Terrell v. Green

ORMOND, J. The first inquiry which presents itself is, what is the character of the sale made by John S. Green, to his brother Joseph A. Green. The bill charges it to be fraudulent. That John being greatly embarrassed, with judgments about to be obtained against him, made a pretended sale of the slaves to his brother, who held them in trust for him, and finally reconveyed them to him and his family. The defence is, that it was a bona fide purchase of the slaves for their full value ; that there was no trust, either express or implied, that the slaves should be held for John S. Green, or his family; and that they were finally reconveyed to the family of John S. as a gift, without any other consideration, than that of love and affection. . The most material inquiry is, as to the consideration, for if that was really paid, and was a fair price for the slaves, it neutralizes most of the facts relied upon as badges of fraud. The defendant, Joseph A. Green, whose answer upon this point is strictly responsive to the allegations of the bill, is evidence for him. He denies all intention of defrauding any one; denies that he knew his brother was insolvent, and circumstantially relates every thing connected with the purchase. He states that he lived some sixty miles distant from his bro — 211 — ther John, who was indebted to him about $4,500, for which he held his notes. That in the fall of 1828, intending to purchase land in Alabama, he called on his brother to get his money, but failed to obtain it. That he came to this State and purchased land, and on his return again called on his brother, who being unable to pay, agreed to let him have slaves at valuation. That he took them at the appraised value, and took a bill of sale of them. That he then employed an agent, (Thornton Talliaferro,) now dead, to carry them to his plantation in Alabama, he returning to his house in Georgia. That they remained in his possession, until by their labor they had realized what he paid for them, when he made a free gift of them to his brother’s family, he being poor and in bad health. This transaction, so far as it relates to the consideration, and the circumstances attending the sale, is fully sustained by W. G. Green, who was examined by the complainants. He proves that John was indebted to his brother Joseph, for which the latter held his notes. That in the fall of 1828, these notes were sent to him for collection by his brother, in anticipation of his visit to Alabama to purchase land. That on his way to this State he called for his money, but could not get it, and on his return from this State, having purchased land, again insisted on payment, offering to take property. This offer resulted in his taking the negroes, at the value assessed upon them by the three brothers. He knows of no trust, either express or implied. He further states that Thor. Talliaferro, their brother-in-law, was not present when the valuation was made, but coming in afterwards, said the ap-praisement was too low, and thereupon Joseph agreed to pay, and did pay, John $500 more, making the purchase money $5,000. This fact, which, coming from the plaintiff’s own witness, cannot be questioned by him, and is doubtless true, stamps the true character of this transaction, and shows it to have been a real, and not a sham sale, for the purpose of defrauding creditors. The same facts are also established by Benjamin Cook, the father-in-law of John S. Green. He also gives a list of the slaves, with the estimated value of each, many of them being young children, and says the price given for the slaves — 212 — was more than they would have sold for at the the time, as negroes were then very low, a fact which this court knows as matter of history. These witnesses prove also, that the notes held by Joseph, on John Green, were given up to him at the time, and these notes are appended to the answer of Joseph Green, having been handed to him, as he says, by the widow of John Green, after his death. They bear date in 1824, 1825, and 1827, and purport to be signed by John S. Green. We must presume that these signatures are genuine, as they were open to inspection, and have not been contested. Assuming that they are genuine, the inference is irresistible, that they evidence real transactions, not only because they correspond with the testimony of the witnesses, but because there could have been no necessity for their fabrication, so many years in advance of any supposed necessity for their production, John S. Green having died eight years before this bill was filed. Nor indeed, was their production at any time necessary, as the legal inference would have been, that they were destroyed, and the supposition that they were fabricated, imputes if possible more folly, than guilt to the supposed actors in it. They must doubtless be considered as genuine papers, and though they are proof which could not have been demanded, when produced they are strong confirmation of the fact of the indebtedness • of John S. to Joseph A. Green; as no one can be presumed to execute notes for the payment of money, extending over a series of years, without any assignable motive, who is