11 Ky. Op. 761 | Ky. Ct. App. | 1882
Opinion by
The amended petition filed by the appellees charges actual fraud on the appellant and for that reason his claim was postponed to the claims of the other creditors. The execution by the debtor, Cheatham, of an absolute conveyance to the appellant for a consideration expressed to have been paid when the recital was false, while not conclusive, is certainly strong evidence of fraud, and when considered in connection with the other facts and circumstances presented by the record there is but little doubt left as to the propriety of the judgment below.
The appellant had been furnishing the debtor with moneys and in other ways aiding him in running his distillery and is presumed to have known what his pecuniary condition was. He certainly had a better knowledge of the personal condition of Cheatham than any of the parties to this record, and it is a little remarkable that when the debtor is about to fail, for the first time in their business transactions, the appellant deems it advisable to take from the debtor not only a mortgage to secure what he was about to advance him, but an absolute deed for a consideration, nearly double the amount he really owed him. This conveyance he kept in his pocket for months and then placed it on record when, upon its face, if a bona fide transaction, it was just and proper, and if not it was a fraud upon creditors. The appellant says he believed the debtor was amply able to pay his debts and if so the stronger reason for not accepting a deed absolute on its face when it was intended only as a mortgage and to secure a fictitious liability or the payment of a large sum of money for which the debtor had received no consideration. The debtor was then insolvent and had been for years and not long after the conveyance made an assignment for the benefit of creditors. The debtor says the reason the conveyance was not placed on record at the time it was made, was for fear of alarming creditors, and he so stated to the appellant. The latter says it was to save the payment of costs in recording the mortgage, etc. The latter reason we think is not at all satisfactory with a man of business habits w.ho is about to invest or loan money and secure it by mortgage. The appellant may have supposed that
While the appellant says he acted in the best of faith, the testimony of Cheatham, the debtor, and the character of the transaction and the insolvent condition of Cheatham at the time must control this judgment. During the progress of this case and after answer filed by the appellant it seems that in a different action
The judgment below is therefore affirmed.
Judge Hargis not sitting.