Gove v. Lawrence

Eastman, J. If the land conveyed to Towle had been-attached as the property of Lawrence, upon a valid debt-, [490] existing against him at the time of,the attachment, a very different question would be presented from the one raised by this case. That fraudulent conveyances are void as to creditors is not a matter open to argument. Towle v. Hoit, 14 N. H. Rep. 61; Carlisle v. Rich, 8 N. H. Rep. 44; 2 Kent’s Com. 442; Paul v. Crooker, 8 N. H. Rep. 290; Jackson v. Myers, 18 Johns. Rep. 425; McConihe v. Sawyer, 12 N. H. Rep. 396; Smith v. Lowell, 6 N. H. Rep. 67; Kendall v. Fitts, 2 Foster’s Rep. 1. If the fraud be corruptly intended, the conveyance is not only void as to creditors whose debts exist at the time of the sale and transfer, but also as to all who may subsequently become creditors; and had Gove attached this land, as he could have, done, prior to the proceedings in bankruptcy, by Lawrence, it might have availed him for the satisfaction of the bond. Kittredge v. Warren, 14 N. H. Rep. 509; Kittredge v. Emerson, 15 N. H. Rep. 227. But it is unnecessary to investigate the nature of the conveyance from Folsom to Towle any'farther than to ascertain its effect upon the bankrupt certificate of Lawrence. The bond being provable under the proceedings in bankruptcy, the question is, was it discharged by those proceedings ? If it was, then this action cannot be maintained; but if not, then it can be. It is not suggested that the effect of the certificate can be ;avoided, unless it be on account of the conveyance of the land to Towle instead of Lawrence, or from a failure by Lawrence to make a correct schedule of the property. The referees find that the conveyance was made in 1839,' and that the deed was made to Towle instead of Lawrence, expressly to avoid an attachment of the land by Pease, on a ■ debt created in 1836. The bankrupt act was passed August 19th, 1841, and went into effect February 1, 1842. The .second section of the act provides, among other things, that all future payments, securities, conveyances or transfers of [491] property, or agreements made or given by any bankrupt in contemplation of bankruptcy, and for the purpose of giving any creditor, indorser, surety, or other person, any preference or priority over the general creditors of such bankrupt; and all other payments, securities, conveyances or transfers of property, or agreements made or given by such bankrupt, in contemplation of bankruptcy, to any person or persons whatever, not being a bona fide creditor or purchaser, for a valuable consideration, without notice, shall be deemed utterly void and a fraud upon this act. Now if we can hold this conveyance to have been made in contemplation of taking the benefit of the bankrupt act, it will render void the certificate; but not otherwise. The act of Congress evidently looks to the transactions of the bankrupt, both in regard to his acts in becoming a bankrupt and to his proceedings in obtaining a certificate of discharge. It does not require an examination into the business of a whole life, and provide that every indiscretion, or fraud even, shall prevent an applicant from obtaining the benefits of the act. If the petitioner shall have taken no fraudulent steps in contemplation of bankruptcy, and shall honestly and legally comply with the requirements of the act in obtaining his discharge, it is all the law contemplates. And it seems to us quite clear that this conveyance in 1839, made two years before the passage of the bankrupt act, and when no act of the kind was in existence, and made, too, expressly for the purpose, and no other, of defeating an attachment on a debt created in 1836, cannot be regarded as having been made in contemplation of bankruptcy. Nothing is disclosed which has a tendency to any such result, or which can lead us to any such conclusion. The provisions' of the fourth section of the bankrupt act, referred to by counsel, relate to frauds and concealments contrary to the provisions of the act, and not to frauds generally, as stated in the" argument. Nor do we think that any well founded objection can be [492] raised to the sufficiency of the certificate, on account of the schedule of the property. In our opinion the description in the schedule was as correct as it well could be. The interest which Lawrence had in the land was an equitable one. It is true that he had no legal title or deed of the land, and in fact no evidence of title whatever; but at the same time he had paid the full consideration for the property; and where an estate is conveyed to one and the consideration is paid by another, a resulting trust is created in favor of the latter, and he is the equitable owner. 4 Kent’s Com. 305; Gardiner Bank v. Wheaton, 8 Greenl. Rep. 373; Jackson v. Matsford, 11 Johns. Rep. 90 Botsford v. Burr, 2 Johns. Ch. Rep. 405; Powell v. Monson, 3 Mason’s Rep. 347; Jackson v. Moore, 6 Cowen’s Rep. 726; Page v. Page, 8 N. H. Rep. 187; Jackson v. Morse, 16 Johns. Rep. 197, Pembroke v. Allenstown, 1 Foster’s Rep. 107. There is no doubt that the interest which Lawrence had in the property could have been taken by his creditors for his debts; neither can there be any doubt that his assignee could sell such an interest, and that it would pass by the sale. As the discharge in bankruptcy cannot be invalidated by this conveyance, or by any inaccuracy in the schedule, the bond upon which the suit was instituted being provable in bankruptcy, was discharged by the bankrupt proceedings, and, of course, the plaintiff having no cause of action, the suit must fail. Judgment for the defendant, upon the report.