Case ID: sc-eq_31/html/0346-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ex’ors of J. S. Lott and others vs. Thomas DeGraffenreid and others.
    
      Limitations, Statute of- — Fraud—Recording—Notice.
    A bill to set aside a deed for fraud upon creditors of the grantor, is barred after four years from the date of the deed, although the grantor reserves a life interest in the land conveyed.
    Recording of a deed of land is notice to the creditors of the grantor.
    Where the plaintiffs are executors, and the statute of limitations commenced running in the lifetime of the testator, an averment in the bill of want of notice to the plaintiffs is no answer to a plea of the statute of limitations.
    A possession consistent with the terms of the deed is not evidence of fraud where the creditors have notice of the terms ; the deed being recorded.
    The happening of an event which gives a right of possession to one having an expectant interest, does not revive the right of creditors to file a bill to set aside the deed for fraud. *
    Where a mother conveys a number of slaves to her son, her possession of three, for her comfort and convenience, is not sufficient evidence of fraud.
    Where there is a valid sale of slaves, and the grantor afterwards voluntarily releases the debt, a bill by creditors to set aside the release for fraud is barred ‘ after four years.
    BEFORE WARDLAW, OH., AT CHESTER,
    JULY, 1858.
    Wardlaw, Ch. The pleadings in this case are voluminous, and some of them, so far as I can judge, from the imperfect copies furnished to me, are irregular and incomplete. It is not necessary to the judgmeht to be pronounced, that I should attempt any full summary of the pleadings and facts.
    The original bill, filed May 2, 1849, alleged that the plain- ■ tiffs are creditors of Sarah DeGraffenreid by assignment to them of her sealed note to James B.. Pickett, dated Nov. 17, 1837, and due one day after; upon which judgment, in the name of the said Pickett for their use, was obtained in Nov., 1841, against her for $1,813, and interest and costs; that this sealed note was given for the balance due by the said Sarah to the said Pickett for the guardianship by her of his wife, her daughter; that the said Sarah had fraudulently conveyed her lands to her son, Thomas DeGraifenreid on May 5, 1836, for the nominal consideration of $5,330, not in fact paid, and that about the same time she transferred to him all or most of her slaves by collusion; and the bill prayed that these conveyances and transfers, which defeated satisfaction of the debt to plaintiffs, should be set aside, and that the estate, or at least the price agreed to be paid for it, should be made liable for said debt. The plaintiffs obtained leave from the Court to amend their bill generally, and on May 20, 1854, filed a bill of revivor and supplement, which contains additionally nothing important, except the statement that Thomas DeGraifenreid, as her agent, received large sums of money from her credits with instruction to pay the proceeds to plaintiff, and that he had become since her death the administrator of her property, and also except the prayer that the said Thomas should account for the sums of money he had received as her agent.
    The answers, with much extraneous matter, deny all intention of fraud, aver that the conveyances of the land were duly recorded, and the consideration fully paid, and that the transfer of the negroes was before the execution of the single bill to Pickett, and that although the price for them, $15,000, was not in fact paid, the note for the purchase money was given and surrendered by said Sarah to Thomas, and receipt in full also given by her; that defendant, Thomas, had been in the actual adverse 'possesion of the lands and negroes since 1836; that this defendant had received some moneys as agent of his mother, but none with instructions to pay the plaintiffs, and that in fact he had paid all to his mother; that the transactions in question occurred manyyears ago, and all of them of much importance within the full knowledge of Pickett, and with constructive notice to plaintiffs, and under all the circumstances defendants rely upon the staleness of plaintiffs’ claim, and the statute of limitations.
    The plaintiffs offered in evidence an assignment, dated January 26, 1847, by Sarah DeGraiFenreid to them of so much of certain notes and demands entrusted by her for collection to Mr. N. R. Eaves, as would satisfy the plaintiffs’ judgment. Mr. Eaves testifies that he paid over to Mrs. DeGraiFenreid all the funds collected by him, indeed more, without notice of the assignment, and that plaintiffs can expect nothing from the assignment.