not really indebted. But independent of this presumption, arising from the notes themselves, the indebtedness of John to Joseph is fully proved. To repel this proof, ■ it is insisted there are various facts proved, establishing the fraudulent character of the sale. As - that the slaves were brought away in the night, and traveled an unusual road to Alabama — that John S. Green came to this State about the same time, and resided near the slaves —that it was a sale of all the slaves of the vendor, leaving none for the performance of the menial, offices of the family —that he occasionally exercised control over the slaves, after the sale — and that finally, the slaves went back to the posses-session of his family. These are doubtless signs, or badges — 213 — of fraud, and unexplained, would justify, and indeed, require the court to infer, that the sale was merely colorable. But when it is shown that a full and fair price was paid for the slaves, and possession delivered, and retained for more than six years, the explanation is full and complete. Badges or signs of fraud, are inferences drawn by experience, from the customary conduct of mankind, which is in general marked by selfishness, and distrust of his fellows. The law therefore acting upon these known principles of human action, will not, against creditors, presume a gift to be made from motives of pure benevolence, but will .rather presume a secret, and less worthy motive for the act; and in favor of creditors requires its purity to be established by satisfactory proof. But when the party shows the property to be his own, and that he has the right to do with it as he pleases, the inference is at once repelled. The utmost that the creditor could ask, would be, that the proof of the consideration should be more stringent, than would be demanded where no suspicion of unfairness existed. Here the proof is ample to meet the demands of such a case, and were it much less convincing and satisfactory than it is, would be sufficient, when as here, the creditor has slept upon his rights for fifteen years and upwards. During this long interval of time, many facts must have become impossible of proof, from the death of witnesses, as is shown to be the case here, and even as to living witnesses, much must have faded from the memory, and passed into oblivion. It is certainly a possible case, that a sale may be fraudulent, though a full price is paid for the property, if the intention of the parties was to defraud creditors. But here it is not shown, that Joseph A. Green knew of the insolvent condition of his brother; he denies all such knowledge. His brother William, who lived near John, deposes that he did not know it, and it certainly would be a rash presumption, that Joseph was better acquainted with his condition, being sixty miles from him. If, however, he did know the fact, he had the right to purchase the property to save his own debt, and no inference could arise that he intended to defraud others, and not to secure himself. To make such a purchase fraud — 214 — ulent, the proof must be clear and convincing, that such was the purpose and intent of the act. Nothing need be said here, as to the land alledged to have been purchased with the money of John S. Green, as the proof is ample to show, that the land was not purchased with his means, but by his friends for the benefit of his family. It is further urged, that this contract was void at the time it was made from a law of the State of Georgia, then in force, to be found in Prince’s Dig. 164. The act is as follows: “ Whereas a practice of selecting particular creditors by assignments and transfers of property, made by persons indebted, and thereby excluding or defrauding othex bona fide creditors'of their just claims on the estate of insolvent debtors, is contrary to the first principles of equity and justice. To prevent the .mischief thereof, be it enacted, <fcc. that any person or persons unable to pay his or their debts, who shall at any time hereafter, make any assignment or transfer of real or personal property, stock in trade, debts, dues or demands, in trust to any person or persons, in satisfaction or payment of any debt or demand, or in part thereof, for the use and benefit of his, her, or their creditor or creditors, or for the use and benefit of any other person or persons, by which any creditor of the said debtor shall or maybe excluded from an equal share or portion of the estate so assigned or transferred, such assignment, transfer, deed, or conveyance, shall be null and void, and considered in law and equity as fraudulent against creditors: provided, nevertheless, that nothing contained in this act shall prevent any person or persons in debt from bona fide and absolutely ¡selling and disposing of a part or the whole of his, her or .their real and personal estate, so the same be free from any trust for the benefit of the seller, or any person or persons appointed by him, her or them.” We think the clear intention of the legislature in ths act was, to break down the practice of giving preferences to certain creditors by deeds of assignment, and to compel debtors making assignments in trust, to place