60 Ky. 391 | Ky. Ct. App. | 1860
delivered the opinion oe the court:
In March, 1847, James Sims conveyed to his son, John G. Sims, a tract of land, lying in Jessamine county, containing 287i[ acres, for the consideration of $11,498, of which sum one-third was paid in hand, and for the residue the purchaser executed five notes, each for $1,533 07, to secure the payment of which a lien was retained on the land.
It furthermore appears, that Seamonds made his will on the 2d of October, 1847, in which he states that he had already paid for the purchase of land for his daughter, Merilda F. Sims, upwards of two thousand dollars, and he directs that his executor “pay on said purchase of land, which has already been made, by my son-in-law, John G. Sims, a sum sufficient, with what I have already advanced, to pay for 145 acres of said land, and that he take a deed therefor to my said daughter, Merilda Frances, providing that she shall enjoy it during life, and at her death it is to pass to, and be vested in, her children,” &c.
Seamonds died in 1856, and his will was admitted to record in the county of Bourbon, where he died and had resided. In a proceeding soon afterwards instituted for the allotment of dower to his widow, the executor filed an amended petition, setting forth the foregoing provision of the will in favor of Mrs. Sims, and the subsequent execution of the title bond to the testator, and asking the court to determine whether, under the will, it was his duty to require the title to the 145 acres of land to be taken to, or for the benefit of, Mrs. Sims, and if so, that it be so decreed. On this amended petition process issued against Sims and wife the 22d February, 1858, and served the same day. On the next day Sims executed to the executor, P. J. Seamonds, a deed of conveyance for the 145 acres of land, reciting the execution of the title bond to M. Seamonds, and the provision of his will before referred to, and that the conveyance was made “only for the purpose of vesting the legal title of said land in the said Preston J. Seamonds, to enable
Sims, on the 24th of February, 1858, made a conveyance of his entire estate, consisting of land and personal property, to Bronaugh, as trustee, for the benefit of all his creditors. The deed is dated the 23d of February, but was not acknowledged, and, according to the proof, was not in fact signed until the 24th. The land conveyed is described as containing “about two hundred and seventy-seven acres — less by the tract of one hundred and forty-five acres this day conveyed by said Sims to Preston J. Seamonds off the east end of said tract.” The trustee was authorized to sell the property, real and personal, for the best price he' could obtain, retaining five per cent, for his services, &c., the residue of the proceeds to be distributed among the creditors of the grantor, pro rata, if insufficient to pay all his debts in full.
Bronaugh, the trustee, filed this petition in June, 1858, alleging that he had made a sale of the land conveyed, amounting to $8,879 31, and of the personalty amounting to $1,875 56; that he had been notified of the existence of debts against Sims, exceeding the amount of the assets, some of the creditors claiming to have the right to full payment of their demands, and he therefore asks that the court will direct a settlement of
Scott answered, setting up one of the notes which had been given by Sims to his father for part of the original purchase money, and to secure which a lien upon the «entire tract had been reserved in the conveyance as before stated, which note had been assigned to Scott, and upon which there was an alleged balance unpaid of about $500.
Throop also asserted a lien upon the land for the payment'of two other notes', which had been given by Sims for part of the original purchase money, amounting to about $2,500, and which had come to his hands as the administrator of the vendor, James Sims, deceased.
Two other creditors, Emily Corn and J. C. Wilmore, file their answers and cross-petitions, charging that on the 23d February, 1858, and just before the execution of the deed of trust, and of the conveyance to Seamonds, Sims was the owner of, and had in possession, a note on one Robinson for about $1,080, and that he then assigned said note to Price and Muir, who were then his creditors ; that said assignment was made in contemplation of insolvency, and with the design to prefer them as his creditors ; that the assignment was fraudulent as to the other creditors of Sims, and operated as a transfer of all his property for the benefit of such creditors, who, occupying the position of innocent creditors, without notice of the title bond made by Sims to Seamonds in 1849, are not affected by it; that the deeds from Sims to Seamonds, and from the latter to Mrs. Sims and her c'hildren, are fraudulent as to creditors, and should be set aside; that the deed of trust was made subsequent to the assignment of the note to Price and Muir, and after the property of Sims had, by.operation of law, passed to his creditors, and they pray that all the several conveyances mentioned, as well as the assignment of the note, be set aside; that the property of Sims be sold, and the proceeds equally distributed among his creditors, &c.
Price and Muir answer, denying all the material allegations of the cross-petitions. They say they became the sureties of Sims on his notes given in 1856, for mules purchased from one
Seamonds and Mrs. Sims also answer, denying the alleged fraud in the execution of the conveyances under which the lat- • ter claims the 145 acres of land for herself and children, and insist upon the validity of her title under the provision of the will, and the title bond in pursuance of which those conveyances were made.
The circuit court rendered a judgment sustaining the claim of Mrs. Sims and her children to the 145 acres of land; sustaining also the validity of the assignment of the note to Price and Muir, and dismissing the cross-petitions assailing that assignment. The judgment also sustains the deed.of trust, and
From that judgment Mrs. Corn and Wilmore have appealed, insisting that it should be reversed upon the following grounds:
1. That John G. Sims was an incompetent witness, and that the court erred in not excluding his testimony.
2. That the assignment of the note to Price and Muir- was made in contemplation of insolvency, and conferred upon the assignees no right to the proceeds.
3. That the conveyance of the 145 acres of land by Sims to Seamonds, and by the latter to Mrs. Sims, were fraudulent in law and in fact, and should have been set aside.
