. ARK.] HOME LIFE ACCIDENT CO.. V. SCHICHTL; HOME LIFE & ACCIDENT COMPANY V. SCHICHTL. Opinion delivered November 8, 1926. 1. APPEAL AND ERROR—PRESUMPTION IN FAVOR OF DECREE.—Where the chancellor made no special finding of facts, it will be presumed on appeal-that he found in favor of the appellee upon all diSputed questions, wherever essential to the support of the decree. 2. APPEAL AND ERROR—CHANCELLOR'S FINDING—PREPONDERANCE OF EVIDENCE.—The Supreme Court will accept the finding of the chancery Court as conclusive unless against the preponderance of the evidence. , . 3: FRAUDULENT CONVEYANCES—EVIDENCE.—In a ' Suit bY a mortgagee, holding a deficiency judgment after foreclosure; to set adide a con7 veyance by the mortgagor to his wife on the ground of fraud; a', finding of the chancellor that the mortgaged land was, of greater value than the debt secured wal not against the preponderance of the evidence. 4, FRAUDULENT CONVEYANCES—FINDING OF CHANCELLOR—EVIDENCE.-7 In a suit by a mortgagee holding a deficiency judgment after foreclosure to set aside a conveyance by the Mortgagor to his'wife fOr fraud, a finding that the conveyance was made withOnt -aetual intent to defraud and that the mortgag6r was not then insolvent, held not against the preponderance of the evidence. 5. FRAUDULENT CONVEYANCES—VOLUNTARY CONVEYANCE.—A.conveyance made without consideration is valid against creditors and purchasers if its execution is free from fraud, either .ctual' or presumed. 6. F RAUDUL EN T CONVEYANCES—VOLUNTARY CONVEYANCES—PRESUM P-TION.—As to subsequent creditors, • there "isP no preSumption of ' fraud in a voluntary conveyance by a debtor, but as to existing: creditors there is a presumption in.such case. 7. FRAUDULENT CONVEYANCES—PRESUMPTION AS TO SECURED CREDITOR., —The presumption as to existing creditors which arises ,upork proof of a voluntary ' conveyance by a debtor does mit aii§e- in the case of a secured creditor, who will be held to have looked' only to his security for collection of his debt. 0
32 HOME LIFE ACCIDENT CO. V. SCHICHTL. [172 8. FRAUDULENT CONVEYANCES—PRESUMPTION OF FRAUD.—There is no conclusive presumption of fraud as to existing creditors where a debtor execuied a voluntary conveyance, if he was not at the time insolvent. 9. FRAUDULENT CONVEYANCES—PRESUMPTION OF FRAUD—REBUTTAL.— In a suit by a mortgagee holding a deficiency judgment after foreclosure to set aside a voluntary conveyance by the mortgagor to his wife, where the court found that there was neither insolvency nor intention to defraud, the presumption of fraud, if any, was overcome by the proof. Appeal from Lee Chancery Court ; A.1. Hutchins, Chancellor ; affirmed. Daggett & Daggett, for appellant. Maun & McCulloch, for nppellee. MCCULLOCH, C. I. In September, 1919, John N. Schichtl, one of the appellees, became the owner in fee simple of a tract of land in Lee County, Arkansas, containing 643 acres, known as the Sullivan place, the consideration for the purchase •being the sum of $40,000, of which $10,000 . .was paid in cash to J. K. Sullivan, the vendor, and annual installment notes were executed for the balance, with a mortgage on tbe land to secure the same. Sullivan subsequently assigned the notes to appellant. About the same time, Schichtl purchased an adjoining ,tract of -land containing about 1,100 acres, known as the Highland place, the consideration for the purchase being $28,500, which was all paid, in cash except $5,000, a note and mortgage on the land securing the same, being executed, and this note also was assigned to appellant. Neither of these debts was paid, and on June 22, 1922, aPpellant, being still the legal holder of said notes, instituted actions in the chancery court to recover judgment against Schichtl and to foreclose the lien on said tracts of land. The amount of - the several debts for which the decree was rendered was $31,950, the indebtedness against the Sullivan Place, and $5,000, the indebtedness against the Highland place. This decree was rendered on September 27, 1922, and a sale of said lands was ordered to pay the debt. The sale was made by the court's commissioner on January 23, 1923, and appellant became the 0
