Ledbetter v. Davenport Bros.

TYSON, C. J. The bill in this cause is exhibited by creditors of J. M. Ledbetter, and seeks to subject to the payment of their debts certain property attempted to be conveyed by him, in fraud of their rights, to one Gullatt,- and to have declared void a mortgage upon this property [339] by Gullatt to one Matthews. It attacks the consideration of these alleged conveyances as being simulated, and also upon the theory, if adequate consideration ivas paid for the property, that Gullatt and Matthews had notice of Ledbetter’s intent to hinder, delay, or defraud his creditors in the making of the sale to Gnllatt. Complainants being existing creditors of Ledbetter át the date of his attempted sale to Gullatt, it will not be doubted that the burden of proof was upon Gullatt to show that he paid a valuable consideration for the property, and that, it was adequate, and upon Matthews to establish that he was a bona fide purchaser for value. If each of these respondents had borne this burden put upon him by the law, it then became incumbent upon the complainants to prove that they had notice of Led-better’s fraudulent intent, or — its equivalent — of such facts as put them upon inquiry which, if followed up, would have disclosed his fraudulent purpose; and, if this was shown, the complainants would be entitled to the relief granted them by the decree appealed from. The fraudulent design and purpose of Ledbetter to put his property beyond the reach of his creditors is established beyond serious controversy; and we entertain the opinion, after a careful examination of the testimony, not only that Gullatt has failed to show that he paid an adequate consideration for the property, if, indeed, he paid anything, but that he is chargeable with knowledge of Ledbetter’s fraudulent purpose, and that Matthews is also chargeable with like knowledge, if, indeed, he parted with anything of value to Gullatt on the mortgage which he claims to hold. Affirmed. Simpson, Anderson, and McClellan, JJ., concur.