Pope v. Andrews

By the Chancellor. This bill is filed for the purpose of setting aside a deed from Joseph Andrews to his brother, Thomas Andrews, of certain lands in the county of Yazoo, dated the 4th March, 1839. The complainant claims those lands as a purchaser, under a judgment rendered in his own favor, in May, 1839, against Joseph Andrews and James H. Yance; and alleges that the deed from Joseph to Thomas Andrews, was made to “ delay, hinder, and defraud” his creditors ; and prays that the same, as to him, may be declared fraudulent and void. The answers deny all fraud, and insist that the sale to Thomas Andrews was made in good faith, and for a valuable consideration. I am to decide upon the issue thus made : 1. Whether there was fraud on the part of Joseph Andrews : and, 2. Whether Thomas Andrews knew of, or participated in, that fraud. The prosecution of these inquiries, demands a critical and searching examination of the various facts and circumstances disclosed by the pleadings and proofs, in order that the motives and influences which led to the sale may be fully seen and understood. 1. It appears that one James Vance and Joseph Andrews, were engaged as partners in the business of merchandising; that Vance was the active partner, and had, from want of skill, or from neglect, or other cause, so managed the affairs of the partnership, that, by the spring of 1839, the concern had become greatly embarrassed, was harassed with lawsuits, for large sums of money, and threatened with immediate and hopeless insolvency. Joseph Andrews, being advised of this state of things, became alarmed for the safety of his individual property, and declared to his friends, about that time, and afterwards, that he would never pay any of the debts of the partnership; that he had been swindled and ruined by Vance, and that none of his individual means should ever be applied to the payment of their joint debts. These facts and declarations are fully proven by C. F. and M. [155] B. Hamer, two of the defendant’s own witnesses. In consummation of the purposes, thus avowed by Joseph Andrews, I find him, in quick succession, conveying away all, or nearly all, of his visible and tangible property, and divesting himself of everything upon which an execution at law could be made to act. How well he accomplished his design, is fully shown by the fact, that executions upon all judgments, subsequently obtained against him, were returned “no property found.” 2. There is something in the very terms and character of the sale to Thomas Andrews, which, when viewed in connection with the heavy embarrassments of the firm of Andrews & Vance, and the declaration of Joseph Andrews, that he would never pay any of their debts, furnishes to my mind the most convincing proof of the true character of the transaction. 1. It is proven, that Thomas Andrews was a mechanic, with but a small property, and limited resources, and yet, by the sale, he contracted a debt for upwards of sixty-five thousand dollars ; an amount vastly beyond what he could pay, by the aid ’of his limited means ; but still we find Joseph Andrews entirely willing to rely upon no other security, than that of a deed of trust upon the same property which he sold to him ; and this, too, although it appears that much of the property embraced by the deed is of a perishable nature, and must become extinct long before the period at which the heaviest portions of the debt are to mature. 2. Upwards of sixty thousand dollars of this debt is divided into three equal instalments, and made to mature nine, ten, and eleven years after the date of the contract, with a proviso in the deed of trust, that it should not be enforced until the last payment fell due ; thus, in point of fact, extending the credit to eleven years. This extravagant credit is rendered more remarkable, when it is recollected that it was given by one in great need of ready means, to meet heavy impending liabilities, and to one whose limited resources furnished but a flimsy assurance that the debt would ever be paid. I think, that a sale upon such a credit, by one largely in debt, and whose every means were more than demanded to meet his then existing and pressing wants, is wholly irreconcilable with the conduct of an honest debtor ; and can only be accounted for upon [156] the hypothesis, that the sale was made, in the language of the statute, “with intention to hinder, delay, and defraud creditors.” From this view of the case I cannot doubt, that so far, at least, as Joseph Andrews was concerned, the sale was intended to lock his property against the legal pursuit of his creditors, and at the same time admit him to the secret enjoyment of the profits thereof. It placed it in his power to postpone his creditors for eleven years, and then to pay them, or not, at his pleasure. 3. This brings me to the second branch of the inquiry ; Was Thomas Andrews privy to the alleged fraud ? If he was not, then he stands fortified and protected by the provision of our statute, as a purchaser for valuable consideration, however fraudulent may have been the intention of his grantor. The counsel for the defendants insist, that there is no evidence in the case, establishing any such privity. It very rarely happens, that direct evidence of fraud can be obtained, it is usually elicited from the facts 'and circumstances attending each case. It is generally true, that the first effort of a man who intends to commit a fraud, is to throw a veil over the transaction, which may shield it against assault, and baffle all attempt at detection. No man willingly furnishes the evidence of his own turpitude. It is equally true, that the very means, which are carefully used to impress the transaction with outward fairness, not unfrequently serve to expose its inward deformity and turpitude. The difficulty of obtaining direct evidence in such cases, has led to the rule in equity, that fraud may be inferred, from facts and circumstances, — such as the nature of the contract, and the relation and circumstances of the parties. Chesterfield v. Janssen, 3 Ves. sen. 155 ; Denton v. Mackenzie, 1 Desauss. Rep. 300 ; Gist v. Frazier, 2 Littell’s Rep. 118; Watkins v. Stockett, 6 Har. & Johns. Rep. 435. I infer that Thomas Andrews was privy to the fraud intended by Joseph Andrews. 1. Because they were brothers, living in the same neighborhood, and sometimes together, and were likely, therefore, to be familiar with each others circumstances, and to share each others confidence. 2. Because the embarrassments of Joseph Andrews, as a member of the firm of Vance & Andrews, appear to have been [157] a matter of neighborhood notoriety, of which Joseph Andrews, himself, frequently spoke to others; avowing his determination never ’ to pay, out of his property, any of their debts; and I am not at liberty to suppose that he did not make similar avowals to his brother, in whom he appears to have had the utmost confidence, or that the same facts were not known to him, that appear to have been familiar to others. 3. Because he shows in his answer, that he was aware of the heavy indebtedness of his brother Joseph ; and he must have known, from the very nature of the long credit given to him on the sale, that it was the purpose of Joseph, to thus carry out his previously avowed intention of never paying the debts of the firm of Vance & Andrews ; because he must have seen that Joseph was thus divesting himself of all the means which he had, by which either a voluntary or forced payment could be made. Taking all these circumstances together, I think they countervail the denials of the answer, and prove that the sale was made with a fraudulent intent. I have, not noticed the deposition of Joseph Andrews, because I am satisfied that he is an incompetent witness. 1. Because a defendant who is charged with colluding with his co-defendant, in regard to the transaction sought to be impeached, cannot be a witness for his co-defendant, especially where he is liable for costs, as Joseph Andrews evidently is, in this case. Whipple v. Lansing, 3 Johns. Ch. Rep. 612 ; 2 Ves. sen. 628, 629. 2. Because Joseph Andrews is directly interested in upholding the sale; for, if it is set aside, he must lose all right upon his deed of trust, and to enforce the payment of. the notes, taken as the consideration of that sale. Upon the whole, I shall declare the deed from Joseph Andrews to Thomas Andrews, so far as it relates to the land, fraudulent and void as against the complainant. And shall direct the costs of the suit to be paid by the defendants. Let a decree be prepared accordingly.