ARK.] HOME LIFE ACCIDENT ' CO. -v. SCMCHTL. 33 purchaser of the Sullivan place for the consideration of $15,000, and of the Highland place for the sum of $5,000, the amount of the indebtedness against that place. It appears from the undisputed proof adduced in the present litigation that, during the time that Schichtl owned these lands and a year or two before the foreclosure of the mortgages, he collected from the St. Francis Levee District the sum of $20,000 as damages caused by the taking of a right-of-Way along the Mississippi River for reconstructing the levee. Out of this fund thus collected,'Schichtl spent $9,000 in the erection of a gin on the Sullivan place, and he also erected three houses on the farm, the cost thereof not being disclosed in the evidence. Schichtl was also the owner of 630 acres of wild and unoccupied lands in Lee County, the Value thereof not being shown hi the record in the present case, and, during the pendency of the foreclosure proceedings and prior to the rendition of the decree in the case, he conveyed those lands to his wife, Annie G. Schichtl, one of the appellees, for the recited consideration of ten dollars and love and affection and *funds which she had previously advanced to him. Appellant commenced this action in the chancery court of Lee County • on August 11, 1923, to set aside the said conveyance- of John N. Schichtl to his wife and to subject the lands to the payment of the unpaid balance of appellant's debt represented by the decree against John . N. Schichtl. It was alleged- in the complaint that the conveyance was executed by Schichtl to bis wife without any valuable consideration, and with fraudulent intent to cheat, binder and delay appellant as his creditor. The answer contained denials of all the allegations of fraudu-lentintent in regard to the conveyance in question.. The cause was heard upon oral testimony and upon an agreed statement as to some of the material facts . in the case, and
the chancery court rendered a decree in favor of appel-lees, dismissing appellant's complaint for want of equity. There was a sharp Conflict in the testimony upon some of the material facts, principally as to the mar-
34 HOME LIFE A-cCIDENT CO. v. SCHICETL. [172 ket value of the Sullivan place and the Highland place at the time of the execution of the deed by Schichtl to his wife which is alleged to ,have been executed with fraudulent intent. The chancellor made no special findings of fact, but we-must assume that he found in favor of appel-lees upon all disputed facts which are essential to the support of the court's decree. It is undisputed that the consideration for the purchase of these lands in September, 1919, aggregated the sum of . $68,500 ; that the lands were . worth that sum .at that time, and that Schichtl spent $9,000 .in improVing the lands by building a gin thereon, making a total valuation of $77,500. There is proof of further improvement of the Sullivan place by building three houses, but . we:find no statement in the record of the cost of those houses. :If the $20,000 , received . by Schichtl from the. St, Francis Levee Board should -be deducted from the total valuation stated above in arriving at the tine . valuation, it would leaye an aggregate valuation on . the two farms of $57,500. , According to the testimony in the case, the appraisers for the levee boards fixed the value of the lands,taken . at-$250 an acre, and no improvements on the farm were taken into the right-of-Way. The aforementioned settlement with Sehichtl was made -upon- that appraisement: . The amount . of the indebtedness against :the two . tracts of land at the time •of the conveyance now under investigation was about -$37,000. The commissioner 's. sale of the two farms left a:deficiency decree of something over $16,000. There was, as before stated, a conflict in the testimony .doneerning the:value of the Sullivamplace and the Highland place at- the time of...the conveyance under consideration, :but we must _accept -the finding of the chancery court as conclusive, unless it is:against . the preponderance. of the evidence. The testimony adduced. by the appellees concerning the value of the two farms at the time of the execution of this , deed was from $50,000 to-$60,000, and the testimony adduced by . appellant tended to show that the value of the two tracts at that time was from $35,000 to $40,000. According to the preponderance
ARK.] EtOME LIFE ACCIDENT CO. v. SCHICHTL. 35 •of the eVidence, the value of the lands at that time was considerably abOie the aniount of Schichtl's indebtedness to'appellant. The finding of the chancellor that the value Was' as. Muck' s that shewn by the testimony of Witnesses addticed by appellees is not Against thepreponderanee of the testimony, and we must therefore accept that finding • as correct. In-additiOn to that, it appears froth nndis-puted evidence that, after appellant beeame the owner of the Highland place, it sold timber therefrom at the price of $2,000. ' It is undisputed that Schichtl had no other indebtedness of any character except that to appellant, as'aboVe stated. Schichtl testified, as his reason for Mak: ing the conVeyance to his wife, that she had been in very bad health f6r two or three years, and Constantly needed Money, and that he conveyed the lands to her so that she could be prepared to take care of herself. He testified that-he had no idea of defrauding appellant, and supposed