Droop v. Ridenour

Mr. Chief Justice Alvey delivered the opinion of the Court: The object of the. bill in this case is to establish a claim — 235 — of the plaintiffs against Albert M. Ridenour, one of the defendants, and a nonresident of this 'District, and to have a certain deed of an interest in real estate, made by the said Albert M. Ridenour to Alice E. Ridenour, declared void as-being intended to hinder, delay and defraud the creditors of the grantor, especially the plaintiffs. The deed bears date the 19th of August, 1895, and was filed for record on the 21st of September, 1895, and the present bill was filed on the 28th of September, 1895. The debt alleged to be due the plaintiffs is supposed to have accrued, as money had and received to their use by the defendant, Albert M. Ridenour, between June 23, 1894, and February 1, 1895. The claim is founded upon an alleged embezzlement of money by the said Albert M. Ridenour, while in the employ of tho plaintiffs as their bookkeeper, between the dates mentioned. The case has been in this court on a former appeal by the plaintiffs, and upon a reversal of the order appealed from, the case was sent back for further proceedings (9 App. D. C. 95, 412); and after such further proceedings had, and a full hearing upon evidence, the bill was dismissed by the court below, and the plaintiffs have brought the case here on a second appeal. Both Albert M. Ridenour and Alice E. Ridenour are now, and have continued to be from a time anterior to the date of the deed, nonresidents of this District. The bill alleges that the defendant, Albert M. Ridenour, absconded or left this District to avoid prosecution or service-of process upon him for his embezzlement or defalcation; and, consequently, no process could be served upon him in this jurisdiction to enable the plaintiffs to recover judgment upon their claim at law. It is further alleged that Albert M. and Alice E. Ridenour were formerly husband and wife, but, as the plaintiffs were informed, had been divorced prior to the time of making the deed, though, as plaintiffs believe, they had, notwithstanding the divorce, been cohabiting together as man and wife. It is further alleged that the conveyance of the real estate, which consisted of an equity of — 236 — redemption in an undivided one-fourth interest in a certain parcel of ground in this District, had been made without consideration, and with intent to hinder, delay and defraud the creditors of Albert M. Ridenour, particularly the plaintiffs, pursuant to a fraudulent scheme concocted between the parties to the deed. The two defendants, Albert M. and Alice E. Ridenour, answered the bill sepai’ately, and they deny all the material allegations of the bill respecting the want of bona fides in the making of the deed by Albert M. to Alice E. Ridenour, and they aver that they had been absolutely divorced by a decree of the Circuit Court of Cook County, in the State of Illinois, passed on the 31st of August, 1893; and that, by said decree, Albert M. Ridenour was ordered and decreed to pay to said Alice E. Ridenour the sum of $50 per month as permanent alimony; and that the arrears of alimony and the relinquishment of the future accumulations thereof, together with certain considerable sums of money, which had been, from time to time, loaned by Alice to Albert, formed the real and true consideration for the deed for the interest in the real estate conveyed. It is also utterly denied, by both defendants, that they had cohabited together as husband and wife since the divorce, and for some time before. And in the absence of clear and decisive proof of the fact, no presumption can be entertained in support of such allegation as that made by the bill. Testimony was taken, and among the witnesses examined was Alice E. Ridenour; and her testimony has not been impeached, except as the circumstances of the case may afford grounds for suspicion as to the intent and purpose of the conveyance. Her testimony fully supports the defence set forth in her answer. There are four principal questions presented by the pleadings and evidence. First, whether the proof establishes with sufficient clearness the existence of the claim set up by the plaintiffs against Albert M. Ridenour. Sec — 237 — ondly, whether the facts and circumstances of the case, as shown in proof, have sufficient probative force to impeach and overcome the prima facie effect of the deed from Albert M. Ridenour to Alice E. Ridenour. If not, third, whether the deed so made is an assignment for the benefit of creditors, such as is contemplated by the act of Congress of February 24, 1893, to prevent undue preferences; and, fourth, whether the certified copies of the decree of divorce and for alimony, and of the will of Mrs. Hall, bequeathing a sum of money to Alice E. Ridenour, and the receipt of the latter therefor, are so authenticated as to be admissible in evidence, for the purpose for which they were offered? 1. The proof in respect to the claim of the plaintiffs, considering the nature of the claim, and what it involves, as it affects the defendant, Albert M. Ridenour, apart from mere pecuniary considerations, and the circumstances under which it is made, is not beyond all question or doubt. But, without going into a critical examination of the evidence relied on to establish the claim, we shall, for the purposes of this case, assume that it is sufficiently established, and that the plaintiffs are, and were at the date of the deed in question, creditors of the grantor in the deed, as charged in the bill. And treating the debt as established, we shall proceed to consider the other questions we have stated. 