Case ID: dc_17/html/0362-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice James", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIS WOOSTER Et Al. vs. ANTONE DEVOTE Et Al.
    1. Where one is indebted even in a small amount, e. g., $127, a voluntary conveyance of his property is fraudulent as to the existing creditors, and will be set aside.
    2. On setting aside such a conveyance subsequent creditors who have come in may have the benefit of the decree.
    In Equity.
    No. 9,359.
    Decided May 7, 1888.
    The Chief Justice and Justices Cox and James sitting1.
    Appeal from a decree setting aside an alleged fraudulent conveyance.
    The bill was filed by judgment creditors of the defendant, Antone Devote. It appeared that Devote, after part of the debt included in plaintiffs’ judgment was incurred, conveyed his real estate to the defendant, Sprigg, for the stated consideration of $10, and on the same' day Sprigg conveyed the property to the defendant, Anna M. Devote, wife of Antone Devote, for the same consideration.
    Further facts are stated in the opinion.
    Mr. Wm. A. McKenney, for defendants, appellants:
    Mere indebtedness on the part of a grantor at the time of making a conveyance is not sufficient to establish an intent to hinder, delay and defraud creditors. If the debtor has ample means left to pay the debts owing by him at the time of making the conveyance, then the conveyance is valid and will not be set aside as having been made in fraud of the rights of creditors. Bump, Fraud. Conv., 3d ed., p. 279; Lloyd vs. Fulton, 91 U. S., 480; Jones vs. Clifton, 101 U. S., 225.
    Subsequent creditors who have trusted the debtor, after they have had notice that he had put his property out of his hands by a conveyance valid between him and his grantee, can never claim, that the conveyance is void as to him on account of such indebtedness.
    The record of the deed is notice to all the world. Kane vs. Roberts, 40 Md., 590.
    A deed fraudulent and void as agáinst the grantor’s antecedent creditors, is valid, if recorded, as against subsequent creditors where there is nothing in the deed itself, and no evidence to show any intent or design to defraud such creditors.
    Fraud in fact must be shown. Kane vs. Roberts, 40 Md., 590; Williams vs. Banks, 11 Md., 250; Cooke vs. Kell, 13 Md., 469; Moore vs. Bondheim, 19 Md., 175; Wallace vs. Penfield, 106 U. S., 260.
    The settlement of lands by a man upon his wife is not invalid, if the rights of existing creditors are not thereby impaired. U. S. Trust Co. vs. Sedgwick, 97 U. S., 304; Clark vs. Killian, 103 U. S., 766.
    “Whenever a party who, as actor, seeks to set the judicial machinery in motion and obtain some remedy, has violated conscience, or good faith, or other equitable principle, in his prior conduct, then the doors of the Court will be shut against him in limine; the Court will refuse to interfere on his behalf, to acknowledge his right, or award him any remedy.” Wilson vs. Bird, 28 N. J. Eq., 352; Creath vs. Sims, 5 How., 192; Paine vs. Lake Erie & L. R. Co., 31 Ind., 283; Bleakley’s App., 66 Pa., 187.
    Mr. J. T. Cull, for plaintiffs, appellees:
    The deeds are fraudulent and void, being a voluntary settlement by Antone Devote on his wife, Anna M. Devote, of all his property subject to execution, when he was indebted to Wooster & Adams, and rendered it impossible for them to make their debt. 13 Eliz., chap. 5; Sexton vs. Wheaton, 8 Wheat., 229; Kehr vs. Smith, 20 Wall., 31; Edwards vs. Entwisle, 2 Mackey, 43; Worthington vs. Bullitt, 3 Md. Ch., 99; Walter vs. Lane, 1 Mac A., 275.
    The property left after the deeds were made was small in value, of a perishable nature, and exempted by law from execution. R S. D. C., sec. 797.
    Where a deed is set aside as to existing creditors, subsequent creditors are admitted to share the fund. Kehr vs. Smith, Edwards vs. Entwisle and Walter vs. Lane, supra.
    
   Mr. Justice James

delivered the opinion of the Court:

In the case of Wooster and others against Antone Devote and others, we are asked to set aside a conveyance made by Devote to his wife, on the ground of fraud against his creditors.

The facts appear to be that Devote had’two jueces of real estate, and a business in the market, with a stock that was shifting from time to time, being jiurchased day by day of wholesale provision dealers. He was occupying on a monthly agreement certain stalls, the original lease to which had expired. It appears that the real estate in question was all the property he had of any substantive character. He owed only $127, so far as shown to the Court, at the time of the conveyance; but his only means of paying even such a small sum as that consisted of his business prospects.

It is perfectly well settled that if a man makes a voluntary conveyance of his property, relying upon his business jprospects as a means of paying even small existing debts, the conveyance tends to hinder and delay his creditors. The business is not accounted a property sufficiently certain for his creditors; and of course it would not be so in case of his death. The case is accompanied by some acts on the part of Devote which indicate that it was a measure for protection in case his debts should trouble him. He had, in a very indefinite way, associated his son with him in his business so that strangers had a right to regard the son as a partner, and it appears that the father was incapacitated by bad health from giving his personal attention to the business, so that the son was left with the power of making debts which might prove to be indiscreet and, consequently, troublesome.

In some conversation which the defendant had about this conveyance he disclosed the real object of it — that it was intended as a protection against the power of his son to waste this property. That contemplated the making of debts and contemplated - at the same time a protection of his property against those debts. We regret the result, as it looks' like the struggle of a well meaning man, in bad health, to provide for his family against misfortunes which might overtake him. Nevertheless, the fact remains that he has made such a disposition of his property as to hinder and delay the existing creditors, small as the sum due them was. More debts were contracted afterwards, and although it may be said that these later creditors had the opportunity of learning from the record that he had conveyed his property and, therefore,'may be said to have extended their credits in the face of the fact, yet it is well settled that such a deed must be set aside in behalf of the existing creditors, and then the subsequent creditors who came in may have the benefit of the decree.

We are compelled, therefore, to affirm the decree below holding this conveyance to be fraudulent.