Converse v. Hartley

Dutton, J. On the 14th day of April, 1859, a division was made between the wife of Lansford W. Hartley and the other heirs of her father, by which she was to take the land described in the petition in this case, as her share of her father’s estate. As her share was estimated at $3,700, and as the property in question was valued at .$6,000, she and her husband were to give a note to the other heirs for $2,300, secured by a mortgage of this piece of land. This arrangement was carried into effect, except that through mistake and misapprehension the deed was given to Hartley and his wife jointly instead of being given to the wife alone. The note was to be paid out of the property by sale or otherwise. If nothing further had been done, it is clear that Mrs. Hartley would have had an equitable right to have the title transferred from him to her, subject to the mortgage, and that this right would have been paramount to any claim of his creditors. Stedwell v. Anderson, 21 Conn., 139. But the facts found in the case show that although he received the avails of the sales of wood cut on the land and of portions of the land itself, and also received moneys which belonged to his wife, yet that he had beyond this expended $1,447.16 of his own funds in permanent improvements on the property. As the legal title in part was in him, the legal and equitable title to these improvements vested in him, and a court of equity would not [379] compel him to part with the legal title till he had received payment for these advancements. Stedwell v. Anderson, supra. It appears that Hartley through a third person quit-claimed all his interest in the property, which would cany these improvements, to his wife, without any consideration" escept the equitable right of his wife to the mere title to the land. This was manifestly fraudulent in law as against his creditors. The petitioner is entitled therefore to relief in some form. The court below by its decree vacated the whole title conveyed by Hartley to his wife, and then gave her a right, on the performance of certain conditions, to a restoration of it. This we think was inequitable and erroneous. Mrs. Hartley has done nothing to forfeit her right to both the legal and equitable title to the land. There was no fraud in fact. The petitioner has no claim to a title to any portion of the land. He is entitled to the benefit of the improvements, and as these can not be separated from the land itself without great injury and loss, he has an equitable lien, which is to be enforced like any other equitable lieu. Mrs. Hartley should be foreclosed unless she satisfies the just claims of the creditors, or rather, what would be more equitable under the circumstances and loss oppressive to her, on her default a sufficient undivided interest in the property subject to the mortgage should be sold and the money for the payment of the creditors be raised by it. The decree of the superior court must therefore be reversed. The decree was also erroneous in part on another ground. Mrs. Hartley was required, in order to retain the property, to pay the whole amount of the debts allowed by the commissioners. This includes $99.82 which accrued after the deed from Hartley was given. The superior court found there was no fraud in fact. The conveyance was therefore good against subsequent creditors. Benton v. Jones, 8 Conn., 186 ; Hinde v. Longworth, 11 Wheat., 199. The decree should have been, therefore, that unless the respondent should pay to the petitioner, within such time as the court should limit and appoint, the sum of $792.90, the [380] amount of the debts which accrued prior to the conveyance by Mr. Hartley to his wife, with interest, the petitioner should be authorized to sell such an undivided interest in said property, subject to said mortgage, not exceeding the proportion of 1,447 to 6,000, as will raise the sum of $792.16, and that the title to the purchaser be made effectual. The motion for a new trial in this case raises the question, in the first place, whether it was competent for the petitioner to prove that creditors of Hartley gave him credit on the ground of his apparent ownership of the land which he after-wards conveyed through a third person to Mrs. Hartley. It is difficult to conceive of any ground of objection to this evidence. The reason why a voluntary deed is regarded as fraudulent against prior creditors, is the presumption of law that credit was given on the apparent ownership of the property conveyed by the deed. The evidence offered was unnecessary, but could not prejudice the case. The other point raised on the motion is, that the superior court received evidence of facts alleged in the bill which the committee reported as not proved. This, according to the practice in this state in chancery proceedings, was correct. Committees are appointed to aid the court in finding facts. A part of these may be found by the committee and the residue by the court, or the whole may be found by either, although the whole must be sanctioned by the court. There was nothing inconsistent in what was reported by the committee with what was subsequently found by the court. The motion for a new trial must therefore be denied. In this opinion the other judges concurred.