Rynearson v. Turner

| Mich. | Oct 31, 1883

Campbell, J.

Tliis is a bill filed by a surety against the principal debtor, two surviving co-sureties and the representatives of a third, to obtain contribution towards a debt which complainant paid in full. The bill also attempts to reach property of the deceased co-surety alleged to have been conveyed in fraud of complainant. The ground of action was that in 1870, Jesse W. Turner, desiring to get rid of an injunction granted against him at the suit of Benjamin Atwood, in Kalamazoo county, complainant and "William Lynn, Cyril Tyler and Eli H. Collar signed a bond with Turner agreeing to perform any decree which might be rendered in said cause. The decree, which was in a foreclosure suit, being granted in favor of Atwood and affirmed by the Supreme Court, was executed, and resulted in a deficiency after sale. Suit was then brought on the injunction bond, and judgment rendered in May, 1879, for $1402.55 and costs, which complainant paid. He now alleges that the other sureties and principal are irresponsible, and asks relief - to the extent of half his outlay, against the estate of Lynn, who is dead. And he seeks to reach the property of Lynn conveyed under the following circumstances:

On May 26, 1876, Lynn conveyed to his son George W. Lynn, by deed not recorded till November 9, 1877, a farm known as the northwest quarter of section 12, town 4 south of range 9 west, (except a small parcel of half an acre,) for a consideration expressed in the deed at $12,000. George W. Lynn mortgaged the property, by mortgage bearing date the same day with the deed, for $1200. This-mortgage was not recorded until May 23, 1879. .William Lynn also transferred considerable personal estate to his son George with the farm.

This conveyance to George W. Lynn was made, if correetly dated, but a short time before the foreclosure decree, which was rendered in June, 1876; and the record of George W. Lynn’s ’mortgage to his mother, the defendant Maria Lynn, was recorded on the day when the verdict was rendered on the bond against complainant.

William Lynn died intestate m September, 1878, and, so far as appears, left no estate. An administrator was appointed, who is a defendant in this cause. Complainant claims that the dealings with George were fraudulent, and seeks to subject the property to the payment of Lynn’s half of the debt, the other parties being insolvent. Maria.Lynn and the remaining children of William Lynn are brought in as in fact enjoying the possession with George as heirs of their father.

Defendants answered, claiming the benefit of a demurrer, and also setting up the good faith of the bargain and dealings. Testimony was taken on this subject. The court below dismissed the bill on the ground that the jurisdiction belonged to the court of probate, and was beyond the equity powers of the circuit court. It is also claimed that complainant is not entitled to relief because not a judgment creditor.

We think the court erred in taking this view of the jurisdiction. The determination of the terms of contribution involved an inquiry into the liability and solvency of Turner, Tyler and Collar as well as of Lynn’s estate, and these complex equities could not be settled before the probate court or commissioners. To that extent, at least, the bill wa's well founded on any theory, and inasmuch as the jurisdiction was necessary to determine Lynn’s share, there was nothing left after such determination to be ascertained. And while it would probably be convenient for purposes of administration to have this amount in some way certified and found in the probate records, there could be no revision of it after the decree once fixed the sum of the liability. The bill could not properly be dismissed.

A somewhat different question arises concerning relief against the property. But inasmuch as Lynn’s insolvency might have some effect on the other sureties, it seems to have been necessary to inquire whether he was insolvent in fact. So that, at any rate, there was sufficient ground for investigating the facts. It depends, therefore, on the result of that investigation how far we need inquire into the further questions as to relief.

The value of the land in question is variously estimated. It does not appear to have been worth $12,000, but it may be roughly placed at between six and seven thousand dollars. We are inclined to credit substantially the defendant’s theory, that George W. Lynn, -who had been working for his father for some years, was anxious to set up for himself and wished to have his pay for his past services to enable him to purchase a smaller farm. The claim is that it was proposed that he should take this, and give a mortgage to his mother for $1200 and pay off debts of about $800, cancel his own claim, and support his parents. The evidence is not satisfactory upon all these points, but it is, we think, beyond question that a very considerable part of the consideration, in order to make up the full value of the property, would consist of the agreement to support Lynn and wife. As against his creditors no such provision could be sustained. It would be a provision for the direct benefit of the grantor. It is difficult to believe the arrangement was not made with some idea on George’s part that the scheme was for the purpose of defeating the recovery on this suretyship obligation. But, be this as it may, William Lynn could not make such an arrangement lawfully, and the whole matter appears to have been left at loose ends, without any such action as could place George in the position of a bona fide purchaser who had paid the consideration in full. It is evident that the amount left open was considerably larger than would suffice to pay this debt, and we think George must account for it.

The only remaining question is whether this relief can be granted in the present case. The objection made is that complainant is not a judgment creditor, and that the bill should be filed by the administrator of William Lynn, under the statute, to avoid the conveyance on behalf of the creditors who were to indemnify him for so doing. It does not appear that other creditors have proved claims, or sought to-have this done. And' in our opinion the facts having all been investigated and the conclusion having been pertinent to the inquiry, there is no reason for circuity of action. Complainant is -entitled to the same consideration as an ordinary judgment creditor, since his position as a judgment defendant defines his rights as perfectly as a new judgment would. And, inasmuch as the administrator is a party to the record, every one interested is before the Court, and full justice can be done.

The decision is not put upon the ground of holding heirs responsible as such. Our probate system has abolished that method. But the case is one of a creditor seeking relief against a conveyance made in his fraud.

We think that a decree must be made that complainant is entitled to contribution from William Lynn’s estate in the sum of one-half of the judgment and costs paid by him, with interest from the date of payment, and that unless George W. Lynn pay the amount, with costs of this Court and of the circuit court, within four months, then a sale may be made by a circuit court commissioner of so much of the land as is necessary, subject to the mortgage to Mrs. Lynn.

The decree must be reversed, with costs of both courts, and a new decree entered accordingly.

Graves, C. J., and Cooley, L, concurred. Sherwood, J, did not sit in this case.