21 Iowa 205 | Iowa | 1866
In the case at bar, the plaintiff is not entitled to be relieved against the father’s conveyance to his son on the ground of being a creditor of the father. He was, it is true, at one time a creditor, but was paid at the time of his purchase from the father, of the lot in question. The act of 13 Elizabeth has, therefore, no application to the case.
The statute of 27 Elizabeth in substance declares void every conveyance, &c., of lands made and to be made for the intent and, purpose to defraud, and deceive such person as shall purchase la/nd so before conveyed.
Now, the ground upon which the English decisions above referred to have gone is, that the subsequent sale by the grantor is considered as proving conclusively that the voluntary deed was executed with the fraudulent intent to deceive subsequent purchasers. Per Marshall, Ch. J., in Cathcart v. Robinson, 5 Pet., 265, 279; 1 Am. Lead. Cas., 47.
The English doctrine when applied against bona fide voluntary alienees, in favor of subsequent purchaser with notice, was manifestly a source of fraud and injustice. Why should one, with full knowledge that a man not indebted had fairly made a reasonable provision for a wife or child by a voluntary conveyance, be permitted to purchase of them the same property and hold it as against the wife and child?
The subsequent purchaser in such case is not, in the language of the statute, defrauded cmd deceived, for he buys with actual knowledge. And how can a man be defrauded or deceived by a transaction of which he has notice when he buys ? This construction, instead of preventing frauds, worked them, by enabling a party “ intentionally to defeat the fair claims and expectations of a prior grantee.” (4 Kent Com., 463;)
In view of the course of decision in this country, and the reasons for it, it is our opinion that the rights of the plaintiff are, under the facts of this case, superior to those óf Jerome Cole. What are these facts ? They are:
1. That the conveyance by the father to Jerome was, as shown by the evidence, acbually fraudulent, and did not originate in an honest desire and purpose to make a settlement upon or provision for him. This is shown by
2. This conveyance was purely and confessedly voluntary.
3. The father, after this conveyance to the son, remained in possession, claiming the property as his own, using it as his own, and, finally, about a year and a half afterward, selling it as his own, giving no notice of Ms son’s right.
4. The plaintiff was a bona fide purchaser for full value, without anj-actual notice of the son’s right, or of the prior voluntary conveyance to him.
Under these circumstances, this court has recently decided, that a subsequent creditor of the father could have avoided this conveyance to the son. Hook v. Mowre, 17 Iowa, 195, 201, and cases cited, and 202, proposition third.
And all courts hold that a subsequent purchaser has rights as high, and some hold that he has even higher rights than a subsequent creditor. Salmon v. Bennett, 1 Conn., 557; S. C., 1 Am. Lead. Cas. supra, and notes; Willard’s Eq., 234, 235; Verplank v. Sterry, 12 Johns., 638, per Spencer, J.; Lewis v. Love’s Heirs, 2 B. Mon., 345, 347; Rob. Fraud. Con., 473, and cases.
“All the cases admit,” says Wilde, J. (Clapp v. Leatherbee, 18 Pick., 131, 137), “ that if there is any fraud in a voluntary conveyance, or if it is merely colorable, it can never be set up against a subsequent purchaser for value.”
So in a prior case in the same State, the court, in relation to a voluntary conveyance which was held to be intentionally fraudulent, remarked, “ That deed conveyed his (the grantor’s) title to the plaintiff as against the grantor and every other person, unless it was fraudulent at the time of its execution, in which case it was void against creditors and subsequent purchasers. Ricker v. Ham, 14 Mass., 139.
What we do decide is, that where the first conveyance originates in a fraudulent purpose, and is without any consideration of value, and the grantor remains in possession, and claiming ownership, sells the property as his own to a party who buys without actual notice of the prior deed, and pays value, the latter purchaser may avoid the prior voluntary and fraudulent conveyance. See on this point Hooke v. Mowre, 17 Iowa, 202. This is for the plain reason, that in such case, the prior conveyance is not only fraudulent, but would, in fact, be the means of working an actual fraud upon others should it be sustained as against the subsequent purchaser.