    Defendants offer in evidence the receipts of Pickett to Mrs. DeGraiFenreid, dated April 3, 1837, in full of the share of his wife, who was her ward, and the receipts of Sarah DeGraffen-reid to her son, Thomas, acknowledging that he had paid her $15,000 for twenty-six negroes on Jan. 1, 1836, and $5,340 for the lands on March 31, 1837; the receipt for the price of the lands being dated Feb. 17, 1839. Defendants further prove that Thomas was in possession of the lands and negroes from 1836; except that his mother retained a home on the land, which she had reserved by one of the deeds, and three of the negroes, Hector, Joe, and Harriet, to wait upon her person, and about her house. She died in 1848. She had usually lived with her son, Thomas, but lived in a separate house the last four or five years of her life.
    I am of opinion that the defence of the statute of limitations must prevail as to all the grounds of complaint in the original bill. The conveyances of the lands were duly recorded, and this registry gave constructive notice to all persons that Thomas DeGraiFenreid claimed the title; and his adverse possession of the lands for thirteen years afterwards, before bill filed, would ripen his claim jnto right, even if it began in fraud. But there is no satisfactory proof of such fraudulent beginning of his claim to the land. He swears in his answer that he paid the purchase money, and his answer is supported by his mother’s receipt, by the presumption from the lapse of time, by the notoriety of his ownership and possession, and by the acquiescence of Pickett and all claiming under him, and there is no countervailing evidence of any weight. The residence of his mother on the land is consistent with the express reservation to her in the deed of a home thereon, and scarcely under any circumstances could have been obstructed by her son who had the proper feelings of human nature. All these same circumstances support his title to the negroes, except that there was no registry of his title, (and this is not required by law, and would not create constructive notice,) and no actual payment of the purchase money. That she was allowed to keep three of the negroes in her more immediate service, although under the general control of her son, is surely not overwhelming evidence of fraud between parties who were affectionate, and properly understood the duties growing from their relation of mother and son.
    NIn the discussion before me, however, the right of the plaintiffs to relief is urged, not from the fraudulency of the original contracts of sale and purchase of lands and negroes between Sarah DeGraffenreid and her son Thomas, but from the fact that the price of the slaves was not paid by the purchaser to the seller. This fact of non-payment is confessedly true. He did not pay the price to his mother, and received from his mother as a donation the note which was the evidence of this contract to pay, with her receipt for the money. Yet this was no part of the original contract. Her right to give before she paid her debts, to be generous before she was just, might have been reasonably questioned within the term before the bar of the statute applied. But neither she nor any in her right as creditor, or otherwise, could reclaim her gift after four years. The only claim of herself and creditors, was in the nature of assumpsit for money had and received by him to her use,-and should be prosecuted within the term, barring simple contracts. Questions about notice have no application, as he was the purchaser of the legal title, and payment by him of the price must be presumed from his long possession of the property. His acknowledgment that he had not paid does not remove the bar of the statute, when it is accompanied with no acknowledgment of the subsistence of the debt, nor promise to pay it, on the contrary with a denial of any liabilities on his part. This disposes of the original bill. The new matter in the supplemental bill concerning moneys received by Thomas as his mother’s agent, if received by him more than four years before the bill was filed, as I conclude they were, is also barred by the statute of limitations, on the principles already stated. Besides, there is no evidence of his receiving any money as her agent, which he did not pay to her, as is manifest from his answer and from the testimony of Mr. Eaves.- Still further, the right of a creditor to pursue the debtor of his debtor, in disputed liabilities, beyond the attachment law and other cases provided for by the Statute, can hardly be admitted. At least the plaintiffs must have shown clear proof of the indebtedness of this defendant to his mother on this account, before they became entitled to charge this defendant under color of an amendment as to'matters not involved in the original litigation.
