Case ID: ohio-st_63/html/0404-01.html
Source: Caselaw Access Project
Author: {"author": "Minshall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hegler et al. v. Grove.
    
      Conveyance to creditor — To secure debt and liability — Such conveyance an equitable mortgage, when — Cannot be set aside as fraud on creditors, when — Section 5J/64, Revised Statutes — When judgment creditor may proceed against equitable assets.
    
    1. Where a conveyance is made by a debtor to a creditor to secure the latter in what he owes him, and for what he is liable for him as surety, and for such indorsements as he may make for him; and the conveyance is taken by the creditor in good faith for his own security and no other purpose, such conveyance is an equitable mortgage; and cannot be set aside as a fraud on creditors, though the motive of the grantor may have been to hinder and delay his creditors.
    2. In such case the remedy of a creditor is by a proceeding in aid of execution, under section 5464, Revised Statutes, to reach the equity of redemption, and have it applied' to the payment of his judgment. A judgment on which execution may issue is essential to the proceeding.
    (Decided November 27, 1900.)
    Rehearing on error to tlie Circuit Court of Jackson county.
    The suit was commenced in the common pleas court of Jackson county by Martin Grove to set aside certain conveyances made by Yeoman, in 1876, to Allen Hegler, on tbe ground that they were fraudulent as to creditors under sec. 6344, Revised Statutes, and also, by operation of law, created a trust in favor of all tbe creditors of Yeoman and Nitterbouse — Yeoman holding tbe legal title to one-balf of what was conveyed as trustee for Nitterbouse — under sec. 6343. A trial in tbe common pleas resulted in favor of Grove; and tbe case was appealed to tbe circuit court of tbe county. At a bearing upon tbe merits, tbe court, at the request of the parties, made a finding of the facts and its conclusion of law thereon; and which is as follows:
    1. The court find that on the 10th day of February, 1876, the said S. N. Yeoman, F. L. Nitterhouse and Allen Hegler were the joint owners of the real estate and coal rights described in the petition as amended; that the legal title thereof was held by said S. N. Yeoman in the name and for the use and benefit of said owners, each of whom owned the full one-third part thereof.
    2. That on said 10th day of February, 1876, the said S. N. Yeoman, with the consent of the said F. L. Nitterhouse, conveyed by deed in fee simple, the said real estate and coal rights to the said Allen Hegler, which said deed was duly signed and acknowledged by the said S. N. Yeoman; that the actual and only consideration for said deed, was and is expressed and set forth in the written agreement, made by all the said parties, and executed eotemporaneously with said deed, a copy of which is as follows:
    “Memorandum of an agreement, entered into this 10th day of February, 1876, by and between S. N. Yeoman and F. L. Nitterhouse, parties of the first part, and Allen Hegler, party of the second part, witnesseth: Whereas, the said Allen Hegler has become surety and indorser for the parties of the first part, upon certain promissory notes, and, whereas, said parties of the first part and said Allen Hegler are joint owners of several tracts of land, and the coal rights of certain other tracts of land, all known to them and others as the Pigeon Creek coal lands, and situate in Jackson county, Ohio, and deeded to S. N. Yeoman as trustee in trust for himself and said Nitterhouse and said Hegler. And said parties of the first part, wishing to indemnify said Hegler, and hold him harmless by reason of his certain commercial and business favors to them, and his said suretyship on the said promissory notes as aforesaid; the said S. N. Yeoman, by and with the consent of the said F. L. Nitterhou.se, as trustee holding the legal title to said lands this day conveyed the same to said Allen Hegler, viz:
    “First Tract: Being forty-one acres in section 4, township 7, R. 18, in fee.
    “Second Tract: Being twenty-one acres in section 83, township 8, R. 18, in fee.
    “Third Tract: Being 223 acres in sections 28 and 33, township 8, R. 18, in fee.
    “Fourth Tract: Being forty-one acres in section 32, township 8, R. 18, in fee.
    “Also the stone coal right to certain several other tracts of land in said conveyance described, together with the right to mine and remove the same.
    “Now the understanding existing between the parties hereto is this: Said Allen Hegler is to reconvey to said parties of the first part, or their heirs or assigns, their two-thirds interest in said lands and coal rights, when the said parties of the first part shall have secured him, the said Hegler, in other manner from loss by reason of his suretyship, and business and commercial favors as aforesaid. The understanding being, that said Hegler lias all and every right in and to said property necessary to indemnify him against any loss he may sustain as aforesaid. It is further understood and agreed between the parties hereto that said Hegler shall not sell or dispose of said lands and coal right, except for the benefit of all the parties hereto, and then only after consulting with the said S. N. Yeoman and F. L. Nitterhouse, and obtaining their consent to such disposition or sale of said lands and coal right.
