25 W. Va. 242 | W. Va. | 1884
It is contended by the counsel for the appellants, that the circuit court erred, first, in setting aside the conveyance from A. II. Wilson to Martha E. Chilton, dated February 22, 1875; second, in directing the sale of the529|- acres of land, including the interest of Mary E. Wilson therein, without making his brother, P. II. Wilson, a party to the suit, and without having the 529J acres specially assigned and laid oft to him out of the 1,212 acre tract, and in directing a sale of the lands conveyed to Martha E. Chilton, before it was ascertained that the proceeds of the sale of the 529-J acres should prove insufficient for the payment of the debts of A. II. Wilson.
To permit the wife of a insolvent debtor under such circumstances to defeat the demands of her husband’s honest creditors, on the grounds that he had invested the moneys so'obtained by him, with all his own moneys, in improvements of her separate estate, not liable to his debts would do violence to the plainest principles of right and justice. The questions presented for our consideration are first, were the purchase of the lot from Hansford and the deed conveying the same to Gillison, trustee, for the sole benefit of Mary E. Wilson fraudulent as to the creditors of her husband, whose debts wore then contracted, or as to those who subsequently became such; and secondly, wore the advancements made by him which were invested in building said dwelling house fraudulent as to his creditors, and if so to which of them and to what extent ?
Before a man has a right to be generous, even to his wife, he must be just to all of his creditors. No matter what amount of property a man may appear to own, he in fact can rightfully be said to own only so much thereof as may remain after the demands of all his honest creditors are satisfied. According to the principles of natural justice and equity, he holds his property in trust for the benefit of all his creditors with only a remainder for the benefit of himself, or the objects ot his bounty.
If there be no creditors, or the amounts due to them bear only an inconsiderable proportion to the amount of his prop
Was the said lot in the hands of Mary E. Wilson, justly chargeable with any portion of the moneys belonging to her husband invested therein, or expended by him in building the dwelling house thereon, and if so, to what extent, and in whose favor ? If, after expending all his own money in erecting the dwelling house and other improvements, at a cost of $5,000.00 upon his wife’s separate property, the defendant, A. II. Wilson, had on October 15, 1870, when he was indebted to the Kanawha Valley Bank $405.48, and to William C. Blaine $1,500.00, conveyed directly to his wife the tract of 529-J acres of land, without any consideration deemed valuable in law, no one would contend that such a conveyance could bo sustained against the demands of those creditors, notwithstanding the embarrassed pecuniary circumstances, or the actual insolvency of her husband at the time of making-such conveyance. Neither would the injustice done to these creditors be less apparent, if instead of conveying the land to her directly, he had authorized her to sell or incumber it for the full value thereof paid to her, and had ratified the sale made or incumbrance created by her, by conveying the land to her vendee or mortgagee. In either case the effect would be the same, a gift to the wife, at the expense of the creditors of the husband. The case under consideration, though differing in form, is precisely the same in principle. Instead of couveying the land to his wife, or permitting her to sell or encumber the same, and receive the proceeds, the husband encumbered the land for $1,500.00 lent him by Blaine, payable in a year thereafter, and within less than two months afterwards he in effect made a gift of the money to his wife by expending the same on the dwelling house erected on his wife’s lot, for the comfort and convenience of his wife and himself, while the creditor remains unpaid, and the husband
The question here discussed was considered by this Court in the case of Rose & Co. v. Brown & Wife in 11 W. Va. 122. In that case, the wife of Brown on September 30, 1872, purchased a house and lot at the price of $4,500.00, of which one-third was paid in hand, and the residue in two equal installments payable in one and two years thereafter. Three thousand dollars of the purchase money was a gift from the husband to his wife, made some time before her purchase and the residue furnished by him afterwards. When a bill filed by subsequent creditors of the husband whose debts were contracted between September 1, 1873, and September 11, 1874, to set aside the conveyance to the wife as fraudulent, and to charge the house and lot with the amounts of their judgments, this Court held, that the conveyance to the wife, though voluntary, was not fraudulent in fact, but that her husband did in fraud of his creditors voluntarily divert his means from the payment of his debts and invest them in said house and lot for the benefit of his wife; and that in so doing ho had, in fraud of his existing creditors, without considera
From these authorities and the facts appearing in the record we are of opinion that tide house and lot, conveyed by Hansford and wife to the defendant Mary E. Wilson is chargeable with the amount of said Blaine debt, as well as with so much of the plaintiffs judgment of $1,868.82 as was due to it, at the time said dwelling house was completed; and that unless the same be otherwise paid, the said house and lot must be sold and the proceeds thereof, as far as necessary for that purpose, applied to payment thereof; and that for those reasons the circuit court erred in sustaining the exceptions of Mary E. Wilson to the commissioner’s report and in dismissing the plaintiff’s bill as to her; and that instead of sustaining her exception to the supplemental report of the commissioner showing that he had inadvertently omitted to insert in his original report the debt due from A. II. Wilson to the plaintiff, as of the date of October 15,1870, and disregarding the same, the court should have recommitted the report to the commissioner that this debt might be properly reported.
