Case ID: nj-eq_5/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE EXECUTOR OF NATHAN COOPER v. PRUDENCE COOPER AND OTHERS.
    1. J. C. died March 15th, 1833, leaving a will, by which he ordered all his debts to be paid, and gave and bequeathed to his widow all his estate, real and personal, during her natural life or widowhood, and appointed her sole executrix thereof, the will containing no devise or bequest of the estate after her death. The testator left a grandson, his only heir-at-law. The widow and the grandson, and his family, occupied the dwelling-house and lands, and converted all the personal property to their own use. On the 2áth of July, 1834. the widow, and the grandson and his wife, conveyed all the real estate to T B. S. On a bill by a creditor of the testator attacking the bona fideo of the sale, and the answer and proofs in the cause, the deed was declared void, and the lands held liable for the complainant’s debt.
    2. On bill filed by a creditor of a testator, by bond signed by the testator and a surety, to set aside a sale of lands made by the executor and devisee, and to subject the lands to the payment of the bond debt, held that the surety was not a necessary party to the suit.
    John Cooper died March 15th, 1833, leaving Prudence-Cooper, his widow, and John S. Cooper, his grandson and only heir-at-law, and leaving a will, by which he ordered that all his just debts and funeral expenses should be duly paid and satisfied as soon as conveniently could be after his decease, and gave and bequeathed to the said Prudence all his real and personal estate during her natural life, or as long as she should remain his widow, and appointed the said Prudence sole executrix of his will, “ giving or granting her full power and authority to act in and about the premises.” At the time of his death he was seized in fee of certain lands in Morris county, described in the bill of complaint in this cause, and therein stated to be of the value of $600, and possessed of some personal estate, but to what amount the complainant says he cannot state. It would seem from the pleadings in the cause that the value of the personal estate was about $300.
    At the time of the death of John Cooper, the executor of Nathan Cooper held the joint and several bond of John Cooper and Daniel Horton, dated June 2d, 1812, conditioned for the payment to the said Nathan, his executors, &c., of $300, with interest, in one year, on which are several endorsements of interest received, the last of which is a receipt for one year’s interest, dated June 3d, 1831. After the death of John Cooper, Prudence, his widow, and John A. Cooper, his heir-at-law, with his family, occupied the lands and dwelling-house of the testator, John A. Cooper and his family living with the widow, and the personal estate of the testator, consisting of household furniture and stock on the farm, being used in the family.
    On the 24th July, 1834, Prudence Cooper and John A. Cooper and Mary, his wife, by their deed of that date, conveyed all the real estate of which the said testator died seized to Thomas B. Stout, for the consideration expressed in the deed of $500, the deed giving a particular description of the lands, and adding, after the description, this clause: “ being the whole of the lands of the said deceased, according to the last will and testament of the said John Cooper, deceased.”'
    On the 9th October, 1834, Nathan A. Cooper, executor, &c., of Nathan Cooper, deceased, exhibited his bill on behalf of himself as such executor and of all other creditors of John Cooper, deceased, who shall come in and seek relief by and contribute to the expense of the suit, against Stout, Prudence Cooper and John A. Cooper, stating, among other things, that Prudence, combining with the said John A., had converted and disposed of all the personal property of the testator to her own use, without accounting in any way for the same; and that there were no assets, real or personal, of the testator remaining, except the real estate described in the bill; that Prudence and John A. are insolvent; and that for the purpose of defrauding the complainant they did, by their deed dated July 24th, 1834, convey all the said lands to Stout; that before and at the time of the conveyance, Stout had full knowledge of the debt due the complainant, and that the land so conveyed to him was the only property left of the estate of the said testator, out of which the complainant could collect his debt; that, as the complainant is informed and believes, it was talked of and contrived between the parties to said deed, before and at the time of its execution, that by means of the said conveyance the complainant would be defeated of collecting his debt out of the estate of John Cooper, deceased.
    The bill charges that Stout took the deed with full knowledge of the will, ánd that the conveyance was made with a secret understanding with Stout for the purpose of defeating the creditors of John Cooper, the said testator; that, as the complainant is informed and believes, no part of the consideration money was paid, and that it all still remains in the hands of Stout; that about September 1st, 1834, the complainant gave notice to Stout not to pay over the consideration money to Prudence and John A., and requested that it might be applied towards discharging the debt due the complainant.
