34 F. 435 | U.S. Circuit Court for the District of Colorado | 1888
This case is now before me on final bearing. The facts are these: On July 23, 1877, complainant recovered judgment in the district court of Arapahoe county for §2,171, against Samuel H. Thatcher, a brother of defendant. On November 13, 1876, Samuel H. Thatcher conveyed to defendant, by warranty deed, lor an expressed consideration of $4,000, the lands in controversy. Complainant caused execution to issue on his judgment, levied upon the lands as the property of Samuel H. Thatcher, bought them in, and now seeks to have this warranty deed set aside as a cloud upon his title, and such title quieted as against all claims of defendant. He insists that that deed was fraudulent and void, because made by Samuel H. Thatcher with intent to defraud his creditors, complainant among the number.
Many questions are raised and discussed by counsel. In the view which I have taken of this case I shall have occasion to refer to but one or two, and, in order to present these, some other facts must be stated. The judgment against Samuel H. Thatcher grew out of these transactions: In November, 1875, one Zella Glenmore, the proprietress of a house of ill fame, purchased a lot of furniture from Rhoda Sevins, the proprietress of a like house. She borrowed $2,700 of complainant; gave her note with Samuel H. Thatcher’s indorsement for that amount. This note was secured by a chattel mortgage on the furniture, which at
There is a question in the caso as to whether the lien of this judgment
In the case of Ingals v. Brooks the facts were as follows: Israel Brooks conveyed all his lands to his son, Clark Brooks, and as part consideration therefor said Clark Brooks agreed to pay all the debts of his said father. Leafy Brooks, who had become the wife of Ingals, presented a claim against the father, Israel Brooks, against which the son, Clark Brooks, maintained he had a set-off. They compromised; Clark Brooks released his set-off, and Ingals and wife threw off half the amount of their claim. Ingals then went’to the father, Israel Brooks, and got him to allow judgment to go against him for the other half of the claim, of which proceeding Clark Brooks had no notice. Ingals then levied execution under this judgment on the lands held by Clark Brooks, and sold the same, and in course of time got a sheriff’s deed, and began his action in ejectment. The court uses the following language:
“The judgment, being altogether inter alios, and in express violation of the understanding of Clark when he surrendered the claim against Leafy, one of the plaintiffs, and paid one-half the amount of the note in money, in agreed satisfaction of the whole, would have no effect upon the defendant Clark. He is entitled to show that the note was paid before sued, or that the judgment was for other reasons fraudulent to him. Atkinson v. Allen, 12 Vt. 619. This compromise of the note by Clark was just as effective a bar to the claim in law, and just as effective a release of his undertaking to pay it at the time of the conveyance, as if he had paid all the money upon it. It is true, he did undertake or promise to pay off- the debts of the grantor, his father; and he has in fact paid them all, except the mortgage, which is not in question; and the judgment against Israel, the father, is either a subsequent debt founded exclusively on his promise to pay what they did not get of Clark, and which in no sense, under the circumstances, can be regarded as forming any part of the debts which Clark was to pay, or else the whole proceeding, so far as it is attempted to give it the appearance of a prior claim, is a fraud upon the compromise and settlement made with Clark, and the consequent surrender of the note; and in either case it will not enable the plaintiff to treat the conveyance as void, and levy upon it as the land of Israel Brooks. Judgment is reversed and the case remanded.”
In the case of Boutwell v. McClure, the court used this language:
*439 “The judgment upon the plaintiff’s claim in this action, whether rendered before or after the claimant's appearance, concludes nothing on the question. In all such cases there is likely to exist the form of a contract of a date early enough to accomplish its purpose, and it is not uncommon that this contract assumes the more solemn form of contracts, such as that of a promissory note, or even a judgment of a court of record; but in either ease they are of course only conclusive upon the parties under such contracts. Upon any question arising in regard to the creditor being bona fide such at a particular date, and continuing such to the present time, the contract is but prima fa,(He evidence of the fact. It is always competent to impeach the debt, either as to its bona fide character, its date, or its continuance. For although the debt once existed, and at a date early enough to defeat the alleged fraudulent conveyance, yet, if it has been extinguished by payment on the part of the debtor, it sinks at once into the common mass of his assets, and cannot be subsequently kept on foot as the debt of a bona fide creditor.”
