Case one of two
156 Ky. 669
Court of Appeals of Kentucky.
Dec. 19, 1913.
ACTION: Affirmed.

Appeal from Circuit Court, Clay County.
Action by H. B. Marcum against William Marcum. From a judgment for plaintiff, defendant appeals.

This is an action against the appellant upon a return of no property found, under the provisions of section 439 of the Civil Code of Practice for the discovery of his money or other property, and for subjecting of same to the satisfaction of a $650 judgment debt which the appellee held against him. The appellant, defendant below, filed his verified answer, but same not being deemed by the court sufficiently full or explicit, he was by proper process brought into court, and testified in person. In this way he disclosed the fact that he owned, or claimed to own, a tract of land containing about 100 acres, and in his testimony he gave a detailed boundary and description of the land which was situated in Clay county, on Island creek, where the action was instituted and pending. In his written answer the appellant admitted that he owned this tract of land which was situated on Island creek (without otherwise describing it), but, being a housekeeper with a wife and six infant children, he claimed it was exempt to him as a homestead. No evidence was heard on this bill of discovery other than that of the defendant, who is appellant here, and the lower court upon consideration of the case rejected appellant's claim that the land was exempt to him, and subjected it to the payment of appellee's judgment debt, and directed the master commissioner to proceed in the usual way to sell same.

Appellant on this appeal assigns two errors of the lower court as ground for reversal. The first is that by this proceeding for a mere discovery of appellant's property no lien was acquired upon the property discovered, and therefore the court could not, without further steps, subject same to the payment of the debt. He insists that since the land was not described in the petition or the written answer, no lis pendens was created, and that a detailed description of the same, merely shown in the evidence given by appellant, taken down and transcribed by the stenographer, is not sufficient to create a lis pendens. If the interests of strangers or third parties were involved, this objection might well be urged, but as between the judgment creditor, and the debtor, we are of opinion that the lower court did not err in taking jurisdiction of this land as the subject-matter of the action. After appellant's disclosure that he was the owner of it, it was not necessary for appellee, in order to acquire a lien, to have another execution issued and levied upon it, or to sue out an attachment. The section of the Code, supra, not only authorizes the institution of an equitable action for the discovery of the property, but it is "for subjecting the same to the satisfaction of the judgment." Since the Code permits the court to subject the property disclosed to the satisfaction of the judgment debt, we do not think the lower court erred in the steps taken to that end, if, in fact, it was subject to execution; that is, not exempt to appellant as a homestead. The appellant resided in the town of Manchester, and had for a year or more before this action was instituted. He never resided upon nor made the Island creek property his home, and his relation to it was never such that it could or can be considered a homestead. Several years ago he did reside upon a piece of property which was located about a mile and a half from the Island creek land, and if his home place and the Island creek land together had been worth no more than $1,000, he might properly have claimed both as exempt to him, but his home place alone was worth $3,500. He sold it for that price, and then, or shortly afterwards, moved to Manchester. We gather from appellant's testimony that the Island creek property is a remnant of a much larger tract of land to which appellant and his wife jointly had record or legal title.

All but this 100 acres has at various times been sold, and, according to appellant, his wife received the proceeds, and in that way has been paid for as much or more than her share of the whole, and for that reason he claims to and does own the Island creek land, but since the record shows that his wife has not formally divested herself of title in the Island creek remnant, the lower court, before having the property sold, should direct that she be made a party to the action, and then sell, for the satisfaction of appellee's debt, such interest that he, the appellant, may have.

In effect the judgment of the lower court only directs a sale of appellant's interest; and, being of opinion that the court properly subjected his interest to the payment of this debt, the judgment is affirmed, but the wife should be made a party and her interest determined before its sale.

Ky.App. 1913.
161 S.W. 516, 156 Ky. 669

Case two of two
177 Ky. 186
Court of Appeals of Kentucky.
Oct. 16, 1917.
ACTION: Former opinion overruled and withdrawn, and judgment reversed.

Appeal from Circuit Court, Clay County.
On petition for rehearing. Petition granted.
For former opinion, see 176 Ky. 318, 195 S. W. 785.

