The Chancellor :
These deeds, it will be observed, are not impeached upon the ground of their being fraudulent under the provisions of the insolvent system, as having been executed by Spindler with a view of being and becoming an insolvent debtor. They are charged as having been made to delay, hinder and defraud creditors, and as, therefore, being fraudulent and void, both at common law and under the provisions of the statute of 13th Elizabeth, chap. 5; and, whether they are so or not, is the only question that has been discussed by the counsel in their oral and written arguments.
The principle extracted by Mr. Chancellor Kent from a review of the cases is, “that if the party is indebted at the time of the voluntary settlement, it is presumed to be fraudulent in respect to such debts ; and no circumstance will permit those debts to be affected by the settlement, or repel the legal presumption of fraud” — that “the presumption of law in this case does not depend upon the amount of the debts, or the extent of the property in settlement, or the- circumstances of the party” — “that there is no such line of distinction set up or traced in any of the cases ; and that, therefore, the law has wisely dis[510]*510abled the debtor from making any voluntary settlement of his estate to stand in the way of his existing debts.”
This principle so affirmed by Chancellor Kent in Reade vs. Livingston, 3 Johns. Ch. Rep., 500, 501, as the clear and uniform doctrine taught by the cases, is considered by Mr. Justice Story as strictissimi juris, and pushing the rule to an unreasonable extent, unless indeed the conveyance is intentionally made to defraud creditors, when it would be void on account of ill faith. But if the conveyance is founded upon a good consideration, and is, moreover, bona fide ; then, though the grantor may be indebted at the time, yet if the circumstances attending the transaction are such as to repel the presumption of fraud, it seems, from the reasoning and cases cited by the writer, that the mere circumstance of the party not being entirely exempt from debt at the time would not be sufficient to overthrow the conveyance.
The doctrine established by the Supreme Court of the United States, is, that a voluntary conveyance made by a person not indebted at the time, in favor of his- wife and children, cannot be impeached by subsequent creditors upon the mere ground of its being voluntary. It must be shown to have been fraudulent, or made with a view to future debts; and the mere fact of being indebted at the time does not, per se, constitute a substantive ground to avoid a voluntary conveyance for fraud, even in regard to prior creditors. The question whether fraudulent or not, is to be ascertained from all. the circumstances of the case, and not alone from the mere fact of indebtment at the time. “If,” say the Supreme Court in Hinde’s Lessee vs. Longworth, 11 Wheat., 1991, “it could |be shown that the grantor was in prosperous circumstances, and unembarrassed, and that the gift to the child was a reasonable provision, according to his state and condition in life, and leaving enough for the payment of the debts of the grantor, the mere fact of his being indebted would not make the deed fraudulent.” The want of a valuable consideration may be a badge of fraud, but it is only presumptive, and not conclusive, evidence of it, and may be rebutted by evidence on the other side.” And this [511]*511doctrine, as Mr. Justice Story says, was asserted in a case where the conveyance was sought to be set aside by persons claiming under judgment creditors upon antecedent debts. 1 Story’s Eq., sec. 362.
If the high authority of the Supreme Court required any support, it would be found in the cases cited by the writer, (in note 21 to this section,) and particularly in the case of Verplanck vs. Story, 12 Johns. Rep., 536, in which Mr. Justice Spencer, in delivering the opinion of the court, said, “if the person making a settlement'is insolvent or in doubtful circumstances, the settlement comes within the statute of 13th Elizabeth, ch. 5. But if the grantor be not indebted to such a degree as that the settlement will deprive the creditors of an ample fund for the payment of their debts, the consideration of natural love and affection will support the deed, although a voluntary one, against creditors, for, in the language of the decisions, cit is free from the imputation of fraud.’ ”
These decisions, thus modifying and mitigating the rule upon this subject, as laid down by Chancellor Kent, in the case referred to, are quite in accordance with the doctrine held by the Court of Appeals of this state, in Jones vs. Sluby, 5 H. & J., 372, and appear to me to be so perfectly reasonable and judicious, that I should be disposed to adopt and follow them, even if opposed by authorities equally imposing.
