Sackett v. Spencer

The opinion of the court was delivered, March 21st 1870, by Agnew, J. The complicated and rather difficult questions of mortgage and trust presented in the paper-book, disappear, when the material facts eliminated from the' mass are shown in their proper relations. R. H. Sackett, the plaintiff, claimed title through a sheriff’s sale of the land in suit, made in 1867; under a judgment against Thomas Forman, entered December 6th 1861. Forman had conveyed the land to Henry Spencer, the defendant, by a deed dated January 23d 1861, ten months prior to the entry of judgment. At the time of the entry of judgment, therefore, Forman had no apparent title, legal or equitable, consequently the plaintiff could recover only upon establishing such a fraud upon creditors as would destroy the deed from Forman to Spencer. This then was the only question in the case, for as plaintiff in the ejectment, Sackett could recover only on the strength of this position, and the burden ’of the proof of it rested on him. It is evident, therefore, that if the conveyance from Forman to Spencer was bon& fide, and made on sufficient consideration, that is, if made upon an honest and fair undertaking to convey to Spencer, in considera [98] tion of the payment of the purchase-money procured by Spencer to be paid by another to Overton, the original grantor, the case of the plaintiff must fall, whether the deed from Overton to For-man was absolute or held in trust. The plaintiff made out a primá facie case of fraud, by showing that the title was apparently absolute in Forman, and that he was deeply involved in debt at the time of his conveyance, to Spencer, and that in three days after-wards Spencer reconveyed to Christiana Forman, the wife of Thomas Forman. To support this title the defendant then gave evidence of the previous relations and dealings between himself, Forman and wife, in relation to the land. Briefly stated, the facts alleged and proved by the defendant were these: Nehemiah Smith and his son had bought the land from Edward Overton, and made a small improvement. Spencer purchased the interest of the Smiths for $50, surrendered it to Overton and took another, article to himself, dated December 11th 1850. He entered into immediate possession, extended the improvements, and continued in exclusive possession until this suit was brought against him in 1867. Having failed to pay Overton the purchase-money on the 30th of October 1856, and just as the last instalment was falling due, he with Forman called on Mr. Overton and had him convey the land to Forman, who paid him the purchase-money. At the same time Overton, probably to protect himself, made the following endorsement on Spencer’s article of December 11th 1850 : “ Received this 30th of October 1856 of Edward Overton, a deed for the within land, I having acquired all right, if any there be, of Henry Spencer, who assents and agrees to such deed.” This was signed by Forman and witnessed by Spencer. The defendant also alleged and proved that the money paid by Forman to Overton belonged to Mrs. Christiana Forman, Spencer’s sister, and the wife of Thomas Forman, and that it was advanced by her under an arrangement with Spencer, to relieve him, and the deed taken to her husband acting as her agent, in order to secure its repayment. So the matter rested till 1861, when Spencer got Forman to convey to him by the before-mentioned deed of January 23d 1861, with the intention of raising the money and paying his debt to Mrs. Forman, but failing to raise it, he reconveyed the property to Mrs. Forman to keep her secure, by the deed of January 26th 1861. He afterwards made sundry payments to Mrs. Forman and obtained a conveyance from her, giving her his obligation for the balance. This deed was made in 1864. At the subsequent sheriff’s sale in 1867, of the land as the property of Thomas Forman, Spencer gave notice of his claim of title to it. The defendant, in order to meet the apparent title in Forman, contended at one time that the deed from Overton to Forman was a mortgage, and at another, that it was held in trust for Spencer, to which the plaintiff replied the Act of 1856, on the ground that [99] the trust was not declared in writing. Thus the case became complicated by questions as to the absolute or qualified character of the deed to Forman. But it is evident these questions became immaterial as soon as Forman conveyed to Spencer in January 1861. By so doing he recognised his liability to convey under the arrangement, whether this arrangement could - be enforced against the land or not under the Statute of Frauds. He stood in the precisely analogous position of an owner who sells land by parol and receives the purchase-money but delivers no possession. The title remains in him by virtue of the Statute of Frauds and Perjuries, and he cannot