126 Ill. 525 | Ill. | 1888
delivered the opinion of the Court:
The Appellate Court, in its opinion filed on reversing the decree of the Superior Court, concurred in the conclusion reached by the Superior Court, that the conveyances and assignments in controversy were conceived and executed by the present appellee, of his own motion, for the purpose of preventing his wife from obtaining maintenance and support from his property. We have carefully examined the evidence preserved in the record, and we have no doubt of the correctness ■ of that conclusion. In our opinion, the allegations of the bill ' are unsupported by the evidence, and it might be sufficient to dismiss the bill for that reason, without considering any other. See White v. Morrison, 11 Ill. 361; McKay v. Bissett, 5 Gilm. 499; Jackson v. Miner, 101 Ill. 550; Baldwin v. Campfield, 4 Halst. Ch. 891. We shall, however, not rest our decision ' on that ground alone.
The fourth section of our statute of “Frauds and Perjuries” makes void every gift, grant, conveyance, assignment or trans- • fer of or charge upon any estate, real or personal, * * * made with the intent to disturb, delay, hinder or defraud creditors or other persons,” etc. (Rev. Stat. 1874, chap. 59.) If ' the wife be not, technically, a “creditor,” she surely comes within the language “other persons,” and she is, obviously, as much injured by such a conveyance as any creditor can be. The same or equivalent language has been held to apply to the "wife, in the following eases: Bails v. Bails, 1 Cold. (Tenn.) 287; Reynolds v. Vance, 1 Heisk. (Tenn.) 344; Killinger v. Reidenbauer, 6 S. & R. 531; Boslaugh v. Boslaugh, 68 Pa. St. 499; Brewer v. Connell, 11 Humph. 500; Jenny v. Jenny, 24 Vt. 324; Gilmore v. Hutchinson, 120 Mass. 271; Jiggits v. Jiggits, 40 Miss. 714; Green v. Adams, 59 Vt. 602; Johnson v. Johnson, 12 Ky. Court of App. 485. See, also, Bump on Fraudulent Conveyances, 515.
El Draper v. Draper, 68 Ill. 17, we held that a conveyance, after bill filed for divorce and alimony, with intent to deprive the wife of alimony, was fraudulent, and should he set aside; and this, by necessary inference, recognizes that the wife is within the contemplation of the statute.
The instrument executed on the morning of the 27th day of August, 1885, is, upon its face, plainly fraudulent, in that it attempts to secure the use of the property to appellee to the exclusion of all others,—whether creditors or others having claims upon him. Power v. Alston, 93 Ill. 587; Annis v. Bonar, 86 id. 128; Truitt v. Griffin, 61 id. 26; Mitchell v. Sawyer et al. 115 id. 650; Moore v. Wood, 93 id. 451. And the same is, in effect, the character of the instrument hearing date September 30, 1885.
But assuming that the several assignments and conveyances contain nothing, upon their faces, to condemn them, and that in the papers subsequently executed there is a trust declared in behalf of appeEee, which, upon its face, discloses nothing to render it illegal, the question arises, is it competent for the defendant to show that the several assignments and conveyances were, in fact, made to prevent the wife of appellee from obtaining maintenance and support from his property, and that the papers declaring the trust were executed secretly, and knowledge thereof withheld from the public, to enable appellee to re-assert his ownership of the property after having accomplished the purpose of the assignments and conveyances. It seems to be thought by counsel for appellee that Fast et al. v. McPherson, 98 Ill. 496, requires an answer in the negative. It is clear that such a view results from a misapprehension of the point actually in controversy in that ease. It was there charged that Dexter had held the property in secret trust, in fraud of the creditors of Mrs. McPherson. But he had executed his trust by conveying the property,'by the direction of .the agent of Mrs. McPherson, to Fast, and Fast made a formal public declaration, in writing, that he held in trust. The principle applied is well sustained by authority. “Thus, where an act, though the result of an unlawful contract, is itself lawful, it may form the consideration for a lawful agreement, as, for instance, the actual transfer of stock, the agreement to do which was illegal. Similarly, a trustee into whose hands money is paid on account of a third person, can not set up the illegality of the trust under which the money was so paid, though the cestui que trust could not have enforced his right against the payer directly, as in that case he could only have got the money through the illegal agreement.” Fry on Specific Performance, (2d Am. ed.) p. 215, see. 313. See, also, ibid, ante, sec. 312.
This court, in Miller v. Marckle, 21 Ill. 152, committed itself to the doctrine that it is competent to go behind the language of a writing, and show that the real purpose of, its execution is to hinder, delay and defraud creditors, in violation of the Statute of Frauds and Perjuries,—and this in behalf of the party ostensibly bound by the instrument, and to defeat a suit for its enforcement. The doctrine is re-asserted in Ryan v. Ryan et al. 97 Ill. 38, and indirectly recognized in Dunaway v. Robertson et al. 95 Ill. 419.
