#### Rucker, for Levick, &c. *vs*Abell *et al.*

Chancery.

*Case*142.

Error to the Meade Circuit.

*September*22.

*Fraudulent conveyances. Gifts. Voluntary*conveyances,-

A voluntary conveyance by *&*grantor to his children when indebted, though it be in compliance with a previous verbal promise made when unembarrasse d , is notvalied.

Jddge SrMPSON

delivered the opinion of the Court.

Autiiough Robert Abell, the son of Samuel Abell,, sets up and relies upon a contract with his father, for the purchase of the tract of land, alledged to have been fraudulently conveyed to him, in violation of the rights of his father’s creditors, yet he introduces n© testimony to establish the existence of any such contract.. On the contrary, all the evidence in the cause, proves that the land was a gift to him by his father, and not the subject of sale for a valuable consideration.

As then his right to the land depends on a gift merely by parol, and not consummated by deed until after the-time his father became unable, on account of his liabilities, to give land to his children, without a violation: of good faith to his creditors, the question occurs,, whether the conveyance when made, shall relate back to the time of the original gift, or shall be regarded as-taking effect merely from the time of its- execution?

When the verbal gift was made, and the son placed in the possession of the land, the father was unembarrassed in a pecuniary point of view, and his condition then was such as to justify the gift, without any imputation of fraud. But when the gift was consummated by a conveyance, his condition was changed. He had incurred extensive liabilities as a surety for another son,, which threatened to involve him in complete and utter *567bankruptcy. And at the same time that this conveyance was made, all his landed estate was conveyed to ■other relatives, the whole arrangement having been ■evidently made by him to prevent the subjection of his property to the payment of his liabilities as surety. The circumstances under which the conveyance was made, manifest conclusively a fraudulent intent in its execution, and renders it void as to creditors, unless it can be sustained by reference to the previous voluntary promise.

A verbal gift of land wholly invalid, vesting no right, legal or equitable in the donee.

As the land, notwithstanding the verbal gift, belonged to the father until the conveyance was executed ; as the son had no equity arising out of a contract of purchase, and the payment of a valuable consideration, and as the father retained the right to the land, and had the power to complete the gift or not athis discretion, it ■seems t*o us that the title of the son must depend upon the validity of the gift at the time of the conveyance, and can derive no aid or support from the previous verbal promise. Any other doctrine would enable a father, by a verbal gift of his land to his children, retaining the title in himself, either to remain the real, as well-as ostensible proprietor of the property, or by a completion of the gift, to divest himself of all right and title to it, whenever circumstances might render it necessary to do so for the purpose of placing it beyond the reach of his creditors. Such a power on the part of the father, the ownership of the property affording him the means of obtaining a delusive credit, - would open a wide door for the introduction of fraud and imposition upon creditors.

A verbal gift of land is wholly invalid. It vests no right in the donee, legal or equitable. The donor still has the power to consummate the gift or not, at his option. Being voluntary at its commencement, it is no less voluntary at the time of its completion. Until that time the property belongs to the donor, and is liable for his debts, or subject to any disposition he may choose to make of it, not inconsistent with the rights of creditors. A gift then, merely verbal, being wholly inoperative until a conveyance is executed, the validity of the trans*568action must depend, not upon any antecedent promise, but on the condition of the donor at the time the gift is made effectual.

The fact that a veyanee is made instance6of1 the embarrassed to his son, does not render it more valid against his made^yVimselff If he had the eble to his credi-

Where a son unírom the'fatbon takes possession lands, expecting thegifltobeconsummaied, he is tledllasly against creditors,to compensauon tor such improve, hold a lien upon improvement,Te-due ting the value ot the use.

The fact, that the deed was not made by the father himself, but by his vendor, at his instance, to whom he had paid the purchase monej'-, and whose bond he held for a title, can make no difference in the law of the case. The land was liable to his creditors, although his title to it was only an equitable one, and the law will not , . permit him, by having the conveyance made to another person, to change the destination of the property and thereby defeat the iust claim of his creditors.

But as the son had taken possession of the land under the verbal gift, and made valuable improvements there-oil) under the expectation created by the act of the father, that the gift would be consummated, he is in equity, entitled to pay for those improvements, and has *\.*,. , , . , *„*,, . a lien upon the land to secure the payment of their value. This lien would exist against the donor, and is valid against creditors. But its amount must be deter- ° mined by deducting from the value of the improvements a reasonable compensation for .the use of the land.

The sale to Robert A. Abell, the brother of Samuel, cannot be sustained against the creditors. The land *°*. . , sold is ailedged by the complainant to have been, at the time it was sold, of the value of six or eight dollars per acre. This allegation is not controverted. The price given is less than one half of this value. The purchase is ailedged to have been made in trust for Samuel’s benefit; this is not denied. The defendant avers that the whole transaction on his part, was fair, done in good faith, and without the intent or imagination of fraud. If this be true, it can only be so on the supposition that the transaction was, in reality, a transfer of the title to secure a loan of money, upon the payment of which the title to the land was to revert to Samuel Abell. The complainant suggests such to have been the nature of the transaction, and requires the defendant to state whether it were so or not. To this cull, no response is given in the answer. This conveyance, therefore, must be regarded as a mortgage merely, securing to Robert *569A. Abell the re-payment of tire money advanced, by him to Samuel Abell. The testimony shows an advance of one hundred and sixty dollars, and the execution of a note for three hundred. If the note has been paid the amount of the lien of Robert A. Abell on the land,'will be four hundred and sixty dollars, with interest from ■the time the money was paid. If the note has not been paid, his lien on the land will only extend to the amount •actually advanced by him,x whatever it may be. This .fact must be ascertained by a reference to a commis.sioner. •

*L. Hard and Grigsby*for plaintiffs; *B. Hardin*for •defendants.

The Court below was right in subjecting the land •given to Nathan Abell, to the payment of his father’s ■debts. The doctrine applied to the gift to the other son, is decisive against the validity of the gift to him. But the Court erred in dismissing the complainant’s-bill and refusing him any relief against the land conveyed to Robert Abell and Robert A. Abell.

Wherefore, the decree as to said defendants, is reversed and cause remanded, for further proceedings and •decree as herein indicated.