Buffum v. Green

The opinion of the court was delivered by Richardson, C. J. , It is very clear, that an insolvent debtor may give a preference to one creditor by paying his debt in full, [80] to the exclusion of all the rest of the creditors, provided it be done with good faith. Indeed, it would be strange, if this could not be lawfully done in this state, where a creditor may by attaching all the property of his debtor secure the payment of his debt to the exclusion of all the other creditors. The cases, to which we have been referred by the counsel of the tenants, are directly in point, and we do not understand that the principle is contested in this case. Rut several exceptions have been taken to the5 title, upon which the tenants rely. In the first place it is contended, that there was no delivery of the deed to the tenants, previous to the time when the land was attached by virtue of the demandant’s writ. This objection, if well founded in fact, must prevail. But the case states, that the deed was delivered to a third person for the use of the grantees, and was actually in the hands of one of the grantees, before the attachment was made ; and there are many adjudged cases, which clearly show, that the delivery to the third person was a valid delivery. 1 Johns. Ch. Rep. 254, Souverbye v. Arden. There is then no foundation, on which this exception can rest. It is also contended, that there was no consideration which can support the conveyance against creditors. It is not disputed that there were debts due from the. grantor to the grantees, or that the conveyance was made in payment of those debts. But it is objected, that no price was fixed for the land, and no agreement was made as to what debts should be discharged by the conveyance. We do not, however, see any legal foundation for this objection. If the land was conveyed for the purpose of paying the debts due to tb e grantees so far as it would go, and accepted by them thus in payment, it will in law operate as a payment to the extent of its value. And we are not aware of any rule of law, requiring, that the particular debts to be discharged shall be designated, [81] when payment is made in land, any more than when payment is made in money. But it is said that, although the debts due to the grantees might be a good consideration, their liabilities as sureties could not be so. The law is, however, otherwise. It is well settled, that such liabilities are a good consideration for a conveyance. G Mass. Rep. 342, Stevens v. Bell; 1 Burr. 474 ; 2 Johns. Ch. Rep. 308. And the grantees are as well entitled to hold the land conveyed to them, to enable them to pay the debts of the grantor, for which they were liable as they would have been to hold money, had it been paid to them for that purpose. We have no doubt, that there was a good consideration for the conveyance equal to the full value of the land. It is further objected, that there was a secret trust or confidence in the conveyance, and this is attempted to be shown from several circumstances. In the first place, it is said, that the contract was not complete, that there were to be further proceedings to settle the value of the land, and whether it should go in part satisfaction, or in full discharge of the debts, and that the land was held in trust, until these matters were settled. But it does not seem to us that this affords any ground even to suspect that there was a secret trust .which cap invalidate the conveyance. The grantor sent the deed to the grantees for the purpose of paying the debts du#S to them, and the debts for which they were liable, and they accepted it accordingly. This, in point of law, constituted a payment to the extent of the value of the land. Now a trust, which invalidates a conveyance as against creditors, is the reservation of some benefit to the grantor. 3 N. H. Rep. 424. But what reservation was there in this case ? There is not only no evidence of any in this case, but it is highly improbable, under the circumstances, that there was any. There was no previous consultation between the parties. The grantor had absconded before the deed was offered to the grantees. [82] The deed was recorded before either of the grantees had notice of the conveyance. The land was not of sufficient value to pay the debts due to the grantees, and the debts for which they were liable. It is in the highest degree improbable, that they would have assented to any secret reservation had it been proposed to them, and there is nothing in the case that renders it at all probable that any proposition of the kind was ever made to them. In the next place it is said, that the receipt of the consideration is acknowledged in the deed, and that the grantor is thereby estopped to say: that the debts due to the grantees are paid by the conveyance, there being no agreement for that purpose, and that so there is a secret trust as to the whole value of the land. But we are not aware of any such estoppel. The grantor would not be permitted, for the purpose of defeating the operation of the deed, to show that there was not a consideration of money paid. But it has been settled in this court, that for any other purpose he may show the true consideration. Some other circumstances have been mentioned by counsel, which in some cases attend a secret trust ; but we see nothing in this case, which indicates in the slightest degree any thing of the kind. The verdict must therefore be set aside, and Jl new trial granted.