7 Blackf. 400 | Ind. | 1845
— This was a bill filed by Hanna to set aside a deed made by Parkinson to Webster, as fraudulent against Hanna, a creditor of Parkinson’s. The facts stated in the bill are, that on or about the 1st of February, 1840, Parkinson was indebted to Hanna in the sum of 750 dollars, which, on being requested, he represented himself as being then unable to pay; that Hanna threatened him with a suit, which was actually commenced about the 1st of March following, and judgment was obtained at the next October term; that a few days before the suit was commenced, to wit, on the 28th of February, 1840, Parkinson, for the purpose of defrauding Hanna, conveyed to Webster, his co-defendant, wTho knew that Parkinson’s object was-to defraud the complainant, a
Parkinson admits in his answer the debt to Hanna, the judgment, the sale on execution, and the purchase by Hanna as stated in the bill. He admits also the conveyance to Webster at the time mentioned in the bill, and that he retained the possession of the premises, He admits his insolvency, and distinctly states that he is the owner of no property except such as is by law exempt from execution; but he' denies the insolvency of Webster. He denies that the deed was made to defraud Hanna, and denies that he knew that Hanna was- about to sue him. He says that having conveyed the property to Webster, he continued to occupy it under a lease from Y/ebster for the term of two years, according to which the rent was to be applied to the payment of the interest of the purchase-money, and that at the expiration of the term, Webster would or might take possession, &c. Webster also answers, and admits that the property described in the bill was conveyed to him by Parkinson as stated by the complainant; he says that his purchase of it was bona fide; that he did not know at the time of the conveyance that Parkinson was indebted; he denies the charge of insolvency; admits that possession'of the property was not formally delivered to him by-Parkinson; and makes the same averment as to the lease to Parkinson for two years, &c., that is contained in Parkinson's answer.
Depositions.were taken, and, at the hearing, the Court de
According to the common law, as well as by the express provisions of our statute, a deed, or any other conveyance of lands, &c., made to hinder, delay, or defraud creditors, is. absolutely null and void. To determine whether the deed from Parkinson to Webster is fraudulent and void or not, we will refer to the facts disclosed in the pleadings and proof. And here we remark that as to Parkinson's intention in conveying to Webster, we think there can be no doubt. It is admitted by his answer that, at the time of the conveyance, he was indebted to Hanna, and that, in a very few days after the deed was executed, suit was commenced and prosecuted to final judgment. A witness swears that Parkinson, in anticipation of the suit, said that he would fix his property so that Hanna should not get it. There is other testimony to the same effect. He admits also his insolvency. These facts bring him clearly within the decisions, which declare that a deed made by a debtor under such circumstances, is fraudulent as to creditors.
The next question is, was Webster a fraudulent grantee? for It is necessary before the deed can be declared void, that he should have been privy to the fraud. Dugan v. Vattier, 3 Blackf. 245.—Anderson v. Roberts, 18 Johns. R. 515. There is no direct proof that Webster knew of Parkinson's indebtedness at the time of the execution of the deed; but there is a principle, which, applied to the case, affects him with notice of the fraudulent intent of Parkinson. Webster's purchase is not yet complete, that is, he has not yet obtained the conveyance, and paid the purchase-money. Until he does both, his purchase, as to third persons whose rights are affected by it, is incomplete. As a general rule, notice before actual payment of all the purchase-money, is equivalent to notice before the contract. Even if the purchase-money be secured to be paid, yet if it be not in fact paid before notice, the plea of a purchase for a valuable consideration will be overruled. 2 Sugd. Vend. 274.—Hardingham v. Nicholls, 3 Atk. 304. It is true, this rule is generally applied in the case of purchasers having a prior lien against subsequent purchasers, but the principle will as aptly apply in conveyances made to defraud creditors. Under the operation of this rule, Web
Under all the circumstances of the case, we are of opinion that the deed from Parkinson to Webster comes within the statute prohibiting conveyances to hinder, delay, or defraud creditors, and that it is therefore void.
— The decree is affirmed with costs.