Under the circumstances of this case (the son’s deed being actually fraudulent, the'father being in possession, claiming and selling the property as his own, to a purchaser, for value, without actual notice), we are of opinion, and so decide, that the constructive notice arising from the
To this effect are all the authorities, many of the cases going much further. 1 Am. Lead. Cas., 4th ed., pp. 46,47, and authorities cited; per Kent, Ch. J., in Sterry v. Arden, 1 Johns. Ch., 261, 270, 271; S. C., 12 Johns., 536, and note, Judge Spencer’s remarks, pp. 557, 559; Story Eq., § 425 et seq.; Hooke v. Mowre, 17 Iowa, 195; Gooch's case, 5 Co., 60 a; Buckle v. Mitchell, 18 Ves., 111, per Sir William Grant. The reason being, that notice to a purchaser of a fraudulent conveyance is simply notice of a nullity, for the statute makes such conveyance absolutely void. If he knew of it, he at the same time knew it was a nullity.
It might be a very different case if the first deed, though .voluntary, was fair and meritorious, intended to be and being nothing more than a reasonable provision for wife or children. In such a case our registry laws afford an additional reason for not following the staid and severe doctrine of the English courts, allowing purchasers with notice to avoid a prior voluntary conveyance, though bona fide made.
At the time when the statutes of Elizabeth were enacted there were no laws in England requiring the registry of deeds and conveyances, and hence there were greater opportunities for making secret transfers. Previous to the time of Queen Anne, there were no registry laws in England, and to this day, unless enacted recently, there are no such laws applicable to every part of the realm. Sugd. on Vend., 966: and seet his subject discussed by Gibson, J., in Lancaster v. Dolan, Rawle, 231, 245.
Our statute provides (Kev., § 2220) that “No instrument affecting real estate is of any validity against a subsequent purchaser for a valuable consideration without
If the instrument is without validity before recorded, it is equally so after it is recorded; in other words, its registration gives it no additional efficacy, does not free it from the taint of fraud.
If the first deed, though voluntary, is free from fraud, and is duly registered, then it might well be (especially if the grantee has not allowed the grantor to remain in possession exercising the right of ownership) that the after purchaser would be bound to take notice of “the right of the grantee conferred by such instrument.” Upon this subject, see Lewis v. Love's Heirs, 2 B. Mon. 345, 347; Bank v. Patton, 1 Rob. (Va.), 499, 544; Lancaster v. Dolan (leading case in Pa.), 1 Rawle, 231, 235; Cain v. Jones, 5 Yerg., 249; 1 Id., 13; Bell v. Blaney, 2 Murph. (N. C.), 171; Ricker v. Ham, 14 Mass., 137; 18 Pick., 131; Sterry v. Arden, 12 Johns., 261; S. C., Id., 559.
We need not decide what would have been the effect if the plaintiff, at the time of his purchase, had had actual notice of the conveyance to the son; nor what would have been the effect under our recording act, if the deed to the son had been bona fide, and the plaintiff had purchased without actual, but with constructive notice of it.
As there is independent proof of actual fraud in the first conveyance, we need not discuss how tar, if at all, such fraud may be presumed from the mere .-fact, without more, of a subsequent sale for value.
The plaintiff would be liable on the covenants in his deed; and this action of the son against Templin, as it binds the plaintiff, is in effect the same as if it were against the plaintiff in person;' Besides, the plaintiff is liable, for the time he occupied, to have a similar action brought against him by the son. We therefore think he is entitled to bring this bill to enjoin that action and have the validity of the son’s right determined.
We have given the ease, as the question is a new one in this State, a very thoughtful consideration, and are brought to the conclusion that the decree below dismissing the bill was erroneous. That decree is accordingly reversed, and the cause remanded, with directions to the District Court to enter a decree as prayed in the petition.
Reversed.