Case ID: sc-eq_4/html/0227-01.html
Source: Caselaw Access Project
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Date Created: 2024-08-24T03:29:51.129683

Georgetown.
    
    Heard before Chancellor Desaussure.
    Archibald Taylor, vs. Robert Heriot, Executor of Wm. Heriot.
    case hit,
    A surety may apply to the court for relief and protection as soon as-lie is endangered.
    Conveyances of property by a husband in trust for bis wife and her issue, and purchases made on their behalf, will not be set aside as voluntary or fraudulent, where the husband has received and applied to the payment of his debts, dr other use, funds or property of his wife,, even though the values be not exactly the same.
    A marriage settlement not recorded within the time prescribed by-the statute, is void as to creditors, though the property was the wife’s, and though it was recorded before the debts contracted. The mere recording, after the legal time, is not sufficient notice to such creditor, as to set up the settlement, against his demand.
    The bill was filed in this case by the complainant, who liad become surety for the lato Wm. Heriot, in a bond executed in April, 1803, and conditioned to pay & large sum of money to Mr. Withers, the guardian-of Miss Butler, at a time when Wm. Heriot was in good credit, and apparently in affluent circumstances. Mr. Heriot on S4tli June, 1807, executed a mortgage, to the complainant of four lots of land, and eight negroes, part of'which however were comprized in the deeds hereinafter mentioned, or were subject to judgments. Since the death of Mr. Heriot, in Nov. 1807, it appeared that his affairs were embarrassed, and that if the marriage settlement executed by him previous to his marriage with Miss Thomas, on the 10th May, 1792, and certain other subsequent deeds were supported, his estate would not be adequate to the payment of his debts; and in that case the complainant would be obliged to pay the debt of Mr. Heriot to Mr.' Withers, for which he was surety.
    The bill sought relief, by setting aside those deeds, and subjecting the property to the debts of Mr; Heriot.
    An objection was made at the bearing, that the complainant came too soon for relief, as he had not yet been damaged, not having been obliged to pay the-security debt. But the judge was-of opinion that a'surety'need itot wait until he had paid the debt, but might come , for relief as soon as he was endangered; and that it was manjfest jn ^,js case¡, that he was endangered. From this part of the decree there was no appeal.
    FEB’Y, 1812.
    ‘With respect to the marriage settlement, it was executed on the 10th May, 1792, and it was not recorded till the 4th March, 1795. This was greatly beyond the time allowed by the statute, prescribing the time within which marriage settlements should be recorded. But it was stated to the court, and not contradicted at the hearing, that the deed of settlement was recorded at that time, (4 March, 1795) in Georgetown, which was the place of Aosidence both of Taylor the complainant and of Mr. W. Ucriot; and that the debt for which Mr. Taylor became surety for Mr. Heriot, was not contracted till April, 1803.
    For the defendant, it was argued by Mr. Richardson, the attorney-general, that though the marriage settlement was not recorded within the time prescribed by statute, yet having been recorded upwards of seven years before the debt was contracted, for which Mr. Taylor became surety, there was no fraud, imposition or sur-prize on him. That though there was no positive proof of direct notice to him of such settlement, there was a strong presumption of notice, which brought this case within those cases which had been decided under the registering act, and which established that the first recorded deed should not have priority if the vendee had knowledge of tbe existence of a deed prior to his own for the same property, though not recorded according to law. ("Sec Lcncve vs. Leneve, 3 Atk. 646, 651. Ncwland on Cont. 509 & 510. And that the court would be the more en-dined to give this construction, as the property comprehended in the marriage settlement in question, was wholly the property of the wife. And of this opinion was the presiding judge, (Desaussurc) who decreed in favor of the marriage settlement. But as the presumption of notice to Mr. Taylor arose altogether from the deed being recorded (as was then stated) at the place of his residence; and as Lord Kardwicke in Hiñe and Dodd, 2 Atk. 275, requires the proof of notice to bo very clear, to prevent the registering acts, the judge desired that this question should he carried up to the Court of Appeals.
    The other deeds, the validity of which was questioned, were the following :
    A deed dated the 29th August, 1795, and executed by Mr. Heriot, by which he convoyed to Mr. E, Thomas, a lot in Georgetown, (No. 218,) with the improvements, and several slaves, whom he had recently purchased, in trust for Mrs. Heriot and her issue.
    The consideration was stated in the deed to be Mrs. Hcriot’s joining her husband in conveying her moiety of a tract of 36 acres of land, on Charleston neck, (which was her own property) the price of which came into Mr. Heriot’s hands, and to his use, on his promising to make compensation therefor. It appeared that the piice obtained for the 36 acres was only 1200k but it was then really worth more, and had since risen to a much greater value. The lot and negroes conveyed in trust were proved to be worth a good deal more than Mrs. Hcriot’s moiety of the 12001. but much less than the encreascd value.
    Also another deed dated the 1st. Feb. 1802, and recorded the 2d Feb. 1802, by which Mr. Robert F. With-\ ers conveyed alotoflandin Georgetown, (No. 217) to " Mr. E. Thomas, in trust for Mrs. Hbriot and her issue, for the sum of 180Z.