That the grantor, Spindler, was largely indebted at the period of the execution of the deed of the 27th March, 1834, is not denied by his answer, and is, moreover, abundantly established by the evidence. If not actually, at that time, insolvent, he was unquestionably in precarious circumstances, and although he alleges that he retained ample means to pay his debts, no attempt has been made to prove the existence of such means, and the burden of proof to repel the fraud presumable from the condition of the grantor at the time, is clearly upon the parties claiming under the deed. Birely vs. Staley, 5 G. & J., 432.
My opinion, therefore, is, that this deed of the 27th of March, 1834, is void as to creditors under the statute of Elizabeth, being purely voluntary, having been made by a party shown to have [512]*512been largely indebted at the time, and the parties claiming under it having failed to show other property owned by the grantor, sufficient to pay his debts; and, being moreover convinced, from the- evidence and circumstances of the case, that the grantor had not, independent of the property so conveyed, sufficient to pay the demands of his creditors. I do not, however, mean to be understood as deciding, that creditors, impeaching a voluntary conveyance made by their debtor, are bound to show, affirmatively, that the debtor has by the conveyance stripped himself of the means of paying his debts ; because, I think, the parties claiming under the deed, are required to show that the grantor did not so disable himself, and that a sufficient fund remained to satisfy the claims of his creditors ; and that, therefore, the facts of this case are even stronger than would be required to bring it within the less stringent principle laid down by the Supreme Court, and established by the other cases referred to.
The next inquiry has reference to the bill of sale of the 18th of April, 1834, and which purports to be made for a monied consideration of $3500.
The original answer of the grantee, Phillips, to the averments and interrogatories of the bill in reference to the execution of this bill of sale, and the time and manner of paying the consideration expressed in it, and also in other respects, being evasive and unsatisfactory, the complainant excepted thereto, and after argument, the exceptions were sustained, and the defendant, by an order passed on the 29th of October, 1846,-was required to put in a full and sufficient answer, by a day limited for that purpose.
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The Chancellor :
These deeds, it will be observed, are not impeached upon the ground of their being fraudulent under the provisions of the insolvent system, as having been executed by Spindler with a view of being and becoming an insolvent debtor. They are charged as having been made to delay, hinder and defraud creditors, and as, therefore, being fraudulent and void, both at common law and under the provisions of the statute of 13th Elizabeth, chap. 5; and, whether they are so or not, is the only question that has been discussed by the counsel in their oral and written arguments.
The principle extracted by Mr. Chancellor Kent from a review of the cases is, “that if the party is indebted at the time of the voluntary settlement, it is presumed to be fraudulent in respect to such debts ; and no circumstance will permit those debts to be affected by the settlement, or repel the legal presumption of fraud” — that “the presumption of law in this case does not depend upon the amount of the debts, or the extent of the property in settlement, or the- circumstances of the party” — “that there is no such line of distinction set up or traced in any of the cases ; and that, therefore, the law has wisely dis[510]*510abled the debtor from making any voluntary settlement of his estate to stand in the way of his existing debts.”
This principle so affirmed by Chancellor Kent in Reade vs. Livingston, 3 Johns. Ch. Rep., 500, 501, as the clear and uniform doctrine taught by the cases, is considered by Mr. Justice Story as strictissimi juris, and pushing the rule to an unreasonable extent, unless indeed the conveyance is intentionally made to defraud creditors, when it would be void on account of ill faith. But if the conveyance is founded upon a good consideration, and is, moreover, bona fide ; then, though the grantor may be indebted at the time, yet if the circumstances attending the transaction are such as to repel the presumption of fraud, it seems, from the reasoning and cases cited by the writer, that the mere circumstance of the party not being entirely exempt from debt at the time would not be sufficient to overthrow the conveyance.