    The bill prays that the said.debt may be decreed to be a lien on the lands ; and that the said deed may be declared to be void as against the creditors of John Cooper, deceased,- and that the said lands may be sold to pay the said debt and such other debts, &c.; or, if the court should think it proper to confirm the deed to Stout, that Stout may be decreed to account for and pay over the fair value of the lands to the complainant and such other creditors as may be entitled to relief under the bill, towards their claims, and that Stout may be enjoined from paying to Prudence or John A. Cooper any moneys that may still be due from' him on account of said lands, and that Stout, Prudence and John A. Cooper may be enjoined from making any further conveyance of the lands.
    The injunction was granted.
    Stout put in his separate answer. He admits that he has lately heard of the debt mentioned in the bill, and that the principal, with some interest thereon, is still due. He admits that John Cooper died seized of several tracts of land, worth about $500, which he believes to be a full, adequate and sufficient price for the same, and possessed of some personal property. He denies that Prudence and John A. Cooper have continued to receive the rents, issues and profits for any longer time than until the sale to him, on or about July 24th, 1834, except the use of the house and barn and the privilege of getting wood for fuel, as his tenants; and says that the profits of the premises and the crops raised on the same have been exclusively in him and his tenant, for his own use, without the control or interference of the said Prudence or John A. Cooper. That as to the allegations of the bill respecting the conversion of the assets by Prudence and John A. Cooper, the deficiency of assets, the insolvency of said Prudence and John A. Cooper, and.their having promised to pay said debt, and their acknowledging that the real estate was bound for it in their hands, he has no particular information other than that contained in the bill.
    That on or about July 24th, 1834, he bought the premises of Prudence and John A. Cooper, by deed of that date, duly acknowledged and recorded, for the consideration of $500 paid and secured to be paid to said Prudence and John A. Cooper; that this was the full value of the premises, and that the sale thereof was a fair, opon and bona fide sale, and with no view or intent on his part to defraud the creditors of the said Prudence and John A. Cooper, or either of them, or the creditors of said testator; that the $500 was in part paid, and the remainder secured to be paid as follows : on the sale being made he drew three notes, one dated July 24th, 1834, to Prudence Cooper, for $100, payable one day after date, which was, on the day it became due, fully satisfied, paid off and discharged to said Prudence; and a note drawn upon said sale and dated by mistake July 25th, 1834, but intended for the 24th, in favor of Prudence and John A. Cooper, for $200, payable thirty days after date, writh interest, which note, with the interest thereon, was by him fully and fairly also paid ofi‘ and satisfied to John A. Cooper, on the 26th of August, 1834, and the two said notes by them given up to him and now in his possession, with the receipts and acknowledgments of payment endorsed thereon may more fully appear; the remaining note was dated July 24th, 1834, drawn in favor of Prudence, payable eight months from date, with interest, for $200, on which' he did, on the 30th of August, 1834, pay to Prudence $127.65, which is or ought to have been credited thereon, which note still remains in the custody of said Prudence, unless she has assigned it; so that on the 30th August, 1834, he had paid to Prudence and John A. Cooper the purchase money for the premises, except about $72.35 and a small amount of interest thereon, which still remains in his hands unpaid, in obedience to the order of this court.
    That immediately after the execution of said deed he entered into possession of the premises, put a tenant in possession of part thereof under him, and has taken the rents, issues and profits thereof to his own exclusive benefit, except the house and barn, which he has rented to Prudence and John A. Cooper for a valuable consideration, with privilege of fuel, as after stated, without any bargain or understanding with said Prudence or John A. Cooper that the sale was collusive, fraudulent, or a cover from the creditors of the said Prudence and John A. Cooper, or of either of them, or of their testator, John Cooper, or that they were to receive any advantage from said sale except the purchase money.