    It appeared that Mr. Heriot paid the purchase money., But it appeared also, that Mr. E. Thomas, the father of Mrs. Heriot, advanced several sums of money to Mr. Heriot, as part of his wife’s fortune, which ho promised to secure by a trust deed. And Mr. E. Thomas, in las last will and testament, dated 6th Oct. 1807, deducted 660Z. from the share of his estate bequeathed to his two grand sons (the children of Mr. and Mrs, Heriot) because of the advances he had made their father, on a promise to be invested for their benefit.
    It appeared from the evidence that Mr. Heriot had a good deal of property, and was in good credit and extensive business prior to, and in the year 1795. That in -1797', he contracted some large debts, and gave bonds;, on which judgments were aftemvards obtained, and exe-cations returned nulla bona, in the year 1809. And though large payments had been made, considerable balances remained due. it was proved that the 600i.de-.' rived by Mr. Heriot, from the sale of Mrs. Heriot’s land on Charleston neck, was applied to make a payment on one of those debts.
    It was contended for the complainant, that the property comprized in the two abovementioned deeds of the 29th August, 1795, and 1st Feb. 1802, were fraudulent, and void, as to creditors, and ought to be set aside.
    St was not denied that some value had been given in the case of the deed of the 29th, August, 1795, by wrhich Mr. Heriot conveyed a house and lot, and seven slaves, to Mr. B. Thomas, in trust, for the use of his wife and her issue j as Mr. Heriot had received and applied to the payment of his debts, the 600l. which was obtained on the sale of Mrs. Heriot’s land of inheritance. But it was insisted that the property so conveyed in trust, greatly exceeded in value the sum so received ; and that at least for the excess, the trust deed should be set aside.
    Bui the presiding judge was of opinion, that 6i as to this inequality of the values it appears by the evidence that the land on Charleston neck, was sold for 600Í. which went to the payment of Mr. Heriot’s debts. But the land which was then worth more, has encreased prodigiously in value, perhaps five fold. The house and lot, No. 318, conveyed to Mr. Thomas, wore worth, according to the evidence given in the cause, about 500/. and negroes at that time were worth about 501. each, though some of these were individually worth much more. The difference of value then at that time was from 2501. to 300/. If there had been any evidence to shew a mala fides, a disposition in these arrangements to defraud creditors, undoubtedly the court would lay hold of this or any other circumstance, to defeat such intent. But so far as wc have gone, I do net think we sec any thing indicative of fraud.
    The proceeds of the sale of ihe land of Mrs. Heriot on Charleston neck, were fairly applied to creditors. It was of great and encreasing value, which was generally known. And though we cannot take its increased value as the standard by which to form a comparison with the value of his property conveyed in 1795, in trust, we may look at that circumstance as some evidence of the fairness of the transaction. And when the mind is satisfied on that point, the court does not weigh these comparative values in golden scales.
    If indeed the property of the wife conveyed to the use of the husband, or sold to pay the husband’s debts, was grossly inadequate in comparison with the property .of the husband conveyed for the benefit of the wife and children, this might be evidence of fraud : And the court would not protect a conveyance for the benefit of a man’s wife and children, of a vast property on a trifling consideration. But this is not such a gross arid outrageous inadequacy as should produce that impression; more especially,, when it is recollected, that the father of Mrs. Heriot made other advances to Mr. Heriot.
    It was strenuously urged, that Mr. Heriot being indebted to others, though not to Mr. Taylor, at the time of this deed (August 1795) being executed, he could not make lawfully such a deed. It would be fraudulent against all creditors or purchasers under the statute 13 Eliz. C. 25 and 27 Eliz.
    The first, of these statutes was made for the avoiding fraudulent feofments, &c. of lands or goods and chattels,, contrived to delay hinder or defraud creditors, and others of their actions, debts, &c. But the statute is declared by one of its clauses not to extend to conveyances of estates, or interests made upon good consideration and bona fide. The 27th Eliz. declares that every con, veyance of lands with intent to deceive and defraud purchasers, for money or other good consideration, shall be deemed null and void as to such purchasers. The 4th section provides that the act shall not extend to impeach or make void any conveyance of land, made for good consideration and bona fide. In the construction of the stat. of IS Eliz. the question has arisen* whether a vol> untary conveyance made fby a person indebted at the time, can be maintained ? And to be sure the the reason of the tiling, and the authorities of the decided cases, are clear that such conveyances cannot be supported, jn faVor of blood and natural affection. This was decided as far back as Twines’ caso, S Co. 81 and all the cases have followed that — Seo 1 Vez. sen. 27, Beaumont vs. Thorp; 2 Vez. 11, Townsend vs. Windham; 1 Atk. 15 j Ambler 121.
    All these cases, however, turn upon the conveyance being voluntary and mala fide. But where a settlement is made by a father on his son and wife, in consideration of a portion paid by the wife’s father, though the husband’s father was indebted at the time, and though the settlement was after the marriage, it was decided not to be fraudulent as to creditors, being for a valuable consideration and bona fide — See Russel vs. Hammond, decided by Lord Hardwicke, reported in Atk. IS. See al-iso .Wheeler vs. Caryl, Amb. 121, where a husband made a settlement after marriage for a valuable consideration, it was decided to he good against creditors. Also Bro. C. C. 90, Stevens vs. Olive. And such settlement after marriage for valuable consideration, is good against creditors or purchasers — See Atk. 187; 2 Vezey, 16, 308 ; 2 Atk. 44 — 46. Our own court of law has decided that a marriage settlement made after marriage, and comprizing part of the husband’s property is’ good, if made bona fide, and when the husband was in good circumstances and able to pay his debts — 1 Bay, 171; Cowper 434 and 710.
