No. 2463 Philadelphia, 1981, Appeal from the Order of the Court of Common Pleas of Northampton County, Civil Division, at Nos. 1979-C-7428 and 1979-CE-7429.
James R. Fiorentino, Bethlehem, for appellant.
Michael P. Shay, Jackson M. Sigmon, Sigmon & Ross, P.C., Bethlehem, for appellee.
Cavanaugh, McEwen and Hoffman, JJ. McEwen, J., files a concurring opinion.
[ 300 Pa. Super. Page 353]
Appellant contends that the lower court erred in permitting appellee to garnish a joint checking account; and, alternatively, that it erred in ignoring a stipulation concerning the amount in controversy. Because we hold that the garnishment was proper, but that the amount in controversy was only $4,200, we modify the order of the lower court, and, as modified, affirm.
Appellee divorced Donald E. Stinner in 1977. Subsequently, she commenced an action in assumpsit against him to enforce a property settlement agreement and recovered a $8,666.72 judgment on February 5, 1980. This Court affirmed without published opinion. Stinner v. Stinner, 296 Pa. Superior Ct. 645, 440 A.2d 1262 (1981). In March of 1981, appellee garnished a checking account held jointly by Mr. Stinner and his second wife, appellant Sonja Stinner. Appellant timely objected to the garnishment, asserting her entireties interest in the account. The sheriff subsequently determined that she was a prima facie owner of the account as tenant by the entireties. Following a hearing on appellee's objection to the sheriff's determination, the lower court permitted appellee to execute against the whole account, holding that the direct deposit of Mr. Stinner's paycheck into the joint account was fraudulent under section 4 of the Uniform Fraudulent Conveyance Act, Act of May 21, 1921, P.L. 1045, No. 379, 39 P.S. § 354. This appeal followed.
[ 300 Pa. Super. Page 354]
"[I]t is well settled that Pennsylvania subscribes to the majority view which regards entireties property as unavailable to creditors of one of the tenants." Patterson v. Page 354} Hopkins, 247 Pa. Superior Ct. 163, 171, 371 A.2d 1378, 1382 (1977). However, when a spouse conveys individual property to a tenancy by the entireties in fraud of creditors, the creditor may nevertheless execute against the property so conveyed. See, e.g., First National Bank of Marietta v. Hoffines, 429 Pa. 109, 239 A.2d 458 (1968); Patterson v. Hopkins, supra ; 9 Goodrich-Amram 2d §§ 3101:3, 3111(b):4.2 (1976). See generally 39 P.S. § 359. "Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent, is fraudulent as to creditors, without regard to his actual intent, if the conveyance is made or the obligation is incurred without a fair consideration." 39 P.S. § 354. A person is insolvent for the purposes of the Uniform Fraudulent Conveyance Act if "the present, fair salable value of his assets is less than the amount that will be required to pay his probable liability on existing debts as they become absolute and matured." Id. § 352(1). Under section 4 of the Act, 39 P.S. § 354, when the creditor establishes that the grantor was in debt at the time of a conveyance, the burden shifts to the grantees to establish, by clear and convincing evidence, either that the grantor was then solvent and not rendered insolvent by the conveyance, or that he received fair consideration for the conveyance. First National Bank of Marietta v. Hoffines, supra, 429 Pa. at 114, 239 A.2d at 462; Patterson v. Hopkins, supra 247 Pa. Super. at 170, 371 A.2d at 1382. "[W]here a husband conveys [property] to his wife or to his wife and himself as tenants by the entireties for a nominal or inadequate consideration, at a time when the husband is insolvent or thereby rendered insolvent, the conveyance is presumptively fraudulent as to the husband's creditors." First National Bank of Marietta v. Hoffines, supra, 429 Pa. at 115, 239 A.2d at 463 (citations omitted).
The record reveals the following: Appellant and Mr. Stinner married and opened a joint checking account in 1978. They jointly own a 1973 Cadillac and a $62,000 home that is subject to a mortgage having an outstanding balance of $47,000. Mr. Stinner individually owes approximately $54,000 to various creditors and nearly $8,700 to appellee. He is
[ 300 Pa. Super. Page 355]
employed by Bethlehem Steel Corporation and receives a net annual salary of $61,338. His paychecks and all bonuses are directly deposited to the joint account. He maintains no investments, owns no valuable paintings, and has no other significant assets. The subject account is used to pay household expenses, Mr. Stinner's loans, and his children's college tuition. Appellant is a full-time homemaker, who has occasionally deposited personal funds in the joint account. Appellant generally maintains the account, writing almost ninety per cent of the checks. In addition to Mr. Stinner's direct deposits and appellant's sporadic deposits, they deposited their joint tax refund check and the proceeds of a $5,000 joint loan in the account. From this evidence, the lower court concluded that Mr. Stinner conveyed his salary into the joint account by direct deposit and that he was insolvent at the time. We are bound by those findings. See, e.g., Bales v. Bales, 280 Pa. Superior Ct. 96, 99, 421 A.2d 422, 424 (1980); Patterson v. Hopkins, supra 247 Pa. Super. at 172, 371 A.2d at 1383.
Appellant contends that the lower court erred in finding that the conveyances lacked fair consideration. We disagree. Appellant had the burden of establishing, by clear and convincing evidence, that she had given fair ...