Spaulding v. Blythe

1 Ind. L. Rep. 237

• Court: Indiana Supreme Court
• Decided: May 10, 1881
• Status: Published

Opinion

Opinion by

Mr. Justice Elliott.

This appeal brings before us the question of the sufficiency of appellee’s complaint.

The complaint seeks to set aside certain conveyances which are alleged to have been made to defraud creditors. Two conveyances are attacked as fraudulent. The first of these was executed on the 30th day of July, 1873, by John Spaulding and his wife, Ella Spaulding, to Henry S. Barnaby; the second was executed on the -day of-, 1874, by said Henry S. Barnaby and his wife,. Eliza S. Barnaby, to Ella Spaulding and her children.

It is alleged that the first conveyance was executed without consideration, and that said John Spaulding did not have any other property subject to execution. It w'as not necessary to allege that the grantee had notice of the fraudulent purpose of the grantor, for it sufficiently appears that the conveyance was without consideration, and the grantee a mere volunteer. It has long been firmly settled that a voluntary conveyance, made by a debtor who has no other property subject to execution except that conveyed, is fraudulent as to creditors. O’Brien v. Coulter, 2 Blkf. 423; Palmer v. Henderson, 20 Ind. 297 ; Hougland v. Sherman, this term; Clark

Chamberlain, 13 Allen, 257; Neuman v. Cordell, 43 Barb. 448; Bump Fraud. Conv. 197.

Judge Story thus states the rule borrowed from the civil law by the common law, and the courts of chancery : “ Hence, all voluntary dispositions made by debtors, upon the score of liability, were revocable whether the devisee knew of the prejudice intended to creditors or not.” Story Equ. Juris. §§ 351, 353, 355. It is true that in Spaulding v. Myers, 64 Ind. 264, it was held that a complaint alleging exactly the same facts as those stated in the present was bad, because it did not aver notice to the grantee, but it is evident by the allegation that there was no consideration for the conveyance was not brought to the attention of the court. That case was not very fully argued. There was, as here, no brief at all from the appellee.

In Spaulding v. Myers, supra, the complaint was, except as to parties, precisely like the one under examination, and it was held bad because it did not show that at the time the second conveyance was made the debtor who executed the first of the two conveyances had no property subject to execution, and we think this ruling was correct. If there was property of the debtor which the creditor could have reached by ordinary legal process and out of it have secured payment of his debt, there was no reason for wresting this particular property from the grantees in the second conveyance. Before resorting to property conveyed to grantees, even though without consideration, that of the grantor then subject to execution ought first to be exhausted. We hold the complaint bad, not because it failed to aver notice on the part of the grantees of the grantor’s fraudulent design ⅜ but because it is not shown that when the grantees now claiming title received a conveyance, the grantor did not have other property subject to execution sufficient to have satisfied the claims of creditors.

Judgment reversed.