Clark v. Harper

74 N.E. 61, 215 Ill. 24
CourtIllinois Supreme Court
DecidedApril 17, 1905
StatusPublished
Cited by16 cases

This text of 74 N.E. 61 (Clark v. Harper) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark v. Harper, 74 N.E. 61, 215 Ill. 24 (Ill. 1905).

Opinion

Mr. Justice Magruder

delivered the opinion of the court:

Substantially, the contest in this case is between the appellees, as judgment creditors of Peter Wallace, deceased, claiming under a sheriff’s deed obtained under their judgment against him, and the appellant, as grantee in a deed executed directly to him by the judgment debtor, Wallace. The main contention of the appellees is, that the deed, executed by Peter Wallace to the appellant on November 22, 1893, and recorded on December 8, 1893, was fraudulent and void, as having been made for the purpose of hindering and delaying the creditors of Wallace. The master and the chancellor in the court below found that' the deed in question was fraudulent and void as to appellees, and was with the knowledge of the appellant executed with the design of hindering, delaying and defrauding the creditors of Wallace, and particularly Helen A. Butler, whose heirs and devisees are the appellees herein. After a careful examination of the evidence, we are of the opinion that the finding of the trial ■ court in this respect is correct, and should not be disturbed.

First—The appellant, John H. Clark, was the son-in-law of Peter Wallace. When the deed of November 22, 1893, was executed by Wallace to appellant, Wallace lived in Chicago and Clark in Quincy. At that time Wallace was insolvent, or on the verge of insolvency. His creditors were pressing him. The note, held against him by Helen A. Butler, and upon which judgment was afterward rendered on April 12, 1894, was. then past due and unpaid. On September 27, 1893, about two months before the execution of the deed from Wallace to the appellant, a judgment was entered against Wallace in favor of one Campbell, and execution was issued against Wallace. The legal title to the land here in controversy was then in Wallace, and the Campbell judgment was a lien upon the property. The testimony shows that the appellant was aware that his father-in-law, Wallace, was pecuniarily embarrassed. It appears from the statement of facts preceding this opinion, that not only were judgments rendered against Wallace in favor of Percy and Butler and Campbell, but also in favor of other parties.

In Beach v. Miller, 130 Ill. 162, we held that, where the good faith of a sale of property is attacked, it is always competent to prove that the vendor was embarrassed or insolvent. Where a grantor makes a conveyance for the purpose of defeating the claims of his creditors, and the grantee, even though some consideration passed between the grantor and the grantee, knowingly assists .in effectuating the fraudulent intent, or even has notice of such fraudulent intent, such grantee will be regarded as a participator in the fraud. “The law never allows one man to assist in cheating another.” (Beidler v. Crane, 135 Ill. 92; Bear v. Bear, 145 id. 21). While the relationship, which existed between Wallace and the appellant, is not in itself proof of fraud, yet it is a circumstance to excite suspicion; and where a conveyance is made by an insolvent debtor, if a near relationship exists between the grantor and grantee, more vigilant and jealous scrutiny will be excited, and clearer and more convincing proof will be .required than when the transaction is between strangers. (Wightman v. Hart, 37 Ill. 123; Robinson Bank v. Miller, 153 id. 244; Martin v. Duncan, 156 id, 274; Lehman v. Greenhut, 88 Ala. 478).

Second—It is claimed on the part of the appellant that an indebtedness existed from his fatherfin-law, Wallace, to him, and that the deed of November 22, 1893, was executed to him by Wallace in payment of that indebtedness. Appellant, in his original bill filed in this cause, states that, by reason of the existence of such indebtedness and of the conveyance to him, he “is the owner in fee simple of the land and premises aforesaid, and is entitled in equity to have the said deed reformed and corrected,” etc. He also alleges in his bill that the deed from the sheriff to Helen A. Butler, and the proceedings under her judgment, are clouds upon his title to the land in question, and that he is “the owner of said land and premises in fee simple and entitled to the possession thereof.” If any indebtedness existed from AVallace to the appellant, the proof is uncertain as to the amount and extent of such indebtedness. The consideration named in the deed of November 22, 1893, is $5000.00. The bill, filed by the appellant, alleges that the indebtedness was about $2000.00. In his testimony appellant is unable to name the exact amount of the indebtedness, and admits that he has no books, or letters, or memoranda of any kind to indicate its amount. At one time he says that it was about $800.00, and at another about $1000.00. He introduces some testimony to show that in March, 1893, he advanced about $650.00 to his father-in-law, Wallace. In the deed hereafter mentioned, dated November 7, 1894, in which he conveyed the premises back to Wallace, the consideration named is $754.45. The proof shows that the property in question, at the time it was conveyed to the appellant by Wallace, was worth from . $1500.00 to $1800.00. If any such indebtedness actually existed, there is no satisfactory evidence that it was more than about $700.00. When the deed of November 22, 1893, was executed to appellant, who was at that time in Quincy, it was recorded by Wallace, the grantor therein, and, after being recorded, was delivered by the recorder to Wallace, the grantor, and not to appellant, the grantee. It is true that the recording of the deed was prima facie evidence of its delivery to the appellant, but this prima facie evidence of delivery, resulting from the recording of a deed, may be rebutted by testimony. (Valter v. Blavka, 195 Ill. 610). We do not wish to be understood as holding that there was no subsequent delivery of this deed to the appellant, but the circumstances mentioned, together with the readiness with which appellant deeded the property back to his father-in-law, Wallace, when requested to do so by the latter on November 7, 1894, lead to the conclusion, that the deed was not intended to vest the absolute ownership of the property in the appellant.

Under the most favorable view for the appellant, which can be taken of the evidence, the deed so executed was a mere security for an indebtedness, largely less than the value of the property conveyed. This, however, as has already been stated, is not the theory of the bill; but the theory of the bill is that the deed was made, not as a security, but as full payment of indebtedness, so as to clothe the grantee with the absolute ownership. Where a grantee takes a conveyance, absolute on its face, and attempts to set it up as a purchase, when in truth it is a mere security for a debt, such conduct will, under most circumstances, be regarded as a fraud, and will prevent such grantee from claiming to be a bona üde mortgagee. (Metropolitan Bank v. Godfrey, 23 Ill. 531). In Beidler v. Crane, 135 Ill. 92, we said (p. 98) : “A conveyance of property, which is absolute upon its face, but which is really intended as a mortgage or security, is well enough as between the parties; but the settled doctrine is, that such a transfer of property is fraudulent and void as to creditors.” Where a deed thus absolute in form is recorded, it imports an unconditional sale, and hence its natural and necessary effect is to mislead, deceive and defraud creditors. By such a deed a secret trust is created for the benefit of the grantor, and as such it is a fraud upon the rights of those, to whom he is justly indebted.

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Bluebook (online)
74 N.E. 61, 215 Ill. 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-v-harper-ill-1905.