    Indeed, the being indebted at the time of making even a voluntary conveyance, is only a presumption of fraud so as to set aside the, deed; and being a presumption may be, repelled by evidence or circumstances. For if the debt in question is secured by an adequate mortgage, the sale of another property could not render the debt insecure, and a voluntary conveyance would be supported. Lush vs. Wilkinson, 5 Vcz. 384 ; Stevens vs. Olive, Qr Bro. 92. Nay the person so indebted must he insolvent, or at least in very doubtful circumstances, in order to impeach a voluntary conveyance made on a meritorious consideration. Lush vs. Wilkinson, 5 Vez. 384 5 East and Co. vs. Clavel, Gilb. Rep. S7; Newld. 384.
    For to say that the mere circumstance of the person feeing indebted at the time, without reference to the comparative state of his debts, and of his means of paying them, shall be a sufficient proof of fraudulent intention, with respect to creditors, the’ the conveyance is on the most meritorious consideration, is to assert, that if a man possessed of an, estate of 1000L per annum, should after jnarriage, settle.on his wife a small jointure of 40i. or 50i. per annum, it shall be considered as a settlement to defraud creditors, though be may not owe much more than 100 or £001. This certainly was not intended by the statute, and therefore we must always examine the proportion between the debts and the estate, and the extent of the settlement before we pronoance a settlement void, even when voluntary and after marriage.
    It is, perhaps, difficult to form a very correct opi)i-ion in this case, relative to the comparative value of Mr. Heriot’s property and funds, and of his debts. A great deal of testimony given in the case, shews, that Mr. Ile-riot had considerable funds, and still more considerable credit, long after the marriage settlement, and all the other deeds in question ; and long after Mr. Taylor’s engagement for him as his security. Wé learn too, that he made considerable payments on his debts after the execution of all these deeds. And the proof is extremely vague and uncertain as to the extent of his debts, at the time of these deeds being executed. I cannot, therefore, ascertain clearly what was the exact situation of his affairs. But certainly, the proof does not establish insolvency, or any thing like it, at the time of entering into the deeds. Upon the circumstances of this case, therefore, I am of opinion this conveyance was fairly made for valuable consideration, and the disproportion of value is not so inadequate and outrageous as ought to bring the case within the statutes j and that therefore, it shall be protected against all, except creditors, who may have had- a specific lie», or a judgment and execution which bound the property at the time of making the deed.
    With respect to the posscssion-by Mr. Heriot, it was consistent with the deed, and with the nature of the connexion between the husband and wife, and therefore does not furnish that evidence of fraud, which possession retained by the person conveying usually does— Newland on Contracts, 373 — 4 ; 10 Vezey, 150, Lady Arundel vs. Phipps.
    The next deed to be examined, is that of Feb. 1, 1802, by which Mr. Withers conveyed a lot, (217,) to Mr. Edward Thomas, intrust, for the wife and children of Mr. Hei’iot.
    This case does not turn upon the statutes which relate only to sales made to defraud creditors and purchasers, and not to purchases made by the debtor, by which property is conveyed by third persons, not to himself, but to a trustee for Ms family. No provision is made by statute law for this case.* It is left to the great principles which govern all these questions, which túrn upon the fact, whether it is a fair bona fide transaction, founded on valuable or other sufficient consideration ; or a mere collusion and fraud, to deceive and defeat creditors. If the former it is valid; if the latter, it is void. For a person deeply indebted, approaching to insolvency, shall not be permitted to convert his funds, which ought to be applied to pay his debts, to purchases of property conveyed to trustees for the benefit of his family, to the, prejudice of his creditors. The facts proved are the conveyance of some property of the value of 180/,. by Mr. Withers to Mr. Thomas, in trust for the children of Mr. Heriot, the grand children of Mr. Thomas. So far Mr. Heriot’s creditors have nothing to do with the transaction, for no part of Ms property has been subtracted from them or their claims. And there may be gifts or sales and conveyances by third persons to a man’s children against which he or Ms creditors can have nothing to say.
    But Mr. Withers, when cross examined, stated, that be was pi’ettv sure that it was Mr. Heriot, who paid Mm tlie value of the property in question, though Mr. Thomas had spoken to him on the subject.
    This undoubtedly raises a presumption that he did apply his private funds to this purchase, which ought to have gone to the payment of his debts; which, if done in a state of insolvency, or approaching to it, might make it fraudulent as to creditors.
    On the other hand, there is a presumption that Mr. Thomas the trustee, furnished the funds to make the purchase $ for he was the grand-father of the children to be beneñtíed by the conveyance; he spoke to Mr. Withers about the purchase; and he was in the habit of advancing for the benefit of his daughter and her children. Besides the whole amount of Mrs. Heriot’s property sold, and of Mr. Withers’ advances, are more than equal to the whole amount of the direct conveyance by Heriot to Mr. Thomas, of the house and lot (.218;) and of the negroes in the deed of August 1795, and of the land Comprized in this conveyance from Mr. Withers. For the account seems to have stood thus :
    Amount of sale of Mrs Heriot’s land on 1 Charleston Neck, j
    Advance mhde by Mr. Thomas, actually proved, }
    
