Maynard v. Hoskins

Manning J.: The bill is in aid of an execution at law, and not a judgment creditor’s bill under the statute, after an execution returned unsatisfied in whole or in part. It states that the premises levied on were purchased and paid for by Thomas J. Hoskins, the judgment debtor, and that a conveyance was taken by him in the name of his wife, Martha L. Hoskins, to keep them from his creditors; and that Mrs. Hoskins, afterwards, with a like intent conveyed them to Henning, who the bill charges had notice of the intended fraud. Previous to the Revised Statutes of 1846, if one purchased real estate and paid for it, and took a conveyance in the name of another, in equity there was a resulting trust in favor of the person paying the purchase money, [489] unless the purchase was intended as a gift or advancement to the person to whom the conveyance was made. But this equitable interest does not appear ever to have been subject to levy and sale on execution under the laws of Michigan. This question was not made by counsel or decided by the chancellor in Cutter v. Griswold, Wal. Ch. 437. The only question considered and decided by the Chancellor in that case was, that the conveyance to the son could not be sustained against creditors, as a gift or advancement, as the pecuniary circumstances of the father were such, at the time of the conveyance, as to preclude his making such gift or advancement. It seems to have been taken for granted in that case, by counsel and Court, that a resulting trust could be sold on execution. To that extent, but not as an adjudication, the case is evidence of the then existing law. But such evidence at most is very slight, and deserving of little consideration, when restricted to a solitary case. But whatever may have been the law at that time is of no importance in the present controversy, as such trusts were abolished by the Revised Statutes of 1846. By them it is provided that “ When a grant for a valuable consideration shall be made to one person, and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made; but the title shall vest in the person named as the alienee in such conveyance, subject only to the provisions of the next section§ 2637 of Comp. L. The next section is as follows: “Every such conveyance shall be presumed fraudulent, as against the creditors of the person paying the consideration; and when a fraudulent intent is not disproved, a trust shall result in favor of such creditors, to the extent that may be necessary to satisfy their just demands§ 2638. The trust here reserved in favor of creditors can only be reached by a bill filed by a judgment creditor after an execution has been taken out and returned, on or after the [490] return day, unsatisfied in whole or in part. Or in case of the death of the debtor, and the insolvency of his estate, by a bill framed on like principles. It is not subject to levy and sale on execution: Brewster v. Power, 10 Paige, 562; Garfield v. Hatmaker, 15 N. Y. 475. The decree of the Circuit Court must be reversed, and the complainant’s bill be dismissed with costs. Martin Ch. J. and Campbell J. concurred. Christiancy J. was absent.