    He denies that at the time of the conveyance of the premises to him, or of the agreement for the sale, he knew of the said debt from said John Cooper, deceased, to the complainant as executor of Nathan Cooper, or that the premises conveyed to him were the only assets out of which said debt could be paid. He denies that there was any such conversation or understanding between him and Prudence and John A. Cooper, or either of them, at the time of the execution of the deed or at any other time, about defeating the complainant of recovering said debt by means of said sale, and that such sale was for any such purpose as is pretended in the bill; and he says he is a bona fide purchaser of the premises for a full, fair and valuable consideration, without any notice of the demand now set up by the complainant in his bill.
    He says that shortly after said conveyance to him, to wit, on or about July 28th, 1834, he entered into articles with said Prudence and John A. Cooper, under seal, dated the day and year last mentioned, whereby, in consideration of fifteen dollars, he let to them the house and barn on the premises, with the privilege of using the old wood that had fallen down and remained on the lot below the house, to use as firewood, till the 1st of April, 1835; and that the said Prudence and John A. did, by said articles, promise and agree to yield up possession of said house and barn on the 1st of April, 1835, in as good repair as when they leased it, fire excepted; and he says that, except the use of said house and barn and the said privilege, neither Prudence nor John A. Cooper has or has had any control over or interest in the premises since the sale to him on the said 24th July, 1834 ; and that since the said 1st of April, 1835, he has leased the house and the whole premises to one Thomas Bowman, who now has possession of the same; and he says that he denies that there was any agreement or understanding, at the time of the sale or at any other time, by which he was to take the premises subject to the said debt, or any other debt, but khat the sale was absolute and unconditional, without any reservation or secret trust whatever.
    He submits that by no construction of the will is he, a bona fide purchaser, subject to the payment of the debts of the testator ; and that it is manifest, from the whole will, that no lien is created thereby which can or ought to attach on his estate.
    He admits that, on or about September 1st, 1834, he received a notice from the complainant, forbidding him to pay over any moneys that then were or might be due from him to Prudence and John A. Cooper, or either of them, on account of any lands that belonged to John Cooper, deceased, and that had been bought by him of Prudence and John A. Cooper; and he offers to pay into court the said sum of $72.35, and the interest thereon, which was all the money due on account of said sale when he received the notice, and still remains due, to be disposed of by the court.
    He submits that all the matters complained of are matters which may be determined at law, and with respect to which the complainant is not entitled to any relief in this court; the complainant not having any lien for the said debt on the said land since the alienation thereof to him; and he hopes he shall have the same benefit of this defence as if he had demurred, to the bill.
    Prudence and John A. Cooper put in their joint and separate answer. They admit the giving the bond as stated in the bill, and that the principal of the bond and some interest thereon is still due, but what amount they cannot say; and that John Cooper died seized of several tracts of land, worth about $500, and possessed of some personal property, worth about $300.'
    They admit that they continued to receive the rents and profits till April 1st, 1885, and also that, it was the express agreement between Stout a.nd them that the profits of the premises and the crops should be exclusively in them, for their benefit, until April 1st, 1835.
    They admit that Prudence has converted and disposed of all the personal estate, and that they are insolvent, not having property enough to pay their debts.
    They admit that by deed of July 24th, 1834, for $500 promised to be paid them by Stout, they conveyed the lands to him. That Stout promised to pay them $100 at the execution of the deed, $200 in eight months, and $200 in one year thereafter. That he did not pay the $100 at the execution of the deed, nor has he since paid it, but that he paid to Prudence, in cash and store trade, at different times, in all about $40; and also that he wanted to offset a demand he had against John A. Cooper, of about $47, leaving a balance of about $13, of the $100, yet due. That he never gave a note for the $100, or any part of it, but refused to do so. That on the day of the sale he gave two notes for $200 each, one payable in eight months, and the other in one year. That after the subpoena in this cause was served on the defendants, Stout called on Prudence and requested her to give him a receipt for some money, and to let him have one of the said $200 notes, promising to return it and give up the said receipt, saying he would yet pay her all the money; that he only wanted to use them for the purpose of filing in chancery on Cooper's bill. That he has not paid any part of the $400 mentioned in the notes, nor has he returned the said note, or the said receipt, but has since promised John A. Cooper the whole of the money if he would not come < ut against him.
    
