Karstorp's Estate , 158 Pa. 30 ( 1893 )

Opinion by

Me. Justice Mitchell,

When Karstorp sold his house in 1886 he gave his wife six hundred dollars, as her share from the lumber that her father had given her for the construction of the house, and the auditor finds that this was a fair proportion of the value, but even if not, it was a good gift, as Karstorp was not then indebted.

The purchase of the hotel property in December, 1888, was in appellant’s name, and the auditor finds that it was made by her. This was the most important fact in the case. The creditors contended that the purchase was made by Karstorp and that it was put in his wife’s name by legal if not actual fraud. But the auditor found otherwise, and the court, though apparently entertaining some doubts, indicated by his expression that “ if there is any one to complain here, it should be the creditors,” nevertheless confirmed the finding, and we therefore accept it, in the absence of clear proof of error.

The first payment for the hotel was one thousand dollars, and of this, the auditor finds that only six hundred, with interest, was the money of the appellant. It is a plain inference, though not specifically found, that Karstorp at that time was indebted, so that he could not as against his creditors pay his wife more than legal interest. Something over three hundred dollars of Karstorp’s money therefore went into this hotel purchase, and could be followed by his creditors. Upon this basis the auditor surcharged the appellant with one fifth of the purchase money subsequently received by her for the sale of the hotel. This was an error. On the facts as assumed by the findings, when his wife purchased the hotel, Karstorp gave her the difference between what he owed her and the thousand dollars she paid. This was a valid gift between themselves, and against all the world but the creditors, and the latter’s right, in the absence of fraud on her part, was only to annul it, and treat it as so much money of their debtor in her hands, not to follow it into the profits of a separate investment by her. What the arrangement was between the husband and wife as to the business, and what his interest in the hotel was, if he had any, was not shown, and cannot be assumed in the absence of evidence. On the finding of the auditor it was her property, the husband lived only six months after its purchase, she continued the business after his death, made the subsequent payment on account of the purchase, and finally the sale out of which the main profits of the whole matter accrued. To any share in those profits, the creditors have shown no valid title. All they can legally ask-now is the return of the money with interest which the husband gave away ineffectually as against their rights.

The decree is reversed, and decree now that the account stand as a final account on which the appellant is to be surcharged with $316.00, with interest from Dec. 29, 1888; and the record is remitted for distribution accordingly.