King v. West

Clerke, Justice. The creditors of West have, undoubtedly, a right to investigate the good faith of the purchase of the property in question, made in the name of his wife; and it matters not whether they are antecedent or subsequent creditors. (Mead agt. Gregg, 12 Bar. S. C. R. 653.) Nor do the sections of the statute relating to trusts limit or restrict their right in this respect. By recollecting the evils which this statute was designed to remedy, it will be readily seen that those sections are intended to prevent secret resulting trusts; giving to those who were at the time creditors of the party, the privilege of a presumption in their favor that the transaction was fraudulent; but by no means excluding subsequent [336] creditors from the right to inquire, by competent testimony, into the validity of the transaction. But can this investigation be made under an order of refe rence, to ascertain the claims to surplus money pursuant to the present 48th rule of this court? I think not. The liens referred to in that rule are those which subject the estate to be sold under execution, without any further intervention of the court. Claims, however equitable, which are not matured into liens, under which the property can be charged in execution, and sold without further adjudication, cannot be taken into consideration by the referee, under an order of this nature. Therefore questions, however pertinent under other proceedings, would be useless under the present; because, whatever may be the answers to them, the referee could in no way make them applicable to the particular report which he is authorized to make. I, therefore, dismiss the order to show cause, without prejudice to the judgment creditors of West to take any other course which they may be advised to pursue.