    In testimony whereof, the said S. N. Yeoman and F. L. Nitterhouse and Allen Hegler have hereunto set their hands and seals the day and year above written.
    Signed and sealed S. N. Yeoman (Seal.)
    in presence of us: F. L. Nitterhouse (Seal.)
    T. D. McElwain Allen Hegler. (Seal.)
    G. Ogle.
    That but two copies of the said agreement were made, one of which was delivered to the defendant, Allen Hegler, who did not make known its existence, and the other copy was delivered to said S. N. Yeoman, who concealed its existence, until his death in July, 1890, when it was found sealed up in an envelope, indorsed in the handwriting of said Yeoman, as follows:
    “In case of my death, to be delivered to F. L. Nitterhouse, without opening, and if F. L. Nitterhouse be not living, then to my brother, Capt. J. A. O. Yeoman, without opening.” (To which said recitation in the foregoing finding of fact, of said action of said Yeoman with respect to said copy and the indorsement of said envelope, said Hegler excepts.) Nitterhouse being alive at the time of S. N. Yeoman’s death, said envelope and its contents were delivered to him, without opening, as directed on said envelope, and the existence' of said contract was also carefully con' cealed by said Nitterhouse until in May, 1893, when he revealed the same to plaintiff in a confidential con versation, and this was the first and only knowledge or information plaintiff had of the existence of this contract, or that said deed of February 10, 1876, was. not an absolute conveyance.
    3. That said deed and written agreement were executed and received by said parties respectively with intent to secure and indemnify the said Hegler against loss or damage by reason of his suretyship for-said S. N. Yeoman and F. L. Nitterhouse, and Yeoman and Nitterhouse, and their indebtedness to said Hegler to the full amount of said indebtedness secured by, and owing to said Hegler, and also for further indorsements and advances such as said Hegler might make to or on account of said Yeoman and Nitterhouse, and for the further purpose, on the part of said grantors, to place said real estate'beyond the reach of their creditors.
    4. That on said 10th day of February, 1876, the pre-existing liability of said Hegler for said Yeoman and Nitterhouse which he was subsequently compelled to pay, was the sum of $13,994.26, including the amount paid by him on said purchase money mortgage to said Sells, as shown in said report of said special master commissioner; that on said> day concurrently with said deed and agreement, said Hegler became further liable as indorser, upon notes for $8,000, to the First National Bank of Washington C. H., which were also secured by mortgage on real estate, and was. compelled to pay in the year 1884, on said liability, the sum of $1,327.13, making an aggregate of existing and concurrent liabilities as surety and indorser of $15,321.39; that subsequently said Hegler became further liable, as surety for said Yeoman and Nitterhouse, in the sum of $3,042.57, which he thereafter paid; and that in 1875, said Yeoman was indebted to. said Hegler in the sum of $1,000, the value of stock of said Hegler, in the Amazon Insurance Company, loaned by said Hegler to said Yeoman and never returned, and was indebted to said Hegler on said account, on said February 10, 1876, in said sum of fly-000; and the court find that the lands and property conveyed to said Hegler on said February 10, 1876, exceeded his then existing liabilities and his above-debt of $1,000, in the sum of $7,411.94.
    5. And the court further find that on the said 10th day of February, 1876, the value of said lands described in said deed of said Yeoman to said Hegler,. was the sum of $35,600, instead of the sum of $33,-065, as reported by said master, two-thirds of which belonged to said Yeoman and Nitterhouse, and that their interest therein at the time of said conveyance-thereof amounted to the sum of $23,733.33; and the court further find that said deed and written agreement were made between said parties, and said deed was in good faith accepted by said Hegler to secure the debts and liabilities then existing, for which said Hegler was liable as surety, and for debts and liabilities then owing to said .Hegler from said Yeoman and Nitterhouse, or either of them, and for all future indorsements of said Hegler for them, or future advances made by said Hegler to or for said Yeoman and Nitterhouse, or either of them, and as to said Hegler for no other purpose.
    6. That afterwards, to-wit, in the year 1878, said defendant Hegler, proceeded on said real estate, so conveyed to him, to open mines to coal deposits, and to develop the same and manage the operation and development thereof, and to render said lands and coal deposits productive and profitable.
