100 Ky. 105 | Ky. Ct. App. | 1895
delivered the opinion oe the court:
The appellant, G. A. Seiler, was a young man of thrifty habits, and by the aid of his father, at his starting out to work and trade for himself, had accumulated some $2,000 up to the 5th of October, 1891, when his father, George F« Seiler, his co-appellant here, sold and conveyed to him a tract of 100 acres of land, of inferior quality, in Pendleton county. The consideration of the land was stated to be $1,800, recited as cash in hand, and this appears to have been its fair value.
At the execution of the deed only the sum of $268 was actually paid; the balance of the purchase money was set-off against the amount owing the son by the father for money loaned him and work done for him the last year or two next preceding the execution of the conveyance.
In January, 1892, the appellee, Walz, having a debt of some $500 against John Seiler, the brother of Geo. F.,
By their answers the appellants denied the allegations of the appellee’s petition, but after preparation the chancellor subjected the land to the payment of the debt sued on.
For the appellee it is urged, first, that there was in fact no debt due the son from the father; that this conveyance was wholly without consideration, and made by the father to the son with the sole purpose of defrauding the former’s creditors, and that of that, fraudulent intent the son had notice.
On this issue the proof is altogether in favor of the existence of such indebtedness. Only the father and son testify on that subject with any particularity, though they are corroborated by other circumstances
There is no proof contradicting this direct testimony, though it would seem to have been an easy matter to show, if such was the fact, that the son had no means, or was in fact unable to buy this land. We are convinced, therefore, that this claim is a just one, and the son a bona fide- creditor of the father when the deed was made.
In the second place it is insisted that the father’s purpose in selling the land was to defraud his creditors, and that the son had notice of this purpose; but to the extent the father was indebted to the son there could have been no fraudulent intent in the meaning of the section under which this suit was brought. The action was not to set aside a conveyance because of a fraudulent preference of a creditor. By preferring the son as a creditor the father committed no actual fraud on his other creditors. It was commendable in him to pay his debts, and he might prefer one creditor over another without committing actual fraud or doing aught that is denounced in the statute relied on by the appellee. Relief from such a preference must be sought under another and different statute. Section 1, article 2, chapter 44, General Statutes, now section 1910 of the Kentucky Statutes.
The son, however, was not a creditor to the full extent of the value of the land or of its purchase price, and if the transaction on the father’s part was in any
From the proof we are constrained to the belief that the intention of the father was, first, to prefer his son as a creditor; second, to place the residue beyond the reach of his other creditors, and we are of the opinion that the son had full notice of this purpose or of these purposes on the part of the father.
The brother of the appellant, Geo. F., had failed in business a few days before this deed was made, and the latter was on his paper for a large amount. Of this failure the father and son had been informed, and while it is claimed that the contract for the sale of. the land had been entered into in the July previous, it is significant that no deed was made until after this information had been received, by which the father’s estate would likely be involved in financial ruin.
The question is thus presented whether the son may still occupy the position of preference given him by the deed, notwithstanding his notice of the fraudulent intent of the father. As to the extent of the payment •made there would seem to be no doubt. He has no claim against the land for its reimbursement, and could not ■present it as a.claim against the estate of his father, so
He has only aided in placing beyond the reach of ether creditors, a sum represented by the difference between his own debt and the value of the land, or, in other words, the sum of $268. We do not think he forfeits his debt or loses a preference which is not assailed .in this proceeding.
Let the land be subjected to the payment of $268, with interest from the institution of appellee’s action, with division of all costs.
Wherefore the judgment is reversed for the purposes indicated.'
The following response to a petition for rehearing was delivered by the Court, June 20, 1895:
It appears that there was a personal judgment against Geo. F. Seiler which is not affected by the principles decided in the opinion. There was, in fact, no defense of a serious nature attempted to be interposed for him.
That judgment is, therefore, affirmed as to Geo. F. Seiler, and, as the entire judgment is superseded, the motion for damages is sustained.
