Claflin v. MessClaflin v. Mess
This suit is brоught by a judgment creditor to set aside certain conveyances alleged to have been made in fraud of creditors. The title sought to be avoided was made October 4th, 1870, and was put on record January 16th, 1871. No dealings took place between the judgment debtor and the сomplainant until May 26th, 1871, and the debt on which, the complainant’s judgment is founded was not incurred until 1873.
In respect to debts existing at the time a voluntary settlement or conveyance is made, the lаw raises a conclusive presumption of fraud, and no circumstances can be shown which will repel that presumption. It is a sound principle of law, as well as of morals, that a mаn must be just before he is generous. Rut there is no such presumption in respect to subsequent debts, and a creditor whose debt is incurred subsequent to the making of a voluntary deed, in order to impeach it, must show fraud in fact. Cook v. Johnson, 1 Beas. 54; Belford v. Crane, 1 C. E. Gr. 271; Ridgeway v. Underwood, 4 Wash. C. C. 137; Reade v. Livingstone, 3 Johns. Ch. 481. Actual fraud may be established in the same way and by the same means that any other fact may be proved. It may be considered proved when it appears that, after deducting the property which is the subject of the gift, the grantor has not retained suffiсient available assets for the pay
A subsequent creditor may alsо impeach a voluntary deed, simply on the ground that it was made with intent to defraud existing creditоrs. 1 Am. Lead. Cas. 40; 1 Story’s Eq. Juris. § 361; King v. Wilcox, 11 Paige 594. But, in such a case, in order to establish a good title to relief, he must show that, at the time of thе commencement of his suit, there were debts still outstanding which the grantor owed at the time he made the deed, otherwise no foundation is laid for avoiding it as a fraud upon antecedеnt creditors, for if the grantor has paid all his debts incurred prior to the conveyance, thаt fact fully repels all -idea of fraud as to them. Hunt on Fraud. Con. 52; 1 Am. Lead. Cas. 41; Spirett v. Willows, 3 DeG. J. & S. 292; Freeman v. Pope, L. R. (9 Eq.) 205; S. C., L. R. (5 Ch. Ap.) 536; Lush v. Wilkinson, 5 Ves. 387; Kidney v. Consomaher, 12 Ves. 156. The complete dominion which the law gives every man over his property, allows him to do with it as he pleases while he is free from debt, or so long as he pays his debts.
For present purposes it will be assumed, notwithstanding some evidence to the contrary, that the deed in controversy ts without sufficient consideration to support it against creditors whose debts existed at the time it was made. The complainant’s rights as a creditor arose long after the title he seeks to avoid became a matter of public record. The evidence will not support a finding that the deed in question was madе with intent to defraud future creditors; on the
The fact is proved beyond dispute—indeed, scarcely any attempt was made to deny it—that the defendant, a year or more after he made the conveyance, repеatedly represented, to persons of whom he desired to obtain credit, that he was still the owner of the property. His conduct in this respect was not only fraudulent, but criminal, and he оught to have been made to suffer the consequences of his false pretences. But the property was then lawfully vested in another, whose title had been notified to all the world, by аn open, public record, for a year or moi’e, and no representation that thе defendant could make, which was neither countenanced by nor known to the owner, could affect the title.
In my view, the complainant has failed to make a case which entitles him to the relief he asks; his bill must therefore be dismissed, with costs.