Cushwa v. Cushwa

Eccleston, J., delivered the opinion of this court. This is an action of ejectment to recover certain lands in Washington county, instituted by the appellees against the appellants. It is admitted that. John Cushwa, the elder, died seized of these lands, having executed his will devising them to his sou Benjamin, who took and held the same under the devise; that on the 14th day of November 1826, Benjamin executed a deed to his brother, John Cushwa, for these lands. It appears in proof, that on the 26th of March 1839, Benjamin gave to his brother John a single bill for $4689.86, on which, after the decease of John, his administrators obtained judgment, and shortly afterwards Benjamin died, leaving the appellants, Isaac B. Cushwa, Ann E. Cushwa and Sarah Troup, his heirs at law. After the decease of Benjamin a scire facias against his heirs and terre-tenants issued upon the judgment, and a fiat was rendered thereon against the appellants. Under a fi.fa. upon this fiat the lands in controversy were sold, and the appellees purchased them; which sale was set aside on motion and a second fi.fa. issued. Under this writ the appellees became the purchasers at the price of $50. A motion was made to set aside this sale also, which motion was pending at the trial of this cause below. The defendants offered in evidence the proceedings upon the application of Benjamin Cushwa as an insolvent petitioner, which commenced on the 19tlx of December 1826. The ob50 feet of this offer was to show the time of the application, the appointment of John Cushwa as trustee, and the deed from Benjamin to John conveying his properly to him as trustee; that the deed of the 14th November 1826 was in fraud of the creditors of Benjamin, having been executed by him with a* view and under the expectation of becoming an insolvent petitioner, and that after the death of John, William Ditto was appointed trustee in his place. It is admitted that the- plaintiffs, John S'. Cushwa and Elizabeth Brewer, (wife of the plaintiff, David Brewer,) aretft-e children and only heirs at law of John Cushwa, the brother of Benjamin. The plaintiffs claim under the deed of the 14th November 1826. The defendants say that deed is void, and the title of Benjamin passed under the insolvent proceedings to John, as-tr-ustee; and that after his decease, upon the appointment of William Ditto as trustee in the place of John, the title vested* in the new trustee. A deed which is fraudulent against creditors may be impeached for their benefit, but it is good against all others. See the opinion C. J. Taney, in White, Warner & Co., vs. Winn and Ross, cited in 8 Gill, 501. Such a deed cannot be successfully impeached by the parties to the fraud, or by their ^representatives or heirs at law. The defendants do not pretend to be creditors of Benjamin* Cushwa. Nor do they show any title in themselves by adverse possession-for twenty years or by any other means, but profess to rely simply upon being in possession at the institution of the suit, and insist that there is an outstanding title in-Wm. Ditto, which is sufficient to prevent the plaintiffs from maintaining this action. It is also insisted in argument on-the part of the defendants, that they make no claim or defenceas heirs at law of Benjamin Cushwa. This position is obviously taken for the purpose of avoiding coming in conflict with; the principle which denies, not only to the party himself, the right to impeach his own deed for fraud in which he was a-participant, but also to those claiming under him adversely lathe deed. To allow such a defence as this under the circum [51] stances of this caso, would be a virtual repeal of the principle just stated. The defendants do not exhibit a shadow of title; it is admitted they are, in fact, the heirs at lav/ of Benjamin Cuslnva, who executed the deed of the 14th of November 1826, under which the plaintiffs claim; and the only proof in defence is offered with the express design of showing that deed was a fraud upon the creditors of the grantor. The law so much abhors fraud and the courts have so pertinaciously refused to suffer a party, or those claiming under him, to reap any benefit, from his fraudulent transaction when the fraud is attempted to be set up, that we should feel ourselves to be violating wise and salutary principles, well settled, were we to sanction the present defence. The courts have repeatedly declined to suffer a grantor to rely upon the fraud, when, as plaintiff or complainant, he is claiming relief against the effect of his deed, or when, as defendant, he is resisting the claim of the grantee. The case of Stewart vs. Iglehart, 7 G. & J., 132, is one of the latter class of cases; and that of 'Freeman and Sedwick, vs. Sedwick, 6 Gill, 29, is one of the former class. In Stewart vs. Iglehart, the court allowed the children of Maria Stewart, one of the grantors, to impugn the deed only because she did not participate ia the fraud and was herself imposed upon; whilst the deed was allowed to have full force and effect against her husband, Joseph Stewart, the fraudulent, grantor, although he relied upon the fraud as a ground of defence. And notwithstanding Iglehart was held, in consequence of {saving notice, as standing in regard to his mortgage from Richard Stewart in the same condition which Richard did under the deed from Joseph Stewart and wife, still the complainant, (iglehart,) obtained a decree for the sale of Joseph’s life estate for the payment of the mortgage debt. Thus the grantor’s defence, founded upon fraud, was defeated, although it was necessary to sustain the claim against him under the deed in which the grantee participated in the fraud. In Freeman and Sedwick, vs. Sedwick, James Sedwick executed a deed to his brother, Joshua, for the purpose of de [52] frauding creditors. Subsequently, an agreement was entered into between the parties, that Joshua should veconvey the property. There was no valid consideration for either instrument. After the death of Joshua, a bill was filed claiming a reconveyance; but the Court of Appeals finally dismissed the bill, because the original contract or deed