Corbitt v. Cutcheon

Champlin, J. Section 6203 of HowelFs Statutes enacts that— “Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands, or in goods, -or things in action * * * made with the intent to hinder, delay, or defraud creditors * * * of their lawful suits, damages, forfeitures, debts, or demands, * * * shall be void.” The intent of the parties, and the effect of the con [43] veyance upon the creditors of the grantor, form the criterion to determine whether such conveyance is fraudulent. Pierce v. Hill, 35 Mich. 199. If the conveyance is made with intent to hinder or delay or defraud creditors of the grantors in the collection of their demands, it will be fraudulent as to them. Cleland v. Taylor, 3 Mich. 201; Trash v. Green, 9 Id. 358; Maynard v. Hoskins, Id. 485; Smith v. Rumsey, 33 Id. 183; Pierce v. Rehfuss, 35 Id. 53; Allen v. Kinyon, 41 Id. 281 (1 N. W. Rep. 863). Buchanan & Misner, by a bill of sale, conveyed all their property to the plaintiff in this suit, absolute in form, and the property was delivered to him. But it was not, in fact, an absolute sale. It was made upon a secret trust to pay certain secured creditors, and to reconvey and return to Buchanan & Misner any property which should remain after paying such secured creditors. There were other creditors than those the conveyance was intended to prefer, and among them was Lewis M. Cutcheon, the defendant in this suit. The intent of the parties in making the conveyance was a question which, under the testimony, was fairly submitted to the jury; and they, under the law as given them by the court, found a verdict for the defendants. The question of fact is, upon this record, settled by the verdict that the sale to Corbitt was made Avith intent to hinder, delay, and defraud the creditors of Buchanan & Misner. The only question upon which I have entertained any doubt is whether defendant Cutcheon, by delay in not commencing suit sooner, or by any transaction with Corbitt, had acquiesced in or confirmed the transaction. The statute was made for the benefit of -creditors, and they may dispense with a provision of law which is made for tlieir benefit. Mr. Cutcheon was informed, a short time after the occurrence, of the terms of the alleged sale. But mere notice, Avithout any action on the part [44] of the creditor, and mere acquiescence, by taking no present measures to set aside the conveyance or interfere with the transfer, does not amount to a confirmation. He can be precluded. from assailing the transfer only on the ground of estoppel or agreement. There must have been a benefit conferred upon him, or there must have been some disadvantage suffered by Mr. Corbitt, such as ought to bind the conscience of Mr. Cutcheon, or clothe his act with the character of a contract. Bank v. Davis, 44 N. H. 548; Knauth v. Bassett, 34 Barb. 31; Jenness v. Berry, 17 N. H. 549; Annin v. Annin, 24 N. J. Eq. 184; Hays v. Heidelberg, 9 Penn. St. 203. Mr. Cutcheon hired sawing done at the mill, but paid for such sawing; and Mr. Corbitt refused to allow any part of the pay for such sawing to be applied upon his debt. We do not think that this was such an act as precludes Mr. Cutcheon from his remedy to attack the validity of the sale to Corbitt. We are unable to perceive any error in the record, and the judgment is affirmed. Morse and Long, JJ., concurred with Champlin, J.