Barrett v. Nealon

Opinion, Mr. Justice Paxson: The learned judge below unfortunately drifted into a wrong theory in the trial of this case, and the error runs all through it. He held substantially that if the mortgage given by John Nealon to the defendants below, was in pursuance of an arrangement by which it was to be used to protect Nealon’s property from the creditors who held his indorsements, it was not fraudulent unless he also intended to hinder and delay the plaintiff below. Nealon testified that the mortgage was intended in part at least to cover up his property so that it could not be made liable for his indorsements ; that he did not regard them as just debts, and that he had no thought or intention of keeping any of his just creditors at bay, and particularly that he did not intend to defraud the plaintiff below. It needs but a moment’s reflection to see that tins position cannot be sustained. The plaintiff was a creditor at the time the mortgage was given. Nealon was as much bound for his indorsements as for any other debt. The effect of covering up his property to protect him against particular creditors is a wrong against them all, and they are all equally hindered or delayed. He cannot be permitted to say that he intended to cheat A. but did not mean to cheat B., both being existing creditors at the time; and that his mortgage or conveyance given for the purpose of covering up his property, while void as to A., is yet good against B., because he did not intend to defraud the latter. It is true we have held in some cases that where a debt has been contracted years after the fraudulent act, such creditor has no standing to attack it, for the reason that not being a creditor at the time he was not a creditor intended to be defrauded. But it has never been held that a conveyance to hinder and delay creditors was not assailable by all creditors existing at the time of the conveyance. Acting upon the theory above indicated, the learned judge held that there was not sufficient evidence of fraud to submit to the jury, and directed a verdict for the defendants. This, [178] we think, was error. There was the positive evidence of Nealon that the mortgage was given to protect his property from his indorsees, and there was some evidence that the defendants (mortgagees) knew of his purpose, and acquiesced in it. There was enough to carry the case to the jury. All of the assignments of error are sustained. Judgment reversed, and a venire facias de novo awarded.