Noblet v. St. John

Gileillan, C. J. May 5, 1870, L. G. St. John executed to one Barnard a mortgage for $6,000 on the real estate in controversy. There was no consideration between mortgagor and mortgagee for the mortgage, but it was executed to enable Barnard, by hypothecating it, to raise money for the use of a firm of which mortgagor and mortgagee were members. Barnard borrowed $5,000 from Kimball & Farnsworth and assigned to them the St. John mortgage as collateral security. They foreclosed the mortgage under the power of sale and bid in the property, April 16, 1874. At the time of the foreclosure, there was due from Barnard to them, of the debt for which the mortgage was assigned as collateral, the sum of $3,100. Kimball & Farnsworth had no notice that the mortgage was, as between mortgagor and mortgagee, without consideration. In the notice of foreclosure sale they claimed to be due the whole amount due by its terms, and bid in the property for that amount, with expenses of sale. January 3, 1873, L. G. St. John became indebted to plaintiff, who recovered judgments on such indebtedness March 14, 1874, one for $1,138.65 and one for $1,918.06, both docketed the same day. April 3, 1873, L. G. St. John, with intent to hinder, delay and defraud the plaintiff of his said demands, conveyed part of the land in controversy to R. L. Broadwater, his daughter, and part to Joseph Broadwater, his son-in-law, each of whom, at the time of such conveyance, knew of such fraudulent intent. Joseph Broadwater procured a house on the part conveyed to him to be insured, and before the conveyance by Kimball & Farnsworth it was burned, and he received the amount for which it was insured. Before the end of the time to redeem from said foreclosure sale, it was orally agreed between said Kimball & Farnsworth and the defendants M. C. St. John and Joseph Broadwater, that, after the time for redemption should expire, if said premises should not be redeemed, said Kimball &-Farnsworth would convey all their interest in said premises to said M. C. St. John and Joseph Broadwater, on being paid the full amount of the said indebtedness of Barnard to them, with costs of foreclosure and interest to the time of such payment. The premises were not redeemed, and, 182 after tlie time expired, pursuant to such oral agreement, Kimball & Farnsworth conveyed them to said M. C. St. John and Joseph Broadwater, each of them paying one-half the amount so agreed oil. Joseph Broadwater paid his half in part with the money received by him for insurance of the house. The action is brought to subject the land to the lien of plaintiff’s judgments. There is nothing in the case to impeach the title of Kimball & Farnsworth under their foreclosure; there is nothing to suggest that they did not act in perfect good faith in all that they did. The case then stands thus: By their foreclosure Kimball & Farnsworth acquired a title which was superior to and defeated not only the fraudulent conveyance to the Broadwaters, but also all the rights of plaintiff in respect to the land as creditor of L. G. St.John. That title is in no manner dependent on or affected by the fraudulent conveyance. They could convey it so that it would be held by their grantees just as they held it, unless the grantees were under some duty or obligation to provide for or protect the estate against the mortgage under which it was acquired. Though the title to the equity of redemption in the part of the premises conveyed by L. G. St. John to Joseph Broad-water was, by reason of the fraudulent intent, voidable as to plaintiff, and might, so long as it continued, be subjected to his judgments, it created no duty on the part of Broadwater to preserve it so that plaintiff could reach it, or to prevent it being defeated by the mortgagee. Much less did it create any obligation on his part to protect plaintiff’s rights against the mortgage. Neither Joseph Broadwater nor M. C. St. John stood in any such relation to the mortgage as to prevent his taking and holding the title acquired by its foreclosure the same as any one else might. Nor is Broadwater’s right to hold the title affected by the fact that part of the consideration paid by him to Kimball & Farnsworth consisted in money which he received from the insurance on the house. Plaintiff cannot claim to be put in any better position by reason of Broadwater procuring and collecting the insurance than he would have been in had the latter done nothing. The rights of plaintiff could not be prejudiced by the acts of Broad-water in that regard. The money so received stood upon a different footing from money received by the holder of the fraudulent title for 183 a conveyance by him to a bona fide purchaser; for in such case the creditor is prejudiced, the real estate is put beyond his reach, and it is but'just that the proceeds of the conveyance placing it beyond its reach should stand in its place. Judgment affirmed.