The doctrine established by the Supreme Court of the United States, is, that a voluntary conveyance made by a person not indebted at the time, in favor of his- wife and children, cannot be impeached by subsequent creditors upon the mere ground of its being voluntary. It must be shown to have been fraudulent, or made with a view to future debts; and the mere fact of being indebted at the time does not, per se, constitute a substantive ground to avoid a voluntary conveyance for fraud, even in regard to prior creditors. The question whether fraudulent or not, is to be ascertained from all. the circumstances of the case, and not alone from the mere fact of indebtment at the time. “If,” say the Supreme Court in Hinde’s Lessee vs. Longworth, 11 Wheat., 1991, “it could |be shown that the grantor was in prosperous circumstances, and unembarrassed, and that the gift to the child was a reasonable provision, according to his state and condition in life, and leaving enough for the payment of the debts of the grantor, the mere fact of his being indebted would not make the deed fraudulent.” The want of a valuable consideration may be a badge of fraud, but it is only presumptive, and not conclusive, evidence of it, and may be rebutted by evidence on the other side.” And this [511]*511doctrine, as Mr. Justice Story says, was asserted in a case where the conveyance was sought to be set aside by persons claiming under judgment creditors upon antecedent debts. 1 Story’s Eq., sec. 362.
If the high authority of the Supreme Court required any support, it would be found in the cases cited by the writer, (in note 21 to this section,) and particularly in the case of Verplanck vs. Story, 12 Johns. Rep., 536, in which Mr. Justice Spencer, in delivering the opinion of the court, said, “if the person making a settlement'is insolvent or in doubtful circumstances, the settlement comes within the statute of 13th Elizabeth, ch. 5. But if the grantor be not indebted to such a degree as that the settlement will deprive the creditors of an ample fund for the payment of their debts, the consideration of natural love and affection will support the deed, although a voluntary one, against creditors, for, in the language of the decisions, cit is free from the imputation of fraud.’ ”
These decisions, thus modifying and mitigating the rule upon this subject, as laid down by Chancellor Kent, in the case referred to, are quite in accordance with the doctrine held by the Court of Appeals of this state, in Jones vs. Sluby, 5 H. & J., 372, and appear to me to be so perfectly reasonable and judicious, that I should be disposed to adopt and follow them, even if opposed by authorities equally imposing.
That the grantor, Spindler, was largely indebted at the period of the execution of the deed of the 27th March, 1834, is not denied by his answer, and is, moreover, abundantly established by the evidence. If not actually, at that time, insolvent, he was unquestionably in precarious circumstances, and although he alleges that he retained ample means to pay his debts, no attempt has been made to prove the existence of such means, and the burden of proof to repel the fraud presumable from the condition of the grantor at the time, is clearly upon the parties claiming under the deed. Birely vs. Staley, 5 G. & J., 432.
My opinion, therefore, is, that this deed of the 27th of March, 1834, is void as to creditors under the statute of Elizabeth, being purely voluntary, having been made by a party shown to have [512]*512been largely indebted at the time, and the parties claiming under it having failed to show other property owned by the grantor, sufficient to pay his debts; and, being moreover convinced, from the- evidence and circumstances of the case, that the grantor had not, independent of the property so conveyed, sufficient to pay the demands of his creditors. I do not, however, mean to be understood as deciding, that creditors, impeaching a voluntary conveyance made by their debtor, are bound to show, affirmatively, that the debtor has by the conveyance stripped himself of the means of paying his debts ; because, I think, the parties claiming under the deed, are required to show that the grantor did not so disable himself, and that a sufficient fund remained to satisfy the claims of his creditors ; and that, therefore, the facts of this case are even stronger than would be required to bring it within the less stringent principle laid down by the Supreme Court, and established by the other cases referred to.
The next inquiry has reference to the bill of sale of the 18th of April, 1834, and which purports to be made for a monied consideration of $3500.
The original answer of the grantee, Phillips, to the averments and interrogatories of the bill in reference to the execution of this bill of sale, and the time and manner of paying the consideration expressed in it, and also in other respects, being evasive and unsatisfactory, the complainant excepted thereto, and after argument, the exceptions were sustained, and the defendant, by an order passed on the 29th of October, 1846,-was required to put in a full and sufficient answer, by a day limited for that purpose.
