Bay v. Cook

Mr. Justioe Nkeese delivered the opinion of the Court. This was a bill in chancery in the Superior Court of Chicago, by Isaac Cook, complainant, against the defendants, Edgar T. Bay and others, seeking to subject certain property of Bay, to the execution on a judgment obtained by Cook against Henry B. Bay on the 30th May, 1857, and the others named in the bill. k The facts of the case are briefly these. Cook was sheriff of Cook county in 1850, and appointed Daniel T. Wood, one of the plaintiffs in error, his deputy, who, on the twelfth of March, 1850, executed his bond in the penalty of ten thousand dollars with Henry B. Bay, and the others, his sureties, conditioned that Wood, as such deputy, should faithfully discharge all the duties required of him as deputy sheriff, and save Cook harmless on account of any and all acts of the deputy, or by color of his office. An action was brought on that bond, in the Cook Circuit Court, in which the breach assigned was, that Wood, as deputy, had collected a large amount of State and county taxes, for which he had failed to account and pay over. A judgment by default was entered against Wood and Bay and the other parties, for the debt, to be discharged by the'payment of the damages, which were assessed at five thousand three hundred and eighty-two dollars and seventeen cents. On the 12th of June, 1857, an execution was issued on this judgment, which came to the hands of the sheriff, July 23rd, and returned November 20th by order of the Circuit Court, which order was set aside by this court. After making the bond, and before May 1,1851, Henry B. Bay purchased from Joseph Smith, with his own money and 'means, certain lands in Cook county, described as the west half of lot 5, in block 81, in the.School Section Addition to Chicago, and paid for the premises on that day, and was entitled to a deed therefor, but at his request, the conveyance was made by Smith, to his son, Edgar T. Bay, then an infant, in whom the title became vested. Henry B. Bay entered into possession of the lot and erected two houses upon it, and before his death, made a will by which he devised the premises to this son Edgar, and appointed John S. Bay, his brother, his executor. This executor proved the will and obtained letters testamentary, and filed an inventory in which he did not insert this lot and premises as a part of the estate. Cook’s claim was allowed by the court of probate, to $6,648.58, and placed in the fourth class, to be paid in due course of administration. It appears also, that Henry B. Bay was the one-third owner of two steam dredging machines, which, shortly before his death, he conveyed, by bill of sale, to John S. Bay, for the sum of fifty dollars, and also all his interest, of every kind, in several firms of which he had been a partner. These dredging machines were not included in the inventory, the executor claiming them as his own. The judgment against Henry B. Bay, as one of the sureties of Wood, was unsatisfied, and no execution had issued upon it, except the one mentioned. This was the position of the matter, when the defendant in error filed a bill in chancery against the defendants in tbe judgment, and against Edgar T. Bay and John S. Bay, tbe executors of Henry B. Bay, to subject this lot and premises, and the interest in the dredging machines, to the payment of the judgment. The court decreed according to the prayer of the bill, from which decree the plaintiffs here sued out a writ of error, and have assigned for error, 1, that there was no breach of the bond nor liability thereon, by Henry B. Bay, at the time of the conveyance to Edgar T. Bay; 2, a court of equity had no jurisdiction of the case, no execution having been returned unsatisfied; 3, the decree is against law and evidence. The first point made by the plaintiffs in error under this assignment of errors, is, that the judgment upon which the bill of complaint was filed, was not warranted by law, the breach assigned in the declaration being a failure to pay over taxes collected by Wood, and the bond being conditioned for the faithful performance of his duties as deputy sheriff. We do not suppose, if a judgment is.in full force and rendered by a court of competent jurisdiction, and no fraud in obtaining it is alleged, that its validity can be inquired into in a court of chancery. However erroneous it may be, it must have full force, until it is reversed. But this court has settled the character of the proceedings on the bond, and have decided, that the breach was well assigned, and that the sureties of the deputy sheriff must answer for his default in failing to pay over the taxes lie had collected in virtue of his office. Wood et al. v. Cook, ante, 271. The second point made by the plaintiffs in error, is, that there are no equities in the bill, and this is discussed under fifteen subdivisions, and one of them, the tenth, is further subdivided into five different propositions. We shall not examine them all separately, nor follow the counsel on either side, into, the wide field of argumentation they have so diligently explored, but content ourselves with the consideration of what we deem the important points of the controversy. It is urged by the plaintiffs in error, that as it affirmatively appears from the bill, that the conveyance sought to be avoided was made by Smith to the son of Henry B. Bay, and that the consideration was paid by the father, the presumption is, that it was by way of advancement to the son. Admit the principle, it is but a presumption, subject to be rebutted by circumstances, or by evidence showing a different intention. This is the doctrine of the cases cited by counsel, and of all other cases which have come under our notice. It is a question of intention, each case to be determined by the reasonable presumption arising from all the facts and circumstances connected with it. ThompsoN, C. J., in the case of Jackson v. Matsdorf, 11 Johns. 