    7. The court further find that on the 22nd day of March, 1875, said S. N. Yeoman and F. L. Nitterhouse, together with said plaintiff and Adalaski Smith, as sureties for them, executed and delivered to •the First National Bank of Washington, Ohio, their promissory note of said date, for the sum of $4,888, and interest thereon, that on the 19th day of January, 1876, suit was brought by said bank on said note against said Nitterhouse, plaintiff and Smith, and on the 4th day of March, 1876, judgment was recovered by said bank against said defendants in said action, for the sum of $5,268.88, and $6.50 costs; and that on the 30th day of June, 1877, plaintiff was compelled to pay to said bank, in satisfaction of said judgment, the sum of $6,086.05.
    On the 16th day of November, 1875, said Yeoman ■and Nitterhouse, together with said plaintiff as surety for them, executed and delivered to one Lenox Campbell, their promissory note of said date, for the sum of $5,000, and interest thereon; that on the 16th day ■of January, 1876, suit was brought on said note by said Campbell against said Yeoman and Nitterhouse, and on the 15th day of March, 1878, judgment was recovered for the sum of $5,964, and $-costs; and ■on the 15th day of March, 1878, said plaintiff herein paid, in satisfaction of said judgment, the sum of $6,005.25; on the-day of-, 1875, said Yeo-t man and Nitterhouse, together with said plaintiff herein, and said Allen Hegler, as sureties for said Yeoman and Nitterhouse, executed'and delivered to Edward and Peter Putnam their promissory note for the «urn of $-, and on the 14th day of March, 1879, said note being more than two years past due, said plaintiff paid to said Putnams in satisfaction of his liability thereon, the sum of $600.
    That prior to the 10th day of February, 1876, said Yeoman and Nitterhouse executed and delivered to Lenox Campbell their promissory note for the sum of $3,000; that on the-day of-, 1876, said note being past due, said Campbell commenced suit thereon in the court of common pleas of Fayette county, Ohio, against said Yeoman and Nitterhouse, and on the-day of January, 1877, recovered judgment against said Yeoman and Nitterhouse for the sum of $1,877.60, which said judgment has since been, to-wit, on the-day of-, 189 — , assigned to said plaintiff, who is the owner thereof. The court further find that each and every of said several judgments became dormant upon the expiration of five years from the respective dates of the recovery thereof, and that no proceeding or action for the revivor thereof, or of either of said several judgments, has ever been commenced or attempted, by said plaintiff, Martin Grove or by any other person.
    8. The court further find that on the 28th day of August, .1878, said S. N. Yeoman and F. L. Nitterhouse, each, filed their several petitions in voluntary bankruptcy, in the United States district court for the southern district of ‘Ohio, to be severally adjudged bankrupts, by virtue of the statutes of the United States', in that behalf; that such proceedings were thereupon had by said court on said several petitions, that said S. N. Yeoman and F. L. Nitterhouse were each severally adjudged to be bankrupts, and that afterwards, on the 13th day of February, 1879, said S. N. Yeoman and F. L. Nitterhouse 'were, each of them, by the decree of said United States district court, severally discharged from all their debts and liabilities made provable by said bankruptcy laws of the United States, existing and in force on said 28th day of August, 1878, and said adjudications, orders, decrees and discharges, so made and adjudged by said United States district court have each and every one of them continued and remained and now are, in full force, and Avholly unimpeached and unmodified; that, all of said debts, liabilities, and rights in action set up by said plaintiff herein were on said 28th day of August, 1878, provable claims against the estates in. bankruptcy of said S. N. Yeoman and F. L. Nitterhouse.
    9. The court further find that on said 10th day of' February, 1876, said S. N. Yeoman and F. L. Nitterhouse and Yeoman & Nitterhouse Avere, and each of' them was, insolvent, yet said firm was a going concern having general business credit.
    10. And the court further find that since said 10th day of February, 1876, said defendant Hegler has received from sales of part of said lands, rents, royalties, and profits from said real estate and coal rights, the sum of $102,994.53, as is set forth in said master’s report.
    11. That said defendant Hegler has expended and paid out in improvements, taxes, and should be allowed for clerk hire and on account of his own services and expenses during the said time, the sum of $20,940.90, as is shown in said master’s report and supplemental report.
    12. The court further find that said defendant,. Hegler, has been from and since said 10th day of Fébruary, 1876, in the open, exclusive, notorious and uninterrupted possession of said real estate, under and by virtue of said deed and agreement.
    13. That plaintiff, after the filing of his petition herein, gave notice of the pendency of this action, as. required by Section 6344 of the Revised Statutes of Ohio, and that no person has appeared and asked to be made a party hereto, or asked or proposed to make proof of any claim herein.