4. That the whole tract of land purchased by Sims -from his father should have been held subject to the lien for the unpaid purchase money.
These points will be briefly considered in the order in which they are stated.
1. The exceptions to the deposition of Sims were not acted on by the court below, and therefore no question as to the competency of the witness, or the admissibility of his testimony, .is presented. Even if the court had erroneously-decided upon the exceptions, such error, unless excepted to at the time, is waived, and furnishfes no ground of reversal here. (Civil Code, sec. 653.) We need not refer to the numerous recent decisions which settle this point conclusively.
2. That Sims was insolvent at the date of the assignment of' the note, on Robinson, to Price and Muir; and that he was himself fully aware of his insolvent condition, at the time, are facts about which there isano controversy. The effect of the assignment, therefore, was to secure the assignees in their liability as his sureties in the debt to Brown. By the very terms of the assignment it was made to Price and Muir, “to -pay, in part, a note to M. Brown, who holds a note on me, and they security,” and it.therefore operated not only as an indemnity to the assignees, but as a security for the debt on which they were bound as sureties. The legal deduction from these facts
But the assignees, in their answer, seek to avoid the effect of the statute, and to maintain the validity of the assignment by the agreement or contract, alleged by them to have been made with Sims at the time they agreed to become bound as his sureties in the debt to Brown. We might concede that this agreement, as alleged, would have operated to invest them with an equitable right to the note, upon the principles settled in the case of Newby, &c., vs. Hill, &c., (decided at the Winter Term, 1859, 2 Met., 530.) The evidence, however,.fails to establish any such agreement. Sims, the only witness who testifies upon the subject, says that before his sureties signed the note he told them that the proceeds of the sale of the mules should be applied to its payment, that it was his intention sacredly to so apply the money ; that at the time they signed the note there was no agreement between them and himself that they should have the note, but it was his intention to collect the money and pay the debt on which they were bound; that eight or ten days after his sureties had become bound he told one of them that he “wanted them to have the note he held on Robinson,” &c.
The circuit judge, in the opinion delivered by him, concedes, virtually, the insufficiency of the proof to support the alleged agreement, but sustains the validity of the assignment upon the ground that the promise of Sims to apply the proceeds of the sale of the mules, as just stated, was consistent with justice, and that his sureties, to whom this promise was made, had a claim upon his integrity for its fulfillment.
It seems to us quite clear that the adoption of this principle would defeat the leading object of the statute referred to, and deprive it of all its efficcay, by tolerating the very evil which it was designed to remedy. What was the nature, extent, and
The language of the act is, “that every sale mortgage, or assignment, which shall be made by debtors in contem|)lation of insolvency, and with the design to prefer one or more creditors to the exclusion in whole or in part of others, shall operate as an assignment of all the property and effects of such debtor,” &c.; but a “mortgage made in good faith, to secure any debt or liability created simultaneously with such mortgage,” is not affected by the provisions of the act.
This record presents the case of an assignment made by the debtor in contemplation of his insolvency, not. to secure a liability created simultaneously with it, but to secure a pre-existing liability, the effect as well as the design of the transaction being to prefer the assignees to the exclusion of other credi
3. Upon the third ground relied on for reversal, but little need be said. The question made by the evidence, and argued by counsel, whether the assignment of the note, the effect of which has just been considered, was made before or after the execution of the conveyance by Sims to Seamonds, is considered wholly immaterial to the rights of the parties involved in this branch of the case. Nor is it necessary to decide upon the effect to be given to the proceedings and judgment in the Bourbon circuit court, as the right of Mrs. Sims and her children to the 145 acres of land in contest is maintainable upon other grounds.
That this land was purchased in good faith by the father of Mrs. Sims, for the purposes indicated in the provisions of the will, cannot be, and indeed has not been, seriously controverted. It is also proved beyond question that he fully paid the purchase money at some period between the making of his will and his death, which occurred in 1856. Here, then, was a complete, valid, and enforceable equity, further evidenced by. the bond of Sims to Seamonds in March, 1849, untainted by even a semblance of actual fraud, subsisting at the time when, by operation of law, the property and effects of Sims were transferred to his creditors for the payment of their debts. Whatever may be the nature and extent of the right thus acquired by the creditors, it is very certain that they take the property and effects of the debtor subject to all valid equities and incumbrances existing at the time the transfer takes effect. It is the well settled doctrine that, a purchaser of land takes
The present as well as the former statutes regulating conveyances, relate to conveyances of the legal title only, and contain no provision for the registration of bonds or other written evidences of mere equitable titles. (Morton vs. Robards, &c., 4 Dana, 260.) The sale of land by transferring an equity to the purchaser must, in the very nature of the case, be private, and the failure to give it publicity, or the failure of the purchaser to take the open and visible possession, has never been regarded as even authorizing the inference of fraud, or as otherwise impairing, much less defeating, the equity of the purchaser. Besides, it is obvious in this case that the possession of the land by Sims was perfectly consistent with the equitable title of his wife and children.
We are satisfied, therefore, that the court below properly sustained their claim to the land in contest.
4. We also concur with the circuit judge in his conclusion that the land embraced in the deed of trust to Bronaugh was alone subject to the discharge of the subsisting liens for the * unpaid purchase money. Upon this point we need only refer to the case of Winfrey vs. Williams' executors, &c., (5 B. Mon., 428,) and Brummel, &c. vs. Murray, &c., (MS. opin. present term.) The rule as settled in the case of Dickey vs. Thompson, (8 B. Mon., 316,) rests upon different principles, and does not apply to the facts of this case.