was fraudulent. Here the claimant, basing his right to relief upon the fraudulent character of the transaction, was defeated. And at the close of their opinion the court say, the case of Stewart vs. Iglehart “is conclusive in this.” In that we have seen the grantee comrnitting the fraud, could not avail himself of the fraud to defeat the claim of a party who stood in the same relation to the deed, in consequence of notice, as the grantee, who was a particeps criminis. We have examined a number of authorities on this point and they clearly establish the principle, that where a conveyance has been made with a design to defraud creditors, (he law will not permit the grantor to set up the fraud for the purpose of avoiding the transfer. See the cases cited in 6 Gill, 40, 41. There are some instances in which a plaintiff may not be able to enforce a fraudulent contract, and where the rule applies, that ‘ ‘in pari delicto potior est conditio defen dent is.” The application of this rule is treated of by Judge Green, in Starke’s Exc’rs, vs. Littlepage, 4 Randolph’s Rep., 372. He holds that if, for the purpose of frustrating the original design of such transactions, it may be necessary either to enforce such contracts at law or to grant relief against them in equity,- it will be done, notwithstanding both the parties are in pari delicto. A defendant at law will not be allowed to rely on his pwn turpitude, nor will a party as plaintiff in equity be prevented from alleging it, if, by refusing to execute the contract at law or by refusing to relieve against it in equity, would have the effect of promoting the original design and of encouraging the making of contracts of like character. On this subject the judge says, “the contract is enforced or avoided both at law and in equity, as may best answer the purpose of discouraging the fraud or contract against the policy of the law; [53] and it is for this purpose, and not because the defendant is in such cases strictly entitled, on his own account, to be discharged from bis contract, that the rule is established that in pari delicto potior' est conditio defendentis; a rule which, in general, discourages vicious contracts, but which is not enforced when it would counteract this policy of the law.” And on page 375, in the same case, it is said, “to allow a fraudulent debtor, conveying his property to another with intent to defraud his creditors, to allege that, fraud for the purpose of avoiding the transfer, would be using the maxim of the law to frustrate the policy of that very maxim, by giving full effect to the fraudulent contrivance of the parties, according to their intent, and indeed rather to enforce than to frustrate the fraudulent contract, and debtors might, with perfect impunity, practise frauds upon their creditors.” In this opinion many cases on the subject are examined with much ability, and it is said that a fraudulent grantor, under such circumstances, has not been relieved in equity, except in the case of Austin vs. Winston, 1 Hen. and Munf., 33, which was decided by a divided court. The decision in Starke's Exc'rs, vs. Littlepage is referred to and approved in James vs. Bird's Adm'r, 8 Leigh's Rep., 512, 513. In Doe on Demise of Roberts vs. Roberts, 2 Barn. and Ald., 367, the deed under consideration was made in contravention of the policy of the law. The defendant offered evidence to show that the deed was fraudulent, and notwithstanding it was objected to by the plaintiff, the court admitted the proof and the defendant obtained a verdict. The four judges of the King’s Bench granted anew trial, and in deciding the rule nisi Bayley, J., says: “This defence ought to have had no weight. By the production of the deed the plaintiff establishes Aprima facie title; and wc cannot allow the defendant to be heard in a court of justice to say, that his own deed is to he avoided by his own fraud.” And Holroyd, J., says: “A deed may bo «avoided on the ground of fraud, but then the objection must come from a person neither party nor privy to it, for no man can allege his own fraud in order to invalidate his own deed.” [54] A defence in ejectment, based upon an outstanding title in a third.party, like any other defence, must be sustained by proof legally admissible in the cause. Now the proof offered in the present instance to show the outstanding title is in direct violación of an established principle of law. The defendants wish to prove that the deed of their ancestor was a fraud upon his creditors. This the law will not permit. As authorities bearing upon this case, see 6 H. & J., 61, 116. 7 H. & J., 453, and 5 G. & J., 346. The plaintiffs rely upon a deed, alleging it to be a valid and legal instrument; but it is assailed by the defendants as being fraudulent and void. Standing in the relation which they do to this transaction, they cannot avail themselves of such a defence, although in argument they profess not to claim the lands as heirs at law of Benjamin Cushwa, or through him in any manner, for the fact is, the record contradicts (he allegation that they do not claim through their father. Their appearance is entered as heirs at law; the permission for them to be admitted as defendants is the same, so likewise is the leave to ascertain their defence, and the defence taken for them by their attorneys is as heirs at law. All the defendants in these several instances are named as heirs at law except William Cushwa, who is called executor of Benjamin. Because the verdict gave five hundred dollars damages, it is contended that inasmuch as no such damage could be legally given in an action of ejectment, the judgment is erroneous, although in accordance with the verdict, and therefore should be reversed. But no question on this subject was raised below, and no motion in arrest of judgment having been made, the act of 1825, ch. 117, will not allow such a question to be raised in this court. From what has been said it will appear, that we do not think the court below committed any error in refusing the prayers of the defendants or in granting that of the plaintiffs, and therefore the judgment will be affirmed. Judgment affirmed.