Park v. Bamberger

Campbell, J., delivered the opinion of the court. On the 29th January, A. D. 1868, J. H. Rhodes, of the [568] firm of Rhodes & Bright, duly conveyed lot 23, in the town of Shannon, to appellant, and the deed of conveyance was filed for record on the next day. On the 30th January, A. D. 1868, appellees sued out an attachment against said Rhodes & Bright, returnable to tbe circuit court, which was levied, or attempted to be, onlot 23 aforesaid. Soon afterthis (in less than one month) Rhodes & Bright petitioned and were adjudicated bankrupts. Their bankruptcy was suggested1 on the record of the circuit court, and the attachment suit aforesaid was continued and remained until 6th November, 1872, when judgment was rendered in it against defendants, Rhodes & Bright, and lot 23 and other property condemned to be sold. This lot was about to be sold under final process upon that judgment when appellant exhibited his bill to enjoin the sale, on the ground that he had acquired title by the conveyance of the lot to him by Rhodes, and that the threatened sale would cast a cloud upon said title. Appellees answered the bill, and averred that the conveyance of title from Rhodes to appellant (complainant below) was void, because made with intent to hinder, delay, and defraud creditors of Rhodes & Bright. The facts disclosed by the record are that appellant was a farmer, living six miles from Shannon, where Rhodes & Bright did business as shop-keepers. W. C. Rhodes was a member of the firm of Rhodes & Bright, as was J. H. Rhodes his father, and W. C. Rhodes was son-in-law to appellant, who became liable for said firm to their creditors, Tyre & Co.j in a considerable sum, and the lot 23 and other property were conveyed to appellant in consideration that he would pay Tyre & Co. some $2,600 due them from Rhodes & Bright, and for which, in whole or in part, appellant was then liable as indorser or surety for them. The evidence is not precise and definite as to the amount of the liability of appellant, nor as to the value of the real and personal property conveyed to him by Rhodes & Bright. Prima facie the title was vested in appellant by the conveyance from J. H. Rhodes, as against appellees, who on the day after this conveyance attached the lot. Appel569 lees by tbeir answer sought to avoid this effect of the deed, by .attaching it as having been made to defraud creditors. Unless this affirmative defense was made apparent by evidence appellant was entitled to maintain his bill. The deed vested the legal title in him unless it was fraudulent and void. "We have examined all the evidence relied on to show it to be "fraudulent and void, and think it was a transaction in which the members of the firm of Rhodes & Bright attempted to 'indemnify and save harmless the appellant, by reason of his. liability for said firm, by conveying to him their individual and partnership property, and appellant was endeavoring to secure himself against loss by reason of such liability ; and, although 'the transaction is condemned by the bankrupt law, and the assignee of Rhodes & Bright might have avoided the transactions and recovered the property, it was competent by the common law for Rhodes & Bright to prefer appellant, and convey him property to save him harmless by reason of his liability. This not being a contest between appellant and the .assignee in bankruptcy of Rhodes & Bright, the rights of the paarties are to be governed by the general rules of law applicable to preferring creditors, and not by the provisions of the bankrupt law, which this court is not called upon to enforce in '.this suit. The evidence does not sustain the defense that the deed to ¡appellant was fraudulent and void under the law applicable to the case. This disposes of this appeal, and renders unnecessary a decision of the other questions argued by counsel. If appellant had title paramount to the claim of appellees to subject the lot under their attachment, it is immaterial whether the judgment of appellees against the lot was valid or '•void ; and, as appellant is held to be entitled to succeed on the •merits, the admission of testimony or its exclusion is unimportant to him, and it matters not that the chancellor erroneously ^refused to allow him’ to dismiss his bill, without prejudice, when he prayed to be allowed to do so after the argument at the final hearing. [570] The decree is reversed, and decree may be entered here perpetually enjoining appellees from executing their judgment,described in the pleadings against lot 23 in Shannon, as prayed in the bill.