    
      And the court, as well upon the admitted facts in the pleadings herein as upon the foregoing conclusions of fact, conclude as law:
    1. That said deed is not a trust in the hands of said defendant, Hegler, but was and is constructively fraudulent, for that although received and acted upon by said Hegler, in good faith, and with no fraudulent purpose, it operated to conceal the fact of the equitable interest of said Yeopian and Nitterhouse in said real estate from their creditors; and to the extent that said real estate so conveyed by said Yeoman to said Hegler exceeded in value the amount of the security and indemnity provided for by said agreement executed cotemporaneously with said deed, said conveyance is constructively fraudulent.
    2. That the said discharges in bankruptcy of said Yeoman and Nitterhouse, do not, nor does either of them constitute a defense to the action, as against either or all of said defendants, and that said plaintiff was on said 10th day of'February, 1876, and still is, a creditor of S. N. Yeoman and F. L. Nitterhouse.
    3. That said conveyance and agreement were and are not a conditional sale to said Hegler of said real ■estate, but constituted a mortgage in equity; not an agreement to assume and pay debts of said grantors, ■or either of them, but to secure subsisting liabilities and further advances, all of which said Hegler is entitled to have first paid out of the proceeds, rents and profits of said real estate now in his hands.
    4. That the two-thirds interest in said real estate so conveyed, and which was the property of said Yeoman and Nitterhouse prior to said conveyance, should be ordered to be sold as upon execution, and the proceeds applied in payment:
    
      First: Of the taxes charged against said real estate, and the costs of this action, including a fee to the said T. S. Hogan, special master commissioner, .of $700, which sum the court find to be his reasonable compensation, together with the fees of said stenographer, as reported by said master;
    Second: The amount of plaintiff’s said claim,, which the court find amounted on the first day of this term of this court to the sum of $33,050.60.”
    Error is prosecuted to this court for the reversal of the judgment of the circuit court.
    
      Mills Gardner and John Logan, for plaintiffs in error.
    Was Grove at the commencement of suit a creditor of Yeoman and Nitterhouse, within the meaning of the statute, providing that transfers made by a debtor with intent to hinder, delay, or defraud creditors, “shall be declared void at the suit of any creditor?”' Section 6344, Rev. Stat.
    It has been uniformly held that the statute, now Section 4196, Revised Statutes, declaring such transfers “utterly void,” means void only as to creditors. Burgett v. Burgett, 1 Ohio, 469; Tremper v. Barton, 18 Ohio, 418.
    In 8 Am. & Eng. Encyl. Law (2d ed.), 239, a creditor is defined, “One who has a right to recover money of another on any account whatever.”
    Bouvier’s Law Dictionary defines a creditor as “one who has a right to require the fulfillment of an obligation or contract.”
    The courts have uniformly required a plaintiff to show that he comes within this definition, as a predicate for suit to annul a fraudulent transfer. He must disclose a clear right of action in force to warrant a court in treating him as a creditor; he must have a right which could be enforced at law against the debtor making the grant. Fuller v. Bean, 30 N. H., 181; Edwards v. McGee, 31 Miss., 143; Brinkerhoff v. Smith, 57 Ohio St., 610; Hart v. Hart, 5 Watts, 106; Bump on Fr. Conv. (4th ed.), Sec 501.
    The bankruptcy act of 1867, expressly vested in the assignees all property conveyed or disposed of by the bankrupts in fraud of creditors. Sections 5046, 5114 and 5115, U. S. Rev. Stat.
    Whatever view state courts may have -expressed as to the effect of the provisions named, the Supreme Court of the United States has definitely and finally settled the construction; and the construction given by that court to federal statutes is universally accepted as binding upon the state courts. Keene v. Mould, 16 Ohio, 12; Mount v. Manhatton Co., 41 N. J. Eq., 215; Lee v. Citizens Bank, 2 C. S. C. R., 298; First National Bank v. Chapman, 9 C. C., 79, 4 Circ. Dec., 252; Glenny v. Langdon, 98 U. S., 20; Trimble v. Woodhead, 102 U. S., 647; Moyer v. Dewey, 103 U. S., 301.
    Recognizing the conclusive effect of these final adjudications by the Supreme Court, we refer to the following cases decided in many of the states, where it was sought to enforce rights which passed under the act to assignees in bankruptcy. Buckingham v. Buckingham, 36 Ohio St., 68; McCartin v. Peery, 39 N. J. Eq., 201; Mount v. Manhatton Co., 41 N. J. Eq., 211; Peery v. Carnes, 86 Mo., 656; Voorhees v. Carpenter, 127 Ind., 304; Burton v. Peery, 146 Ills., 72, 112; Hale v. Christy, 24 Neb., 746; Lowell of Bankruptcy, Section 317; Carr v. Hilton, 1 Curtis C. C., 230.