that it would realize a sufficient sum from the sale under the mortgages to collect its debt. It is'thus seen that we have a finding of the chancery court in accOrdance with the preponderance of the -evidence to the effect that the deed of conveyance under inyestigation was executed withont any actual int6ntion to defraud creditors, and that the grantor was not insolvent at the time of the execution of the deed. The ques:- tion then presented is, whether or not there was constructive or legal fraud conclusively presumed from the exedu-tion of the deed without Ccinsideration other than the grantor's affection for his wife, the grantee. It should be noted, in the beginning of the consideration of this-question, that our statute (Crawford & Moses' Digest, § 4874) renders invalid only those conveyances "made or contrived with the intent to hinder, delay or defraud creditors * * * or as against -creditors and purchasers prior and subsequent." A conveYance, eyen without consideration, is valid against creditors and purchasers if its execution is free from fraud, either actual or presumed. Nearly every phase of the subject Of fraudulent conveyances has been dealt with in
36 HOME LIFE ACCIDENT CO. v. SCHICHTL. [172 numerous decisions of this court. The subject was treated at length by Mr. Justice COMPTON in delivering the opinion of tbe court in Bertrand v.. Elder, 23 Ark. 494. Reference was there made to the opinion of Chancellor Kent in Reade v. Livingston, 3 Johns. Ch. Rep. 479, where it was directly decided that a voluntary 'conveyance of property is, as against existing creditors, conclusively presumed to be fraudulent, and that no circum, stances- will be permitted to repel the presumption. But that decision was directly rejected by this court in the following language : " Though the decision in this case is not unsupported, the decided preponderance of authority, both in this country and in England, is against it, and establishes a rule less rigid, and, in our opinion, more consistent with the sound interpretation of the statute of frauds." After a full discussion of the authorities, the court said: " The principle, as we apprehend, to be extracted from the decisions in England and America, is that the voluntary, conveyance of a party to his wife or child, though he be indebted at the time, is prima facie only, and not conclusively, fraudulent, in respeet to the claim of an -exig ting creditor, and that the presumption thus raised may he met and repelled by proof on the other side. The question of fraud must depend on all the circumstances of the case, looking to the state and condition of the grantor, the extent of' the property conveyed, and the direct tendency of the conveyance respecting the claims of creditors." Numerous deeisions of the Supreme Court of the United States are cited in support of that statement of the law. In the case of Driggs & Co.'s Bank v. Norwood, 50 Ark. 42, S. W. 323, 7 Am. St. 78, Mr. Justice Siwn'u, speaking for the court, used the following language, which is in line with that used in the case oited above : "Every voluntary alienation of his property by an embarrassed_ debtor is presumptively fraudulent against existing creditors. Indebtedness, raises a presumption
ARK.] HOME LIFE ACCIDENT CO. v. SCHICHTL. 37 -of fraud, which becomes conclusive upon insolvency. But, as to subsequent creditors, a voluntary conveyance by a person in debt is not po&i se fraudulent. To make it so, proof of actual or intentional fraud- is required." We find in Judge • BATTLE'S opinion in the case of Rudy v, Austin, 56 Ark. 73, 19 S. W. 111, 35 Am. St. 85, the following statement, which is not only a most lucid exposition of the law on the subject, but has been often referred to in subsequent decisions : "A debtor has the right to make reasonable provi-.. sions in property for his wife or children, according to his state and condition in life. But, in doing so; . he must retain in his possession 'property amply sufficient to pay all his debts. If he does so fairly and honestly, the child or wife for whom the provision was Made is not bound to refund tbe advancement . for the benefit of creditors, in the event tbe parent or husband should subsequently fail -or become unable to pay the debts he owed when the provision was made. The law requires every man to be just before be is generous. If he makes a voluntary conveyance while he is in debt, it presumes that it is fraudulent as to existing creditors, and the burden is on those claiming under the conveyance to repel the presumption. If he be insolvent, unable to pay his debts, the presumption that it is -fraudulent as to antecedent creditors is con-elusive." • The line as to the presumption of fraud is thus clearly drawn between attacks by prior existing creditors and subsequent creditors. The statute supra protects creditors of both classes, •ut there is a distinction as. to • presumption in the rules of evidence in the two classes of cases. • As to subsequent creditors there is no presumption, and the burden of proof as to fraud rests upon the attacking creditor, whilst in the case of existing creditors there is a presumption of fraud arising from a voluntary conveyance by the insolvent debtor. Williams-Echols . D. 0. Co. v. Bloyd, 169 Ark. 529, 276 S. W. 1. The proof in this case and the finding of the court thereon is that Schichtl, the grantor, was not insolvent at tbe time he