Did the circuit court err in setting aside as fraudulent the deed to Martha E. Chilton dated February 22, 1875, and in charging the lands mentioned therein with the debt of $500.00 with interest thereon from August 6, 1872, due to her from A. I-I. Wilson ?
The evidence in the case warranted the conclusion reached by the circuit court, that this deed was made without consideration save only the debt of $500.00 due to Mrs. M. E. Chilton, and the same was made with intent to hinder, delay and defraud the creditors of said Wilson. While her debt
She stands, in this case, in the predicament of a purchaser, who under the same circumstances, upon such a fraudulent purchase, pays the purchase-money in cash. But to authorize the court to set aside a deed as fraudulent because made to hinder, delay or defraud creditors, it is not sufficient that this fraudulent intent exist in the mind of the grantor, but the grantee at the time the deed was made must have had knowledge or notice of, and participated in the fraudulent act, and intent. If the grantee had such knowledge, or knowingly participated in the execution of the fraudulent act the deed will be void as to the creditors of the grantor, although the grantee may have paid a full consideration for the property thereby conveyed. In such case the deed is void as to creditors, not because it was voluntary and without consideration deemed valuable in law, nor because the consideration was inadequate, but because it Avas made with intent to hinder, delay and defraud the creditors of the grantor. Goshorn’s Executors v. Snodgrass, 17 W. Va. 717. As between the fraudulent grantor and grantee the deed is valid- and binding, and the law leaves them where they have placed themselves, and will neither aid such grantor to regain his property nor such grantee to reclaim his purchase-money. Baldwin, Justice, delivering the opinion of the Supreme Court of the United States in Barth, v. McNutt, 4 Peters 184, says: “ Public morals, public justice and the well established principles of all judicial tribunals alike forbid the interposition of courts of justice to lend their aid to enforce a contract which began with the corruption of a public officer, and progressed in the practice of known wilful deception in its execution. The law leaves the parties to such contract as it found them. If either has sustained a loss by the bad faith
We are therefore of opinion that the circuit court did not err in declaring said deed fraudulent and void, but it ought not to have declared the same absolutely void, but void only as against said creditors; but the court did err in declaring the debt of $500.00 of Martha E. Chilton a lien on the lands described in the deed of February 22, 1875. It remains to consider what interest the said A. II. Wilson owned in the tract of 1,212 acres of land which can be made liable for the payment of his debts. Assuming as true what is alleged by Wilson in his answer that his father John Wilson at the time of his death was the owner of the tract of 1,212 acres of land and upon his death “many years ago” the title to said
It is however contended by the counsel for the appellants that the commissioner having reported that the interest of A. II. Wilson in the 1,212 acres was only one-third thereof,
The decree rendered in this cause on June 27, 1879, is so carelessly drawn as to render its execution almost impossible. Upon its face it neither ascertains the amount or priority of any debt, or the person to whom the same is to be paid. It is true it refers to the “several sums ascertained to be due to the complainant and other judgment and trust creditors of Wilson the several sums ascertained to be due to them respectively by report of Gallagher, and contained on pages 33 aud 34 of said report,” and decrees that unless the same be paid, &c. Such a decree leaves every creditor to determine for himself and at his peril the amount intended to bo. decreed to him. As this decree must for other errors therein be reversed, it is not necessary to decide whether this error in the decree would of itself be sufficient to reverse the same; but we are of opinion that the decree should upon the face thereof, show the amount and priority of the several debts against said A. II. Wilson; the persons to whom each is payable, and the property or fund out of which each debt is entitled to be paid. We are therefore of opinion that so much of the said decree, as sustains a part of the exceptions of the plaintiff and the Clifton Iron and Nail Company, to the report of the commissioner, and as overrules the exceptions to said report by Martha E. Chilton, so much of said decree as declares the said deed from A. H. Wilson to Martha E. Chilton dated February 22, 1875, was made with intent to hinder, delay aud defraud the creditors of said Alexander II. Wilson must be affirmed; that so much of said decree as declared the deed of February 22, 1875, be “vacated, annulled and set aside,” is erroneous and should be amended, by declaring that the said deed is, as to the said creditors of said Wilson, fraudulant and void, and the same, as to them, is set aside, vacated and annulled, and being so amended must also be affirmed; and that the residue of said decree must be reversed with costs against the appellants Martha E. Chilton and Mary E. Wilson, in favor of the plaintiff and the other appellees, except Joseph B. Chilton, as the parties substantially prevailing; and this cause is remanded to the circuit court of Kanawha county for further proceedings, there to be had therein, according to the principles settled in this
Reveesed. — Remanded.