    
      The effect of this doctrine is sought to be avoided on the theory that a right in the assignee having become barred by the two years’ limitation in Section 5057, U. S. Rev. Stat., creditors of the bankrupts could then subject the property by action in their own name.
    . This theory misconceives the effect of the provision. Section 5057 provides that such action by an assignee shall not be maintainable, unless brought within two years from the time when the cause of action accrued for such assignee.
    Recurring to the decisions of the Supreme Court, we find the law declared to be that this limitation begins to run against the assignee from the time of his appointment. Bank v. Sherman, 101 U. S., 403.
    This statute is merely a statute of limitations; and not of restriction upon the jurisdiction of the federal courts. Upton v. McLaughlin, 105 U. S., 640.
    That to be available as a defense, it must be pleaded. Bailey v. Glover, 88 U. S. (21 Wall.), 342; Rosenthal v. Walker, 111 U. S., 185.
    If, moreover, the right of action is barred as against a trustee, it is equally barred against the cestui que trust. Meeks v. Olpherts, 100 U. S., 564; Trimble v. Woodhead, 102 U. S., 647.
    Plaintiff misconceives statute 6343. It prescribes a remedy, but creates no right. The bankruptcy act of 1867 being in force, under which the debtors assigned, clearly the remedies of creditors were furnished by the federal statute, which superseded the’ state law on the subject. Loveland on Bankruptcy,, p. 19; Lowell on Bankruptcy, pp. 5, 6.
    The reply further argues that the alleged preference to Hegler had become unassailable because six months had intervened before the bankruptcy, and under Section 5129, U. S. Rev. Stat., the assignees of Yeoman and Nitterhouse were precluded from avoiding the preference.
    It is idle to discuss this proposition, because under the state law, the preference was unimpeachable. Cross v. Carstens, 49 Ohio St., 548.
    What right has Grove to ask the state court to substitute a preference to him for that given by the bankrupts to Hegler?
    The court held the transaction an equitable mortgage. If it was an equitable mortgage, then it is not subject to be annulled because the property mortgaged was worth more than the debt secured.
    If the deed and agreement of February 10, 1876, constituted an equitable mortgage, the equitable estates of the mortgagors could not be subjected to pay their general creditors’ claims in an action under Sections 6343 and 6344.
    The only remedy to a creditor, was a proceeding in aid of execution under Section 5464.
    But Grove was not an execution creditor of Yéoman and Nitterhouse. He had no judgment upon which execution could issue; for, the bankruptcy aside, his judgments had become dormant at the expiration of five years from their respective dates, and continue dormant.
    This equitable mortgage, taken by Hegler in good faith, must be upheld as a mortgage; it cannot be constructively fraudulent; it has only the attributes of a legal mortgage taken in good faith for indemnity. Lowell on Bankruptcy, Sec. 314; Kemper v. Campbell, 44 Ohio St., 210.
    Now what remedy have creditors of the mortgagor of such an incumbrance? Certainly not to annul the mortgage as fraudlent, when taken in good faith, and for value. The creditor’s remedy is no greater than that of the grantor. Wright v. Franklin Bank, 59 Ohio St., 80.
    Yeoman and Nitterhouse were competent to release their equity by parol; and answer that they did so release. Shaw v. Walbridge, 33 Ohio St., 1.
    And plaintiff avers that the assignees in bankruptcy with full knowledge elected- not to take charge of the property. Sparhawk v. Yerkes, 142 U. S., 1; Atkinson v. Tomlinson, 1 Ohio St., 237; Hanes v. Tiffany, 25 Ohio St., 549; Blandy v. Benedict, 42 Ohio St., 295; Marshall v. Stewart, 17 Ohio, 356.
    
      Van Deman & Chaffin and J. M. MeCillivray, for defendant in error.
    . Was Grove a creditor within the meaning of Sections 6343 and 6344?
    We contend that he is, and comes within the definition quoted by counsel from Bouvier, viz.: “Grove has the right to require the fulfillment of the obligation” of Yeoman and Nitterhouse to apply the property they owned, when they went into bankruptcy, toward the payment of their existing debts.
    But the word “creditor” also has a broader definition. The American Encyclopaedic Dictionary says he is “one who has given credit to another.”
    The authorities cited by counsel do not support his assertion that the creditor “must have a right which could be enforced at law against the debtor.” Fuller v. Bean, 30 N. H., 181; Hart v. Hart, 5 Watts, 106; Edwards v. McGee, 31 Miss., 143.
    True, the case of Brinkerhoff v. Smith, 57 Ohio St., 610, does discuss the necessity for the attacking creditor to set forth the nature of his- claim, etc., so that issue may be joined. But there is not one syllable in the opinion in that case, or in either of the other cases cited, inconsistent with our contention in this.