      6601.
    
    Amount secured to wife and children, by Mr* Heriot’s deed of August 1795,
    House valued at Negróes át about Value of the property in Mr. W’s. deeds to Mr. Thomas for the grand ■children,
    1,260A
    }
    5001.
    S50
    180
    1,0SGL
    1,260
    1,030-
    Leaving abalance of the sura of on the side of Mrs. Heriot; which would 230?. Ucablo to the payment of the Jots No. 13 and 14, conveyed by the assignees of Mr. Heriot in blank, but intended for the children, and valued at g 710 or 165Z. That this ad-vanee of 6601., was intended by Mr. Thomas, not to be g¡.ajuj^oqg Mr. Heriot, is apparent from his message to Mr. Heriot, proved by Dr. Thomas, and by the clause in Mr. Thomas’ will made, in the year 1807, by which he deducted 6601. from the share of his-estate intended for his two grand-sons, the Heriots, sons of Mr. and Mrs. Heriot, (and defendants in this suit,) on account éf such advance, for which he considered them secured by the deeds under consideration.
    It was given in' evidence, or rather admitted in the defendant’s answer, that there was a conveyance from the sheriff, in April 1800, of some lots opposite Georgetown to Mr. E. Thomas, in trust for Heriot’s children. But not a tittle of evidence was given to shew that Mr. Hcx'iot had been the purchaser, or had been the-paymaster. This deed, therefore, is not impeached.
    The next question,.relates to the deeds found among the papers of Mr. Heriot, executed by his assignees, conveying certain lots in Georgetown, to wit, No. IS and 14, without the name of any grantee. Very little evidence was given on this point. It was said that Mr. Heriot declared he had bought in the lots for his children at the sales of his property. No proof was furnished that the lots were his, or had been paid for by him out of bis funds or the children’s funds, or whether ever paid for at all. I am left so entirely in the dark for want of evidence, that I cannot make any decree which can affect this property, more especially as I find a balance of 3301 in Mr, Heriot’s hands, of the funds arising from the sale of Mrs. Heriot’s land and Mr. E. Thomas’ advance to him, which was applicable to this or any other purchase for the children, and actually exceeded the value of theso lots.
    It is therefore ordered and decreed, that the hill be dismissed so far as regards the property comprehended in the deeds which have been under our consideration. As to the rest of the property of Mr. Heriot, it is decreed that the executors do account for the same in the course of legal administration; and apply so much as may remain after satisfying debts which have priority to the payment of the debt to Mr. "Withers, for which Mr. A. Taylor is surety* and such other creditors as stand in equal degree.
    Hewky W. Desaussure.
   From this decree there was an appeal on the following grounds:

First, — 'That the marriage settlement of 10th May, 1792, under which the defendants claim is void by reason of its not being recorded within the time limited by law.

Second, — That the conveyance of William Heriot of the lot, No. 318 and seven negroes, of the 29th August, 1795, is void against creditors for all beyond the actual consideration proceeding from Mrs. Heriot.

Third, — That all the subsequent conveyances and purchases to the benefit of the wife and children of Mr. Heriot ought to enure to the benefit of his creditors inasmuch as it appears that these purchases were made by Mr. William Heriot, and the transfer to his children was unsupported by any legal consideration which ought to protect them against creditors.

BiANDiNG, Comp. Sol.

The appeal was heard at Columbia, by the Chancellors Desaussure, Gaillard, Wáties, James and Thompson.

After the argument, the court pronounced the following decree:

We have considered this case with attention, and we are of opinion, thatthe conveyances of property for the benefit of Mrs. Heriot’s children were supported by considerations of sufficient value to maintain them against a subsequent mortgage creditor. But the marriage settlement stands on a different footing. That deed was executed on the 10th May, 1792, and recorded on the 4th March, 1795, in the register’s office in Georgetown district. The law requires marriage settlements to be recorded within three months, and in the secretary’s office. If it had been so recorded, there would have been no question of its validity, however indebted the husband might have been at the time, for the settlement was of the wife’s property, and the consideration was marriage.

