demanded his arrest.
Weber A. Hattrem, in the application for the administrator's bond, agreed to reimburse plaintiff for all its expenses in connection with the matter, and plaintiff therefor, pursuant to the principle that equity, taking jurisdiction for one purpose, will retain it to do complete justice between the parties, alleged and proved its expenses and sought a judgment therefor in this suit.
Defendant Josephine R. Hattrem is an experienced bookkeeper and has applied her knowledge thereof to her own affairs. She kept in touch at all times with her husband's affairs. She apparently knew that the real property was only a part of the consideration obtained from Tyler for the sale of Hattrem's business. In her testimony, however, she stated, in effect, that she was paying the expenses of the household because her husband was unemployed, implying that he had no assets. *Page 364
The claim of Josephine R. Hattrem is that she furnished the money to her husband and he converted it into property and she claims a resulting trust therein, and she asserts that the deed from her husband was merely a return to her by him of her advances of money to him.
The lower court found that the conveyance of June 21, 1929, was made with intent to defraud, hinder and delay creditors, and that defendant Josephine R. Hattrem was not a purchaser thereof in good faith.
At the time of the conveyance there was a contingent liability on the part of Weber A. Hattrem to the plaintiff, which is as much protected against a fraudulent conveyance as a claim already matured and due when the conveyance is made. It is not material in such cases whether a bona fide claim is due or to become due. 27 C.J. 473, § 113.
Where equity takes jurisdiction for one purpose it will retain it to do complete justice between the parties, and the amount paid by plaintiff on the judgment and the expenses in connection therewith should all be adjusted in this suit: Shultzv. Shively, 72 Or. 450 (143 P. 1115); Templeton v. Bockler,73 Or. 494 (144 P. 405); Oregon-Wash. R. N. Co. v. Reed, 87 Or. 398 (169 P. 342, 170 P. 300); Crossen v. Campbell, 102 Or. 666 (202 P. 745).
On account of the close relationship between Weber A. Hattrem, the husband, and Josephine R. Hattrem, his wife, and the possession by them alone of all the evidence of the transaction, a conveyance of property from the husband to the wife, in such a case, creates a presumption, under many circumstances, that the grantor's intent was to hinder, delay and defraud his creditors. It at least shifts the burden to defendant to prove that the transaction was made in good faith: *Page 365 § 63-507, Oregon Code 1930; Elfelt v. Hinch, 5 Or. 255; Davisv. Davis, 20 Or. 78 (25 P. 140); Hillsboro Nat. Bank v.Garbarino, 82 Or. 405 (161 P. 703); Blackabee v. Seaweard,112 Or. 675 (231 P. 146); Van Riper v. Davenport, 121 Or. 474 (245 P. 316, 256 P. 193).
It is disclosed by the record that Mrs. Hattrem had notice of every essential fact which would put any person of ordinary intelligence on inquiry. She knew the suretyship contract; that her husband's sister was making trouble concerning his administration of the estate; that her husband and his surety might be called upon to make good the funds of the estate, and, in addition to this, the fact is that this real property her husband received and $73,000 in personal property, was for his interest in the Municipal Reserve and Bond company.
The appellant suggests that the plaintiff should satisfy its judgment out of the $73,000 of personal property. This the plaintiff has endeavored to do, but, it being hidden, it was unable to realize thereon except in a small amount. We do not think that it is within the privilege of a party defendant, against whom it is alleged that a conveyance was made in fraud of creditors, and it is sought to set aside such conveyance, to say that the plaintiff should satisfy its claim out of some other property which is also conveyed away or hidden. Such claim cannot be countenanced in a court of equity.
There are several badges of fraud in this suit. The transfer, it seems, was made in anticipation of the attack upon Hattrem's administration of his father's estate, which followed soon after the conveyance: Garnier v. Wheeler, 40 Or. 198 (66 P. 812). The fact that the conveyance left the husband with no property available to his creditors is a badge of fraud: Clarke *Page 366 v. Philomath College, 99 Or. 366 (193 P. 470, 195 P. 822). An excessive effort to make the transaction appear fair and as made in good faith is also a badge of fraud. This is indicated by the attempt of Mrs. Hattrem to give out the inference that her husband, by reason of his unemployment, was wholly without funds, and that the support of the family fell entirely upon her. On the other hand, her husband's sworn statement, in a complaint filed, is that about a year before, in February, 1929, he received, in addition to the real property, a sum equaling $73,000.
The learned trial judge, who heard the witnesses and saw their demeanor upon the stand, was in a better position to judge of the strenuous effort made, if any, to color the testimony, and was in a better position to pass upon the good faith of Mrs. Hattrem, than is this court.
Weber A. Hattrem failed to testify and explain the good faith of the transaction. This is also a badge of fraud: 27 C.J. 494, § 148. The advances claimed to have been made by Mrs. Hattrem to her husband are not clearly shown. The fact that Weber A. Hattrem kept the $73,000 in a place inaccessible to his creditors stamps the transaction as in bad faith.
The testimony of Mrs. Hattrem shows that whatever advances she made to her husband were not made so that he might invest the same for her in real property or with which to buy the property in question. They were made, as she testified, for him to use as capital in his bond and security business and to be added to his assets to form the capital for the business. The law is plainly laid down in Barger v. Barger, 30 Or. 268 (47 P. 702), that where a husband, without objection, uses his wife's money, jointly with his own, in his business ventures, no trust in favor of his wife *Page 367 can attach to the real property purchased with the proceeds of the business. The amount furnished by the wife is indefinite and merely an estimate.
But the proof of a resulting trust must be strong, clear and convincing, and if a part payment of the purchase price is claimed the proof must be clear and concise and show the exact proportion of the whole price paid, and that the payment was made for a specific portion of the whole property. Payments made in common by one asserting the claim and the alleged trustee, unless made in aliquot parts, or payments made out of funds commingled and indistinguishable, are not sufficient to establish a resulting or constructive trust: 3 Pomeroy's Eq. Jur. (4th Ed.), § 1040; Holohan v. McCarthy, 130 Or. 577, 587 (281 P. 178). The claim that Hattrem held the real property in trust for his wife has not been established.
The conveyance of the real property having been assailed as fraudulent, it is incumbent on the grantee, Mrs. Hattrem, to allege and prove that she took the conveyance without notice of the fraud, in good faith, and for a valuable consideration: Jones v. Beers, 118 Or. 317 (246 P. 711), and cases there cited. This she has failed to do. On the other hand, it is written large in the record that she well understood the transactions of her husband and was thoroughly conversant with his business and had been for several years. She knew of his business entanglements with his sister, pertaining to their father's estate. The case is too plain to demand a lengthy discussion. The conveyance of the real estate in question was fraudulent and void as to plaintiff.
The decree of the circuit court was proper and is affirmed.
BROWN, BELT and CAMPBELL, JJ., concur. *Page 368