    Counsel has not stated the law as to debts barred by the statute of limitations or discharged in bankruptcy. The debts themselves are not paid or satisfied. It is only the remedy that is suspended, or denied. Root v. Espy, 93 Ind., 511; Fowler v. Wood, 1 S. E. (Sup. Ct. S. C.), 597.
    The effect of a discharge is to release the personal liability only. It does not affect liens upon the bankrupt’s property. Lovelaud’s Work on Bankruptcy, Sec. 285.
    The principle is the same as when a claim is barred by the statute of limitation that does not destroy the debt, but simply denies to you a legal right to enforce it, but it may still be the basis for an equitable action. Gary v. May, 16 Ohio, 66; Welsh v. Childs, 17 Ohio St., 320.
    Counsel for plaintiff in error seems to have studiously avoided discussing the case that is before the court. They persist in discussing an “action to set aside a conveyance on the ground of fraud.” We insist that is not the action upon which we rely, and which the facts found establish. On the contrary it is clearly an action to declare a trust in Hegler, because of the inadequacy of consideration, the secret interest reserved in the grantors, and the fact that Hegler accepted it not only for himself, but for the benefit of others. And in such cases the courts of the states and the United States have held, where the conveyance was made more than six months before bankruptcy, that no right in the property in question passes to the assignee but the only persons who can question it, and. have it declared, are the then creditors of the person making such conveyance.
    . The petition seeks to recover on the ground of “an assignment in trust,” and upon the finding of facts, the court will clearly see that the conveyance did come under that class.
    We think the principle of all the well-considered cases will supjJort our contention. Fowler v. Wood, 1 S. E., 597 (Sup. Ct. S. C.).
    Before cited, “fraud is a necessary element to give the trustees in bankruptcy a right of action.' Insolvency of itself, or the fact that the property conveyed constituted more in value than the grantor could rightfully withdraw from the reach of creditors, does not vest such right of action in the trustee.” Loveland on Bankruptcy, p. 299; Vason v. Estes, 1 S. E., 163 (Sup. Ct. Ga., 87); Champion v. Buckingham, 42 N. E., 498 (Sup. Ct. Mass.); Metropolitan Nat. Bank v. Rogers, 53 Fed. Rep., 776 (C. C. A., U. S. 3rd Cir., Penn.); Blythe v. Thomas, 45 Fed. Rep., 784, (U. S. Dis. Ct. S. C.); Gunther v. Green, 8 Ab. Pr., 191; Matthews v. Westphal, 48 Fed. R., 664 (Cir. Ct., Iowa); Burton v. Perry, 34 N. E., 60 (Ill. Sup.); Bean v. Brookmire, First Dil., 25; Dutcher v. Wright, 94 U. S., 553; Ebersole & McCarty v. Adams, 10 Bush, 83 (Ky.); Seaver v. Spink, 65 Ills., 441; Fisher v. Allen, 13 Grat., 13.
    In Ohio the right of this plaintiff to maintain this suit is very clearly sustained by the case of Card v. Walbridge, 18 Ohio, 411; Mayer v. Evans, 91 U. S., 503 (L. C. Ed., 377).
    Again, in case of voluntary conveyance made more than six months before bankruptcy, and without actual fraud, it was held that the assignee in bankruptcy could not recover. Warren v. Moody, 122 U. S., 132, 138; Vetterlein v. Barnes, 124 U. S., 169; Adams v. Collier, 122 U. S., 382 (L. C. Ed., 1207).
    The conveyance in this case was not given by Yeoman and Nitterhouse, or received by Hegler for the sole purpose of securing Hegler upon debts due him. Was it then a trust within the provisions of Sec. 6343, Rev. Stat.? Of this we think there can be no question.
    In Dickson v. Rawson, 5 Ohio St., 218, the court says when the conveyance is for the benefit of one or more creditors, with a reservation to the grantor, it does come under Sec. 6343. Substantially the same statute has existed since 1838. Swan and Critchfield, page 712. Note.
    True, the court says in Atkinson v. Tomlinson, 1 Ohio St., 237, that a creditor may in good faith, and for the sole purpose of securing himself, take property, etc. And this was affirmed in Floyd v. Smith, 9 Ohio St., 546.
    And the same principle had formerly been declared in Brown v. Webb, 20 Ohio, 389, and subsequently Bagaley v. Waters, 7 Ohio St., 359; Justice v. Uhl, 10 Ohio St., 170.
    But from the finding of facts in this case it is clear that this conveyance was not taken for such sole purpose. The secret manner in which the trust was created, the care with which knowledge of it was guarded, forbid that the rule laid down in the case above referred to could apply in this.
