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SMITH v. ARRELL (03/18/57)

March 18, 1957

SMITH
v.
ARRELL, APPELLANT.



Appeal, No. 94, Jan. T., 1957, from decree of Court of Common Pleas of Delaware County, March T., 1954, No. 2234, in case of Clarence M. Smith v. Paul Arrell et al. Decree, as modified, affirmed.

COUNSEL

Lloyd B. White, Jr., for appellant.

Jack Brian, with him Howard Richard, and Berman & Richard, for appellee.

Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold, Jones and Cohen, JJ.

Author: Cohen

[ 388 Pa. Page 118]

OPINION BY MR. JUSTICE COHEN

This is a contest between a wife and a creditor of her husband. The Court of Common Pleas of Delaware County applied section 7 of the Uniform Fraudulent Conveyance Act and held a judgment confessed by the husband in favor of the wife fraudulent and void as to the creditor.

Section 7 provides as follows: "Every ... obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future creditors, is fraudulent as to both present and future creditors." Act of May 21, 1921, P.L. 1045, § 7; 39 P.S. § 357.

When a husband incurs an obligation to his wife for nominal consideration, the transaction is presumed fraudulent on its face as to creditors of the husband, and no further evidence is required to establish actual fraudulent intent. Iscovitz v. Filderman, 334 Pa. 585, 589, 6 A.2d 270 (1939); Queen-Favorite B. & L. Assn. v. Burstein, 310 Pa. 219, 223, 165 A. 13 (1933). The wife then has the burden by clear and satisfactory evidence

[ 388 Pa. Page 119]

    to disprove the execution of the note during marriage or to prove the fairness of consideration therefor - or further, to prove that the husband's liabilities did not exceed his then remaining assets. Iscovitz v. Filderman, supra; Queen-Favorite B. & L. Assn. v. Burstein, supra; Peoples Savings & Dime Bank & Trust Co. v. Scott, 303 Pa. 294, 297, 154 A. 489 (1931).

This appellant seeks to discharge that burden by novel testimony. She maintains that this is not a transaction between husband and wife. The note dated November 17, 1947, some 18 months before her marriage, she contends was in fact executed on that date. Therefore, no actual intent to ...


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