And it appears by the answer filed in obedience to this order, that he was absent from the United States, on a voyage to Brazil and Buenos Ayres, from a day prior to the 27th of March, 1834, to the 15th of January, 1835, so that he was not and could not have been present, when either the deed of trust or bill of sale was executed. The answer, in responding to the inquiry respecting the time and manner of paying the consideration expressed in the bill of sale, says, “it was duly [513]*513and fully paid by the respondent to said Spindler, by advances from time to timé made, and by a claim for board from said Spindler and his family, furnished by this respondent” — “that said advances and board were supplied to said Spindler by this respondent, personally, prior to the execution of said bill’ of sale,” &c.
This bill of sale, then, which conveyed to the grantee all the household and kitchen furniture of Spindler of every kind and description, without reservation or exception, was executed in the absence of Phillips, the grantee, without the slightest solicitation on his part, and, as confessed in the answer of Phillips, to secure in part a claim due him, from Spindler, for the board of himself and family. It professes upon its face to have been executed for a monied consideration of three thousand five hundred dollars; and there is, moreover, a receipt at the foot of the instrument for that sum. That the sum of $3500 was not paid in cash, stands confessed by the answer, and we have no means of knowing what proportion was so paid; the answer being silent upon the subject. Now, it is certainly worthy of remark, and calculated to arouse suspicion, that a man who swears that he was at that very time engaged in a large and prosperous business, and worth, and possessed of property, independent of that contained in these instruments, exceeding in value more than four times the amount of his debts, should, without solicitation, and in payment of a claim against him, partly for the board of himself and family, convey away, absolutely and unconditionally, all his household and kitchen furniture ; and this ground of suspicion is certainly not weakened by the fact that the grantee in this conveyance is his father-in-law, who, so far from insisting upon such conveyance for his security, was absent from the country at the time.
That Spindler was hopelessly insolvent at the date of this conveyance, and when the deed of the preceding month of March was executed, I am thoroughly convinced from the evidence. It would be a consumption of time to go into a minute analysis of the proof upon this point, and I deem it sufficient to say, that upon a very careful examination of it, I do not see [514]*514any grounds upon which a reasonable doubt can be entertained. I am not only entirely satisfied that he was irretrievably insolvent, but that he knew himself to be so, and that these conveyances were made for the purpose of placing his property beyond the reach of his creditors ; and that it is the duty of this court to frustrate the design, unless there stands in the way-some insuperable principle of law.
The property contained in the deed of trust of the 27th of March, 1834, and the bill of sale of the 18th of April, of the same year, seems to have been every thing of a visible and tangible nature which Spindler possessed, and when, in addition to these transfers, he, in January, 1835, assigned, for Phillips’ benefit, the judgment against Manro, he stripped himself of almost every thing he possessed in the world which could be made available to his creditors. And what makes the assignment of the judgment still more reprehensible, it appears not only to have been made without consideration, but the fact that any ¡such assignment was made, is denied by the answer of Spindler. The record, however, and the proof of Mr. Birckhead fully disprove the answer in this respect, and establishes not only the fact of the assignment, but that the money received upon the judgment inured for the benefit of Phillips.
And taking all these transactions and grouping them together — the proximity of the conveyances to each other in point of time — the total absence, or even pretence, of any valuable consideration for the deed of March, 1834, by which a large amount of property was settled upon the wife and child of Spindler, the suspicious circumstances which surround the bill of sale of April, 1834, and the denied but proved transfer of the judgment of 1835, and I think I may say, in the language of Judge Story, in Bean vs. Smith et al., 2 Mason’s Reports, 294, that “the badges of fraud cluster about them in every direction,” and that these conveyances and transfers were made with the meditated design to injure and defraud creditors.
It appears to me impossible to read this record, and not come to the conclusion that Spindler saw and was fully sensible of the desperate condition of his affairs, and that it was his [515]*515purpose to benefit his family at the expense of his creditors. The deeds, then, in my judgment, were made to delay, hinder and defraud them, and must be vacated and the property sold for their benefit, unless the remaining ground of defence is a good one, and that rests upon the effect of the sale by the sheriff to Phillips, under executions upon judgments against Spindler ,recovered by the General Insurance Company, in the year 1834.