38 HOME LIFE ACCIDENT CO. 1). SCHICHTL. [172 made the conveyance to his wife, therefore then is no conclusive . presamption of fraud under the rule stated by. Judge BATTLE, ' even though aPpellant be pladed in . the same categorf . With referenee . to -presumptions as , a prior *existing creditor. There are authdrities to the effect that a contingentliability, or' one dependent upon a future centingencY; is hot to be 'Treated as an *eXisting debt* within the medhing of the rule as to preSumptive 6-6- dence. Severs v. Dodson, 53 : N. J. Eq. 633, 34 'AU. 7. There are, however, authorities to the contrary. Thomson v. Crain, 73 Fed. 327 ; Sallaske v. Fletcher, 73 Wash. 593, 132 Pao.- 648 .; drocker -v. HvintSinger, 113 Wis. 181, 88 N. W. 232. Some of those authorifies, Partichlarly the Washington case supra, do not relate to the staiute on fraudulent conveyances; but Merely to a statiite which provides that a Conveyance by one of the spouses td the Other of Commanity property ',shall not affect any existing . .equity in favor of creditors of the granter,". and riO reference is made to the'question of fraud. :We are not, however, dealing' merejy with the question whether the indebtedness . is One which literally . existed at the time of the conveyance alleged to haVe been executed with fraudulent intent, but' the question is whether or not the indebtl . edhess is held' Under circumstances which \mild call into ,operation a presumption of 'fraud. We have a ease ,nOw of mortgage indebtedness, and the real question, so . far''as the case relates to presumption, is Whether or not , such - cenclusive presumption should be indulged' in favor of,tlie holder of the secured- debt. The reason for indulging presumptions does not apply, we 'think, under those circumstances, and the anthorities support the view- that there is no presumption under those cireumstances. May on Fraudulent Conveyances; p. 163 ; Bigelow on Frandu-lent' Conveyances, p. 188 ; Welch v. Mann, 193 Mo. 304, 92 S. W. 98; Crombg v. Young, 26 Ont. 194. The reason for this distinction in putting secured creditors in the same' category as subsequent' creditors is that,, whatever presumption is to . be indulged, the creditor, in selecting his security, has, unlike a general creditor, disregarded
ARK.1 HOME. LIFE ACCIDENT CO. V. 8CHICHTL. 39 other property of the debtor and looked only to his security for the collection of his . debt, hence he is.entitled-to no presumpti on of fraud in the conveyance of other property. Such a creditor is one who has already been given a preference over others, and is-not in the attitude of an existing general creditor, hence his reliance is deemed tO have been founded on his security rather than bn the solvency of the debtor. It seems to us that this is a sound dislinction, but, at any rate, tbe trial court has neces'sarily found in this base that there was no insolvency on the part of the debtor and no intention to defraud ; therefore, even if there was a rebuttable presumption, it has been over-comb by the proof- This view- 6f the law , is not in contlibt with our decision in F * irst National Bank v..Herring, 169 Ark: 317, 252 S. W. 37, which was a case of undisputed insolvency. Nor is it in conflict with the decision of this court in Wilks v. Vaughan, 73 Ark. 174, 83 S. W. 9 . 13, and James v. 'Mallory, 76 Ark. 509, 85 S. W. 472. In -both of those cases the court dealt with the question of actual insolvency of. the debtors, who were indebted to mimerous general -creditors, and in each instance such conditions were found by the court to exist. The term " embarrassed debtors, " used in- Wilks v. Vaughan, supra, was evidently •meant in the sense of insolvency ih fact, which the cOurt.found was tbe condition of the debtor at the time the conveyance under investigation was.executed. In James v. Mallory, supra, the court treated. a mortgage creditor as an existing creditor, but, in doing so, it was in responSe- to the argument that the renewal- .of a_ prior debt constituted a subsequent debt. The *question now under consideration in regard to the status of a mortgage debt was not presented -to us in the arguthent. In that case, as in Wilks V. Vaughn, Supra, there were numerous general creditors, and the debtor', waS. inscilvent at the time the conveyance was : executed;; and the court found that there was constructive fraud based on actual insolvency. In the present case tbere was -neither insolvency nor. actual fraudulent intention. •
