57 Miss. 485 | Miss. | 1879
delivered the opinion of the court.
The trust-deed which is attacked as fraudulent in this case was executed by the grantors to secure pre-existing debts due their kinsfolk and intimate friends, and at a time when a heavy suit was pending against themselves, which was just about to ripen into a judgment. These facts, it is insisted, make it necessarily fraudulent in law, even though no fraud in fact was intended, and though the sole intent of the grantors was to give a preference among creditors. The counsel for the appellee concedes that the law would be otherwise if there had been an absolute transfer of property in extinguishment of a pre-existing debt, or if, upon a new consideration, there had been a mortgage executed to secure a contemporaneously contracted indebtedness, but insists that pre-existing creditors who surrender nothing and make no new advance cannot, in receiving a new security, be regarded as purchasers for value.
The defect in this position is in misconceiving the nature and effect of the doctrine of innocent purchasers. without notice, or rather in failing to note the very words necessary to be used in announcing it. He is a bona fide purchaser in the eyes of the law who has paid value without notice of defects in the title of the thing bought, or of fraud upon the part of the seller. Where one has bought under such circumstances, his purchase will ordinarily cut off all unknown equities, and relieve against all secret frauds. But if there be no
It is insisted that this view militates against the doctrine announced in Harney v. Pack, 4 S. & M. 229, Pope v. Pope, 40 Miss. 516, Perkins v. Swank, 43 Miss. 349, and other cases, in which it was announced that the reception of security for a pre-existing debt did not constitute the recipient a purchaser for value. Those cases, properly understood, only declare, what we now reiterate, that if the party attacking such a conveyance can show that there was a defect in the title of the thing conveyed, or an outstanding prior and superior equity, or fraud upon the part of the grantor, the grantee or beneficiary cannot claim to be relieved from such defects or frauds by reason of his own ignorance or innocence. Herein consists the difference between him who has paid and him who has not paid a new present consideration. The first cuts off all unknown equities, and is relieved from the effects of all secret frauds upon the part of the grantor, by his own good faith and his payment of value ; the second, having paid no value, is not protected by his ignorance of defects or innocence of frauds, if in fact such frauds or defects existed.
The sworn answers of the defendants not only deny all fraudulent intent, but they specify with minuteness the several debts to protect which the instrument was made, giving the dates, amount, and consideration of each. The cause having been set down upon bill and answers, these responses must be taken as true. They effectually overthrow the equity of the bill. That the case was not set down within five months after answer filed does not affect the result. The burden o-f making out tire case rested upon the complainant. The averments of the answers, being strictly responsive to the allegations of the bill, must, in the absence of proof, be taken as true.
Decree reversed and bill dismissed.