    But the doctrine of some of those cases is scarcelv the law of Ohio now. At least to be followed a case would have to come squarely under it, the tendency being less to support the preference, and more to protect the unsecured creditor.
    
    
      The facts of this case bring it in principle under the following cases: Shultz v. Brown, 3 C. C., 609, 2 Circ. Dec., 353; Farmers’ National Bank v. Miller, 9 C. C., 111, 6 Circ. Dec., 1; Bradsford v. Beyer, 17 Ohio St., 389; Loudenback v. Foster, 39 Ohio St., 203; Gashe v. Young, 51 Ohio St., 376; Lee v. Hennick, 52 Ohio St., 177; Maas v. Miller, 58 Ohio St., 483; Wambaugh v. Ins. Co., 59 Ohio St., 228.
    If counsel is correct in their contention that the deed and contract together constituted a mortgage, then we submit under the finding of facts there is no question as to our right to have this transaction declared an assignment. Is it not then on all fours with the case of Pendery v. Allen, 50 Ohio St., 121.
    If this then constituted a trust in Hegler, it was for the benefit of the then creditors of Yeoman and Nitterhouse, and the statute of limitation could not affect the right of Grove, or any other then creditor, unless he neglected to sue, and have the trust declared for a period of more than four or ten years after he had knowledge of the fact that he was a cestui que trust. Section 4982, Rev. Stat.; Gary v. May, 16 Ohio, 66; Fisher v. Mossman, 11 Ohio St., 42; Carlisle v. Foster, 10 Ohio St., 198.
    There is no finding of fact that warrants the conclusion that Yeoman and Nitterhouse ever did release their equity to Hegler, and if the testimony given in the case by Nitterhouse was before the court, it would be clearly seen that they never did; hence, there is no application for the case of Shaw v. Walbridge, 33 Ohio St., 1.
    But suppose they had done so, that would in no respect affect the right of their creditors. The fraudulent grantor cannot recover back the property by him conveyed in fraud of creditors, but that does not affect tlie right of his creditors to recover it, and we think that is the principle applicable here.
    That the transaction of February 10, 1876, made Hegler a trustee for Yeoman and Nitterhouse, with a ■duty upon him to account, and right in them to demand an accounting is hardly debatable.
    Said paper was not an absolute sale as in Bagaley v. Waters, 7 Ohio St., 359, because Yeoman and Nitterhouse were “wishing to indemnify said Hegler and Bold him harmless by reason of his certain commercial and business favors to them, and his said suretyship on said promissory notes.”
    That there was a trust created cannot be questioned from the fact that it was given merely as an indemnity. It was to be reconveyed upon giving other security and the following clause: “Said Hegler shall not sell or dispose of said land and coal rights except for the benefit of all parties hereto, and then only after consulting with the said S. N. Yeoman and F. L. Nitterhouse and obtaining their consent to such disposition or sale of said lands and coal rights.”
    The idea of limiting a disposal of real estate by its purchaser, except with the consent, and for the benefit of the sellers, is absolutely repugnant to every idea of a sale, and can only be harmonized with the idea that notwithstanding such sale, the sellers retained a beneficial interest which the purchaser was to protect and account for in the event of a sale. Section 6343, Rev. Stat.
    The deed and contract being contemporaneous acts, and relating to the same subject matter, must be construed together, and the contract attaches a condition to the deed. Barney v. Dimmitt, W. 44; Slutz v. Desenberg, 28 Ohio St., 371; Wilson v. Giddings, 28 Ohio St., 554.
    
      This contract attaches a trust, and conditions as to alienation, the trust, as expressed, being for the grantors. Brown v. Webb, 20 Ohio, 389, 390.
    In the deed and contract Yeoman and Nitterhouse reserved to themselves a beneficial interest in the estate conveyed. This, when coupled with power of' sale, necessitated an accounting, made Hegler a trustee for himself, Yeoman and Nitterhouse, and Section 6343 seized upon and controlled it; and whether this, is merely a reservation of an interest by Yeoman and Nitterhouse, with right to an accounting of the balance, after paying himself, or the arrangement extended to other creditors, as we claim it did, it can make no difference. Bloom v. Noggle, 4 Ohio St., 45; Harkrader v. Leiby, 4 Ohio St., 602; Dickson v. Rawson, 5 Ohio St., 218; Justice v. Uhl, 10 Ohio St., 170, 177; Hyde v. Olds, 12 Ohio St., 591; Pendery v. Allen, 50 Ohio St., 121; Brinkerhoff v. Smith, 57 Ohio St., 610; Maas v. Miller, 58 Ohio St., 483; Wambaugh v. Ins. Co., 59 Ohio St., 228; Loudenback v. Foster, 39 Ohio St., 203; Mayer v. Hellman, Assignee, 91 U. S., 496; Warren v. Moody, 122 U. S., 132; Adams v. Collier, 122 U. S., 382.