40 HOME LIFE A.CCIDENT CO. V. SC:MC:HT:L. [172 The finding of the chancery court is, as we have already said,.not against the . preponderance of the testimony, and therefore should be affirmed. It is so ordered. HART, J., (dissenting). Judge SMITH and I dissent in this . case because we .believe that, when the evidence is viewed in the light most favorable to appellee, we have the case of an insolvent debtor, or one whose embarrassment resulted in insolvency, making a voluntary conveyance of a part of his lands to his wife; which prevented appellant from collecting its debt. • Under our former decisions, such disposition is conclusively fraudulent as against existing creditors ; and a mortgagee whose debt is due at the time Of the voluntary conveyance is an existing creditor. In Wilks v. Vaug han, 73 Ark. 175, Chief Justice HILL, speaking for the court, said: "It is thoroughly settled in equity jurisprudence that conveyances made to members of the household and near relatives of an embarrassed debtor. are looked Upon with suspicion and scrutinized with . care ; and, when they are voluntary, they are prima facie fraudulent., and, when the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as to existing creditors." • This holding has been quoted with approval in our later decisions. McConnell. v. Hopkins, 86 Ark. 225, 110 S. W. 1039; Brady v. Irby, 101 Ark. 573, 142 S. W. 1124; Simon. v, Reynolds-Davis Gro. Co., 108 Ark. 164, 156 S. W. 1015 ; Burke v. New England National gcZak, 132 A.rk. 268, 200 W. 1018 ; Davis v. Cramer, 133 Ark. 224, 202 S. W. 239 ; Farmers' State Bank v. Foshee, 170 Ark. 4.45, 280 S. W. 380 ; and Papan v. Nahay, 106 Ark. 40, 152 S. W. 107. These cases are cited in 27 C. J. 643 in support of the text, which is a g follows : "In other jurisdictions, if the conveyance is vOluntary, it is only prima. facie fraudulent ; but, where the debtor is insolvent at the time of the transfer, or his embarrassment results in insolvency, such conveyances
AE.K.] HOME LIFE ACCIDENT CO. V. SCHICHTL. 41 are conclusively presumed to be fraudulent as against existing creditors, although there is no actual fraudulent intent." As above stated, the undisputed facts bring this case within the rule. In June, 1922, appellant brought suit against John H. Schichtl to foreclose a mortgage given .to secure an indebtedness which was due and unpaid. On the 20th day of September, 1922, John H. Schichtl made the voluntary conveyance in question to his wife. Appellant, who was the plaintiff in the foreclosure suit, proved its mortgage debt; and, no proof having been adduced therein by appellees, who were the defendants in the suit, judgment was rendered against them for the amount of the mortgage debt, and .a foreclosure decree was entered of record on September 27, 1922. The lands •were sold under the foreclosure decree on January 23, 1923, and appellant became the purchaser, , as . : stated in the majority opinion. This left a deficiency decree of over $16,000. Schichtl had no property out of which to satisfy the deficiency judgment except the proPerty he conveyed to bis wife just seven days before the decree in the-foreclosure suit. Our later decisions support the above interpretation. In Bra . dy V. Irby, 101 Ark. 573, 142 S. W. 1124, Mr. Justice FRAuENTHAL delivered tbe opinion of .the court, and said : "But it is alSo.well settled that a voluntary transfer of property by one in debt is presumptively fraudulent as to creditors then existing; and if the debtor is, at the time of such gift, insolvent, or if the gift is of such amount, or made under such circumstances, that it will binder or delay or defraud existing creditors of .such donor, then such , voluntary conveyance or transfer becomes conclusively fraudulent and invalid aS to such existing creditors.32 At the conclusion of the discussion it was said : "From this it results that we have here a. case where a husband, engaged in business and involved in debt resulting . in insolvency, made a voluntary transfer of property to his wife. Under the law, it follows that, -as