    I suppose that the plaintiffs are entitled to an account from Thomas DeGraffenried of the personal estate of Sarah DeGraf-fenreid in his hands as her administrator. So far as this estate consists of legal assets subject to the lien of a judgment or they are entitled to payment according to the priority of their lien; so far as it consists of mere credits or equitable assets, they are only entitled rateably with all her creditors, and all creditors must be called in according to the procedure of the Court
    Other matters have been introduced into the case, of which some notice may be expected by the parties, but as these matters seem to me foreign to the true issues, brief notice will be taken of any of them, and some of them altogether pre-termitted, leaving the parties to propose their briefs for a review of my opinion from the pleadings and evidence. Much is alleged about the lunacy and recovery of Tscharna DeGraf-fenreid, and his title under one of the deeds of 1836, whether by force of the condition or the reconveyance of Thomas DeGraffenreid. And as to all this I need only express the opinion that everything depends on the fairness of the deed, or the collusion between Sarah and Thomas DeGraffenreid. It is objected by defendants that the representative of Allen DeGraffenreid should be made a party; but as the plaintiffs ■ do not seek to look into the guardianship of Allen and Sarah DeGraffenreid, as indeed they could not seek with any show of right, the dealings of Allen DeGraffenreid about the guardianship- could only be used to ascertain the amount of her estate. If alive he could only be a witness, and is not a necessary party in this case. The statement of Coleman, as to the assets turned over by Allen to his mother Sarah, is not only irrelevant but to me unintelligible. So the calculations and argument intended to exhibit that the judgment of the plaintiffs against Sarah DeGraffenreid was far too large a sum, because certain commissions and payments to the credit of Sarah were omitted when she gave the note, and suffered the judgment to be rendered, can have no present bearing, as all these matters were concluded by the judgment.
    It is ordered and decreed that the bill be dismissed, as to all matters and parties, except the accounting of Thomas DeGraf-fenreid concerning the administration of the estate of Sarah DeGraffenreid, and it is referred to the commissioner to take this account on the principles and practice herein suggested.
    The plaintiffs appealed on the grounds:
    1. Because the Chancellor erred in holding, that the statute of limitations was a bar as to the land conveyed to Thomas DeGraffenreid, and which was to be the property of Tscharna DeGraffenreid, a lunatic, upon his being restored to his proper mind, since the right of the said Tscharna did not accrue until 1852, when he ceased to be a lunatic; the estate could not run in his favor, until his right had accrued.
    2. Because the said Sarah DeGraffenreid having reserved to herself a life estate in lands, which were to be the property of Tscharna DeGraifenreid upon his restoration to sanity, and the said Sarah DeGraifenreid having lived thereon until the time of her decease, the statute of limitation could not run in favor of Tscharna until the accrual of his right to possession, and the Chancellor erred in holding it as a bar to complainants’ bill as to said lands.
    3. Because the Chancellor erred, in holding that the possession of Sarah DeGraifenreid of four of the slaves from the time of the purchase or gift of the said slaves to her son Thomas, was not fraudulent as to creditors.
    4. Because the delivery by Sarah DeGraifenreid to Thomas DeGraifenreid of his note for fifteen thousand dollars in 1840, being given for twenty-six slaves purchased of his mother in 1836, was fraudulent as to creditors, and said fraudulent delivery of said note to the said Thomas being unknown to said complainants until within four years of the filing of their said bill of complaint, the Chancellor erred, in holding that the statute was a bar against said fraud.
    5. Because the Chancellor erred in holding that notice to James B. Pickett, the original payee, was a notice to John S Lott, to whom the note was transferred after its execution, and long before the delivery of said fifteen thousand dollar note to Thomas DeGraifenreid by Sarah DeGraifenreid, the gift of said note and not the sale of said slaves for which said note was given, being the fraud which defeated the payment of the claim of complainants.
    
