Whitehill v. Basnett

Johnson, President: In the view T take of this cause the numerous depositions taken on the question of fraud in the purchase of the stock of merchandise and the value of Hunt’s land given in exchange for the goods are wholly irrelevant. The judgments were against F. D. Basnett & Co. and not against Jesse Hunt. If the transaction complained of in the exchange of the land was entered into by F. D. Basnett & Co. with the intent to hinder, delay and defraud the creditors of said firm and Jesse Hunt had'"notice of said fraudulent intent, then as to the creditors of F. D. Basnett & Co. the purchase of the goods by Hunt was void and would not stand in the way of the subjecting of said goods to the payment of their debts. But the creditors will not be permitted to sell the land of Hunt, to pay the debts of F. D. Basnett & Co. If they proceed against the land exchanged for the goods, they must treat the land as belonging to F. D. Basnett & Co., and when [147] they take it for F. D. Basuett & Co.’s debts they must take it cum onere. They can only sell for the satisfaction of their liens' such interest as Basuett & Co. had in the land, and must take it subject to the vendor’s lieu of Jesse Hunt. According to the authorities, if there was fraud in the exchange, yet the transaction was good between the ¡parties. In this proceeding Hunt could not plead his own fraud, it any existed, and have his deed to Basnett & Co. set aside. He is estopped from denying, that F. D. Basnett & Co. have good title to the land. The plaintiffs are proceeding against Basnett & Co. and not against Hunt, and by asking the sale oí the land as belonging to F. D. Basnett & Co. they must affirm their title thereto. How could the coúrt make a good title to the purchaser, if it were declared that the deed from Hunt to Basnett & Co. was void? Could it compel Hunt to convey land for the purpose of paying Basnett & Co.’s debts, even were it proved that Hunt had participated in a fraud to cheat the creditors of Basnett & Co. out of the stock of goods? With the cptestion of fraud therefore we have nothing to do in this cause. The consideration of the cpiestion of fraud would be appropriate in a contest between Hunt and Basnett & Co.’s creditors as to the ownership of the goods, or between the creditors of Hunt and Basnett & Co. as to the ownership of this land. While the bill in this cause seeks to attack as fraudulent the exchange of the land for the goods and the retention of the lien by Hunt, yet it seeks to subject the said land as the property ofF. D. Basnett & Co. to the payment of their debts. It must be considered a bill tor the latter purpose only. My associates are not prepared to concur in the views above expressed, but upon a careful inspection of the record they are clearly of opinion, that the evidence as shown therein wholly fails to show, that if there was any fraud committed by the said Basnett & Co. in the exchange of the goods for the land, Hunt participated therein and had notice thereof, but shows that the transaction was a fair and bona fide, one so far at least, as said Hunt was concerned. They therefore concur in the conclusion that the decrees of the circuit court of Marion county rendered in this cause on the 13th day of [148] March, 1882, and the 21st day of December, 1882, are reversed with costs to the appellants against the appellees, 'Whitehill & Co.; and the cause is remanded with instructions to regard the vendor’s lien reserved to Jesse Ilnnt as the first lien on said land, and to order a sale of said land, and upon confirmation of the report of sale to decree that out of the proceeds of such sale the amount of the lien of Hunt be first paid, and the residue to be paid to those entitled thereto according to their priorities. REVERSED. Remanded.