Egery v. Johnson

70 Me. 258 | Me. | 1879

Yirgin, J.

The complainants allege that on, and for some time prior to October 29,1875, they were creditors of the defendant Johnson who then owned certain real estate described and which he then conveyed, without adequate consideration, to his grandson, the other defendant, to defraud and hinder the complainants ; that they recovered a judgment against the grantor and levied their execution upon the real estate so conveyed ; and they pray that the defendants shall release all their apparent title to the land levied upon to the complainants.

Some objection is made to the form of the bill. What might have been the result had the defendants demurred, we need not now inquire.

Both defendants deny in their respective answers any intention to defraud or delay creditors, and expressly testify to the same. And we feel so uncertain of any fraudulent intent in fact, that were such intent absolutely essential to the maintenance of the bill we should dismiss it.

But the answers inter alia respectively allege in substance— That Johnson sold and conveyed to Keen the land in controversy together with the new house built thereon at a cost of one thous- and dollars, for the sum of two hundred and sixty dollars and an agreement “ to take Johnson to Keen’s house and support and maintain him during the remainder of his life; which he had faithfully done to the present time.” And if this conveyance left the debtor insolvent, it was fraud in law.

Creditors have an equitable interest in the property of their respective debtors — it being the foundation of trusting them— which the law will, under certain circumstances, enforce.'’ But the interests of a bona fide purchaser of a debtor’s property are superior, “ for the obvious reason ” says Selden, J. “ that the latter has not, like a mere general creditor, trusted to the personal responsibility of the debtor, but has paid the consideration upon the faith of the debtor’s actual title to the specific property transferred.” Seymour v. Wilson, 19 N. Y. 417. Hence the rights of a bona fide grantee, who has paid a full valuable consideration, are protected, though the grantor may have been actuated by a fraudulent intention.

Still a grantee is not protected when he has not paid such a consideration, though ho may have acted in good faith. The two must concur. The amount of consideration is not material when the grantor is solvent, (Usher v. Hardtime, 5 Maine, 471; Hapgood v. Fisher, 34 Maine, 407); but when insolvent, the kind and amount of consideration do become material even in the absence of actual intent to defraud. Thus an agreement to support an insolvent grantor may be a valuable consideration, but it is not sufficient to uphold a conveyance as against prior creditors (Hollins v. Mooers, 25 Maine, 192, 199), even if there were no actual intent to' defraud. Webster v. Withey, 25 Maine, 326. Persons taking a conveyance from such a grantor for such a consideration must take care that the existing debts of the grantor are paid, (Hapgood, v. Fisher, 34 Maine, 407); and it is immaterial that the consideration comprises a present sum of money paid in addition to the agreement for support, provided the money alone were palpably inadequate. Sidensparker v. Sidensparker, 52 Maine, 481.

That Keen received a conveyance and transfer of all Johnson’s remaining property is evident.. He not only received a deed of the land in question, but a transfer of two mortgages and a note. His counsel in his brief speaks of the land as “ the last bit of property that he (Johnson) had held in his hands” etc.; and “that he (Keen) took a conveyance of his (Johnson’s) property which was left,” etc.

Thus we see that the defendants are guilty of a constructive or legal fraud, which though not originating in any actual evil design to perpetrate a positive fraud upon Johnson’s creditors, yet is deemed reprehensible and is prohibited by the law since it is equally prejudicial to the creditor’s interests. 1 Story’s Eq. § 258.

We do not think the defendants’ proposition in relation to estoppel is tenable. There is no evidence that the plaintiffs stood by and saw Johnson convey to Keen without objection.

Bill sustained.

Decree as prayed for.

Appleton, C. J., Barrows, Danforth, Peters and Symonds, JJ., concurred.