In Nellis v. Clark, 20 Wend. 24, and in Smith v. Hubbs, 1 Fairf. (Me.) 71, cited with approval and relied upon in Miller v. Marckle and Dunaway v. Robertson et al., the point was raised, and insisted on in argument, that the defense that the instrument was executed in violation of the Statute of Frauds and Perjuries, can only be allowed where the facts showing it must necessarily make a part of the plaintiff’s or complainant’s proof; but it was disallowed, and expressly ruled otherwise.
We concede that the ruling in some States is different from that in this court in the cases to which we have referred; but our cases are not without authority or reason, and the question must be regarded to be settled, here, as they declare. In addition to the cases cited in Miller v. Marckle, the following may be referred to as sustaining like views: Walton v. Tursten, 49 Miss. 569; Chapin v. Rease, 10 Conn. 69; Murphy v. Hubert, 16 Pa. St. 50; Schenck v. Hart, 32 N. J. Eq. 774; Goudy v. Gebhart, 1 Ohio St. 262; McQuade v. Rosencranz, 36 id. 442; Inhabitants of Canton v. Inhabitants of Dorchester, 8 Cush. 525.
It is argued that the fact that a declaration of trust is in writing, prevents its being secret. If, as we have before herein intimated, the purpose of this trust, as disclosed by the instruments relied upon as proving it, is, upon its face, to reserve the use of the property to appellee while placing it beyond the reach of others having a legal right, apart from such transfer, to resort to it, this is not important. But we do not think the question of the secrecy or the publicity of the trust is affected by the circumstance of whether it was created by word of mouth, only, or by writing. That affects simply the question of proof. If the trust affect lands, it must be in writing. (Bev. Stat. 1874, chap. 59, sec. 9.) But, manifestly, a trust may be public, and yet be created by word of mouth, only. Coke says, in Twyne’s case: “And therefore, reader, when any gift shall be to you in satisfaction of a debt, by one who is indebted to others also: 1. Let it be made in a public manner, and before the neighbors, and not in private, ” etc. Had he understood that a writing would be conclusive of this question, he would undoubtedly have added, after the words “in private,” “or let a memorandum thereof be made in writing,” etc. And it is quite as manifest that a trust, though expressed in writing, may be secret, — as, if the fraudulent grantee or assignee, without the knowledge of, any one other than the fraudulent grantor or assignor, execute a writing declaring the trust, and hand it to the fraudulent grantor or assignor, and he thereafter keep it secretly in his own possession. The writing may be as effectually hid from the world at large, as is the memory of the fact not reduced to writing. The writings here relied upon were not placed upon record. They were retained in the pocket-book of appellee, and they were completely secreted from all but him and appellant,— and so the trust they declare is a secret trust.
We are not unmindful, in this connection, that it is competent, in the ease of a fraudulent conveyance or assignment, for the parties thereto to subsequently make a new and independent agreement, for a sufficient valuable consideration, whereby the grantee or assignee shall be obligated to hold the property in .trust for the grantor or assignor, as held in Parker v. Tiffany, 52 Ill. 286, and Songer v. Partridge, 107 id. 529. (See, also, Roberts on Fraud. Con. p. 495, sec. 10.) But it is manifest such agreement must be open and notorious, and made in good faith, to establish a trust in the property, for otherwise it would be but attempting to create anew a secret trust, already condemned by the statute.
What is here relied upon as a new agreement creating a trust between these parties, is an agreement of which the public knew nothing, which the appellee kept concealed in his pocket-book, and which he was under no obligation to observe unless he chose to do so, and which he himself wholly ignored and disregarded in the instrument he executed in January or February following, and dated September 30, 1885. If the first trust was secret, this one was clearly so. Not only was knowledge of it kept from the public, but it does not appear that any right was attempted to be asserted by virtue of it. In truth, we have the impression, from a careful reading of the evidence, that the execution of these several papers was but an effort to guard against dangers suggested by new fears that appellee’s wife might reach his property, as excited from time to time. Appellee seems to have been a passive instrument all the time, and, when acting at all, acting only and strictly in obedience to appellant.
An objection is urged that the Superior Court erred in permitting Cox, an attorney at law, to testify to what appellee said to him in respect to his purpose in making the assignments, conveyances, etc., to appellant. The objection is not tenable. Ho matter of confidence, as between appellee and Cox, was testified to. Cox was the attorney of appellant, not of appellee; and, at most, the case is not different from Lynn v. Lyerle, 113 Ill. 128, where it was held, that if two parties go together to an attorney, and make statements to him in the presence of each other, they are not confidential communications and therefore privileged.
The contention that the court erred in not requiring the parties to interplead on the petition of Hutchinson & Luff, is not tenable. Hutchinson & Luff,—the parties injured, if any, by that ruling,—are not before us. They neither appealed nor sued out a writ of error. We can only consider the case as it was before the Appellate Court.
The judgment of the Appellate Court is reversed, and the decree of the Superior Court is affirmed. Appellant will recover his posts in the Appellate Court as well as in this court, to be taxed on the certificate of the clerk of the Appellate Court.
Judgment reversed.