be compelled to convey it. But if he choose to fulfil his verbal agreement and actually conveys to the purchaser, who can gainsay it ? So it is here: Forman having executed the agreement between him and Spencer by a conveyance, the plaintiff’s success depends not on the antecedent character of the deed from Overton to Forman, but on the question whether this deed was a fraud on creditors. The question of fraud in turn depends on the question, whether the money which paid for the land belonged to Forman or to his wife, and whether it was advanced for the benefit of Spencer under the agreement to convey to him on repayment of the money to Mrs. Forman. If Forman held the land on these terms, and conveyed it to Spencer in compliance with the understanding, it is clear there was no fraud on the rights of creditors, whether he had the power to refuse to convey because of the Act of 1856 or not. Having received the title without the payment of any consideration by himself, it was no fraud on the rights of creditors to fulfil the understanding upon which he received the title. His estate had not paid for the land, and nothing had gone into it to which creditors could lay claim, in foro eonsoientice, especially creditors, as in this case, whose debts arose long subsequently to the arrangement by which he acquired the title. The question of mortgage or not, or trust or not, concerned Forman alone, so long as the title was uncontrolled by the lien of any judgment. It was in his power, if there were no liens to prevent it, to carry out honestly, and in good faith, the agreement under which he took the title, without payment of any consideration on his own part. The real question, therefore, was, whether the wife’s. money paid for the land, and whether he took the title under an honest and fair agreement, to hold it for Spencer’s benefit and as a security for his wife’s money. This question was fairly submitted to the jury and controls the case, the verdict being in favor of the defendant. This solution of the main question disposes of all of the assignments of error involving the questions of trust or mortgage. Thus the true purpose of the evidence excepted to, and set forth in the 3d, 4th, 5th and 6th assignments of error, was to prove the understanding or agreement upon which Forman accepted the title, and [100] the payment of the pur.chase-money by his wife, and not the trust character of the deed. In the same manner the points made in the 8th, 9th, 10th, 11th, 12th, 13th, 14th and 15th assignments, relating to the questions of trust and mortgage, became immaterial when Forman executed the parol agreement to reconvey to Spencer by making the deed to him. The parol agreement being executed, the Statute of Frauds was no longer in the case, and the only question remaining was whether the execution of this agreement was a fraud on creditors. The plaintiff was not injured in point of fact by the refusal of the court to permit the recital in the deed to Forman to be read as set forth in the 1st assignment of error. The deed was actually in evidence, and the plaintiff had a right to pray instruction of the court to the jury on this clause in it. But the reading of the recital was not material, it being an undoubted fact, on which the cause was tried, that Spencer’s contract was surrendered and the deed made by him to Forman, discharged by that contract, and the case turned alone on the fact of the purchase-money being paid by Christiana Forman, and the undertaking that on its repayment Forman should reconvey to Spencer. There is nothing in the 2d assignment of error. The conversation proposed to be proved, between Charles Sackett and Forman was in April, after Forman had conveyed to Spencer; what For-man said then could not be received to affect Spencer’s title. The 7th error is not supported. Spencer’s attempts to borrow money to pay his debt to Mrs. Forman, were corroborative of the facts already proved, and being at and about the time of the transactions proved, tended to show the bona fides of the transaction, and all being ante litem motam. The 16th and 17th errors are not sustained. The fact was precisely as stated by the judge, there was direct evidence that the money was Mrs. Forman’s, and she was not directly contradicted. The fact that Forman got the money of Charles Sackett, or of the firm, to repay what he owed his wife, was not a contradiction of her statement, but merely a circumstance tending to affect her credibility. So far as it went to show that the money really belonged to Forman, and not to her, it was a matter for the jury, and was left to them by the court, in submitting to them the question whether the money was advanced by Mrs. Forman or belonged to Forman himself. This question was fairly submitted to the jury. Finding no error in the record, the judgment is affirmed.