Wilcoxen v. Morgan

| Colo. | Feb 15, 1875

Wells, J.

1st. The declarations of James R. Grant, made at the time of the preparation of the conveyance to Daniel Grant, were properly received upon the question, whether the conveyance was or was not with intent to defraud creditors. Phillips v. Eames, 1 Esp. 357; Cook v. Swann, 5 Conn. 141; Wyckoff v. Carr, 8 Mich. 44" court="Mich." date_filed="1860-01-09" href="https://app.midpage.ai/document/wyckoff-v-carr-6632230?utm_source=webapp" opinion_id="6632230">8 Mich. 44.

2d. These declarations and the attendant circumstances; the relationship of the parties; the fact that the conveyance was made without the knowledge of the grantee ; the absence of consideration, and the subsequent long-continued possession and dominion of the premises by the grantor, sufficiently manifest that the purpose of James It. Grant, in this conveyance, was to put the estate beyond the reach of his creditors.

3d. It is to no purpose to say that Daniel Grant was ignorant of the fraudulent intent of his brother in this conveyance, for the evidence shows that he paid nothing. One who purchases in good faith, for a valuable consideration paid, is not, it is true, affected by a secret fraudulent intent on the part of the grantor. It is otherwise, however, as to a mere volunteer, or where the consideration is love and affection only.

4th. Conveyances, voluntary merely, are maintained as against subsequent creditors. A conveyance which is not only voluntary, but animated by a positive and active intent to defraud existing creditors, is void, not only as to these, but as to subsequent creditors as well. Parkman v. Welch, 19 Pick. 237; Brown v. Niles, 16 Ill. 386; Winchester v. Charter, 12 Allen, 610; King v. Wilcox, 11 Paige, 593; Henry v. Fullerton, 13 Sm. & M. 634; Hutchinson v. Kelly, 1 Rob. 128; Parrish v. Murphy, 13 How. 92" court="SCOTUS" date_filed="1852-04-21" href="https://app.midpage.ai/document/parish-v-murphree-86725?utm_source=webapp" opinion_id="86725">13 How. 92; Pennington v. Clifton, 11 Ind. 165; Marston v. Marston, 54 Me 476; Smith v. Carlisle, 17 N. H. 417. The terms of our statute are quite as broad as those of 13 Elizabeth, c. 5, and this effect has almost everywhere been accorded to it. The authorities cited to the contrary doctrine seem to be opposed to the settled course.

5th. It must be conceded that one who, with notice of the prior fraud, purchases of the grantee in a conveyance fraudulent as to creditors, takes the title subject to all the infirmities with which it was affected in the hands of his grantor. To hold otherwise, is to say that three conspiring together may accomplish a fraud which is impossible to two. Manhattan Co. v. Evartson, 6 Paige Ch., 457" court="None" date_filed="1837-04-18" href="https://app.midpage.ai/document/manhattan-co-v-evertson-5548288?utm_source=webapp" opinion_id="5548288">6 Paige, 457.

6th. The evidence sufficiently manifests that the appellee, at the time of his purchase, had notice of the fraudulent character of the conveyance of James P. Grant to Daniel Grant. Long subsequent to this conveyance James R. Grant was in possession of the property, dealing therewith as his own — the appellee was for a time his co-tenant and partner — free of rent; this immunity being expressly upon the ground that the labor and services of the appellee about the common business were of greater value than those of his copartner. Both James R. Grant and Daniel Grant participated in the negotiation which was consummated in the conveyance to appellee. Daniel Grant agreed that a part of the purchase-money to be paid by appellee should be discharged by a payment of James R. Grant’s debts, and distinctly informed appellee that in this sale and conveyance he was acting for another, and not for himself.

These circumstances seem to us sufficient beyond doubt to advise the defendant that Daniel Grant held the estate in some way for the benefit of his brother, to put him upon inquiry as to the nature of this relation, and to charge him with knowledge of every circumstance which such inquiry, pursued with reasonable patience and diligence, would have developed. JsTo man, having knowledge of such circumstances of suspicion as these, is at liberty to close his eyes and, by his negligence, make himself the instrument of consummating a fraud against which the injured party might otherwise have relief.

The finding of the court below seems to us, therefore, unsustained by the evidence* and the foregoing resolutions bring the case within the principle of the determination in Liss v. Wilcoxen, decided at the term of 1873, ante, 85.

Upon the other questions presented in argument, no opinion is expressed.

The judgment is reversed and the cause will be remanded for further proceedings according to law.

Reversed.