The case of Warner v. Percy was an action in ejectment, and presents the identical question that is involved in the case at bar. Plaintiff claimed title under a warranty deed from Mr. Woodward, executed in February, 1842. The defendant claimed title under a deed from L. E. Felton, executed February 3, 1847, anil Felton got title by moans of a judgment, execution, levy, sale, and sheriff’s deed, and secured possession of the premises. The plaintiff, wbo was grantee in the alleged fraudulent conveyance, brought bis action in ejectment. The plaintiff, under objection from defendant, was permitted to give evidence tending to prove that at the time of the conveyance by Woodward, bis grantor, to the plaintiff, he, Woodward, had claims to a considerable amount (in the language of the exceptions) against Felton for property delivered to him, and for services rendered him; “and the question,” says the court, “is now presented for our decision, whether such evidence was admissible for the purpose for which it was received by the county court. It was a,n important point on the part of the defense to show the motive which induced Woodward to execute the deed to the plaintiff. Was it done with the intention to defraud Pellón? We agree with the county court that if Woodward had, or supposed that he had legal claims against Felton sufficient to meet whatever Felton had against him, it has a decided tendency to rebut any presumption of a fraudulent intent in Woodward to avoid the rights of Felton. The reason must be obvious. The mutual claims might be made the subject of a set-off, and by these means be mutually concluded. We also agree with the county court that tiffs was proper evidence on the question whether Woodward was really indebted to Felton at the time when the plaintiff received her deed, — that is, in such a sense that Woodward could by a fraudulent conveyance avoid any substantial' right of Felton. The plaintiff is not concluded by the judgment against her grantor, especially as it is subsequent to her deed. As between Felton and Woodward, the judgment is conclusive so far as relates to Pelton’s title under bis levy. But so far as the plaintiff is concerned, how far back the indebtedness extends, and what was the relation, the relative state of the mutual claims of the parties to the judgment must be open to inquiry. We see no possible objection to any part of the charge of the court. The charge gives Felton the right to levy on
In the case of Sargent v. Salmond, it appeared that the plaintiff had taken judgment against his debtor for twice as much as he was entitled to. Upon this fact the court refused to give him any relief as against the alleged fraudulent conveyance of his debtor, on the ground that he who conies into equity must come in with clean hands.
In the case of Bruggerman v. Hoerr, it appeared that the judgment was rendered upon a debt which was in fact void as against public policy, and for that reason the court refused to interfere with an alleged fraudulent conveyance.
These various authorities make it clear, not only that the judgment against Samuel H. Thatcher is not conclusive upon the defendant as to the amount of indebtedness, but also that it is the duty of this court sitting as a court of equity to inquire into the circumstances out of which such indebtedness es claimed to have arisen, and if those circumstances do not show that the claim is one which in equity and good conscience ought to be enforced, the court will not inquire into the transaction between the judgment debtor and the defendant, but leave the parties where their legal titles have placed them.
Now, it is a familiar doctrine of courts of equity that where a contract appears extortionate and unconscionable, it will not be enforced; so, where a complainant is seeking to obtain some unfair and unjust advantage, or, having been fully compensated for his time and labor and money, is seeking by technical rules and legal proceedings to grasp more, and wherever generally it would be inequitable so to do, a court of equity will refuse him any relief. See among other cases, Kelley v. Caplice, 23 Kan. 474, which by the way was an action at law; also, Brown v. Hall, 14 R. I. 249, and cases cited therein; Butler v. Duncan, 47 Mich. 94, 10 N. W. Rep. 123; Sime v. Norris, 8 Phila. 84; Earl of Aylesford v. Morris, L. R. 8 Ch. 484.
Now, in the first place, this land was appropriated to the payment of the Kaucher judgment, which was a prior debt of Samuel H. Thatcher. Whether the lien of that judgment was gone or not, the land was in fact sold upon that judgment, and bid in by defendant. Whatever may have been the motives of the two brothers, or by which one in fact the money to pay for the land was advanced, the land was sold, the money was advanced by one or the other, and the defendant became the purchaser, As the land thus went to pay a prior debt of the judgment debtor,-complainant should have a very clear case for equitable interposition before it should be taken from the defendant and applied to the payment of another debt of his brother.
Again, 5 per cent, per month is outrageous interest. It'may be legal if the statute places no limitations upon the contracting powers of parties; but is it equitable? Here Zella Glenmore, the borrower, was a woman so situated that she could not go into the money market and
For the reasons indicated a decree must go dismissing the bill.