      They admit that, at the time of the conveyance to Stout, anA at the time of the agreement for the sale, Stout knew of the said debt due on said bond or otherwise from John Cooper, deceased, and that the lands so conveyed to him were the only assets out of which it could be paid; and that it was mentioned and contrived between them and Stout, before and at the time of executing the deed, as charged in the bill.
    They admit and say that the receipt given by Prudence to Stout was dated some time previous to the time it was given, and that Stout said it must be so to make it appear that the money was paid before the notice of the injunction was served.
    Testimony was taken, and the cause brought to hearing on the pleadings and proofs.
    
      H. W. Green and P. D. Vroom, for the complainant.
    
      J. J. Scofield and B. Williamson, for the defendants.
   The Chancellor.

So far as relates to the defendants, Prudence and John A. Cooper, the cause is free from difficulty. Prudence was devisee and legatee for life or widowhood, of the whole estate, real and personal, and executrix of the will. If she, the executrix, instead of applying the personal estate to the payment of the debts, converted it to her own use, the court could have no hesitation in subjecting her interest in the real estate under the will of which she was executrix, to the payment of the debts which she ought to have paid out of the personal property.

John A. Cooper, as heir-at-law of John Cooper, deceased, is entitled to the remainder in the real estate of said deceased, afrer the life estate therein given by the will to Prudence Cooper and on the death of Prudence would, as next of kin to the testator, be entitled to the personal estate that remained after the payment of the debts of John A. Cooper, deceased.

John A. Cooper must be taken, from his answer, to have connived at or consented to the conversion by the executrix to her own use of the personal estate, and to have joined in the deed to Stout for the purpose of putting the real estate beyond the reach of the creditors of the testator.

, In reference to Stout, so far as the consideration money remains unpaid by him to the grantors in the deed, it is a fit case for the interposition of this court to prevent it from going into the hands of Prudence and John A. Cooper, who admit themselves to be insolvent.

But the case opens a wider range of inquiry. Several questions were started in the argument, on which I shall do no more than intimate, shortly, my impressions, as I think the case may be decided without considering them fully.

The will does not charge the land with the payment of the debts, in exoneration of the personal estate. The personal estate was primarily liable for the payment of the debts. If the personal estate was insufficient to pay the debts, it seems to me that the only safe course for the executrix, under the will, would have been to take the ordinary steps before the Orphans’ Court to obtain a decree for the sale of lands to pay debts. But I do not think it necessary to examine particularly thequestion, somewhat considered in the argument, whether this will authorized the executrix to sell lands to pay debts. I think it is obvious that the conveyance to Stout was made by Prudence Cooper, in her character of devisee of a life estate in the lands, and by John A. Cooper as heir-at-law of the remainder.

Under the answer of Prudence and John A. Cooper, admitting the conversion of the personal.estate by Prudence, and the insolvency of both of them, and the design on their part to put the real estate beyond the reach of.-the creditors of the testator, the case must be considered in the same light as if the personal and real estate had been given to Prudence absolutely and in lhe, and she appointed executrix.

It is a different case from that of an intestacy and administration and a sale by the heir not being administrator ; and is different, also, from the case of a will of real and personal estate devising the land to one and appointing another executor. It is the case of a will devising and bequeathing all the real and personal estate pf the testator to one person, and appointing that person executrix of the will, and a purchase of the land trom that person as the devisee thereof, no order for the sale of lands to pay debts having been obtained or applied for. In such a case, if the executor, in breach of his duty, converts the personal property to his own use, instead of applying it to the payment of debts, the lands devised to him could certainly be subjected, in his hands, to the payment of the debts. And in such a case a conveyance of the land by the devisee, she being executrix also, to another, should, in justice to the rights of creditors, be carefully scrutinized. I will not inquire whether, under such circumstances, a purchaser of the land can be a bona fide purchaser; but whether, under the proofs in the cause, Stout can be held to be a bona fide purchaser.

I think there is no doubt that a creditor may come into this court to test the bona fid.es of such a sale, and to ask that the conveyance be decreed void. Was this sale, then,1 a bona fide transaction? or is Stout chargeable, under the evidence, as a party to the design of the executrix and devisee and of the heir, as admitted by them, to defeat a resort by the creditors of the testator to the land for the payment of their debts? If he is, it will be the duty of the court to declare the conveyance void, or to subject the lands to the payment of the debts, though Stout should have paid the consideration. Whether it has been paid, or how much of it, is one of the questions in the cause.