      McMiley, for appellants.
    
      Eaves and Thomson, contra.
   ! The opinion of the Court was delivered by

Johnson, Ch.

The first and second grounds of appeal appear to me to be misconceived. The conveyances of the land, dated the 5th of May, 1836, were either good or bad at their execution. If good, they passed all the right of the grantor, subject to the reservation in the deeds of a life estate in herself. This life estate, while it existed, was open to the creditor's of Sarah DeGraffenreid, and they might have secured a remedy out of it, corresponding to her interests. . After its efflux their remedy in that way was gone. On the other hand, if the deeds were vitiated, as is surmised, by fraud, the creditors might have proceeded at once, not only against the grantor to carve a remedy out of the estate she had reserved to herself, but against the grantees to set aside the title which passed to them at the execution of the deeds, though their possession was postponed. The statute ran, naturally, from the execution of the deeds, and had full effect in four, not ten years, as has been often determined, unless the party charging the fraud, avers that he only discovered it within four years before filing his bill; in case of such averment, the opposite party may contradict the averment, by proving notice or the means of knowledge upon him more than four years before bill filed. This doctrine is settled in this Court.

These deeds were registered within the statutory period, and imparted the notice necessary to put the creditors of Mrs. DeGraffenreid upon the alert, and the statute ran against them.

Besides, it is no where said in the original bill (filed May 7, 1849,) that either Picket or his administrator, or Lott or his executors, were unapprised of the execution of the deeds, or of the alleged fraud. Such an averment was reserved for the bill of revivor and supplement, (filed May 20, 1854,) by the representatives of Pickett and the executors of Boyce, executors of Lott, in which they say, “ which fraudulent actings and doings of Sarah DeGraffenreid, Thomas DeGraffenreid and Tscharna DeGraffenreid were unknown to your orators until within four years before the commencement of this suit.”

But the statute began its operation in the life-time of Pickett and Lott, not in the time of their representatives, and would complete its effects notwithstanding the latter might be ignorant of the alleged wrong.

It is argued that Mrs. DeGraffenreid’s possession was fraudulent and deceptive. But the deeds were registered, and undeceived the parties as to the right in which she held. It informed them that her possession was consistent with the deeds, and was not only her own possession but that of Thos. and Tscharna, to whom her conveyance enured.

It is argued, again, that Tscharna’s right only sprang up in 1852, when his insanity was removed. Well, then, this title was in Thomas until that time, and upon being cured of its fraud by the efflux of the statute, passed over as a good title to Tscharna. At all events the creditors had lost their right in the land, which right it is not to be supposed would spring up again, to be asserted against a new party, when they might find such a one in possession.

I concur with the Chancellor in respect to the third ground of appeal.

The custody by Mrs. DeGraffenreid of the four slaves allowed for her comfort, after his purchase in January, 1836, is too well accounted for by reasons and principles* the direct opposite of fraud, to require or allow of its being set down to that account. Mere custody is not the possession of an owner. To custody must be added the right under which the property is held. This was determined, if authority wei’e required, in Penn vs. Blocker, and I content myself with referring to that case.

The fourth ground of appeal refers to a matter charged neither in the original nor supplemental bill.

The original bill charged that the transfer of the twenty-six slaves, (January, 1836,) was without consideration and fraudulent.

The answer to that bill, (filed July 3, 1851,) denies the charge, and avers that the slaves were purchased by Thomas, from Mrs. DeGraffenreid, for the full and fair price of $15,000, which he secured by his note, and he exhibited her receipt and bill of sale for the negroes. That answer proceeds: ‘‘ This defendant admits that his mother, Sarah DeGraffenreid, not long after his purchase of the said negroes, (the precise time he cannot now remember, but he thinks and believes some time between April and August, 1840,) gave him, and delivered up to him his note for the purchase money of said negroes, and he paid her nothing for the same. But it was her own free and voluntary act, not asked for by him, nor expected when he purchased the said negroes.'” He goes on to aver that this purchase of 1836, was well known to Pickett when he subsequently (in 1837) took his note, now sued on, from Mrs. DeGraffenreid.

The fact now insisted on. in the fourth ground of appeal, of the voluntary release and surrender of the note given by Thomas for the negroes, was thus spread before the plaintiffs by the record in July, 1851; and notwithstanding there was an order granted to amend the original bill, ample enough to have covered this matter, the parties neglecting this release of the purchase money for the slaves, persisted in the original charge that the slaves were fraudulently alienated ab initio, and no charge as to the giving up of Thomas’ note has ever been made either in the original or supplemental bill.

It is now admitted that the alienation of the slaves was by a fair sale, and the Court is satisfied such was the character of the transaction. But the plaintiffs now lay hold of the delivery up of the note, by way of appeal, which they neglected to make part of their bill. We are of opinion their appeal is without proper foundation, nor do we think that having so long and so palpably neglected to introduce into the bill that which they now regard as so important, they are entitled to the benefit of an amendment, at the risk of indefinite litigation and expense.

It is ordered that the decree be affirmed, and the appeal dismissed.

Waedlaw, Ch., concurred.

Dunkin, Ch., dissented.

Appeal dismissed.