Pell v. Tredwell

The following opinions were delivered : Chief Justice Savage, after commenting upon the facts as they appeared from the pleadings and proofs, came to the conclusion that the appellant not only knew of the deed at the time of its execution, but that he advised to the measure and approved of the act. The chief justice then proceeds as follows: The only remaining question in the case is whether the conveyance is fraudulent and void as against the appellant 1 Previous to the decision in tins court in the case of Seward v. Jackson, 8 Cowen, 406, the law was supposed to be settled that a voluntary conveyance was fraudulent and void as against those who were creditors at the time of the conveyance, but as to subsequent creditors there was no necessary presumption of fraud in their favor; and as against — 696 — such, a voluntary conveyance was good unless shewn to be fraudulent in fact. 3 Johns. Ch. R. 481. 5 Cowen, 72. Such seems to have been the understanding of the supreme court of the United'.States. Chief Justice Marshall, in giving the opinion of the court in Sexton v. Wheaton, 8 Wheaton, 243, says: “ In construing this statute, 13 Eliz. ch. 5, the courts have considered every conveyance, not made on considerations deemed valuable in law, as void against previous creditors ; with respect to subsequent creditors, the application of this statute appears to have admitted of some doubt.” He then reviews many of the cases decided by Lord Hardwicke, and adds: “ A review of all the decisions of Lord Hardwicke will shew his opinion to have been, that a voluntary conveyance to a child by a man not indebted at the time, if a real and bona fide conveyance, not made with a fraudulent intent, is good against subsequent creditors.” He supposes the same rule to exist now, and cites with approbation what was said by the master of the rolls in Battersbee v. Farrington, 1 Swanst. 106: “A voluntary conveyance by a person not indebted is clearly good against future creditors; that constitutes the distinction between the two statutes, 13th 27th Eliz. Fraud vitiates the transaction ; but a settlement not fraudulent, by a party not indebted, is valid though voluntary.” The same doctrine is reiterated in Hinde’s lessee v. Longworth, 12 Wheaton, 213, where Mr. Justice Thompson goes farther than had been before decided, and makes use of language applicable to this case : “ A deed from a parent to a child, for the consideration of love and affection, is not absolutely void as against creditors. It may be so under certain circumstances ; but the mere fact of being indebted to a small amount would not make the deed fraudulent, if it could be shewn that the grantor was in prosperous circumstances and unembarrassed, and that the gift to the child was a reasonable provision, according to his state and condition in life, and leaving enough for the payment of the debts of the grantor. The want of a valuable consideration may be a badge of fraud ; but it is only presumptive, and not conclusive evidence of it, and may be met and rebutted by evidence on the other side.” The doctrine just quoted was ci — 697 — ted with approbation in the decision of Seward v. Jackson, 8 Cowen, 406. This subject was there treated with great ability, and the proposition established by the opinions delivered, that “ a conveyance or settlement in consideration of blood and natural affection, though by one indebted at the time, is only prima facie, and not conclusive evidence of fraud.55 Assuming this to be the law, let us inquire whether there is any evidence of a fraudulent intent in the execution of the deed in question. John Tredwell was indebted, at the time of the execution of the deed, principally to the appellant, who states in his answer that the indebtedness at the time of the conveyance was $6,601,11, and the evidence shews that the property covered by his mortgages was worth more than $9000. It seems also to have been understood by all concerned, that Tred well’s existing debts must be paid. If there was an intention to defraud any one, it was Mrs. Brevoort. But even if the deed was not to be considered operative as to creditors generally, the appellant should be concluded by it; it must be considered that he advised this proceeding to secure the property to a family to which he stood, by virtue of his engagement to his dying sister, in the relation of a parent; he intended it as a provision for the family, and therefore should not be permitted to deprive them of it. There was no fraud about it; although the conveyance covered the whole, yet it was well understood that there was property enough to pay the appellant, independent of the property now in question. Considering, therefore, the appellant as a prior creditor, the execution of the deed under the circumstances of the case must be deemed a fair transaction, and the appellant was properly restrained from selling the farm by virtue of his execution. As the assignee of Wiggins and Booraem, the appellant ought to be considered as a subsequent creditor; and as to such, the law was always understood, that the voluntary conveyance for the benefit of a man’s family was never more than prima facie evidence of fraud, and liable to be rebutted. The circumstances