Motley v. Sawyer

Cutting, J. — Some time prior to 1849, Nathaniel Motley, then being the plaintiff’s husband, conveyed certain real estate to the defendant and received from him, in part consideration, the note now in suit, which was at or about the same time delivered by the husband to Ms wife to procure her release of dower in the estate so conveyed. The general instructions given by the presiding Judge, were strictly in accordance with the law regulating the transfer of negotiable paper. The jury have found under those instructions for the plaintiff, and thereby have established these facts, viz; that the note was transferred before it was due; that at the time of its transfer, the plaintiff had no notice of a failure of consideration; that the transfer was not made for the purpose of defrauding creditors, and that it was done in good faith, the consideration not being so inadequate as to satisfy them that the transaction was fraudulent. At common law this transfer would have been unauthorized and void, but it is sustained by the Act of 1841, c. 21, unless as provided in the second section, the note “ being the property of the husband was conveyed by him to the wife directly or indirectly without adequate consideration and so that the creditors of the husband might thereby be defrauded.” The first requested instruction, if given, would have come in conflict with the Act of 1841, without some proof to bring the transaction within the proviso. The fourth request presented a question of fact and was properly withheld. The fifth request assumes, that if the note was not transferred for an adequate consideration, this action cannot be maintained against the defendant, who was a creditor of the insolvent husband. "We apprehend that the Legislature did not design, that inadequacy of consideration alone should invalidate a transfer, but to do so, it must be accompanied with an intent to defraud existing creditors; or in other words, inadequacy and intent should both combine to render such transfer or sale invalid; otherwise every contract between husband and [74] wife, though executed in good faith, might be inquired into and passed upon by the jury and set aside, if it should be found that the wife, in the legitimate exercise of her judgment, had demanded and received too liberal a consideration. The wife, like any other individual, possessed of property, is under no legal obligation to part with it except by operation of law, or by her own consent, and for a consideration fixed and determined by herself; otherwise she is deprived of free agency, is placed under guardianship and cannot be such a contracting party as is contemplated by the statute. The plaintiff may have received too much for her right of dower, but she was under no legal obligation to release it. It was an interest secured to her by law, and on which she might rely for support in widowhood and old age, and might reasonably consider it of more value than it would be estimated by a jury. So that the question returns, was the price demanded and received in good faith or was it so received for the purpose of defrauding creditors ? If the latter, the transaction would be void, without regard to consideration, by the common law, which in no particular upon this point has-been changed by the Act of 1847. And in this case inadequacy of consideration might have properly been submitted to the jury for the purpose of ascertaining the motives of the contracting parties and for no other purpose; but such was not the instruction here requested. The same remarks are appropriate to the sixth and last request, adding only that it is difficult to perceive how a creditor can be legally defrauded by an act of his debtor, il done in good faith.” Under certain circumstances fraud may be inferred from inadequacy of consideration, but such an inference is rebutted by the admission contained in the request. Exceptions overruled, and Judgment on th,e verdict. Tenney and Appleton, J. J., concurred. Shepley, C. J., did not concur. Footnotes [1] Note. — Other questions which arose in the case at a former trial, have bee®ecided, and are reported’in vol. 34, p. 540.