Hoffman v. Fleming

BRAnnon, Judge: Hoffman obtained a judgment against. J. M. Lake, James B. Fleming, and others, and sued out an execution, which was levied upon some personal property of J. M. Lake, the principal debtor. Fleming and his wife conveyed a tract of land to his brother-in-law, Marshall B. Lake, seven clays after the execution of the note on which the judgment. was based; and, three days later, Marshall B. Lake conveyed it to the wife of James B. Fleming. Afterwards a dwelling house was erected upon this land with means of the wife. Later, Hoffman brought this chancery suit, to set aside the conveyance from Fleming to Lake, and from Lake to Mrs. Fleming, alleging them to be fraudulent, because intended to defraud him of his debt, and claiming also that, as means of Fleming had erected the dwelling house upon the land, lie- could, on that score alone, subject the property to his debt. A decree was entered, finding that sufficient means of Fleming had been expended in the erection of the dwelling house to pay Hoffman’s debt, and subjecting the land therefor; and Fleming and his wife appealed from that decree. It is shown that personal property of the principal debtor was levied upon, of value sufficient to discharge the plaintiff’s debt. It does not appear that it was sold, or what became of it; but the law says that a levy of an execution upon the debtor’s property of value sufficient to pay the debt, is a satisfaction of it, unless circumstances 764 which .in law, defeat such effect are made to appear. McKenzie v. Wiley, 27 W. Va. 658; Campbell v. Wyant, 26 W. Va. 702. FÍeming was J. M. Lake’s surety, and the fact that such levy was made on personalty operates, under the first-cited case and well-established principles of general law, as release of the surety. If is well settled that, after such levy, all right to any other suit is suspended .as between the creditor and principal debtor, and certainly it. would be as to the surety. Freem. Ex’ns, § 269. This suit was brought after that levy, and before any disposition of the property under it, so far as this record shows. This could not. be done. But, in fact, it operates a discharge of the surety, in the absence of proof that it was taken by superior claim, or other reasons shown to deprive it of that legal effect. This decides the case. It is claimed for Fleming that, as some property was placed'by the principal debtor in the hands of a co-surety as collateral security for the debt, the creditor must first look to if. If the conveyances are fraudulent, and as the husband built the house, I do not think that the creditor would be compelled to seek that property first. Parties in fraud have no equities against the rights of the defrauded creditor. The statute of fraudulent conveyances gives the absolute right to such creditor to assault the conveyance that removes his debtor’s property from his pursuit.. In its eye, all property of the debtor is amenable to the payment of his debts. The debtor can not fraudulently remove it out of the reach of the ordinary legal process. If he does, the statute grants the creditor the right to resort to equity to remove the vicious conveyance out of his way. Fraud is one of the recognized subjects of equity jurisdiction, and a very ancient foundation of its power. The fraudulent debtor or his fraudulent alienee cannot tell the creditor to look to other property, and excuse that which has been wrongfully conveyed. They have no rights which equity is bound to respect. Horn v. Foundry Co., 23 W. Va. 522, and opinion; Railroad Co. v. Soutter, 13 Wall. 517; Stout v. Mercantile Co., 41 W. Va. 339 (23 S. E. 571); Almond v. Wilson, 75 Va. 613, 627; Wait, Fraud. Conv. §§ 60, 192, and close of section 369. I am satisfied that the circuit court was correct in holding that the expenditure of the means of Fleming in the erection of the 765 bouse would justify tbe decree but for the fact that the levy upon the personal property operates as payment and release of the surety. On that ground, I conclude that the decree is wrong, and must, be reversed, and the bill dismissed. I do not pass on the question of fraud in the conveyances. It is unnecesssary to do so. Reversed.