#### Edward J. Eck v. H. M. Haydon et al.

1. Husband and wife—how conveyance between, viewed where attacked by creditors. Where a conveyance from hushand to wife is sought to be set aside by the creditors of the former, courts of equity will closely scrutinize the transaction.

2. Preference—right of husband to make, in favor of wife. Where the contractual relation of debtor and creditor actually exists between husband and wife, the husband may for a valuable consideration and in good faith prefer his wife to his other creditors.

Bill in equity. Error to the Circuit Court of Moultrie county; the Hon. Solon Philbrick, Judge, presiding. Heard in this court at the November term, 1906.

Affirmed.

Opinion filed June 1, 1907.

John E. Jennings and John Gt. Fbiedmeyer, for plaintiff in error.

E. M. Peadbo, for defendants in error.

Mb. Justice Baume

delivered the opinion of the court.

Plaintiff in error filed his bill in equity in the nature of a creditor’s bill to remove an alleged fraudulent conveyance by defendant, in error, H. M. Haydon, of certain real estate out of the way of an execution issued upon a judgment by confession for $880 in favor of plaintiff in error against said defendant in error. Upon the hearing in the Circuit Court of Moultrie county a decree was entered by the chancellor dismissing the bill for want of equity.

The judgment by confession in favor of plaintiff in error was recovered February 29, 1904, upon two notes executed May 6, 1903.

*353At the time said notes were given by defendant in error, H. M. Haydon, he was the owner in fee of the undivided one-half of lots 5 and 6, in block 17, of the original town plat of the city of Sullivan, except a strip thirty feet east and west by ten feet north and south out of the northeast corner of said lot 6, also lots 3 and 10 and ten feet off the west side of lots 2 and 11 in block 19 in Canfield’s railroad addition to the city of Sullivan. The title to the other undivided one-half of said real estate was in defendant in error, Rosa A. Haydon, the wife of said H. M*. Haydon.

H. M. Haydon and Eosa A. Haydon were married October 28, 1900, and the evidence introduced on behalf of defendants in error tends to show that at the time of her marriage, the said Eosa A. Haydon had $900 in cash and that on the day .following her marriage she received from her brother as her share of the estate of her grandmother, together with interest thereon, the sum of $1,700. The evidence further tends to show, that on October 29, 1900, said Eosa A. Haydon loaned to her husband the sum of $1,600, taking his note therefor; that thereafter she loaned to her husband at various times other sums of money amounting in the aggregate to $2,000, taking his note therefor; that the consideration for the undivided one-third of lots 5 and 6 in block 17, heretofore described, conveyed to Eosa A. Haydon and H. M. Haydon jointly, was paid by Eosa A. Haydon, and that the consideration of $600 paid for lots 3 and 10 and portion of lots 2 and 11 in block 19, heretofore described, and which were conveyed to them jointly, was furnished by Eosa A. Haydon.

November 18, 1903, H. M. Haydon and Eosa A., his wife, conveyed by warranty deed to B. B. Haydon, the father of H. M. Haydon, all of the real estate above described and here involved, for the expressed consideration of $2,000, and upon the same day the said B. B. Haydon conveyed said real estate to Eosa A. Haydon. The.evidence in*354troduced on behalf of defendants in error tends to show that upon the execution of the conveyance to her of said real estate, the said Rosa A. Haydon surrendered to her husband the note for $2,000 she then held against him. A portion of the real estate conveyed was encumbered by a mortgage for $1,000, and the evidence tends to show that the value of the undivided one-half interest of H. M. Haydon in said real estate was less than $2,000.

There is no direct evidence in the record contradicting the positive evidence introduced on behalf of defendants in error, relative to the transactions between H. M. Haydon and his wife. The note for $1,600 above mentioned, alleged to have been given by H. M. Haydon to his wife, October 29, 1900, was offered in evidence, and so far as the record shows, its genuineness as a note given at the time it purports to have been, was not questioned.

The note for $2,000 alleged to have been surrendered by Rosa A. Haydon to her husband at the time of the conveyance of the real estate to her, is said to have been destroyed and was not, therefore, offered in evidence, but both husband and wife testify that such a note was given and surrendered. That the $600 paid for the lots in block 19, above described, was paid by Rosa A. Haydon out of .her individual funds, is established by proof that she gave her check therefor, which was paid, in the usual course of business, by the bank out of moneys deposited in her name.

True, there are circumstances in evidence which in some degree tend 4o contradict and impeach the testimony of defendants in error relative to the receipt and accumulation by Rosa A. Haydon of a portion of the money which she claims to have loaned to her husband, but after a careful examination of the record we are not prepared to say they are of sufficient probative force to justify us in setting aside the findings of the chancellor upon the merits of the case.

The intimate relation existing between a husband *355and wife affords a cloak for fraud in their dealings with each other to the prejudice of third parties, which requires a court of equity to scrutinize with suspicion their conduct in that regard, and to demand that the good faith of their transactions be clearly established by the evidence.

Where, however, it appears that the contractual relation of debtor and creditor actually exists between husband and wife, the husband may, for a valuable consideration, and in good faith, prefer his wife to his other creditors, German Ins. Co. v. Bartlett, 188 Ill. 165.

The decree of the Circuit Court will be affirmed.

Affirmed.