Carlisle v. Rich

UpfiAM, J., delivered the opinion of the court. By the statute of 3 Hen. 7, ch. 4, all deeds of gift of goods and chattels, in trust for the donor, were declared void; and by the statute of 13 Eliz., ch. 5, gifts of goods and chattels, as well as of. lands, by writing or otherwise, made with intent to delay, hinder and defraud creditors, were rendered void as against the person to whom such fraud would be prejudicial. The English decisions under these statues have been, both at law and equity, that voluntary conveyances, and even family settlements of lands or chattels, (which appear to be favored more than any other species of conveyance,) are fraudulent and void in law against existing creditors ; and these decisions have been fully sustained by the American authorities. Reade vs. Livingston, 3 Johns. Ch. R. 481; Sexton vs. Wheaton, 8 Wheat. 229; Hinde vs. Longworth, do. 199; Thompson vs. Dougherty, 12 Serg. Rawle 448; Parker vs. Proctor, 9 Mass. 390; Bennett vs. Bedford Bank, 11 Mass. 421; Meserve vs. Dyer, 4 Green. 52; Jackson vs. Seward, 5 Cowen 67. The law is well settled on this point; but it is contended that at the time of the conveyance in this case, there were no individuals standing in the relation of creditors of said Peverly ; and that the giving of a bond is not the creation of a debt which can bind the estate of the obligor until after the rendition of judgment for condition broken. But this doctrine cannot be admitted without much consideration. Its tendency would be extensively to sustain fraudulent conveyances made with a view to guard against future liabilities, and would go far to render unavailing all securities by bond, and to defeat the high objects such obligations are designed to effect. The question is different from that presented by the relation betwixt one surety and another, or betwixt a surety and his principal. When an individual becomes a surety lor another, it is holden that no right of action accrues be [49] twixt the principal and surety until the surety has paid, or absolutely assumed, the debt as his own. This principle seems to be necessary, to protect the debtor from suits commenced both by the surety and the creditor, and to prevent payment of the claim to the surety, while at the same time he would be holden liable to the creditor. Suit, therefore, cannot be permitted by the surety till he has cancelled the creditor’s claim. But in cases of voluntary conveyance of property, after an individual had become surety, but before he had been dam-nified by default of his principal, we think courts would hesitate but little in considering the surety as having a subsisting claim at the time of the conveyance, and construing such conveyance as in fraud of the surety. It has been accordingly holden in the very thoroughly considered case of Howe & Ward, 4 Greenleaf 195, that the relation of debtor and creditor among the sureties in a bond, so as to entitle one of them to impeach a voluntary conveyance made by another, commences at the time of executing the bond, and not at the time when one actually pays more than his proportion of the debt. See also Fox vs. Hills, 1 Conn. 295; Jackson vs. Myers, 18 Johns. 425. If this be so, the indebtedness to the obligee, which is directly fixed by the instrument, must be considered, by much stronger reasoning, as equally commencing from the time the instrument was executed. The indebtedness is acknowledged as of that date. It may indeed become subsequently of no force by virtue of full performance of the condition ; but if the condition is broken, the indebtedness should be considered as commencing from the date of the instrument, at least for the purpose of preventing either voluntary or fraudulent conveyances of the obligor to the injury of the obligee. This conveyance then must be considered as void, being a mere voluntary transfer of property without consideration [50] while the grantor was under an existing liability which would bind the estate. It was contended that the deed was not void, because the grantor had other estate left sufficient to pay his debts. But this does not appear. The case finds that when judgment was obtained, there were not sufficient funds to pay the claims recovered under the bond ; and until the contrary appears such will be presumed to have been the case at the time of the conveyance. No point of this kind was taken at the trial, and no testimony was submitted to the jury on the subject. The insolvency must therefore be considered as extending back to the time of the grant. It is also denied that there was any fraud in fact. But it is sufficient that the conveyance is fraudulent in law, arising from the fact that the conveyance was without consideration, while at the same time the liability by bond is regarded as an existing claim. Whether there was fraud in fact would be a question for the consideration of a jury. If there was, it might be immaterial whether the debt subsisted at the time of the conveyance, or not, as a voluntary conveyance with fraudulent views would seem to be void, even as to subsequent creditors ; but not so, if there was no fraud in fact. Reade vs. Livingston, 3 Johns. Ch. Rep. 501; Damon vs. Bryant, 2 Pick. 411; Howe vs. Ward, 4 Green. 195; 2 Kent’s Com. 2 ed. 442. The tenant in this case shows no consideration for the conveyance to him; and it is clear, from the facts in the case, uncontradicted by any testimony on the part of the tenant, that no consideration was paid by him. The exception taken as to the appraisers by whom the demandant’s levy was made is settled, in Porter & al. vs. Bean. 1 N. H. R. 363. Judgment for the demandant.