which are evidence of fraud in such cases are continuing in possession after the conveyance, acting as owner, and thereby obtaining a false credit, and thus impos — 698 — ing on those with whom the grantor might contract. Nothing of that kind can be sustained in this case. Notice was immediately given of the change in the title, and John Tredwell lost, while Hannah gained credit. John Tredwell does not appear, subsequent to the deed, to have contracted debts on his own account; nor did the contract on which the judgment of Wiggins and Booraem was obtained depend at all on his credit. The vessel, which was the consideration of the note, was sold and delivered before the note was endorsed by Tredwell; his name seems to have been obtained as an additional security merely. The circumstances seem to have been understand by the appellant, as he gave but $500 for a judgment of a much greater amount. On the whole, therefore, I am of opinion that the decree of the court below should be affirmed. By Mr. Senator Oliver. The important question in this cause is, whether the appellant assented to the deed from John to Hannah Tredwell. It is proved that he procured or assisted in a survey of the premises; that the boundaries of the survey were sent to him; that they were afterwards inserted in the deed in question; that the deed, when prepared, was read at a meeting of the family and their friends, or some of them ; and that the appellant was present and made no objection. It also appears that the appellant, after the deed was executed, was instrumental in having a debt against John.charged to Hannah. There are also many other facts in the case which go to establish this assent. It woidd seem, therefore, that the appellant must have assented to the deed. His conduct, as well subsequent as prior to the execution of the deed, is totally irreconcilable with any other inference than that of his assent. If the execution of this deed was assented to by Mr. Pell, it was certainly a waiver of all his claims upon the land. Chancellor Kent, in Wendell v. Van Rensselaer, 1 Johns. C. R. 354, says : “ There is no principle better established in this court, nor one founded on more solid considerations of equity and public utility, than that which declares that if one man knowingly, though he does it passively by looking on. — 699 — suffers another to purchase and expend money on land, under an erroneous opinion of title, without making known his claim, he shall not afterwards be permitted to exercise his legal rights against such person.” If Mr. Pell had intended to have held the premises included in this deed for the debts which John Tredwell owed him, he should have taken from Hannah Tredwell the requisite security. Shall he be allowed to allege that the deed was fraudulent, and that he himself was a. parliceps criminis? Certainly not; and he cannot, therefore now be allowed to make this property chargeable with the debts which John Tredwell owed him at the time of the conveyance. The land in question is not. liable to the judgment of Booraem and Wiggins. It may be doubted whether this conveyance was a voluntary one, within the technical meaning of the term; but even if it was, there is no authority except some obiter dicta, which would make it void in favor of subsequent creditors. If, however, the dicta of Chancellor Kent, in 1 Johns. C. R. 481, are to be considered as authoritative; which cannot be assented to, there are even then doubts whether the judgment of Booraem and Wiggins ought to be collected out of the land in question. The circumstances attending this cause seem to repel the presumption of fraud arising in law, from the fact of the party being indebted at the time. The subsequent acts of the parties strengthen this presumption; for there is now no debt that we know of, existing at the time of the conveyance, but what has been paid or adjusted. As the suit brought against John Tredwell for a breach of promise of marriage was abandoned, it may be doubted whether the plaintiff in that suit can now be considered as being even then a creditor within the meaning of the statute; at all events, subsequent creditors ought not, I think, be allowed to set up the indebtedness of John Tredwell to the plaintiff) and thereby to avoid the deed. But even if Booraem and Wiggins could have set up their judgment against the former, (which it has been already shewn they could not,) still it does not follow that Mr. Pell, as their assignee, could. He bought the judgment, for aught that appears, without the consent of Hannah Tredwell; and — 700 — inasmuch as he had assented to her conveyance, he ought not now to be allowed to alledge that the conveyance to her was fraudulent. If this conveyance was good as against him as a P™r creditor, it ought to be held good against him as a subsequent creditor. Although the respondent might have had a remedy in a court of law, yet she has a more complete one in equity; and this coupled with the fact that the appellant did not raise the question till the argument, is a sufficient answer to this point. 3 Johns. Ch. C. 369. The decree ought therefore to be affirmed. This being the unanimous opinion of the court, the decree of the court below was thereupon affirmed.