95, said the question had often been agitated in chancery, whether, when a parent purchased land in the name of his child, it should be deemed a trust for the father, or an advancement for the child. When the child is under age it has generally been considered an advancement. It is always competent to meet and repel thejpresumption by proof of circumstances showing it was not an advancement intended. Proseus v. McIntyre, 5 Barb. 424. When fraud is established, that presumption is effectually repelled. A gift of property, real or personal, made by a parent to a child, is a valid gift, where no creditors intervene, and who, by the gift, are subjected to no loss. But such a transaction, to be received favorably by the courts, must be clear of any imputation of fraud, and free from the suspicion of a design to injure creditors. A parent may give to his child so much of his estate as he pleases, provided he retains enough to answer all subsisting demands against himself. Whether such gifts are valid or not, and made without the intention to injure creditors, is wholly a matter of inference from the facts. There is no suggestion in this case, that the infant son possessed any money or means which could be appropriated to the purchase and payment of this property, or that the money was derived from him, directly or indirectly. On the contrary, the proof is, that his father was, in August, 1850, a partner in a public house in Chicago, called the New York House, to the extent of one-half its stock, business and fixtures, which he exchanged with Smith for this lot, directing Smith to make the deed to his son. Should this, on the facts proved, be deemed an advancement ? The deed bears date August 20, 1850. What the value of the interest in the New York House was, or what the lots were worth, is not shown; but it is shown, that the interest in this public house was all the available means Bay then possessed. The deficit of the deputy is shown to have consisted in omitting to settle up with the State for the taxes collected, which should have been settled for at the pending July term of that year. It is not an unreasonable or violent presumption, that Bay, being one of the sureties, had an eye to the manner in which the deputy was deporting himself, and was apprised of this defalcation; at any rate he knew he was on the bond, and knew there was a possibility he might some day be brought to judgment on it. Sureties on official bonds, as a general fact, do not regard the morality of an act with as much consideration as they would, perhaps, if they were principals, but rather believe they are justified in resorting to almost any device to escape responsibility. The most usual one is, by, in common parlance, “putting their property out of their hands,” at least such portions of it as are liable to execution. Would it be uncharitable to believe that this idea of safety from the bond through Smith, flashed across the mind of Bay ? He never had the legal title to the -lot, and it could not be expected, therefore, that he owned it; if it was in his infant son, he might console himself with the prospect of a future home, unannoyed by creditors, and unterrified by events. In this confidence and hope, he erected houses on the lot, in one of which he dwelt, and dying, devised the whole property, being all he had, to this son, who it is claimed, owned it under the deed from Smith. Can any rational man believe, under the circumstances thus briefly stated, that Bay intended this property as an advancement to his son, when he gave all he had to buy it, that it was all he had when he died, and that he made a formal devise of it to the son ? If Bay intended it as an advancement, why devise it, the title being in the son ? Can it be doubted that the legal title was thus placed in the son for the purposes we have stated? Does a father give all his property to a son by way of advancement ? Again, dwelling-houses were erected on the lot by the father.' When they were erected is not in proof, nor their cost. If they were built after May 30, 1857, the expenditure of the money for them would be in fraud of the complainant, whose judgment was then in force. But the question is, was not Bay insolvent, at the time of this conveyance? In other words, had he property in his possession of value sufficient to meet his obligations ?. This is not pretended; it is only claimed there were no judgment creditors against him, when he purchased the lot and paid for it. But here was a pecuniary obligation of ten thousand dollars against him, with a condition, it is true, and that condition broken at the time he purchased and paid for the lot. In foro consoientm he was the debtor of the defendant in error. It being a question of intention, we have no hesitation in affirming, from the facts and circumstances, that Bay did not strip himself of all his property to advance his infant son, but had the deed made to his son, that he, himself, in the* character of natural guardian, might continue in the undisturbed enjoyment of the property, and thus protect himself against a recovery on the bond, the condition of which .was then broken. The