Root v. Reynolds

Barkett, J, Upon the case as presented by the bill of excep-. tions, it is to be taken for the purposes of the decision now to be made, that Emerson’s motive in selling the property in question was to withdraw it from the reach of attachment by his creditors ; that Emerson was insolvent, and this was known by Root, at the time the trade for the property was closed and consummated, that Root paid a full consideration for it, that he purchased it in good faith, not for the purpose and with the intent of lending himself to aid ‘Emerson in withdrawing his”'property from the reach of his creditors, but for his own individual pse, and only [144] because he thought it necessary for the preservation and promotion of his own business interests. Emerson’s conduct was undoubtedly in fraud of his creditors, and if a knowledge by Root of the fraudulent purpose of Emerson, carried into effect by such sale and purchase of the property, is conclusive to affect him as a party to the fraud of Emerson, then it is clear that he cannot prevail in his present suit. The case excludes the idea of any fraudulent intent on the part of Root, or that he lent himself to aid Emerson in his fraudulent purpose, or that he was a mere volunteer, purchasing because he could buy the property cheap and make a profitable bargain. It shows that he was connected with the property and engaged in the same kind of business that Emerson had been carrying on with it, and that he bought it from a supposed necessity in order to the promotion and preservation of his own business interests. It is not claimed that the purchase was a sham and pretence, under which the title was to appear to pass, while the property was still to be held for the benefit and use of Emerson. The question to be determined is, whether Root, in his position relatively to the property and to the other parties, is, by the mere fact of his knowing of the improper and fraudulent purpose of Emerson, to be affected as if party to a fraud against the creditors of Emerson. We are not prepared.to sustain the position of the learned counsel for the plaintiff to the effect that if Root paid a full consideration for the property, and the purchase was not a pretence and designed as a cloak for the benefit of Emerson, then the transaction was valid as against the creditors of Emerson, and Root is entitled to hold the property. Nor do we regard it needful to discuss this position in the light of the authorities cited in its support. The case of Lowell v. Edgell, 4 Vt. 405, is an authority against that position, and we are not disposed to question the principle or the reasons on which it rests, so far as the real point that the case presented for decision is concerned. We think cases are not of unfrequept occurrence, which would answer to all the elements of that position, and yet the sales should be held void as to the creditors of the vendor. For instance, if in the present case, Root had been a mere volunteer in the purchase [145] and bought only because he could make a good bargain, not caring as to the motives and purposes of Emerson in making the sale, then his having knowledge of those motive^ and purposes would have affected him in his rights as against the creditors of Emerson, though he in fact paid a full consideration for the property. But not being a mere volunteer for the purpose of taking advantage of Emerson’s desire to sell for the motive and purposes by which Emerson was actuated, but having a connection with the property and the business in which it was to be used, and having motives and reasons for making the purchase, entirely independent of Emerson’s motives and purposes in wishing to ^ell, and which were both honest and adequate to every intent, and in exclusion of any intent or willingness to lend himself in aid of Emerson, we think neither principle, legal or moral, nor authority, requires us to hold that mere knowledge of Emerson’s intent and purpose should affect him as being a participant in Emerson’s contemplated fraud. It would seem to be carrying legal ethics to a great length to require a person situated as Root was, to forego the preservation and promotion of the interests of his established business by making such a purchase as he did, free as he was from any fraudulent motive, and moved as he was by an amply adequate motive of the most honest and legitimate character. We think so to hold would contravene the law of the subject as it exists in this State, as evinced by the language of Judge Redfield in Lyon v. Rood, 12 Vt. 233, and as established by the case in Windsor county, cited by him in the case last named. The case that is mainly relied on as establishing a contrary doctrine from that which we adopt and act upon in this case, is Edgell v. Lowell, before cited. With the decision of that case, upon the facts on which the question arose, we have no dissatisfaction to express, though we think the learned judge, in drawing up the opinion, gave to the case of Bridge v. Eggleston, 14 Mass. 250, a force and application somewhat beyond, and aside of its real point and authority. The point in question, in the case last named, arose as to the competency of certain evidence that had been received, of admissions made by the fraudulent grantor, tending to show Ms fraudulent [146] intent in making the sale. In discussing the propriety of receiving that evidence, the court was showing the necessity of proving the fraudulent intent of the grantor, as an indispensible element of a fraud which would be effectual to defeat the title of the grantee. No question arose or was discussed as to what would be necessary in order to render the grantee a fraudulent purchaser, nor was it of interest to any purpose of the decision accurately to define what would constitute fraud in such grantee. The remarks of the judge were general, and his language was not inconsistent with what we hold in this case. It seems obvious that he used the term knowledge in the sense of such knowledge as imported a concurrence in the fraudulent intent of the grantor. That no question was raised or discussion had upon this point is evident from the language of the charge, viz : “ If Eggleston paid the money for the estate, and did it with a knowledge of the circumstances of the grantor, and with the intent to aid and assist him to delay or defraud his creditors, the deed would be void as against them.” Ashmun, counsel for the defendant, said in the argument that the instructions of the judge to the jury were unquestionably correct. Now by recurring to the case of Edgell v. Lowell, it will be seen that the part of the charge which received the special animadversion of the supreme court, was that in which the judge told the jury “that though the grantor might have sold the farm with a corrupt and fraudulent attempt to cheat and defraud his creditors, yet if the vendee did not know it, and purchase with a like corrupt and fraudulent intent, it would not be fraudulent in him,” and the impressive repetition to the jury that the vendee must be actuated by a like fraudulent and corrupt intent with the vendor. Judge Baylies, in the opinion was specially occupied in disapproving the idea that the vendee’s motives, in order to affect him with the fraud, must be identical with that of the vendor. And in so doing he says, “if the vendee, at the time, had knowledge that the vendor sold his farm to defraud his. creditors, it would make the conveyance void in his hands, as to such creditors, although he had no wish to defraud them, but purchased because he considered the farm cheap, and this was the only motive that jpdpped hjrp to purchase and follow? this with this language, [147] “ Hence I conclude that the motives and intents of the vendor and vendee may be different, and the conveyance, as it respects the vendee, will be void.” All that we understand to be meant by this is substantially what we hold in the present case, that if the vendee knows of the fraudulent intent of the vendor, and purchases, having such knowledge only because he considered the property cheap, although actuated by no wish to defraud the creditors of the vendor, it would of itself not be in good faith as to such creditors, would be a lending of himself to aid the perpetration of the fraud, would be purchasing in the character of a volunteer, without any adequate motive or purpose, independent of the occasion of the sale and the opportunity to buy the property cheap. We are satisfied that this court have never understood that case, or the language of the learned Judge, in his opinion, in its application to the facts proved and the charge then under review, as having any other scope or meaning than is here indicated. With that case fresh before them, and as we are informed, upon very full argument and consideration, the supreme court decided the case in Windsor county in the manner stated by Judge Redeield, in Lyon v. Rood, and he, in the last named case, declares the law as he does, with the approbation of his associates, who, with him then constituted the court. Upon a somewhat thorough examination of the cases cited in the argument, we fail to find any substantial authority in opposition to the view here presented, while on the other hand, we regard many well considered cases as going farther than we design to go in this case, and as sustaining the proposition of the plaintiff’s counsel that we decline to adopt. It seems not important to extend comments upon the cases cited upon either side, and the less so for the reason that the principle which governs this case seems to be settled, and to our satisfaction, by the former decisions of our own court. On the whole, we are satisfied that the charge of the county court was well grounded, and presented the case to the jury in a manner well calculated to hold the plaintiff to a full measure of responsibility for honesty and good faith in making the purchase of the property. The judgment is affirmed.