68 Me. 208 | Me. | 1878
The bill alleges that Eben Harden, owning certain parcels of land, conveyed them to his son, Cushman E. Harden, to defraud his creditors ; that the complainant obtained an execution against the grantor, and levied it upon a portion of the land so conveyed; and the complainant prays that the title to the land levied upon shall be released to him by the grantee. The bill is met by a general demurrer.
The first point taken on the demurrer is, that Eben Harden, the grantor, should have been made a defendant to the bill. He is no party to it. This objection must be overruled. Eben
The complainant contends’ that the demurrer would reach no part of the bill, because it is general and not special, insisting that a demurrer is not good unless it specify the parties omitted and the names of such parties. This depends upon whether the want of parties is merely a formal defect or not. To all mere formal defects the demurrer must be special. It is true, the authors on equitable proceedings say that the demurrer should supply the names of the persons omitted, Rnd such would be the better practice. But where the parties left out are so inseparably connected with the subject of the suit that a decree could not be made without directly affecting their interests, the objection to the bill may be taken upon general as well as special demurrer, or at the hearing of the arguments, or even when the decree is to be made ; and
It is a well nigh universal rule in equity, that, if any part of a bill is good and entitles the complainant to relief, a demurrer to the whole bill cannot be sustained. The proper part of the bill can be acted upon independently of that which is faulty. The bill therefore may be maintained, notwithstanding this objection.
Another objection by the respondent is, that the bill is defective because it is no where alleged therein that he (the grantee) participated in the fraudulent intent of the grantor in conveying the land. No doubt, it should in some sufficient form be alleged if it must be proved. We feel' sure that the fact need be neither alleged nor proved in the case of a voluntary conveyance, as this is. The bill alleges that the conveyance was made without valuable consideration; that the grantor, at the time of the conveyance, was in debt and insolvent; that he has been in debt ever since ; that he has exercised acts of ownership over the property since the conveyance; that his object in making the conveyance was to delay, ¡hinder and defraud his creditors; that the complainant became a creditor after the conveyance, and that the conveyance is void as to the claim of the complainant. This is allegation enough, if the facts alleged be proved.
The exact question presented is this : Is a voluntary conveyance from father to sou, made by the grantor with an intent to defraud subsequent creditors, void as to such creditors, when there is no proof that the grantee participated in that intent when he received or accepted the deed ? The statute of Elizabeth, c. 5, answers the question in the affirmative. It pronounces every conveyance, made to hinder, delay or defraud creditors, utterly void as against such creditors, unless the estate shall be “upon good consideration, and bona fide, lawfully, conveyed to such person,” not having at the time “ any manner of notice ” of such fraud. Can it be said that this estate was bona fide, “ lawfully ” conveyed, or that a grantee who pays no consideration for land fraudulently conveyed
Any other view of this question than the one taken by us would permit and encourage most iniquitous frauds upon the part of badly disposed debtors. A man might convey all his property to his wife or minor children upon the eve of an expected bankruptcy, and, on account of his undoubted credit and apparent possession of means and property, be enabled to create a very great amount of subsequent indebtedness. How could a creditor show that the wife, and a fortiori that the young minor children knew of the grantor’s fraud, unless the knowledge can be imputed to them under such circumstances as a necessary implication of law? It would be unnatural for a debtor’s wife and children to believe him to be a dishonest man, and uncommon for them to know much of his business affairs.
It is said sometimes, that a voluntary conveyancy may be good against subsequent and not good against existing creditors. Why?
After considerable research, we find no case that decides such proof to be necessary. Language may be found (in cases) having such a leaning, but not where the facts were as they are here. It must be remembered that the doctrine making any conveyance fraudulent as to subsequent creditors is comparatively new in this country. It was regarded as somewhat a doubtful question in Massachusetts as late as Damon v. Bryant, 2 Pick. 411. It would be in vain, we presume, to search for such a thing in the
The leading case in this country on the effect of a voluntary conveyance upon the rights of subsequent creditors is Sexton v Wheaton, 8 Wheat. 229. The court there place stress only upon the intent of the grantor. Mattingly v. Nye, 8 Wall. 370, sustains the same doctrine. Parish v. Murphree, 13 How. 92, is to the same effect. In Hitchcock v. Kiely, 41 Conn. 611, it was decided that u a voluntary conveyance, fraudulent in fact, will be set aside in favor of creditors, whether the grantee participated in the fraud or not.” In that case, the contending party was a creditor subsequent to the conveyance. In Beecher v. Clark, 12 Blatch. 256, a voluntary conveyance was set aside for the benefit of both prior and subsequent creditors. Hunt, J., says : “ I cannot assent to the proposition, that it is necessary that the grantee should have .known that the intent of the grantor was fraudulent, and that she should have been an intentional party to the fraud. The fact that a wife received a voluntary conveyance of the same, in ignorance of these facts, (showing fraud in fact) will not make the conveyance a valid one.” Savage v. Murphy, 8 Bosw. 75, contains a learned and lengthy review by Hoffman, J., of the earlier decisions by which subsequent purchasers and creditors were permitted to question conveyances as being fraudulent against them, and this proposition is there laid down : “ Where a deed is made to defraud creditors, by one at the time in debt, and who subsequently continued to be indebted, it is fraudulent and void, as to all such subsequent, as well as existing creditors.” See,
Demurrer overruled.