But it was insisted at the trial in the Circuit Court, and the circuit judge was induced to be of that opinion, that the settled property being the wife’s, and the deed being recorded long before the debt was incurred, which was the foundation of the complainant’s suit, and the recording being at the placo of residence of Mr. Taylor, sufficiently established the settlement. The court is however of a different opinion, the circuit judge concurring; The grounds relied upon to prevent the operation of the law in this case, which requires the settlement to be recorded in the secretary’» office within three months, are not of sufficient weight. The property being the wife’s, does not vary the case. The marital rights and the obligations of the husband will attach to the wife’s property; unless there is interposed a settlement ex? ecutcd and recorded conformably to law. And this liability of the property brought in marriage by the wife, extends as Well to debts incurred after the marriage as before. The argument that the deed of settlement being recorded before the debt was contracted in the register’s office, where Mr. Taylor resided, was sufficient to put him on his guard, and was sufficient notice to him of the existence and effect of the settlement, cannot be maintained. It is true that the registering acts to guard against double sales and mortgages have been so construed in equity, notwithstanding these positive provisions, as to give effect to the last recorded deed, against the first recorded deed, where it is clearly made out in proof, that the holder of the first recorded deed, knew at the time he was taking it, that another deed was in existence, conveying the same propei’ty to a third person. And tills rule is founded upon the manifest equity of preventing a man from converting that which was intended as.a shield to guard him from fraud, into a sword to wound others, and to support his own fraud. And so Lord Hardwicke has expressly decided in Leneve vs. Leneve, 3 Atk. 646, 650, 1,2. See also Sheldon vs. Cox, Ambler, 624, arid Newland on Contracts, 509, 510, It is true that lord Alvanly in the case of Tolland vs. Stainbridge, 3 Ves. jr. 478, expresses regret, that the registry act had been broken in upon by parole evidence; but he acknowledged it as the settled doctrine. If this doctrine, growing out of, and applied to the registering acts, for guarding against frauds in double sales and mortgages be applicable to the law for registering marriage settlements, (to which they have considerable analogy, but upon which the court does not now mean to give any opinion) still -the doctrine must be taken with all its limitations. And lord Hardwicke, who established the doctrine on clear principles, lias also fixed the limits. In the case of H:nc v. Dodd, 2 Atk. 275, he lays it down, that equity will not relieve against the legal estate, which the subsequent purchaser has obtained, by registering his deed, unless in a case of apparent fraud, or clear and undoubted notice; but suspicion of notice, though a strong suspicion, is not sufficient to justify the court in breaking in upon an act of parliament, and this has been followed in the case of Tollaiid pud Stainbridge, 3 Ves. 448. Nov,' in the case under consideration, there is no pretence of fraud on the part of Mr. Taylor, and there is no, proof of clear and undoubted notice. Suspicion of notice arising from recording the deed in an office at his place of residence, is not sufficient of itself to make out that clear and undoubted notice, necessary to entitle the party to relief op protection, and there are no additional circumstances of sufficient weight to support the mere suspicion of notice growing out of the recording of the settlement in Georgetown. The marriage settlement therefore in this case cannot protect the property comprehended in it against the claims of creditors.

It is therefore ordered and adjudged that so much of the decree of the circuit court as establishes the validity of the marriage settlement, and protects the property comprehended therein from the claims of Archibald Taylor and others, be reversed, and that the circuit court be directed to order a reference to tire commissioner to examine and report what that property at present consists of, and to state the rights of the creditors therein, according to their legal priorities, and to make such further orders and decrees therein as justice may require.

And it is further ordered and adjudged, that the rest of the decree of the circuit court, relative to the other deeds in question, be affirmed, and that each of the par¡ties pay their own costs of suit.