2. The deed recites a money consideration paid of $450, and this fact is much relied on as indicating the falsity of the transaction as between the parties to the deed. And if this was the only consideration for the conveyance, it would have great force as evidence to impeach the bonafides of the deed, as against the existing creditors of the grantor. The interest of the grantor in the property conveyed is shown to be more than three times the amount of the consideration stated in the deed. But the deed itself does not furnish the only evidence of the consideration upon which it was made. The testimony of the grantee shows that the real consideration was even more than the value of the interest — 238 — of the grantor in the property, as ascertained by judicial sale under a decree. This consideration for the deed, according to the testimony of the grantee, was made up of arrears for alimony, and for alimony to become due, together with certain sums of money loaned bj^the grantee to the grantor. It is insisted, however, that such additional or superadded consideration to that stated in the deed, is not allowable, and can not be shown to support the deed as against existing creditors of the grantor. But that contention is not supported by settled principle. By numerous cases cited it has been held, that although a mere nominal consideration be stated in the deed, as one or five dollars, yet the true consideration may be shown by parol evidence. The only requirement ,to the introduction of evidence of such additional or true consideration by parol is, that the true or superadded consideration, proved by parol, shall be of the same nature and kind as that stated in the deed, and not inconsistent therewith. Hitz v. National Bank, 111 U. S. 722; Richardson v. Braver, 112 U. S. 423, 431; Shirras v. Craig, 7 Cr. 34, 50; Cunningham v. Dwyer, 23 Md. 220; Bullard v. Briggs, 7 Pick. 533; 1 Greenl. Ev., Secs. 285, 304; Bump on Fraud. Conv. 596, and cases there cited. It is an admitted principle that a deed is valid in law with any valuable' consideration, however small, but as inadequateness of consideration may be relied upon to prove, and is often very strong evidence of fraud, a party claiming under the deed may show that it was made upon another and a greater consideration than that which is expressed therein ; and this is allowed to rebut the presumption of fraud which might arise from the apparent inadequate consideration expressed in the deed. Bullard v. Briggs, supra. And this additional consideration may consist either of money paid to the grantor, or to his creditors, or an indebtedness due to the grantee, or liability for the grantor, or other valuable consideration. And as to what constitutes a valuable consideration, especially in respect to an antecedent debt — 239 — or liability, we may refer to the case of Currie v. Misa, L. R. 10 Exch. 153, a ease in the Exchequer Chamber, where the opinion of the court was delivered by Mr. Justice Lush, and wherein the result of the authorities is stated to be, that “ a valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other;” citing Com. Dig. Tit., Action on the Case, Assumpsit B. 1-15. It is objected by the plaintiffs, and strongly urged in argument on their behalf, that what is attempted to be proved by Mrs. Ridenour, the grantee, as the true and additional consideration for the deed, to that stated on its face, is not sufficiently established to be accepted as reliable evidence; and, so far as the alleged additional consideration is made up of the arrears of alimony due, and of alimony to become due under the decree for divorce, such alimony does not, and from its nature could not, form any valid portion of the consideration for the deed. It is argued that alimony decreed to be paid is not a debt, and therefore Mrs. Ridenour was not a creditor of her late husband in respect of such alimony, decreed to be paid by him; and therefore the deed derives no support in respect of the alleged alimony that was included in the consideration therefor. But, in our opinion, this argument is rather more specious than sound. It is true, alimony awarded is not regarded as a debt in the strict technical sense of that term; but the decree of the court awarding alimony imposes a duty and an obligation upon the party against whom it is passed, and confers a benefit and a means of support upon the person in whose favor it is made. It is enforced as a judgment or decree (Allen v. Allen, 100 Mass. 373; Tolman v. Leonard, 6 App. D. C. 224); and if the parties happen to reside in different States, such judgment or decree is enforced by the courts of the United States. Barber v. Barber, 21 How. 582. And a judgment or decree for alimony, or a settlement in — 240 — lieu of alimony that would have been decreed, is not regarded as being in derogation of the rights of creditors of the party obligated to pay alimony, and therefore is not within the prohibition or prevention of the Stat. 13 Elizabeth. Hobbs v. Hull, 1 Cox Ch. 445. It is clear, we think, that the surrender of a claim for alimony due, or to become due, under a decree of a court, constitutes valuable consideration within the meaning of the law, as against the creditors of the party bound to pay such alimony. If, therefore, the true and additional consideration for the deed be such as is testified to by Mrs. Ridenour, there can be no doubt there was a valuable