all their creditors on the same footing. This is clearly manifest in the preamble, which sets forth the mischief intended to be prevented, and there is nothing in the body of the act hostile to this declared — 215 — purpose. The act in the outset speaks of conveyances in trust for the payment of debts, and to this term all the specific conveyances afterwards enumerated must be referred. The proviso, excluding from the operation of the act absolute sales of property made bona fide by persons indebted at the time, was doubtless added out of abundant caution, as without it, such must have been the interpretation put upon the law. Otherwise, the act would have withdrawn from commerce the entire property of all persons indebted in the State, which certainly the legislature did not intend, as it would have put an end to all trade. Under this law, a debtor, although unable to pay all his debts, may make an absolute sale of the whole or a part of his property to a creditor, in payment of his debt, provided it is bona fide; and if fraudulent, it could be set aside at common law, as well as under this statute. The mischief to be guarded against, was not a payment of one creditor, to the exclusion of others, by an actual bona fide sale, for of this as a generally prevailing evil, little danger could be apprehended any where. It was to break up the practice of preferring one creditor to another by a trust, the evils of which have been felt in other countries, as well as Georgia; and as there is nothing impugning the bona fides of the sale, we must hold it valid under this statute. The constitutional provision of the State of Georgia, article 1, <§> 14, states that no law shall be valid, which contains any matter not expressed in the title, has no application here. This proviso is not the enactment of a law in the sense of the constitution, but is entirely negative in its character, excluding a conclusion from the law which was passed. If the proviso were stricken from the law, it would not vary its legal effect, as the construction would be the same without it as with it. It is also supposed that John S. Green took an interest under the deed of 1835, which may be subjected to the payment of his debts. The conveyance is of land and slaves to him in trust for the use of his wife, and children then in existence, or afterwards to be born. Upon the arrival at age, or marriage of any of the children, the slaves were to be divided between the wife and children, and he was appointed a. — 216 — trustee, with authority to manage the property for the benefit of the family, subject to the limitations of the deed. As there is nothing in the deed from which it can be inferred it was the intention of the donor to create a separate estate in the wife, the marital rights of the husband attached to whatever interest she had in the slaves. If the legal esr tate had been vested in the wife, upon its being reduced into possession by the husband, the interest of the wife would have been subject to the payment of his debts. But the estate of the wife being equitable merely, it could only have been made subject to his debts by a proceeding in chancery; and in that court the husband, or a creditor representing him, conceding he had the right to do so, would have been; required to make a settlement upon the wife. [Inge v. Forrester, 6 Ala. 418.] Carleton & Co. v. Banks, 7 Ala. 32, establishes the principle, that after the husband has reduced to possession a chattel, in which the wife had only an equitable title, the interest of the wife might be sold by the creditors of the husband. That was the case of a life estate in a slave, the title to which was in a trustee, with a remainder over after the-death of the tenant for life. The possession was yielded by the trustee to the husband, who thereby became invested with the right to the possession during the life of his wife. In this case, there was no such reduction into possession by the husband. He received the possession under the deed, “ strictly in trust” for the use of his wife and children, and until the quality of his possession is changed by some act demonstrating his intention to assert his marital rights over the property, his possession will be referred to the deed under which he obtained it. An assignment of his interest for a valuable consideration, would be regarded by a court of equity as a reduction into possession, or he might have applied to a court of chancery for that purpose, but until he manifests his intention of assuming his marital rights, his possession must be considered that of a trustee for his wife and children. [Honner v. Morton, 3 Russ. 68; Johnson v. Johnson, 1 Jac. & W. 450; Kenny v. Udall, 5 Johns. Ch. 473; Elliott v. Cordell, 5 Madd. 150; Andrews v. Jones and — 217 — Spears v. Walkley, 10 Ala. 328; see also Fellowes, Wadsworth & Co. v. Tann, 9 Ala. 1002.] Whether the creditors could have asserted the right of the husband during his life, is a question not presented on the record. By his death it is clear the right survived to the wife. This disposes of the entire case, and renders it improper to consider the other questions raised at the bar. Decree affirmed.