Webb's Administrator v. Roff

9 Ohio St. (N.S.) 430
CourtOhio Supreme Court
DecidedNovember 15, 1859
StatusPublished

This text of 9 Ohio St. (N.S.) 430 (Webb's Administrator v. Roff) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webb's Administrator v. Roff, 9 Ohio St. (N.S.) 430 (Ohio 1859).

Opinion

Sutliff, J.

It has always been held under the statute of frauds-in this state, that a conveyance of land made to defraud creditors, is not necessarily void between the parties. Such a conveyance is only void as against creditors. Burgett v. Burgett, 1 Ohio, 469; Lessee of Douglass v. Dunlap, 10 Ohio, 162; Crumbaugh v. Kugler, 2 Ohio St. 373. By the common law and the statutes of Edward-III. and Henry Til., as well as under the statute against fraudulent deeds, 13 Eliz., chap. 5, conveyances to defraud creditors were not held absolutely void. They have always been considered binding on the parties.

, The mortgage in this case is to be regarded as a conveyance although a conditional one, and if fraudulent, equally subject to the-[348]*348•common law and statutory law applicable to absolute conveyances. Lancaster v. Dolon, 1 Rawle, 231; Presbyterian Congregation v. Wallace, 3 Rawle, 130; Ledyard v. Butler, 9 Paige, 132; Lewis v. Lewis’ Heirs, 3 B. Mon. 345.

The defendants, in the first place, deny that any debts or liabilities of the intestate, at the time of his executing the mortgage, remained unpaid at the time of his death. And the proof would .•seem very clearly to sustain this averment. But the sufficiency of that fact alone to constitute a good defense in such a case, has, it is believed, never been determined by any reported case in this state. In the cases of Upton v. Bassett (Cro. Eliz. 445), and in Twine’s *case (3 Coke, 80), it was agreed by the judges “that by the •common law, an estate made by fraud should be avoided only by him who had a former right, title, interest, debt, or demand.” And •Sir Edward Coke seems to have regarded the statute against frauds, 13 Eliz., chap. 5, which he terms a right profitable statute,” as ■only expressive of the common law. Co. Litt. 2906. The same •opinion is expressed by Lord Mansfield, 2 Cowp. 434; and the •opinion, that the acts of 13 and 27 Eliz., are only declaratory of the common law, was expressed by Chief Justice Marshall, Hamilton v. Russell, 1 Cranch, 316, and by Chief Justice Kent, 9 Johns. 339.

But it has been, on the other hand, held that the statute of 13 Eliz., chap. 5, was in extension of the common law; and that a conveyance actually fraudulent may be avoided by subsequent creditors. Thus, in Newland on Contracts, 389, it is said “ that deeds which are avoided by the statute of 13 Eliz., are void as well against those creditors whose debts were contracted subsequently to such deeds, as against those creditors whoso debts wore in exist-■ence at the execution of the deeds.” And the master of the rolls, in the case of Taylor v. Jones (2 Atk. 600), certainly expressed a similar opinion upon that statute; and other highly respectable authorities there are to the same effect, both in England and this •country. In a note in 1 Story’s Eq., he says: “Where a settlement is set aside .as an intentional fraud upon creditors, there is •strong reason for holding it so as to subsequent creditors.”

The apparent conflict of authorities upon this subject may perhaps be found to arise from the seeming obscurity as to what hind •of frauds subsequent creditors may take advantage of. The cases .and authorities appear for the most part somewhat obscure upon. [349]*349this point. It is possible that tho authories may be satisfactorily reconciled by observing a distinction between that class of cases, whore the debtor has made an absolute conveyance by sale or gift to defraud existing creditors without reserving to *himself any trust, and that class of cases in which the fraud would seem to be directed as well against future as existing creditors. Thus, if one possessed of property and of good credit should make a voluntary conveyance of his property with a view to becoming subsequently indebted, and should by means of his former reputation contract debts shortly after tho conveyance of his property, the • creditors being ignorant of the fact, the fraud might well be regarded as directed specifically against such subsequent creditors.. To the last-mentioned class of cases, as including subsequent creditors, should doubtless be added those voluntary and colorable conveyances made and hold under such circumstances as are attended, in law, by the presumption of a secret trust for the grantor, and constituting a continuing fraud. Thus it is laid down in the case of Clark v. French, 23 Maine, 221, that if a deed intended to be absolute, be made without reservation of any secret trust for the benefit of the grantor, although with a fraudulent intent, understood by both parties, to place the property beyond the reach of creditors, although made for a valuable consideration, yet wanting the-ingredient of good faith, it shall be avoided only by creditors existing at the time of the execution of the deed. But if the deed were not absolute in fact, though in form it might bo so, if a secret trust and confidence exist for tho benefit of tho grantor, it should bo hold void against subsequent as well as precedent creditors.

But we do not think the case before us necessarily requires an opinion upon this litigated subject..

The defendants as a second defense deny that the mortgage was made with intent to defraud tho creditors of the mortgagor.

In the case of Crumbaugh v. Kugler, 2 Ohio St. 373, it was held that voluntary conveyances made by a parent to a child without ■ consideration, when made in good faith, and without intending any fraud to creditors, were valid conveyances as against subsequent creditors, and could *not bo sot aside in case of subsequent insolvency of the grantor for the satisfaction of the claims of such subsequent creditors. Applying the same doctrine to this case, and it would have been lawful for the intestate in 1845, if he had other-means sufficient to satisfy his existing creditors, to have executed. [350]*350the mortgage to his mother in trust for his children; and if done in good faith, it would not be competent for any subsequent creditor to call such conveyance in question. The mortgage in such case could only, in any event possible, be set aside in favor of subsequent creditors by showing the transaction to have been mala fide with the intent of defrauding cereditors.

Again, supposing the mortgagor at the time of executing the note and mortgage to have been honestly indebted to bis mother in the sum expressed by the note, although she might have been disposed to forbear enforcing collection, or even exacting security for the same ; under the- general right of a debtor to prefer any creditor, the intestate had the legal right to execute the promissory note and mortgage in question; and when so executed, the same would be valid in law.

Unless, then, the record shows the weight of evidence to be clearly opposed to either of the foregoing propositions, we can not say that the judgment of the district court is not sustained by sufficient evidence, or is contrary to law. In considering the evidence to ascertain its apparent preponderance for or against either of those propositions, the conversations of the intestate after the execution of the mortgage, and in the absence of the mortgagee, were not .admissible as evidence in the case.

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Related

Sturtevant v. Ballard
9 Johns. 337 (New York Supreme Court, 1812)
Ledyard v. Butler
9 Paige Ch. 132 (New York Court of Chancery, 1841)
Lancaster v. Dolan
1 Rawle 231 (Supreme Court of Pennsylvania, 1829)
Corporation for the Relief of Poor Distressed Presbyterian v. Wallace
3 Rawle 109 (Supreme Court of Pennsylvania, 1831)
Foster v. Simmons
9 F. Cas. 579 (U.S. Circuit Court for the District of District of Columbia, 1806)

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Bluebook (online)
9 Ohio St. (N.S.) 430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webbs-administrator-v-roff-ohio-1859.