It is supposed, by the counsel for the defendants, that this purchase by Phillips, at the sale made by the sheriff, gives him every thing necessary to perfect his title, whatever may have been the infirmities of the original deed, unless it can be shown that the sale was collusive and fraudulent, which is denied in the answer, and contested in the argument.
I do not deem it necessary to investigate the question of fraud, as charged on the one side, and disputed on the other, because I think it very clear, that even assuming the fairness of this part of the transaction on the part of Phillips and Spindler, the fate of the case must depend upon the original integrity of the deed of March, 1834, and that the title of Phillips to hold the property conveyed thereby, against the creditors of Spindler, can draw to it no aid from the sheriff’s sale.
The deed of March, 1834, though in-my opinion, fraudulent and void as to creditors, was clearly good inter partes, and of course, Spindler was thereby divested of any interest in the property conveyed, other than the merely contingent life estate reserved to him by the instrument itself, and when Phillips purchased at the sale made by the sheriff, upon an execution issued upon a judgment against Spindler, he acquired and could acquire nothing more than that contingent right, and the contingency not having happened, upon which the title of Spindler to the beneficial interest in the property for life, was to arise, it would seem to follow necessarily, that, this purchase is wholly ineffectual to clothe the purchaser with any rights which can be asserted against the creditors.
These views dispose of the grounds of defence taken in the answers, and? urged in the argument, and, in my judgment show them to be untenable.
[516]*516A difficulty, however, occurred to me at one time, respecting the right of the complainant, who is the permanent trustee in insolvency of Spindler, the grantor, to file a bill to vacate conveyances made by him as fraudulent, under the provisions of the statue of Elizabeth — I thought it might perhaps be doubted, whether, as the conveyances were good against the grantor himself, his insolvent trustee could be permitted to impeach them. Subsequent reflection, however, and an examination of one or two of the cases, has satisfied me that the doubt is not well founded ; and that unless the trustee may maintain such a suit, the creditors of the insolvent, who are prejudiced by the conveyance, might be without remedy altogether. According to the principles settled by the Court of Appeals in Alexander vs. Ghiselin et al., 5 Gill, 138, the whole estate of the insolvent, whatever may be its condition, passes into the hands of the trustee, to be by him managed for the benefit of his creditors, who are deprived by operation of the insolvent system, of the right to pursue in their own names, any remedy against the property of the debtor, however it may be situated at the time of his application for relief.
It is true, that if there be a surplus after the payment of the claims of creditors, it will, be enjoyed by the insolvent, and so far, and to that extent, the annulling the conveyances operates to his benefit, but still as the property or its proceeds must be in the first place applied to the payment of the creditors, the power of the court must be regarded as exerted chiefly for them; and if the conveyance is void as against creditors, under the statute of Elizabeth, it would seem proper to permit the trustee to institute proceedings for the purpose of vacating it, as otherwise the creditors, though wronged, would be without remedy.
In Virginia, the sheriff, when a debtor takes the insolvent oath, and delivers in a schedule, is vested by the act of assembly with all the insolvent’s estate, rights and interests; and as the Court of Appeals of that state said, in the case of Shirley vs. Long, 6 Randolph, 748, “he represents both the insolvent and the creditors,” “'and it would be strange, that if the insolvent were to convey away half his property, and this most [517]*517manifestly fraudulent, this curator and trustee could do nothing, bring no suits, take no steps to recover this, and bring it into a division among the creditors.
The right of the trustee to file such a bill as the present, is maintained by the case of Riggs vs. Murray, 2 Johns. Ch. Rep., 565, and is believed to have been decided by the Court of Appeals of this State, in the case of Gatchell, permanent trustee vs. Uhler and Bruner, not reported, and in Winn and Ross vs. Albert and Wife.
I am of opinion, therefore, that the present bill may be maintained ; and considering, for the reasons which have been stated, that the deed and bill of sale are void, as against creditors, a decree will be passed to that effect, when the property will be vested in the complainant as permanent trustee of Spindler, to be by him administered in insolvency.
The complainant having waived the residue of his prayer for relief, no opinion is expressed in relation thereto.
[An appeal was taken from this decree, which is still depending.]