83 Ky. 391 | Ky. Ct. App. | 1885
delivered the opinion op the court.
This action was instituted by the administrator of' Wm. E. Jones against the appellee, J. J. Jenkins, in which a judgment is sought on a note executed by Jenkins to the intestate for $1,138 on the '28th of August, 1869, .and payable two days after date, and a mortgage having been executed to secure its payment on the real and personal estate of the obligor, the Chancellor is also asked to sell this mortgaged property in satisfaction of the debt.
The appellee Jenkins admitted the execution of the note, but pleaded a want of consideration; and further, that the note was executed and the mortgage given to prevent his creditors from making their1 debts.
The appellant took issue upon the defense presented, and alleged that the note was given for debts- and money loaned the appellee by his intestate. An amended petition was then filed by the administrator, in which it is alleged that T. Y. Jenkins, Sarah E. Hobby, &c., appellees here, had, since the execution and recording of the mortgage, purchased the -land, of the mortgageor or were setting up some claim to-it. These parties answered, admitting the purchase-
The testimony in the case conduces to establish the • fraudulent intention of the parties to the note and mortgage, and that no consideration existed for the execution and delivery of either instrument.
The intestate was a man of but limited means, and in no condition to indulge the appellee, Jenkins, for nine or ten years in the payment of such a sum of' money, and besides, to permit him, without complaint, só far as appears from this record, to convey the security given for the debt to others, and deliver to them the possession. Jones, the obligeein the note and appellant’s intestate, lived until the-year 1881 without any effort to coerce payment, and when he must have known that this land was sold, or the greater part of it, by Jenkins, and deeds made-to the purchasers.
There is no attempt to show any indebtedness on the part of Jenkins to Jones, except on the sale of one crop of tobacco, and there is no proof that the-value of this tobacco approximated even the amount of the note. It was not worth exceeding three hundred dollars. The parties were brothers-in-law, and the circumstances connected with the entire transaction leave but little doubt as to the origin of the claim sought to be enforced.
The transaction between Jenkins and Jones being actually fraudulent, the purchasers for 'value are not.
The rule is that a voluntary conveyance is prima „facie fraudulent as to a subsequent purchaser for value, and unless the purchaser has actual notice of the transfer or conveyance, his title is perfect, and in no manner affected by the fact that the voluntary ■conveyance is of record. Actual and not constructive notice must be brought home to the purchaser.' This is not a mere voluntary conveyance, but a ■conveyance tainted with actual fraud, in which both the mortgageor and the mortgagee have participated, and the question of notice to a purchaser for value does not arise, as he holds the title in such a case, ¡although he may have both constructive and actual notice of the conveyance. Such a conveyance is void .as to the purchaser who pays his money for the land.
In the case of Bibb v. Bibb, 17 B. Monroe, 292, it was held, that where the conveyance, was executed and based upon no other consideration than that of vesting the title in the grantee to defraud creditors, the grantor could not make such a defense against the grantee seeking to recover the land by reason -of his title. . In an executed conveyance, although fraudulent, the title as between the parties passes to the grantee, but in an 'executory agreement the fraud may be relied on to prevent its specific execution. So as between the appellee Jenkins and the intestate, the Chancellor would have declined to render a judgment of foreclosure if the mortgage can he regarded as passing the absolute title.
In the case of Brookover v. Hurst, 1 Met., 665, it •
In the case of Brookover v. Hurst, above, the court held that so far as the contract was executory it could not be enforced, but intimated that the mortgage would be obligatory on the parties, because when the condition was broken the title was absolute. We think it plain that now, the equitable right of the mortgagee to foreclose will not be enter
It is complained by the appellant that as administrator he was at least entitled to a judgment on the-note if not allowed to enforce his lien.
The want of consideration is clearly shown, and we. see no reason why the defense will not prevail as. against any personal judgment in favor of the administrator ; and besides, the land having been mortgaged with a fraudulent intent, the Chancellor will not only refuse to .foreclose the. mortgage, but will decline to aid the plaintiff in any way in his effort-to make the fraud result to his own benefit.
The judgment below, for the reasons indicated,, must be affirmed. (Nellis v. Clark, 20 Wend., 24; Wheeler vs. Russell, 17 Mass., 258; Miller v. Marckle, 21 Ill., 152.)