5 Del. Ch. 11 | New York Court of Chancery | 1874
I shall not state the arguments of counsel in detail, in support of their respective positions. Whatever of difficulty there is in this case is not in a conflict of principles of equity, but arises from the application of those principles to the facts upon which it mainly depends. I have been somewhat embarrassed by the peculiar statement of the complainant’s cause by himself. Although the purpose' of delaying his creditors is expressly denied, his statements in respect to the reasons of the conveyance verge closely oil a confession that delay was his object.
The proofs, however,—connected as they are with the averment in the bill that the agreement between the father and the son was that, as soon as the claims were adjusted and paid, the son should reconvey to the father,—seem inconsistent with any fixed purpose of the father to hinder, delay, or defraud his creditors.
The judgment of the complainant’s father had been in existence several years before the conveyance, and its lien could not be affected, nor its collection delayed, by such conveyance; and the judgment of Bracken against said complainant and his surety was paid within a few days after it was recovered.
Ho executions were ever issued upon these judgments. It is to be observed, also, that the answer of the only defendant who is personally capable of making an answer does not insist that the conveyance was made for the puiqiose of hindering, delaying, or defrauding creditors, but states the belief that the conveyance was made by the father to the son, to enable the father to raise money, without stating any knowledge or belief of the payment of any money by the son to the father as a consideration for the conveyance.
The infant defendants being incapable of personally answering the complaint, I would, if in my judgment the facts proved justified me in doing so, recognize this defense
In fact, if the bill and the proofs of the complainant, or either of them, show that the purpose of the conveyance was to hinder, delay, or defraud creditors, it is not necessary for the defendants to declare such to be the fact. The bill of the complainant must not disclose -the existence of such intention, and his proofs must not establish the existence of such an intention.
A plaintiff comes into a court of equity seeking equity, and he must not show that he has done or purposed to do that which equity will condemn.
Where there is a controversy between the debtor and his creditor as to the amount of the indebtedness, and the debtor makes a conveyance to a third party, with the understanding that such party shall ascertain, adjust, or settle such indebtedness, and raise by sale of such land, or otherwise upon credit of the land, a sufficient amount to pay and satisfy the same,— such conveyance, I conceive, "would not be fraudulent. And unless creditors were in fact thereby hindered, delayed; or defrauded, the purpose to hinder, delay, or defraud ought not to be presumed.
The material question in this case is, Did the complainant, by making the conveyance to his son, intend to hinder, * delay, or defraud either his father, Thomas Pierson, William Bracken, or other creditors ? If he did defraud or intend to defraud them or any of them, and that fact or intention be satisfactorily disclosed by the bill, or the proofs made by the complainant’s own witnesses, then lie has no standing in a court of equity, and is entitled to no relief, although the answer of the defendants may not set up such a defense.
The solicitors for the defendants insist in their argument, among other defenses, upon the benefit of the Statute of Frauds. By Stat. 29 Gar. II. chap. 3, § 7, it is declared that “ all declarations or creations of trusts or confidences of any lands, tenements, or hereditaments shall be manifested and proved by some writing signed by the party who is by law
This section is not in force in this State, and is no part of our Statute of Frauds. In this State a trust or confidence of lands, tenements, or hereditaments may be manifested and proved by paroi, and therefore the objection taken in this-respect in this cause fails.
It is true, as contended by the solicitor for the defendants,, that a resulting trust must attach, if at all, by virtue of the-transaction itself, and that it cannot be raised from subsequent matter ex post facto; and that if a person in the actual possession of property make an actual gift or a transfer of it to-another for that other’s benefit, as a general rule the presumption of a resulting trust will not arise.
It is also true, as a general rule, that the law never implies, the court never presumes, a trust. It is also true, where the-owner of an estate conveys it to another for a valuable consideration, as the price for the title to the estate, but which in fact is not paid, the nonpayment of the consideration price will not change a bona fide sale into a trust. But, to prevent a fraud, a court of equity will regard a conveyance purporting to be absolute on its face as not in fact an absolute conveyance, if the proofs in the cause show that it was not intended to be absolute.
A court of equity will regard what purports to be an absolute conveyance as a mortgage, in order to prevent the-commission of frauds, if the proofs taken according to the-principles of evidence justify them in so regarding the conveyance. If a trust was in fact intended by the grantor and the grantee in favor of the grantor, although the conveyance purports to be absolute on its face, a court of equity, to prevent fraud, will recognize and enforce the trust, and will regard the delivery of the deed as a delivery for the purposes intended, and not for a purpose not intended.
In fact there is no instrument .of writing in form so strong or technical, if pleaded or offered in evidence, which would work a fraud contrary to the actual intentions of the parties,.
The prevention of fraud, more than anything else, is the great prerogative of a court of equity.
While I hold that a trust may be manifested and proved in this State by paroi, I would not consider the loose declarations of a grantee in a deed, that he held for the benefit or in trust for another, sufficient to oust him of his estate.
Yet where his uniform declarations are supported by the continuous possession of the grantor; his occupying and using the premises as his own; receiving the rents therefor; paying interest, as in this case, on money borrowed on the faith of the land conveyed; contracting for the sale of a portion of the land, and the proceeds of sale being applied to the payment of liens against the land, and in payment of debts which had been incurred to raise money for the payment of pre-existing liens upon the land; in short, where every act in respect to the land appears to have been done by or for the grantor, and not the grantee,— all these acts, taken in connection with the declarations of the grantee as to how he holds, and for whose benefit he holds, furnish evidence satisfactory that there must have been an original understanding or agreement between the parties that the conveyance was for the benefit of the grantor, and not the grantee.
Believing that no fraud was done, or originally intended to be done, by either William C. Pierson or George W. Pierson, and that no creditor of the former has been defrauded, hindered, or delayed by the conveyance of the former to the latter, and that no principle of public policy forbids a decree for reconveyance; and believing that a fraud• would result, contrary to the original intention of the father and the son, if the relief is not afforded as prayed,— I direct a decree to be drawn for a conveyance of the lands which were conveyed by the complainant to George W. Pierson, less that portion of said lands which was conveyed by George W. Pierson to Thomas Pierson, by Sarah Y. Pierson, upon the payment to