59 Kan. 528 | Kan. | 1898
The only facts necessary to be stated to disclose the decisive question in this case are :. That R. M. Manley was a devisee under the will of George
The decision was correct. R. M. Manley was the owner of a one-seventh interest in the estate in the-hands of William H. Risk as executor. When he confessed judgment in favor of Risk, he confessed judgment in favor of himself. That judgment became by law a lien upon the real estate of R. M. Manley. The act of confessing it was the giving of a lien to himself upon his own property for. the security of a debt due to himself. It requires no argument to demonstrate that Manley could not do these things directly; that is, he could not confess a judgment in his own favor which would operate as a lien upon his own land for
In Bump on Fraudulent Conveyahces (4th ed.), § 174, it is clearly and tersely stated, that while a debtor may prefer a creditor—
"The terms upon which the property is transferred must be free from all engagements to deliver any portion \>f it for the benefit or advantage of the debtor, for the law will not tolerate any contrivance whereby the debtor devotes his property to certain creditors in preference to the rest, with the secret reservation of a possible interest to himself. If the preference, therefore, is merely a temporary arrangement to prevent a sacrifice of the property and preserve the rights of all to ■an equal distribution, with an understanding that the property shall constitute a part of an assignment to be subsequently executed, it is fraudulent. Creditors also are not allowed to gain a preference by means of a secret undertaking to hold a part of the properly for the benefit of the debtor. The law looks with great jealousy upon the manner of giving preferences, and denounces all departures from go'od faith, and requires that the parties shall not secure any covert advantage to the debtor in preference of his creditors.”
The same doctrine is again stated and illustrated by the same writer on pages 208-212. It has been ap
“1. All gifts and conveyances of .goods and chattels, made in trust to the use of the person or persons making the same shall be void and of no effect.
“ 2. Every gift, grant or conveyance of lands, tenements, hereditaments, rents, goods or chattels, and every bond, judgment or execution made or obtained with intent to hinder, delay or defraud creditors of their just and lawful debts or damages, . . . shall be deemed utterly void and of no effect.” Gen. Stat. 1897, ch. 112, §§ 1, 2.
In the case of Kayser v. Heavenrich, 5 Kan. 325, it was held that an assignment for the benefit of creditors, one of whom was a firm of which the assignor was a member, was void because in secret trust for the benefit in part of the debtor.
But it may be said that the judgment by confession was -not alone upon a secret trust in favor of the judgment debtor ; that it was principally in favor of the
“ It is not denied that a part of the trust for which this assignment was made was for the benefit of the maker thereof, and was so far void, but it is contended that it is only void as to such case, and that the property, assigned must be distributed pro rata among the other persons named as creditors. . . . Every part of the assigned property was held in trust for the payment of this claim for the benefit of one of the assignors. Had a certain definite portion of the property been assigned to pay this particular claim, and the other portions of the estate been designated to pay the other claims, it would have presented a different question, and according to some of the authorities, the void part of the assignment might have been •so held without tainting the whole instrument; but in this case, the whole conveyance was for the payment of this claim for the maker’s use.
“It can make no difference that this claim was but ■small compared with the general indebtedness. It •was an essential part of the whole trust, pervading ■every part, as much as though it constituted nineteen-■twentieths of the trust estate. The conveyance was in trust for the maker’s use, and it cannot make any difference that others were interested in the trust when any person, having a right so to do, contests the validity of the conveyance.”
But it may be urged that the debt on which judg
In conclusion, it may be said that, in such eases as this, the law ought to uphold the transaction because no actual fraudulent intent existed. Not so, however. If a necessary effect of an act is to put creditors at a disadvantage and at the same time to secure an advantage to the debtor, the law esteems the act to be fraudulent. Kayser v. Heavenrich, supra.
The judgment of the court below is therefore affirmed.