Stout is chargeable with knowledge of the will and of the provisions of it. The devisee under the will is a grantor in the deed to Stout, and the deed refers to the will. He is chargeable, then, with knowledge that the devisee conveying to him was the sole executrix of the will, and bound to apply the personal estate to the payment of debts, and, if that was insufficient, to take means to have the land sold for the payment of the debts; and with knowledge that if the executrix and devisee had wasted the personal property or converted it to her own use, the lands devised to her by the same will might be subjected in her hands to the payment of the debts.

.Beyond this, I think that, by testimony in the cause clearly competent, Stout is charged with knowledge of the existence of the debt to Nathan Cooper’s estate; and that at the time the deed was made to him it was unpaid j and that the personal property was insufficient to pay the debts; and that the executrix had failed to apply even what there was towards the payment of the debts.

It is difficult to understand how Stout, with the knowledge of these several matters, could have agreed to buy the land, unless the price agreed upon was so low as to induce him to assume the risk, or unless he bought with a view to aid the grantors in defeating the creditors from subjecting the lands to the payment of the debts, or was influenced by both these considerations.

From evidence free from objection as to competency, it appears that the land was worth a third more than the price agreed upon; and that Stout undertook to befriend the devisee and executrix in the matter, to use his own expression made to the witness Young. But, in addition to the matters above stated, of which Stout is chargeable with knowledge, we may derive aid in coming to a satisfactory conclusion by inquiring what Stout gave in consideration for the deed, by way of securing the purchase money; and what was the position of things at the time of the filing of the complainant’s bill and the service of the injunction on Stout not to pay the purchase money, and at the time when the complainant, previous to filing his bill, gave Stout notice not to pay over any money. This last-mentioned notice Stout admits was given about September 1st, 1834; and the complainant’s bill was filed October 9th, 1834, and the injunction served shortly after.

Stout, in his answer, says, or must be taken as intending to say, (the language in the answer in this respect is studied and peculiar,) that at the delivery of the deed to him, he gave three notes; one dated July 24th, 1834, to Prudence Cooper, for $100, payable one day after date; one dated, by mistake, July 25th, 1834, but intended for July 24th, in favor of Prudence and John A. Cooper, for $200, payable in thirty days, with interest; and one dated July 24th, 1834, to Prudence Cooper, for $200, payable in eight months, with interest; the whole consideration money being $500. Now it appears clearly, by the testimony of Henry Hilliard, that one of the notes given by Stout was for $200, payable in one year. And Stout himself, in the bill filed by him against Nathan A. Cooper and Henry Hilliard, on the 2d July, 1836, says that on the execution of the deed from Prudence and John A. Cooper to him, on the 24th July, 1834, he made and delivered to them his note of that date for $200, part of the consideration money, payable twelve months after date. Both Stout’s answer and the answer of the Coopers, concur that a note for $200 of the consideration money was given, payable in eight months. It is sufficiently clear, then, even without the answer of the Coopers —though I see no objection to considering that, in reference to this matter, at least — that; at the giving of the deed, two notes, of $200 each, were given by Stout, one payable in eight months and the other in a year. It follows that no note of $200 was then given, payable in thirty days, for the whole consideration money was but $500.

Stout’s answer, if it is to be taken as saying that a thirty days’ note, for $200, was given at the time of the sale, is not according to the fact. This is a very controlling consideration in the case. Two notes, for $200 each — i. e., for $400 of the said consideration money — were given, both dated July 24th, 1834, one payable in eight months and the other in a year. There is now exhibited on the part of Stout, a note dated July 25th, 1834, to Prudence and John A. Cooper, for $200, at thirty days, with interest. This note must have been substituted for one of the other two $200 notes.

When was this done, and for what purpose? Was it done on the day of the sale ? Why make any change, then, in the notes ? If Stout, after giving the other notes, thought he could pay $200 in thirty days, was he so apprehensive that the money would not be received before it was due, that he insisted on changing one of the $200 notes to a thirty days’ note? Was this change made before Stout was served with the injunction, or before he received the notice from the complainant, before referred to, given September 1st, 1834 ?

