Riedle v. Mulhausen

Moran, J. The defendant by his pleas set up that the notes sued on were given as part of a scheme to hinder, delay and defraud the creditors of the plaintiff, and the only consideration thereof was the conveyance of real estate to him by plaintiff in pursuance of such fraudulent purpose. By his own testimony the defendant furnished evidence competent to be considered by the jury in support of the allegations of the pleas. By refusing defendant’s instructions and giving the one requested by plaintiff, and the one drawn by the court, defendant’s evidence in support of the issue made by him was practically withdrawn from the consideration of the jury. Where there is any evidence, however slight, to sustain a legal claim or a legal defense, the party introducing such evidence has a right to have it submitted to the jury, by appropriate instructions, and when an instruction is submitted based upon evidence in the case, and stating correctly a principle of law applicable to such evidence and not covered by any instruction given, it is error to refuse the instruction, however meager the evidence to sustain the hypothesis contained in it. Peoria Marine & Fire Ins. Co. v. Anapow, 45 Ill. 86; The City of Chiago v. Scholten, 75 Ill. 468; Wolleis v. King, 54 Ill. 343 ; County of Cook v. Harms, 108 Ill. 151; Missouri Furnace Co. v. Abend, 107 Ill. 44; Eames v. Rend et al., 105 Ill. 506; Trask v. People, 104 Ill. 569. There is a marked and settled distinction between executory and executed contracts of a fraudulent character. This distinction the learned judge who tried this case in the court below seems to have overlooked in his rulings upon the evidence and his instructions to the jury. The deed made with a fraudulent intent is binding between the parties, but as is said in some of the cases, is good by accident, because the law will not aid a party to it to question it. The law by taking this negative stand, may be said to sustain the contract between the parties to it when executed. “Whatever the parties to an action have executed for fraudulent or illegal purposes, the law refuses to lend its aid to disturb. Whatever the parties have fraudulently or illegally contracted to execute, the law refuses to compel the contractor to execute or pay damages for not executing ; but in both cases leaves the parties where it finds them. The object of the law in the latter case, is, as far as possible, to prevent the contemplated wrong, and in the former to punish the wrongdoer by leaving him to the consequences of his own folly or misconduct.” Smith v. Hubbs, 10 Me. 71. In Miller v. Marckle, 21 Ill. 152, a bill was filed to foreclose a mortgage given for the purpose of delaying creditors. The court refused the foreclosure, saying to complainant: “Ton have the notes and mortgage; you were a willing party to the proposed fraud; we will give you no assistance to enforce the one or the other;” and the court cites with approval the case of Smith v. Hubbs, sufra, and the case of Nellis v. Clark, 20 Wend. 24, where suit was brought on a' promissory note, and the court held that it having been given for property, conveyed with intention to defraud creditors, that it could not be enforced against the maker in an action at law. See also Bump on Fraudulent Conveyances, 454; Dunaway v. Robertson, 95 Ill. 419 ; Hill v. Brant, 6 Bradwell, 366; Niver v. Best, 10 Barb. 369. In the case last cited it was held that if the note was given subsequently to the fraudulent transfer, yet if it be made either in pursuance of the original fraudulent agreement or in furtherance of its object, it will still be void, and no recovery can be had upon it, even though a sum honestly due may form a part of the consideration. It is true that the parties might, notwithstanding the' first fraudulent conveyance, have made a valid second conveyance and given a valid promissory note in consideration thereof, but the fraudulent transaction must have formed no part of the consideration of this contract. If the latter conveyance is made in good faith, neither the deed nor the consideration for it will be contaminated by the fraud in the first conveyance. Parke v. Tiffany, 52 Ill. 286; Singer v. Partridge, 107 Ill. 529; Matthews v. Buck, 43 Me. 265; King v. Cantrel, 4 Ind. 251. Here Riedle’s claim was that the second conveyance was in furtherance of and for the same purpose which induced the first, and that the notes in suit were part of the transaction, and the court in the instruction given sua sponte, as well as in the instruction given at plaintiff’s request, ignored this claim and the evidence in support of it, and practically directed a verdict regardless of this defense. In ruling that the note was binding between the parties, even if given in consideration of a transfer of property made to defraud creditors, the court erred, and in refusing the instructions asked by defendant, and giving, at the request of plaintiff, the one set out in the statement of facts and the one drawn by the court, the court also erred. It was entirely a question for the jury, under proper instructions as to the law, to determine whether defendant had sustained his allegations as to the consideration of the notes. He might fail to satisfy the jury of the truth of his assertions, but of his right to have the jury pass upon the question there can be no doubt. The judgment will be reversed and the ease remanded. Reversed and remanded.