Sumner v. Sawtelle

| Minn. | Jan 15, 1863

By the Court.

Atwatee, J.

The first question to be determined under the facts presented by this case is, what estate Mrs. Strout took in the premises in question, by virtue of the conveyance from Mrs. Mathews to her. It appears that N. H. Sawtelle paid the consideration money, and directed the conveyance to be made to his mother-in-law, Mrs. Strout. Sec. 5 of chap. 32. Comp. Stat., 382, provides, “ that every disposition of lands, whether by deed or devise, hereafter made, except as otherwise provided in this chapter, shall be made directly to the person in whom the right to the possession and profits shall be intended to be vested, and not to any other, or to the use of, or in trust for such person; and if made to one or more persons in trust for, or to the use of another, no estate or interest, legal or equitable, shall vest in the trustee.”

Section 7 of the same chapter provides that when a grant for a valuable consideration shall be made to one person, and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made; but the title shall vest in the person named as the alienee in such conveyance, subject only to the provisions of the next section.”

These provisions are so plain and explicit that no possible doubt can be entertained as to their meaning, scope, and the intention of the legislature in enacting them. That intention was to vest the entire interest in premises conveyed under the conditions mentioned, in the alienee, so that the person paying the consideration should have. no estate whatever, legal or equitable, in the premises. Aud herein the statute has changed the rule at common law, which recognized a trust in favor of the person who paid the consideration, when the conveyance was to another. It cuts up the old system root and branch, and leaves the grantee sole owner, of the premises, with the right to the entire control of the same, subject only to the claims of creditors in certain circumstances. And this, irrespective of the motive with which, or the object for which the conveyance was made and accepted. The law has not declared that no-trust shall result to the person paying the consideration, when the transaction is proved fraudulent, but in no circumstances whatever shall he claim an interest in the premises. The common law rule was found to work great injustice, this method of conveying land being often used as a cover for fraudulent transactions, and the whole system has been abolished by these statutes, which have, in substance, been adopted in many of the States. And under them, I cannot see how the person paying the consideration can be heard in any court of law or equity, claiming its aid to enforce or protect any pretended rights in the premises, of whatsoever nature they may be.

It is true the complaint avers that the said N. H. Saw-telle owns the whole beneficial interest therein (the premises conveyed to Mrs. Strout,) and took title to said premises in the name of Clarissa B. Strout.” For what purpose this allegation was made does not appear. I cannot see that it is in anywise essentia] to the Plaintiff’s right of action ; nor is it true as a proposition of law. Nor does it acquire any additional weight or importance from the circumstance that the allegation has been admitted in the answer and found as a fact by the Court. It can only mean that there was ah agreement or understanding between Sawtelle and Mrs. Strout, that the latter should hold the legal title, and the former enjoy the use and possession. If such agreement existed between the parties, it was simply void. The law does not allow property to be held and used in that way. As matter of law it was not true that Sawtelle held the beneficial interest in or the legal title to the property. Mrs. Strout held both. No person, unless a creditor of N. H. Sawtelle, could molest Mrs. Strout in the use and enjoyment of the premises. Neither the allegation or finding can affect the rule of law to be applied to the facts as disclosed by the case.

We find then Mrs. Strout owning certain property, having paid no consideration for the same, which the Plaintiffs seek to make liable to their judgment against Sawtelle, who has paid the consideration. Sec. 8 of the chapter above cited provides that, “ every such conveyance shall be presumed fraudulent as against the creditors of the person paying the consideration ; and when a fraudulent intent is not disproved, a trust shall result in favor of such creditors to the extent that may be necessary to satisfy their just demands.” In the judgment of the law, then, this conveyance is deemed fraudulent as against the creditors of the party paying the consid. eration. The burden of proof is thrown on the grantee in the conveyance to disprove this presumption of law. As the Court has found there was no fraud, it becomes necessary to inquire whether the facts shown by the record justify this finding.

The evidence from which this finding was made is not be_ fore this Court, but we are justified in presuming that the evidence was in accordance with the pleading, and that no facts were proved, which are not justified by the issues. The only allegations in the answer upon which any evidence could be received, having a tendency to disprove the fraudulent intent, were those in relation to the premises being occupied as a homestead by N. TI Sawtell and family. The answer alleges “ that afterwards the Defendant, N. H. Sawtelle, entered upon said lot and proceeded to erect a dwelling-house for a family homestead, and that' immediately after the erection and construction thereof, viz., November 1, 1858, the said Sawtelle sand wife went into the occupation and possession of said lot .and house, and have, ever since that time, occupied the same as a family homestead.” This allegation is objectionable in .form, and if proved as made, would not establish a defense. It could be of no consequence in what light the Defendant regarded the premises, or that he occupied them as a homestead, the question for determination is, whether the facts show that the premises were actually a homestead in the eye of the law. There is afterwards found in the answer, the substantive averment in regard to the premises, that “ the same are their family homestead, and have been as well before as since the execution of said deed, and now is so held and occupied by them, and the said Clarissa B. Strout now holds in trust for them as their homestead.” This substantive averment is still coupled with a description of the manner in which the premises are occupied by Defendants, Sawtelle and wife, and held by Defendant, Mrs. Strout. If, under the facts disclosed, the premises do not fall within the description of property exempt by law as a homestead, any evidence touching the manner in which the premises were occupied by Sawtelle, or held by Mrs. Strout, could have no tendency to disprove the fraud which is presumed by law.

