Day v. Old

2 Miss. Dec. 593

• Court: Mississippi Supreme Court
• Decided: January 30, 1882
• Status: Published

Opinion

Opinion.

Per curiam:

We have diligently searched this record and failed to find that Mrs. Lyons had any legal claim on Mr. Old for her services, for which it is claimed that he paid her by the transfer of the decree which is the subject of this suit. She was, therefore, a voluntary assignee of the decree, and is not entitled to hold it against the creditors of Mr. Old.

Decree reversed and cause remanded for a decree in favor of the appellants.

1 A voluntary conveyance is prima facie void as to existing creditors, and the party claiming under it must rebut this presumption by clear and satisfactory proof. It will not be sufficient to show merely the fair intention of the grantor, and that by good management the property retained by him was sufficient to pay his debts. The proof must show that by the ordinary course of human transactions, the conveyance could not operate to delay, hinder or defeat the claims of prior creditors. The property conveyed must be so inconsiderable when compared with that retained by the grantor, and the debts owed by him, that it could not be supposed that the gift endangered the safety of any of his debts, or could delay their payment. Young v. White, 3 Cush. 146.

A voluntary deed -was not good against a creditor whose debt was in existence at the time the deed was made. Swayze v. McCrossin, 13 S. & M. 317.

A voluntary assignment by an insolvent debtor was per se fraudulent as to existing creditors, whether made with a fraudulent intent or not. Catching's v. Manlove, 39 Miss. 655; Bogard v. Gardley, 4 S. & M. 302.

Where a conveyance may hinder and delay creditors, it is not for that reason alone void, if it were made with a proper intent; but it is void where the main intent is to hinder and delay creditors, and the conveyance is a mere contrivance for that purpose. Farmers Bank v. Douglass, 11. S. & M. 469; Ingraham v. Grigg, 13 S. & M. 22.

The unlawful intent is necessary to vitiate the conveyance, and must be so alleged in a bill to set it aside. The allegation that the conveyance is “void on its face and fraudulent as to creditors,” is insufficient to render the facts appearing on the face of the conveyance, competent evidence to establish fraud, unless it be also alleged that the conveyance was made to hinder, delay Or defraud creditors. Hogan v. Barnett, 37 Miss. 617.

A voluntary conveyance is not fraudulent per se as to creditors. Whether it is fraudulent depends upoii the financial condition of the grantor, his ability to pay debts out of remaining property and like circumstances. If he is wealthy, and 'owes debts only to a trifling amount, a voluntary conveyance made by him will not be deemed fraudulent. (Bogard v. Gardley, 4 S. & M. 302, and Swayze v. McCrossin, 13 S. & M. 317 disapproved), Wilson v. Kolheim, 46 Miss. 346.

A voluntary conveyance is prima facie void as to existing creditors; the grantor’s mere indebtedness, however, will not in all cases render such a conveyance void. The presumption of invalidity may be rebutted by evidence showing that he was in prosperous circumstances, unembarrassed, and had property left amply sufficient to pay all his debts. Cowan v. Alsop, 51 Miss. 158.

A voluntary conveyance by an insolvent is void as against his existing creditors, and the property may be subjected to their judgments, though subsequently obtained. Davis v. Lumpkin, 57 Miss. 506.

The legal presumption that a voluntary conveyance of land is fraudulent as to creditors is not rebutted by showing a retention of a reversion of the land in the grantor where all his tangible property is nominally conveyed for the life of the grantee, but the grantor remains in possession and enjoyment of the same; nor by showing the retention by the debtor of other property, unless it is -undoubtedly sufficient to readily pay all his debts, and is plainly accessible to the creditors. (Wilson v. Kolheim, 46 Miss. 351, distinguished.) Edmunds v. Mister, 58 Miss. 765.

Where a voluntary conveyance is made by a mother to her son, the fact that she. was not actuated by any fraudulent intent, and did not even suppose that she was liable for complainant’s debt, is not of itself a defense to a bill to set aside the conveyance. The law presumes that a voluntary conveyance, though resting on proper moral motives, is void as to creditors. Facts may be shown to overcome the presumption of fraud, as that the donor was prosperous, and retained ample means accessible to creditors ,to discharge all obligations, and that the gift was reasonable, apparently in no serious degree putting in hazard the rights of existing creditors. Where such facts are not shown, the conveyance will be set aside. Cock v. Oakley, 50 Miss. 628.

One is conclusively presumed to have intended fraud if it necessarily and logically results from his conduct. Hilliard v. Cagle, 46 Miss. 309.

The intent of the grantor which will avoid a voluntary assignment, need not be an actual, corrupt intent. The law imputes a fraudulent intent if the thing done is unlawful, and naturally results in hindering, delaying and defrauding creditors. And this fule applies equally where the matter or act that is unlawful is shown by extrinsic evidence, as when it appears on the face of the deed. Marks v. Bradley, 69 Miss. 1; 10 So. 922.

Where the necessary consequence of a written instrument is to hinder, delay or defraud creditors, the maker will be held to have intended to accomplish this, and, as to them, it will be declared fraudulent without reference to the actual intent. Harman v. Hoskins, 56 Miss: 142.

A conveyance in honest payment of a debt is not rendered fraudulent because brought about by the action of other creditors in pressing for collection of their debts. McAllister v. Hosea, 71 Miss. 256; 14 So. 264.

A grantee who takes a conveyance with knowledge of its fraudulent character, 'or has reasonable ground to suspect it, forfeits its advantages, although the consideration may be meritorious. Thompson v. Furr, 57 Miss. 478.

Defendants, after coming of age, lived with their father on his farm many years, until his death. He agreed to pay them $250 a year for their labor. They were engaged constantly in his business, having none of their own. Shortly before his death, he conveyed his farm to the sons, though in debt at the time to other persons. Held, not fraudulent,’ and the deceased had a right to prefer the debts due his sons to those due strangers. Donly v. Ray, 6 So. 324.

The fact that the deed ran to both sons, though the amount due to each was unequal, is not an objection that will avail a third party. Donly v. Ray, 6 So. 324.

A conveyance by a .husband to his wife of property worth $6,500, for a consideration of $400, is voluntary, and invalid as to the husband’s creditors, prior Or subsequent. Wynne v. Mason, 72 Miss, 424; 18 So. 422.

• A debtor in failing circumstances may prefer bona fide creditors. Harris v. Sledge, 21 So. 783.

The grantee in a voluntary conveyance, and all who take under her as volunteers or with notiqe, are liable to creditors of the original grantor for the property or its value. Ames v. Dorroah, 76 Miss. 187; 23 So. 768.

A father, indebted to Ms wife and son, conveyed lands to them jointly, delivering the deed to the wife alone, and told her it was to secure her. There was no understanding as to what Avas to be paid for the property, and afterwards the Avife recovered a judgment against the husband for the debt. The son kneAV nothing of the conveyance until after it Avas recorded, and he had no agreement Avith his father that the latter should secure him, and he never made any claim to the profits of the lands, and permitted his father to control it. Held, that the conveyance Avas valid as against the husband’s creditors as to the Avife, but invalid as to the son, it never having been delivered to him. Chapman v. White Machine Co., 76 Miss. 821; 25 So. 868.