Newberry v. Bulkley

Brainard, J. (After stating the case.) The question in the present case, is, whether the deed of Oershom Jiulkln/, in connection with the defeasance, is good, as a mortgage, or fraudulent ? If it is valid, the levying creditor is postponed, and will take only the equity of redemption. In deciding this question, it is necessary to ascertain the true character of this transaction. The idea of a secret trust, I apprehend, never entered the minds of the parties. It does not compare with the case of a trust; a mere personal confidence, not contemplated as a thing to be enforced, and which the pure principies of justice, never will, and never can enforce. It is true, that the grantor put faith and confidence in the grantees, that that should be done, which would [389] place the whole transaction in its true point of light. This was reasonably done, and the attaching creditor had a fair view of it. A mere random, unconditional conveyance, without any liquidation or adjustment of the claims to he secured, must always be deemed fraudulent and void, as against creditors. And it is truly said, in the case of Cotterell v. Purchase, Cas. tem. Talbot, 64., “ that they who take a conveyance of an estate as a mortgage, without any defeasance, are guilty of a fraud.” But, here, the question is, did not the grantor take a defeasance ? He certainly did, if he took that by which a defeasance could be enforced. While we zealously discountenance fraud, we must, at the same time, be careful not to sanction it. The best test of the transaction under consideration, is, whether, if Sage and the other grantees, after procuring the deed, in the manner, and on the terms stated and proved, had refused to execute the defeasance, would a court of chancery have compelled them to do it ? If so, it follows, conclusively, that the transaction was valid. I apprehend, that a court of chancery woidd have interfered, and enforced the specific performance ; because, the deed was delivered on the express agreement that a defeasance should be executed. It was an essential part of the consideration ; and, for the grantees to attempt to avoid it, would be a fraud, meriting the reprehension and correction of a court of chancery. In the case under consideration, the defeasance was executed in good faith, before the plaintiff had any pretension to a claim on the land. That was actually done, in pursuance of an agreement, which, on refusal, a court of chancery would have compelled ; and the act was done at the time, and in the manner, required by the agreement. But it is objected, that the parties were not all present at the time of the agreement. The maxim, that a subsequent assent is equal to a prior agreement, is perfectly applicable to this case. And besides, Sage may, fairly, be considered as the agent of all the grantees. He informed them of the terms on which he received the deed, as security for their debts, and they acquiesced. [390] In relation to the objection, that the levy of the plaintiff's execution, was irregular, I shall say nothing ; as, on the point which 1 have briefly discussed, lam of opinion, that, the charge was incorrect, and that, therefore, there ought to be a new trial. All the other Judges concurred. New trial to he granted.