That these premises in fact were not and could not be the homestead of the Defendant, Sawtelle, under the facts stated and admitted by the pleadings, I think evident from an examination of the provisions of the Homestead Acts. By the act-of 1858 (Comp. Stat., 569,) it is provided “ that a homestead consisting of any quantity of land, not exceeding eighty acres, and the dwelling-house thereon, and its appurtenances, to be selected by the owner thereof, and not included in any incorporated town, city or village, or instead thereof, at the option of the owner,- a quantity of land not exceeding in amount one .lot, &c., owned and occupied by any resident of this State, shall not be subject to attachment,” &c. This act is explicit, that the property, in order to be exempt, must- be owned as well as occupied, and is to be selected by the owner. It is the owner of property who can plead the defence of exemption, and he must plead it in his own behalf and not for another. The Defendant, Sawtelle, cannot interpose this plea in regard to the premises in question ; for, as has been seen, he does not own them, nor has he any interest of any kind whatever in them. Mrs. Strout cannot plead the act, for she does not pretend that she occupies the premises as a homestead. And as the premises were not and could not, legally, be the homestead of Sawtelle, any evidence touching his occupation of them for that purpose, was irrelevant and immaterial, and did not disprove the fraud which the law presumes in such conveyance as against creditors.

It is urged by Defendant in Error, that the reason why a conveyance without consideration is fraudulent as to creditors, is because it is an attempt to place property beyond their reach, which otherwise might be resorted to to pay their debt; and that an assignment of choses in action without consideration, is not fraudulent as against creditors, where they cannot be reached by an execution. That this doctrine obtained, and perhaps now obtains in England, is probably true, but I think the authorities cited show that it has not been adopted in this country. And Mr. "Willard says, (Eg. Jur., 238,) that, “as the reasons on which the English* courts have declined interfering in favor of the creditor, with respect to property not liable to be seized under an execution at common law, do not exist in this State; and as the right of the creditor to reach the debtor’s choses in action, either by his execution directly, or by the aid of the equitable powers of the Court, is perfect, it would seem that a fraudulent conveyance of choses in action should stand on the same footing as a fraudulent assignment of any other property.” It is true, indeed, that if the premises were actually the homestead of Sawtelle, his creditors could not reach them either by execution or the aid of a court of equity, and the reason he urges against, or in disproof .of the fraudulent presumption, might have weight, if he is in a position to urge it.

But in my judgment, the whole argument of the Defendant in Error rests upon a false theory, and is .not based upon or sustained by the facts in the case. Sawtelle has chosen to place himself in a position, in making this conveyance, in which the law regards him as a fraudulent grantor as against his creditors, and in which the law does not permit him to be heard to refute that presumption, since he has no interest in the property. Mrs. Strout, having the entire interest as against ail the world, save the creditors of Sawtelle, she is the only party to interpose a defense against their claims. She bas shown no equity superior or equal to that of the creditors of Sawtelle, and it would be unjust to permit her to enjoy the use of that property or permit her creditors to seize it on execution against her, to the exclusion of the creditors of the party who has paid the consideration for the property. In equity it is considered that the property has been purchased with the money of these creditors, and they have the first claim upon it, for the satisfaction of their debt. The conveyance, in fact, amounted to nothing else than a gift of the property by Sawtelle to Mrs. Strout, and though a man may dispose of his own property as he sees fit, he will not thus be permitted to dispose of the property of his creditors, against their objection, he being insolvent. I cannot see how these conclusions can be avoided, except upon the ground that a person may make a conveyance of real estate, and establish' such a trust as is set up in the answer. I think this is forbidden by the statute, and that courts have uniformly refused to sustain such a trust on like statutes (Garfield vs. Hatmaker, 1 Smith, N. Y., Ct. Ap. 475; Wood vs. Robertson, 8 Smith, 564, Wentworth vs. Wentworth, 2 Minn., 283). IJpon the admitted facts, the Plaintiffs were entitled to judgment upon the pleadings as there was no material issue to be tried.

The judgment below should be reversed and judgment rendered for Plaintiffs in Error.