• 42 . HOME LIFE ACCIDENT CO. V. SCHICHTL. [172 against existing creditors, such transfer was fraudulent, no matter how pure-the motive whiOh induced it, because, from the testimony, the resurt of such transfer was to reduce . the asset§ of the husband to such an extent as to delay and hinder his creditors in the' collection Of their debt: 'gay v. State Nat. Bank, supra." In Simon v. Reynolds-Davis Grocery Co.-, .108 Ark. 164, the court said: "While the burden of proof is upon the plaintiff who alleges fraud to show it, :yet that burden has been discharged where, .as in this case, he shows that an embarrassed debtor, pending a suit against,him by his creditors, has made .conveyance of all the land he owned,- except his homestead, .to his sons, for - a:, consideration which, upon the face of the conveyance, appears to be a grossly inadequate one. Such circumstances are sufficient to raise a suspicion of fraud and to cast A doubt upon the legality of the transaction, and the burden is then on the one holding under -the deed to show a consideration. (Leonard v. Flood,. supra)." • In Farmers' State Bank v. Foshee, 170 Ark. 451, 280 S. W. 382, the court said: "It impresses us that the purpose of all -these conveyances of- the property' of W. F. Foshee was to place the property beyond the , reach of his creditors. The result - of all the Oonveyanees was -that the property, which was the property of W. 'F. Foshee when the debts were contracted, became, through the various deeds, the property of Mrs. Foshee, the wife and' mother. The law is well established in this State, and by the anthorities generally, that 'where an ernbar-raSsed debtof makes conveyances to members of his own fainilyhis near relatives—such conveyances are looked upon with suspicion and scrutinized with care; -When voluntary, they are priv,a facie fralidulent; and, when the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as- to existing creditors.' Wilkes V: Vaughan, 73 Ark. 174-179 ; Harris v. Smith, 133' Ark. -250-260; Davis' v. Cramer, 133 Ark. 224."
ARK.] HOME LIFE ACCIDENT SCHICHTL. 43 If, .as stated in the majority opinion, the language referred to in Wilks v. E augli/rb, supra, refers to insolvency at the time the volnntary cOnveyance is made, the result would be the same. The words "when the embarrassment of the debtor proceeds to financial wreck" would certainly be.• a definition, of insolvency,. or they would mean nothing and had better, never have been used. . As we have already seen, the conveyance was made just seven days before the foreclosure decree, -and no attempt . was Made to disprove the amount of the mortgage. This shows that Schichtl .knew that- he; owed, the amount of the debt. secured by the mortgage, and . that a decree of foreclosure would: be entered when the.. case was . reached on the call of the calenda r.. There is no claim .that there was any fraud in the foreclosure sale. It was made in due course, and the voluntary conveyance to his wife left Schichtl without any- property to.satisfy the defiCiency decree.. Thus it will be seen that the embarrassment of Schichtl proceeded to financial wreck within four months after the voluntary conveyance was made, and no new cause contributed to this . result. These' facts are imdisputed; and it does not make any difference what cauSed the depreciation in the value of lands between the date of the execution of the mortgage and tbe date of the foreclosure sale, for it wars a, depreciation common to all lands,. and existed, at the time the voluntary conveyance Was made. No matier how pure his motives were, Schichtl made the voluntary conveyance to his wife at u time when he was being sued for a debt 'past due, which . he was unable . to . pay, and the embarrassment resulted.in his financial wreck within four months. That appellant Was an existing creditor, is settled by James v. Mallory, 76 Ark. 509, 89 S..W. 472. In that case the court said: "'If he (JameS) . was insOlVent- at the time, and voluntarily conveyed .away his prOperty without consideration, the conveyance 'is void aS against creditors, even though .he used no .actnal intent to defraud."
Tbe court then said that the conveyance .of James to Mallory & Company, although absolute in form, was not, under the facts, in extinguishment of the debt, but as security therefor. Hence it was said that Mallory & Company ,must be treated as creditors whose debts existed at the time of the fraudulent conveyance. In 27 C. J., 472, it is said that existing creditors are, as the words imply, persons having subsisting . obligations against the debtor at the time the fraudulent alienation- was made. In accordance with this rule is tbe caSe of Tapan v. Nahay, 106 Ark. 230, 152 S. W. 107. There a voluntary conveyance was made by a person against whom a snit for unliquidated damages was pending. No defense was made to the action, and it resulted in a judgment against the defendant. The plaintiff was ,held to be an existing creditor. Indeed, in The absence of authorities, it would seem to be rather . a strange and novel doctrine to hold that the holder of a note and mortgage; :which are past due, and whose satisfaction is being sought by a pending suit, is not an existing creditor.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.