The appellee, H. B. Marcum, by his petition in the court below brought on a return of "no property found" against William Marcum, the husband of appellant sought to discover and appropriate to the payment of his judgment property which he claimed was legally subject to his debt. By the judgment appealed from the court ordered the sale of a tract of land in its entirety, the legal title to which was held by the husband and wife jointly in proportion of one-third to the husband and two-thirds to the appellant, his wife. The judgment found that appellant and her husband had been the owners in the same proportion of a much larger tract of land, from which sales had been made aggregating the sum of $2,350.00, and that the husband had suffered and permitted the wife to take and appropriate to her own use his one-third of the amount of those sales. The husband had also appropriated other sums of money growing out of the joint ownership of himself and wife, and it directed a settlement between him and his wife and adjudged that out of the proceeds of the tract ordered to be sold the plaintiff would be entitled, not only to the one-third interest held therein, by the husband, but also to the additional sum which might be found to be due the husband in such settlement between him and his wife. From that judgment the latter prosecutes this appeal, and in an opinion reported in 176 Ky. 318, 195 S. W. 785, the judgment was affirmed, and we refer to that opinion for a more detailed statement of the facts.

A petition for rehearing has been filed by appellant's attorneys in which our attention is called to the fact that the appropriation by the wife of the proceeds of former sales of the joint property occurred before the creation of the debt sued on; and it is insisted that the appellee, being a subsequent creditor, *656 may not attack those transactions or reach the proceeds by way of settlement between husband and wife because of the fact that he is a subsequent creditor.

The general rule of law upon the subject, as is stated in 20 Cyc. 423, is:
"That a voluntary conveyance cannot be set aside at the instance of subsequent creditors in the absence of proof that the conveyance was made with actual fraudulent intent."
The rule as quoted has been consistently adhered to in its entirety by this court from the beginning, as will appear from its opinions The doctrine of these cases applies only to the extent that there will be no presumption of a fraudulent intent on the part of the grantor in a voluntary conveyance either to his wife or others in favor of a subsequent creditor, but if the proof shows actual fraudulent intent on the part of the grantor to place his property beyond the reach of subsequent creditors, equity will interfere and assist the creditor in the collection of his debt. In this case there is no manifestation in any way of such actual fraudulent intent on the part of the husband at the time he suffered and permitted his wife to appropriate the proceeds of the sales of his undivided one-third interest in their joint property. So that the qualification of the general rule cannot be applied to the facts of this case, and it was therefore error on the part of the court to adjudge any accounting between the appellant and her husband.

This leaves in the case only the question as to the authority of the court to order a sale of the entire tract of land. The power of a court to direct the sale of the whole of real estate held jointly by two or more is statutory, and our statute upon the subject is section 490 of the Civil Code of Practice. That section permits such a sale in a suit brought by one of the joint owners against the others:
(1) If the share of each owner be worth less than $100; and
(2) if the property be in possession and it cannot be divided without materially impairing its value. By the very letter of the statute no one may force a sale of joint property by judgment of court unless he be a joint owner. The entire property, whether divisible or indivisible, and regardless of the value of each joint owner's share, could not be sold at the instance of a creditor of one of the joint owners, the court saying:
"The right to sell the whole property in case of a joint holding, under section 490 of the Code, may be asserted by one of the joint owners against the others, and with the case made out as provided by that section, a court of equity will order the sale. The right to sell in such a case is purely statutory, and the statute must be followed, and, although a creditor of the insolvent assignor has a beneficial interest, the chancellor's jurisdiction is confined to cases where one joint owner sues another joint owner, and no individual or firm creditor can step into the shoes of the assignee and, because he may have a beneficial interest, large or small, assert the right to have the entire property sold."

"But it does not provide for a sale of real property jointly owned by two or more persons at the instance of any creditor of one or more of them, or at the instance of any person holding a lien upon the interest of one of them. The right of sale under the statute is personal to the owner, and cannot be exercised by his creditor. The creditor's right is confined to the sale of his debtor's interest in the land."

The interpretation given the statute by these opinions not only accords with the general rules applicable to construction of statutory remedies, but it is also eminently just and proper as between all parties concerned. It permits a creditor of one of the joint owners to sell the latter's interest in the property, which is all to which the creditor is entitled, and it relieves the other joint owners from the trouble, worry, expense, and annoyance of defending constantly recurring suits against some of the joint tenants in order to prevent the entire property from being sold at perhaps a great sacrifice and to the detriment of the innocent joint owners. Under this rule the court was in error when it ordered the entire tract of land in controversy sold. It should have ordered to be sold only the one-third undivided interest of the husband, William Marcum. The error of the court in thus ordering the sale of the entire property at the instance of a creditor of one of the joint owners was not called to our attention either in the original briefs in the case or in the petition for rehearing.

Wherefore, the petition is granted, the former opinion is withdrawn, and the judgment is reversed for proceedings consistent herewith.

Ky.App. 1917.
197 S.W. 655, 177 Ky. 186


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