   Minshall, J.

The principal question, and the one we shall consider jus, whether Grove had the right to maintain the action. We shall not consider the question, whether, by the discharge in bankruptcy given Yeoman and Nitterhouse in February, 1879, he ceased to be a creditor of theirs. Under the circumstances-of the case there is some doubt",on that question. It seems that the assignee in bankruptcy, with his ah tention called to the facts, declined to take any steps in the matter; and that this left it to creditors to take such steps for the purpose of subjecting the. interest of the grantors in the property to the satisfaction of their claims as, by law they might, irrespective of the proceedings in bankruptcy. The question here is whether, at the instance of Grove as a creditor, the conveyance could be set aside, under section 6344, Revised Statutes, as having been made to defraud creditors; or whether under section 6343, it could be declared to have been made in trust in contemplation of insolvency to prefer one or more creditors. The court finds that the deed was in good faith accepted by Hegler to secure the debts and liabilities-for which he was liable as surety for the grantors, and debts and liabilities owing by them to him, and for all further indorsements made by him for them. On this, finding of facts the court was certainly right in holding, that, as a matter of law, the deed did not create-a trust in the hands of Hegler within the meaning of’ section 6343. The property was not conveyed to him in trust to prefer one or more creditors, but simply for the purpose of securing himself. It was, it is true, a preference to himself, but such a preference is. permitted by our laws where the creditor deals with an eye singe to himself. Atkinson v. Tomlinson, 1 Ohio St., 237; Dickson v. Rawson, 5 Ohio St., 218; Justice v. Uhl, 10 id., 170; Harkrader v. Leiby, 4 id., 602; Bloom v. Noggle, 4 id., 45. The fact that the deed was to secure him as surety on indorsements or otherwise, does not bring it within the principle on which Pendery v. Allen, 50 Ohio St., 121, was decided. In that case Emerson was to pay a debt on which he-was not surety, and it was this stipulation that brought the couveyance within the provisions of section 6343.

But the court found as a matter of fact that the deed was made by Yeoman and Nitterhouse for the-purpose, on their part, to place their property beyond the.reach of their creditors; and from this it is concluded as a matter of law that it was constructively fraudulent as to Hegler, for the reason stated in the conclusion of law, “that although received and acted on by Hegler in good faith, and with no fraudulent purpose, it operated to conceal the fact of the equitable interest of Yeoman and Nitterhouse in said real estate,” and so was within section 6344. We do not think this is a legitimate conclusion so far as Hegler is concerned. He, by the finding of fact, is exonerated from auy fraud whatever in the matter. His purpose was solely to obtain security for himself. This he could do though he thereby obtained a preference. Cross v. Carstens, 49 Ohio St., 548. And the fact that the deed was absolute on its face, though in equity a mortgage, does not affect his rights as such equitable mortgagee, no fraud being designed. Kemper v. Campbell, 44 Ohio St., 210. The motive of the mortgagors cannot affect him or his rights, where his own purpose was an honest one, and he did not participate in that of the other party.

The facts, then, as found do not make a case for proceedings by a creditor under either of the sections referred to, and under which the proceedings were had. Hegler was simply an equitable mortgagee in-possession, and he could have beeen called on to account as such. And he was in fact so treated by the court. But the proceeding was not one of that character. It was a proceeding under sections 6343 and 6344 of the law in regard to insolvent debtors. And herein, we think, the error lies. Grove’s remedy, if any, was under section 5464, Revised Statutes, which provides, that “When a judgment debtor has not personal or real property subject to levy on execution sufficient to satisfy the judgment, any equitable interest which he has in real estate, as mortgagor, mortgagee, or otherwise, shall be subject to the payment of the judgment, by action.” In a case on review it might be proper to disregard the form of proceeding, where a judgment has been rendered that might properly have been rendered in another form of proceeding. But this can only be so, where, in such other form, such relief might have been proper on the facts proved. Exit that is not so in this case. All the judgments held by Grove had become dormant; and no execution was or could have been issued upon any of them at the commencement of the proceeding below, as none of them had been revived; and a judgment on which an execution has been, or at least may be, issued is essential to a.proceeding in aid of execution.

Without going into other questions argued on the rehearing, we are now of the opinion, for the reason just given, that the circuit court erred in rendering judgment against the plaintiff in error, Hegler, and that its judgment should be reversed, and the petition of the plaintiff below dismissed.

Judgment accordingly.