Orr v. Peters

197 Pa. 606 | Pa. | 1901

Opinion :by

Mr. Justice Fell,

There is not a specific finding by the court that the mortgage, whose validity is in question, was given to hinder, delay or defraud creditors, but from the finding's made, it necessarily follows that it was given for that purpose. The substance of the findings of fact is that Peters and Simpson were jointly interested in the development of mineral lands which they owned; that the money advanced by Simpson was his share of the capital used in the enterprise; that it was not advanced with the intention that any part of it should be repaid; that there had been no accounting or ascertainment of an amount due, and that the mortgage was largely in excess of the advances made and of the value of the land; that it was given by Peters at a time when he was disposing of his personal property and incumbering his real estate in anticipation of an adverse result of litigation in which he was involved with the plaintiff. These findings are fully sustained by the testimony. There was enough in the circumstances alone to rebut the presumption of fairness and good faith and to require affirmative proof of both by the defendants: Kaine v. Weigley, 22 Pa. 179; Clark v. Depew, 25 Pa. 509; Redfield & Rice Mfg. Co. v. Dysart, 62 Pa. 62. If there was no debt there was no consideration for the mortgage, and presumptively it was fraudulent and given to hinder and delay the plaintiff in his effort to collect his claim against Peters. The attempt by the defendants to explain the transaction only tended to strengthen the prima facie case against them.

The court had jurisdiction to prevent by injunction an assignment of the mortgage. This was the first step made by the plaintiff in order to protect his rights, and the jurisdiction of equity having attached for this purpose would continue and settle the whole controversy: Allison’s Appeal, 77 Pa. 221. But it is wholly unnecessary that the jurisdiction in equity should be sustained on any narrow or technical ground. Equity has concurrent jurisdiction with law where property has been fraudulently conveyed or incumbered in order to defeat the claims of creditors. A creditor will not be compelled to sell a doubtful title under proceedings at law, but the conveyance or incumbrance will be set aside. “ Where property which is legally liable to be taken into execution has been fraudulently conveyed or incumbered, the jurisdiction is concurrent, as the creditor may either issue execution at law, or file a bill in equity to have the conveyance set aside: ” Bispham’s Equity, sec. 242. The general rule is thus stated in Sexton v. Wheaton, 1 Am. Leading Cases, 54 : “ There are two cases in which a creditor may go into equity to obtain satisfaction out of property fraudulently settled or conveyed ; one where the transaction has assumed such form or the property is of such a nature that it was never subject to an execution at law, and in this case the remedy.is only in chancery; the other, where property legally liable to execution has been fraudulently conveyed or incumbered, for though the property might be sold on an execution at law against the debtor, yet equity will not require the creditor to sell a doubtful or obstructed title at law, but will set aside the conveyance.” Fowler’s Appeal, 87 Pa. 449, is an example of the exercise of equitable jurisdiction under similar facts in this state. The concurrent legal remedy open to the plaintiff was neither plain, adequate nor complete.

The decree is affirmed at the cost of the appellant.