and an adequate consideration as against the existing creditors of the grantor. The gravamen of the bill, in the effort to reach the property conveyed by the deed, is the alleged or supposed fraud and collusion of the grantor and grantee to cheat and defraud the creditor's of the former, and especially the plaintiffs; .and this charge, and the presumption sought to be raised and maintained in respect to the conduct of the parties, are largely predicated of the fact of the former relations that existed between the grantor and grantee in the deed—that of husband and wife. But, as said by the late Mr. Justice Jackson, speaking for the Supreme Court of the United States, in the case of Gottlieb v. Thatcher, 151 U. S. 271, 279, “the relationship of the parties does not, of and in itself, cast suspicion upon the transaction, or create such a prima facie presumption against its validity as would require the court to hold it to be invalid without proof that there was fraud on the part of the grantor, participated in by the grantee. This proposition is so well settled that authorities need not be cited in its support.” In this case, the onus of proof throughout is upon the plaintiffs. It is incumbent upon them, not only to establish their claim as charged against Albert M. Ridenour, including as it does the crime of embezzlement, to the entire satisfaction of the court, but to show by clear and indubit — 241 — able proof that the deed assailed is the offspring of the fraud and collusion of the grantor and grantee therein. The case cannot rest upon presumption merely, because fraud is never presumed ; and in this case, while there may be circumstances to excite suspicion, there is not that clear and definite proof to overcome the prima facie validity of the deed, supported as it is by the positive testimony of the grantee, Mrs. Iiidenour. She not only proves by her testimony an adequate valuable consideration for the deed, but she proves that she had not the slightest knowledge of the existence of the plaintiff’s claim at the time she accepted the deed. If this be true, there is nothing to support this case, charging fraud and collusion as it does, as against the grantee in the deed, assuming the consideration of the deed to be valid. The effort to impeach her veracity was simply abortive. The single witness examined upon that subject is a brother of the late husband of Mrs. Ridenour, and he seems to be actuated entirely by persoiial prejudice to the divorced wife of his brother; and while he says there was a family prejudice against the woman, he admits that he had never heard that her reputation for truth and veracity was bad; and that the subject of her truth and veracity he had never heard discussed. There is really no ground for rejecting her testimony. And that being so, the question is, not what Albert M. Ridenour may have intended, or what reasons may have influenced him in making the deed, whether to defeat the claim of the plaintiffs or not, if the grantee in the deed has done nothing improper to procure its execution, but only accepted the deed, upon adequate valuable consideration, in good faith. In such case, the deed is beyond impeachment by the creditors of the grantor. This is settled and fully illustrated, by the case of Marbury v. Brooks, 7 Wheat. 556, and S. C. 11 Wheat. 78. In that case, it was held, as it has been held in many prior and subsequent cases, that a debtor had the right to prefer one — 242 — creditor to another in payment, and his private motives for giving the preference can not affect the exercise of the right if the preferred creditor has done nothing improper to procure it. And the same principle was fully maintained, by the same court, in the case of Prewit v. Wilson, 103 U. S. 22, where it was held that a conveyance for a valuable and adequate consideration will be upheld against the grantor’s creditors, however .fraudulent his purpose was, if the grantee had no knowledge of such fraudulent purpose. It is a principle of general application, that where a transfer is made to a creditor, or a person occupjdng the position of a creditor, his equity is as strong as that of others occupying a similar position, and he or she is entitled to the benefit of the general rule, that where the equities are equal the legal title must prevail. An existing indebtedness is, therefore, according to all authority, a good and valuable consideration for a conveyance within the proviso of the statute of Elizabeth, which saves the rights of bona fide purchasers. There being no equity prior ór superior to that of the grantee in the deed, the necessity which calls for a new consideration in other cases does not exist. Bump, Fraud. Conv., pages 179, 183 and 186, and cases there cited; Seymour v. Wilson, 19 N. Y. 417; Adams v. Wheeler, 10 Pick. 199; Hitz v. Nat. Bank, 111 U. S. 722. This was the conclusion of the learned judge below, and we heartily agree with him. 3. But it is insisted, that though it be found that there is a sufficient valuable consideration for the deed, made up of the pre-existing liabilities of the grantor, yet the deed must be treated as a voluntary assignment for the benefit of the creditors of the grantor, within the act of Congress of February 24, 1893, declaring void all preferences of one creditor over another; and that the grantee in the deed holds the property conveyed as trustee for all the creditors of the grantor.