Fortune v. Cassidy

Mr. Justice Smith delivered the opinion of the court. It is contended on behalf of appellants that the evidence fails to support the essential findings of the decree, and does hot warrant the relief given by the decree. It appears from the evidence that in the month of April, 1896, a suit was brought in the Circuit Court of Cook county, Illinois, by James H. Gilbert, sheriff, for the use of Kate McGuire, administratrix, etc., on a replevin bond against the principal defendant, Cornelius Hickey, and others who had signed the bond with him, and in that action a judgment was rendered against Cornelius Hickey and his co-obligors in February, 1898, for $2,030. The record does not show the exact date when the replevin bond was signed, but the evidence Warrants the inference that it was signed several years before the above action was brought upon it. It appears that an appeal was taken from said judgment to this court, and that the bond for such appeal was signed by the principal defendant herein and his co-obligors as principals and by the complainant below as surety. The bond was dated December 5, 1898. The judgment of the Circuit Court was afterwards affirmed by this court, and Fortune, appellee, being liable as surety on the appeal bond to pay the judgment, did in fact pay it. Having paid the judgment, appellee Fortune brought suit against Cornelius Hickey, the principal defendant, to recover the amount so paid by him, and on December 13, 1904, a judgment was entered in that suit against said Hickey for $2,812.62 and costs of suit. Execution was issued thereon and was in due time returned unsatisfied, and that said judgment remains in full force and effect and wholly unpaid. The evidence shows, in our opinion, that Cornelius Hickey formed the intention prior to February, 1896, of putting his property in the name of other persons for the purpose of avoiding the payment of any judgment that might be recovered against him and others on the replevin bond; and later, after suit had been instituted on the bond as stated above, and in the month of April, Hickey expressed such intention. Unless the conveyances hereinafter referred to were made subsequently to such expression of his intention and dated hack, he had in February, 1896, when he was liable on the bond, executed a warranty deed of lot one, in block thirteen, in Dr. Snowden’s subdivision described in the bill to Kate Hayes, a sister of his wife. He had also on February 1, 1896, executed the deed conveying the north half of lot seventeen, in block thirteen in the same subdivision, to Kate Hayes; and on the same day he executed a third deed of lot twenty-five, in block one, in C. B. Orvis’ subdivision, described in the bill, to said Kate Hayes. All these transfers were made at the same time, and without any of the circumstances attending them which usually and necessarily accompany the bona fide sale and purchase of real estate in the ordinary course of business. The deeds of said lots were not recorded until May 2, 1896. On July 24, 1899, Kate Hayes executed separate deeds of said lot one, and the north half of lot 17, to one Bridget Drislain, a niece of Cornelius Hickey. The deed of lot 1 was not recorded until March 30, 1901, and the deed of a part of lot 17 was not recorded until October 16, 1901. It appears, we think, from the evidence that neither Kate Hayes nor Bridget Drislain had any money with which to purchase the property so conveyed to them, and that they did not pay any consideration for the properties, and that the conveyances were all made without consideration and for the fraudulent purpose charged in the bill. It further appears from the evidence that Bridget Drislain, on December 12, 1904, the day before the judgment against Cornelius Hickey was recorded by appellee Fortune, conveyed the said north half of lot seventeen to appellant James Cassidy, and the deed was recorded December 16, 1904, three days after the recovery of said judgment. While appellant Cassidy swears that he paid Bridget Drislain $2,000 in cash when she delivered him the deed, we think it is exceedingly doubtful that such payment was in fact made. But whether the payment was in fact made or not, the evidence as to Cassidy’s previous relations with the principal defendant in the bill, Hickey, and with Kate Hayes and Bridget Drislain, and that he acted for all of them in these transactions, shows that appellant Cassidy had notice, at the time of his purchase from Bridget Drislain, that the transfers from Hickey to defendant Hayes and from the latter to Bridget Drislain were fraudulent and made with the intent to prevent the property from being taken in execution for the debt of the defendant Hickey. It appears that Kate Hayes some time after May 2, 1896, conveyed said lot twenty-five to Lawrence Hickey, a son of Cornelius Hickey. The master and the chancellor found from the evidence that this transfer was also fraudulent and was made as a part of the scheme or plan to prevent the lot from being-levied upon for the debt of the principal defendant, Hickey. In this conclusion we concur. The decree dismissed the bill as to the defendant, Thomas Carey, and as no cross-errors are assigned on that part of the decree, the validity of the deed to Carey is not before us. It is urged, however, that the judgment upon which the bill is based was rendered December 13, 1904, nearly nine years after the transfers of the real estate by Cornelius Hickey to Kate Hayes, and that the transfers were made nearly three years before appellee Fortune signed the appeal bond, under which he afterwards paid the judgment against Hickey; and appellee Fortune was not a creditor of Hickey at the time of the conveyances, and could not at the time he became surety on the appeal bond have relied upon the ownership of the property in question by Cornelius Hickey; and these facts show that it is impossible that Hickey could have intended to defraud Fortune by the conveyances or to obstruct him in the collection of any just debt, and therefore the decree should be reversed. This contention is too narrow in its premises to be sound. It is to be observed that the debt for which the appellee Fortune recovered the judgment upon which his bill is based arose directly out of the original liability on the replevin bond which was executed before the original transfers of the real estate by Hickey to Hayes were made. By signing the appeal bond as surety, Fortune made himself responsible for the payment of this original liability in case the judgment therefor was affirmed. When the judgment was affirmed, he paid it, and by that fact became subrogated to all the rights and equities of the owner of the indebtedness, and stood in the shoes of the original creditor as regards the right to have the conveyances set aside, if fraudulent and colorable as to such original creditor. This right of subrogation is an established principle of equity, and is stated in Eddy v. Traver, 6 Paige 521, quoted in Lochenmeyer et al. v. Fogarty et al., 112 Ill. 572, at page 583, as follows: “It is an established principle of equity that sureties, or those who stand in the situation of sureties for those who pay a debt for them, are entitled to" stand in the place of the creditor, or to be subrogated to all bis rights as to any fund, lien or equity which he may have against any other person or property on account of the debt.” As said in 1 Leading Cases in Equity, page 144: “Moreover, as soon as the surety has paid the debt an equity arises in his favor to have all the securities, original and collateral, which the creditor holds against the person or property of the principal debtor, transferred to him, and to avail himself of them as fully as the creditor could have done. For the purpose of obtaining indemnity from the principal, he is considered as at once subrogated to all the rights, remedies and securities of the creditor—as substituted in the place of the creditor, and to enforce all Ms liens, priorities and means of payment, as against the principal, and to have the benefit even of securities that were given without his knowledge. ’ ’ This doctrine is held in numerous cases in the courts of this state. In our opinion, the evidence in the record justifies the inference that Cornelius Hickey was the owner of the property described in the conveyances in question when he signed the replevin bond, and that he executed the conveyances of the property after he became liable on the bond as alleged in the bill of complaint ; and that the conveyances are all tarred with the brush of fraud, and appellee is entitled to the relief given him by the decree. The decree is affirmed. Affirmed.