Three receipts are produced, one signed by Prudence Cooper, on the back of a note made by Stout, dated July 24th, 1834, to Prudence Cooper, for $100, payable one day after date, which receipt is dated July 26th, 1834, and is in full for the note; another of the receipts is on the back of the thirty days’ note, and is dated August 26th, 1834; and the third receipt is a loose receipt, signed by Prudence Cooper, for $127.65, to be credited “ on a certain note held by her against Stout, for the sale of land.” This receipt is dated August 30th, 1834. All three of these receipts are dated of days prior to the 1st of September.

There is a singularity in this matter, well calculated to induce a severe scrutiny of'the transaction; and I feel that I am in very little danger of coming to a wrong conclusion, in saying that these papers were-not made till after the 1st of September, mid, perhaps, not till after the injunction was served. If I am right in this, the next question is, for what purpose was the change made in the" note of $200, and for what purpose were the receipts given ? It could only be for the purpose of making a cáse against the complainant, and this was an object in which the executrix, at that time, from the admissions in her answer, would naturally join.

Did Stout priy the moneys for which the’se receipts were given ? If the change in the note wás made for a purpose, and evidence of the payment of it was necessary, for the same purpose, arid both parties were acting with a common design, very little reliance is to be placed on the receipts, as evidence of actual payment of the moneys. But if, as I think sufficiently appears, this change in the note and these receipts were not made till after September 1st,-1834, then Stout paid, after sufficient notice to put him on inquiry, and the payment, after notice, and the giving and taking receipts dated of a day prior to the notice, is, of' itself, strong evidence of bad faith in the original matter of the sale and purchase.

Iri a case like this, where the devisee máking the deed was also executrix of the will, and as such, if the personal estate was insufficient to pay, should have applied for an order to sell land to pay the debts, but omits to do it within the year, and then, as devisee, makes a deed for the lands to another, and has not even applied what personal estate there was, towards paying the debts, but has converted it to her own use, there is a clear breach of duty and want of good faith in the devisee and executrix iri making the sale or deed, and the court should be well satisfied of the bona fides of the grantee-in taking the deed. In this casé, thécireúm's'tanees and proofs, even without the aid' of the testimony of- Mrs. Cooper and Mrs. Stout, which was objected to as incorhpetent, are too strong evidence of the bad faith of Stout to pérmit the lands, and the value-of them, to be withdrawn from the creditors of the testator.

But I can see no objection to' the testimony of Mrs.'John'A. Cooper; and if that be admitted it shows that Stout got from Mrs. Prudence Cooper one of the original $200 notes and a loose receipt besides, after the injunction had been served on him. Her testimony, altogether, goes to show that the exchange of notes and the taking of the receipts was to enable Stout to make an answer to the bill.

' As to the testimony of Mrs. Stout, it may be that some parts of it should be excluded, on the ground that, at the time of the transaction she speaks of, she was the wife of Stout. But there are some parts of her testimony which, it seems to me, would not fall within that rule; and inasmuch as I do not think her testimony essential to the conclusion at which I have arrived, I do, not think it necessary to examine particularly the admissibility of the different parts of her evidence. Nor do I see that in a case like this the answer of the Coopers is to have no weight. The bill charges the Coopers and Stout with a common design, by the conveyance of the property to Stout, to defeat the creditors, and it puts them all to answer. The Coopers admit it. This is certainly evidence that they, the Coopers, had such a design; and this design on their part furnishes a reason why they might be willing to sign their names to receipts to be used by Stout in aid of their design. But, to proceed a step further, if a bill charging such a design between a grantor and grantee charges that no money was paid, and the grantor admits it, and the grantee says there was, may not the admission of the grantor be considered by the court, in aid of other facts and circumstances going to discredit the answer of the grantee? I think it may. The grantor was bound to answer the bill, as well as the grantee. The answers will agree or disagree. If the grantee says there was money paid, and the grantor admits there was none paid, certainly the case is not so strong in support of the deed as if both had answered that the money was paid. In weighing the testimony as to the fact, this disagreement may be put in the scale.

I have gone carefully over the answers and the testimony in the cause; and I am constrained to say that it appears strongly to me that the case made by the bill is sustained.

As to the objection that Daniel Horton’s representatives should have been made parties, I do not think it is well taken. It is evident he was but a surety on the bond, and this is a bill to subject the lands that were of the principal obligor to the payment of the debt.

On the whole, I think the deed must be declared void, and the lands held liable for the payment of .the debt.