- But to this proposition we can not assent. The act declares that every provision in any assignment — 243 — thereafter made in the District of Columbia, for the payment of one debt or liability in preference to another, shall be void, and all debts and liabilities within the provisions of the assignment shall be paid pro rata from the assets thereof. The present is an absolute deed of conveyance, and there is nothing whatever to indicate an intention on the part of the grantor to create a trust for the payment of any particular debt or liability. It is well understood what meaning the law attaches to the terms “ voluntary assignment for the benefit of creditor or creditors.” It does not mean the making of an absolute conveyance of property directly to a creditor in payment and discharge of a pre-existing debt or liability, as a consideration therefor. While such a conveyance may have the effect of giving a preference to such creditor, it is not an assignment for the benefit of creditors within the meaning of the statute. If it were so, no debtor, in embarrassed circumstances, could devote his property to the payment of any particular creditor, if more than one, or create a lien or incumbrance in favor of a particular creditor, by mortgage or deed of trust. He might sell and convey his property to a stranger, and put the money in his pocket, but he could not convey it to a particular creditor in payment of an antecedent debt. It was certainly not the design of the statute to have any such effect, and statutes of the same import have not been so construed. Nat. Bank of Chicago v. Bank of Kansas City, 136 U. S. 223; Walker v. Ross, 150 Ill. 50; Cissel v. Johnston, 4 App. D. C. 345. But in this case the plaintiffs have not treated the deed as a voluntary assignment for the benefit of a particular creditor under the act of Congress but they treat and proceed against the deed in their bill, as a conveyance made to hinder, delay and defraud creditors, under the Statute of Elizabeth; and they must stand by the case as they have presented it. 4. It remains to consider the question raised by the plaintiff’s objection to the admissibility in evidence of the copy — 244 — of the will of Mrs. Fannie Hall, under which Mrs. Ridenour derived a legacy of $3,000, and the receipt given therefor to the executor; and also to the copy of the decree of the Circuit Court of Cook County, in the State of Illinois, granting a final and absolute divorce to Mrs. Ridenour, from Albert M. Ridenour, dated the 31st of August, 1893, and awarding to the former permanent alimony of $50 per month from the 1st of September, 1893. The ground of objection to the admissibility of these documents, though certified under the seals of the respective courts, is that they are not formally authenticated as required by the act of Congress. Neither of the documents objected to was put in issue by the pleadings in the cause. Indeed, the fact of the divorce was virtually conceded by the bill; but the plaintiffs alleged that the parties had subsequently cohabited together as man and wife. The documents were simply referred to and exhibited in support and corroboration of the testimony of Mrs. Ridenour, to show the extent of her means, and what constituted the consideration for the deed. For such purpose we think they were admissible; and clearly so under the Maryland statute of 1785, Ch. 46, Secs. 1 and 2, that statute being in force in this District. Ab. Comp. Stat. D. C., p. 220. These documents are sufficiently authenticated under the Maryland statute just referred to; and it is well settled that the method of authentication prescribed by the act of Congress of 1790 is not exclusive of any other which the States may think proper to adopt. 1 Greenl. Ev., Sec. 505. Upon the question of the applicability of the act of Congress, see the case of Turnbull v. Payson, 95 U. S. 418, 423. In the case of the decree for divorce and alimony, the whole record, including pleadings and depositions, is not given, but only the decree, reciting the proceedings upon which it was founded; and this omission of the pleadings and depositions is made ground of objection to the admissibility of the certified copy of the decree. But looking to the purpose for which the decree was offered we think the — 245 — objection is not well founded. It was not offered to operate as an estoppel, but only by way of explanation and as corroborative of the witness. In Buller’s N. P., p. 235, it is laid down as law, that “ if a party wants to avail himself of the decree only, and not of the answer or depositions, the decree being under the seal of the court and enrolled, may be given in evidence without producing the bill and answer, and the opposite party will be at liberty to show that the point in issue there was not ad idem with the present issue.” See also the case of Trotter v. Blake, 2 Mod. 231. And in 1 Starkie on Evidence, part 2, Sec. 87 (Metc. Ed.), p. 246, it is said that “ a sentence of the spiritual court of a divorce a mensa et thoro, has been received as evidence without proving the libel and other proceedings.” And so a copy of a will engrossed under the seal of the ordinary, with certificate of its having been proved and admitted to probate, will be received. 3 Bac. Ab., Tit. Executor; Bui. N. P. 245, 246. But if the party desires to prove the facts upon which the decree or sentence was founded, or relies upon the decree or sentence as an estoppel, he must produce the bill, or libel, and answer, and all other proceedings that made up the record. Finding no error, we shall affirm the decree of the court below; and it is so ordered. Decree affirmed.