Henry Wm. Desaussure, ; Theodore Gaiu.ard, Thomas Wattes, Wilt.iam Dobein James, W. Thompson.

Afterwards it was stated to the Court of Appeals, that there had been a mistake in the statement made to the court, that the marriage settlement of August, 1795, had been recorded in the office of the register of mesne conveyances for Georgetown district; for it appeared on further examination since the decree, that the same was recorded in the office of the secretary of state, as the statute provides, but was not recorded until the 4th March, 1795, which was long after the time prescribed by statute; whereupon, on the motion of the solicitors it •was ordered, that the case be remanded to the circuit Court for the correction of the said error ; and that the opinion of the court be taken on the legal effect of that correction.”

Afterwards an order of reference was made by order of the circuit court, to ascertain the state of the facts, as to the lots No. 13 and 14. And the commissioner made the following report:

I have been attended by the solicitors as well oh part of the complainant as of the defendants, and find that lots No. 13 and 14, which were sold at the sales of George Heriofs property, were purchased by Wm. Heri-ot, for the sum of seven hundred and ten dollars. That in payment for the said lots, an account of William Heriot, against George Heriot, to the amount of three hundred and ninety-eight dollars and foi’tv-two cents, was received and discounted; and for tbc balance "Wm. Heriot gave his two bonds, with Robert Heriot security. That after tiio death of Wm. Heriot, his executors found the titles among his papers, but the name of the grantee was loft in blank. That the said two lots were included in.the mortgage given by Wm. Heriot to the complainant, of the 24th June, 180".

At the time Mr. Wm. Heriot received the titles, he said that he did not wish to leave his own name inserted in them, but that he intended them for some one of his family.

And by consent of the parties, I further report that thercis.real estate belonging to the said Wm. Horiot, which is necessary to he sold for the payment of his debts, and that the same is hound by judgments obtained against th© said Wm. Heriot, in his lifetime.

Robert Heriot, Commissioner.

The cause again came to a hearing in the Circuit Court at Georgetown,-in which Chancellor Dcsaussure again presided. After argument, the Chancellor pronounced the following decree.

■ This case has now been brought on, and argued on the ground that the deed being recorded in the proper office, (to wit, .the secretary of state’s,) before the transaction with Mr. Taylor, though not within the time prescribed by the act of the legislature, is good and valid, at least as far as relates to Sir. Taylor, and all subsequent creditors. And it was insisted that the deed being recorded, though not within the legal time, was presumptive notice to Mr. Taylor.

By our statute, a deed of settlement must he recorded m the secretary’s office within three months, to entitle property to its protection — otherwise the deed is void as to creditors.

The deed in question was not recorded within the limited time. Then it is void by the very terms of the act, unless the creditors had actual notice of the settlement, and acted in defiance of it; and it is not quite certain that this would be sufficient. . But there is no pre-|cncc of such actual notice. The whole argument is founded on the presumption of notice, arising from the deed being put on record, though after the legal time, jjut this presumption is clearly not of itself sufficient to prove such a notice, as might bar the creditor.

I am therefore of opinion that the property' comprehended in the mortgage to W. Taylor, remains liable to his demand, notwithstanding such deed of settlement;

Another point in the cause made before me, relates to the two lots of land, No. IS and 14, purchased by Mr. Heriot, and put down to him as purchaser $ but the titles were given to him without the name of the grantee being filled up. It is reported by the commissioner, that Mr. W. Heriot paid for those lots by discounting a demand which he had personally against the estate of the seller, for the greater part of the purchase moneys and by giving his bonds for the balance. This report negatives the idea that he paid for the lots with any part of the trust fund. And his parole declarations cannot be set up to establish a trust against the apparent facts of the case. The lots must therefore be liable to the mortgage given of them by Mr. W. Heriot to Mr. Taylor.

It is therefore ordered and decreed, that the property comprized in the deed of settlement, not properly recorded, and the lots No. IS and 14, bo subjected to the mortgage to Mr. Taylor, and sold to satisfy the same on. the usual terms.

From this decree there was no appeal*