spectre of this bond had a controlling influence over him — the condition had been broken; and he' did not know how soon all he possessed might be swept from him, as a consequence thereof. As a question of intention,, therefore, we cannot doubt, from the facts and circumstances, that it was not as an advancement, the title to the lot was taken to his infant son, but to shield it from his own responsibilities, then existing. An advancement to a child may, properly, be regarded in the same light as a voluntary settlement of property upon him. by the father. The difference is only in the form; but for that, this transaction would be termed a voluntary, settlement. In such case, it is not necessary the father, making the settlement, should be actually indebted at the time he makes it, to render it fraudulent; for if he does it with a view to his being indebted at a future time, it is equally fraudulent,, and will be set aside. This principle is distinctly announced by Lord Chancellor ITakdwicee, in Stileman v. Ashdown, 2 Atkyns, 480, in Fitzer v. Fitzer et al., id. 512, and such is the reasoning, in the case of Taylor v. Jones, id. 600. The deed from Smith to the son, was, to all intents and purposes, a deed from the father to him. Now a serious question protrudes itself in this case. The bond executed by Henry B. Bay was for the faithful performance of the duties of a public office — it was an official bond for the security of the State in the due execution of official duties ; is it the policy of the law, that persons who shall voluntarily assume such obligations and whose solvency has passed the proper ordeal, that they shall be permitted, the next day, to divest themselves of all the property, which enabled them to pass the ordeal, by a voluntary settlement of it upon a favorite child, a wife, or other party, for the consideration alone, of love and affection? Where would be the security of the State, should such settlements be countenanced and encouraged? In such cases, it would seem right and just, that courts should hold such contingent liabilities as equivalent to an actual judgment. We think the facts show the inducement Bay had, to make this settlement upon his son, and it being voluntary and without a valuable consideration, must be regarded, under the circumstances, not as an advancement, but as in fraud of the bond he had executed. As to the objection that the allegation of fraud is not sufficiently specific, that is answered by the facts of the case. They are few and simple, and are so clearly stated, as to enable the parties charged to understand the character of the acts in which the fraud is alleged to consist. It is further objected that the bill contains no allegation that the execution which issued in June, 1857, was levied, nor that it was returned unsatisfied. The case of McDowell v. Cochrane, 11 Ill. 30, disposes of this objection. There it was held, that though ordinarily an execution must issue on a judgment, and be returned unsatisfied before a resort to a court of equity, to reach real estate in which the judgment debtor has not such an interest as might be sold on execution, yet in proceedings against intestate estates which are insolvent, a resort to equity may be had, without this preliminary, as our statute does not permit an execution to be issued upon a judgment against an administrator. The fact of insolvency is sufficiently averred in the bill, by the reference to the inventory filed, which amounts to one hundred and fifteen dollars only. TJnder all the circumstances, we are bound to consider and to hold, that of this real estate, the infant, Edgar T. Bay, held the title in trust for the benefit of the defendant in error, who was a subsisting creditor of Henry B. Bay, who purchased and paid for it, he holding Bay’s conditional obligation for ten thousand dollars,, a breach of which had occurred at the time of the purchase and payment; and also, upon the ground of public policy, that it cannot be permitted a surety in an official bond so to advance a son, or make a voluntary settlement upon him of all his estate, as to defeat the bond. In regard to the interest of Henry B. Bay in the dredging machines, it appears he sold them in 1860, for the small sum of fifty dollars, a short time only before his death, to his brothei-, John S. Bay, whom he appointed his executor. The machines were never delivered to John S. Bay, nor was there any agreement in the bill of sale, that the possession should remain with the vendor. This rendered the sale void for fraud. But fraud is apparent in the price paid, under the circumstances of the vendor. He was heavily in debt; the machines were valued at three thousand dollars, and were in good working order when sold. The one-third interest was variously estimated. Eox, who worked them and knew all about them, says he would have paid five hundred dollars for one-third interest, eveu if the other two-thirds were incumbered to the amount of their value. There is no satisfactory proof that Bay’s third was incumbered in any way. No mortgage is shown, and no mechanics’ liens proved. We are therefore to consider it as free from incumbrances, and worth, at the lowest calculation, five hundred dollars. A sale of it, under the circumstances shown, and for the price given, and the possession of the property not passing to the vendee, constitutes, in both aspects, a fraud, and leaves the property subject to the claims of creditors. We concur with the Superior Court in the decree, and affirm it in all its parts. Decree affirmed.