#### Kevan & als. v. Branch.

October, 1844,

Richmond.

(Absent Cabem,, P.)

a. Pleading and Practice—Declaration —The declaration given in Carrington v. Anderson, 5 Munf. 32, sustained upon demurrer.

2. Bond of Indemnity—Action on—Declaration—Evidence—Variance* *—Case at Bar.—In an action on a bond of indemnity, given to the officer, upon a sale of property under execution, at the relation of the claimant of the property, the declaration states the obligation to be, that the obligors bound themselves to pay. among other things, to any person claiming title to the property levied on, all damages which such claimant might sustain by the seizure, and sale, &c. On the trial, the plaintiff offered in evidence an indemnifying bond, in a penalty, and with a condition, Helii, no variance, and the evidence admissible.

3. Fraudulent Conveyances—Grantor Remaining in Possession—Release Clause—Effect.† — A deed of trust for benefit of creditors, conveys among other things, cattle, household and kitchen furniture, and debts, without specification, either in the deed, or by schedule accompanying it; it provides that the grantor shall remain in possession of the property, for six months ; and that no creditor shall have the benefit *of the trust, who does not release the grantor from any farther liability, in three months. Held, not therefore fraudulent.

4. Same—Grantor—Competency as Witness for Plaintiff.‡—The grantor in the deed, is a competent witness for the plain tiff,, to prove that the property levied on by the officer, is the same conveyed by the deed.

This is an action of debt brought by Jordan Branch, sergeant of the town of Peters-burg, at the relation of John Patterson jr. trustee &c., against the appellants, upon an indemnifying bond given by them, upon a sale of the property of John Patterson sen’r under an execution sued out against him by Kevan & Hamilton.

The declaration recites the provisions of the act of February 21st, 1819,? authorizing the sheriff to demand indemnity for the sale of property under execution, to which a third person claims title; that Kevan & Hamilton had sued out a fi. fa. against the goods and chattels of John Patterson sen’r, which had been levied by the plaintiff on certain specified goods &c., to which John Patterson jr. claimed title; and that a doubt having arisen about the title, the plaintiff had required bond and security of Kevan & Hamilton, for indemnification for the sale of the property so levied on, the defendants by their writing obligatory, &c. bound themselves to pay, among other things, to *114any person or persons claiming title to said property, all damages which such person or persons might sustain in consequence of such seizure and sale, under the penalty of 750 dollars. That all the said property levied on as aforesaid, was the property of John Patterson jr. trustee &c., and was not liable to be sold under the said execution: which the defendants caused the said sergeant to do, by entering into the said bond; whereby the defendants became bound to pay such damages as the jury should assess. And the plaintiff says, that the said.property was worth, and the said defendants are liable to pay the said plaintiff, for the said John Patterson jr. trustee &c., the said sum of *750 dollars. Conclusion that the defendants had not paid the said sum of money, and damages 750 dollars.

The defendants, without craving oyer of the bond, demurred to the declaration; but the court overruled the demurrer: and then the defendants put in a plea of conditions performed; upon which the issue was made up.

Upon the trial of the cause, the plaintiff offered in evidence, a bond in the regular form, containing a condition to warrant title to the purchaser, as prescribed by the act of 1828, Sup. Rev, Code, p. 272, as well as the conditions prescribed by the act of 1819, to indemnify the officer and the claimant of the property. To the introduction of the bond as evidence, the defendants objected, on the ground that it was not sufficiently described in the declaration; but the court overruled the objection, and admitted the evidence.

The plaintiff then offered in evidence, a deed of trust from John Patterson sen’r to John Patterson jr., and John D. Townes, dated the 1st of April 1837, and admitted to record on the same day; whereby he conveyed to them a lot of land, a share of stock, a negro woman and child, a horse, several cows, all his household and kitchen furniture of every description, all debts due him &c., upon trust, that “the said trustees shall permit the said John Patterson sen’r to remain in quiet and peaceable possession of the property aforesaid, now held by him, for six months;’’ and then upon the further trust, to sell, and pay the debts, specified, in the order therein directed. This deed provided that no creditor should have any benefit under it, who did not release the grantor from any farther liability, within three months: and this provision was complied with, on the part of nearly all the creditors. The execution of Kevan & Hamilton was levied on the property, within six months from the date of the deed.

The defendants, thereupon, moved the court to instruct the jury, that this deed of trust was fraudulent *in law, . as to the plaintiffs in the execution ; but the court refused to give the instruction.

The plaintiff then offered to introduce John Patterson sen’r, the grantor in the deed, to prove that the property levied on, was the same property conveyed byr the deed. To the introduction of this witness, the defendants objected; but the court overruled the objection.

To these.several opinions of the court, the defendants excepted, and the jury having found a verdict for. the plaintiff; and the court having rendered judgment accordingly ; the defendants applied for, and obtained an appeal to this court.

May & Joynes for the appellants.

1. The demurrer to the declaration should have been sustained, because, 1st. There is no direct averment that the relator had sustained damage. The allegation of damage is only argumentative, and is, therefore, fatally defective on general demurrer. Dickinson v. M’Craw, 4 Rand. 158. 2d. There is no express averment that the property was in fact sold; without which the action cannot be maintained. The declaration ought to contain an express averment of every fact essential to shew, that the plaintiff’s case is within the statute. Syme v. Griffin, 4 Hen. & Munf. 277.

2. The bond ought to have been excluded from the jury, because it is not properly described in the declaration. The obligation set forth, is an obligation to pay to the claimant of the property, all damages that he might sustain by reason of the seizure &c. The obligation offered in evidence, is an obligation to pay 750 dollars, with a condition. The obligation and condition are separate and distinct instruments. Hurlstone on Bonds 136, 9 Law Lib. ; 1 Saund. 9 b. note 1; and they ought not to be confounded in pleading. Hence, oyer of the bond does not entitle the party to have the condition read to him; and the obligatory part alone is *looked to, to ascertain the parties who are bound by it; and the manner in which they are bound. 11 Leigh 136.

If the defendants had craved oyer and demurred, the demurrer must have been sustained ; because the declaration did not describe the' undertaking of the defendants, according to its legal effect. And the plea of conditions performed, did not preclude the defendants from moving to exclude the bond from the jury. Moore v. Fenwick, Gilm. R. 214.

3. The deed of trust from John Patterson sen’r, was fraudulent on its face, and void as to the appellants; and the court should so have instructed the jury.

In Skipwith v. Cunningham, 8 Leigh 271, this court held, that an insolvent debtor making an assignment, may exact a release from his creditors, as a condition of their participation in the fund. This must be', however, only where there is perfect good faith on the part of the debtor; and an honest devotion of his whole property to the payment of his debts. In New York, these deeds are not sustained, even under such circumstances. Wakeman v. Grover, 4 Paige’s R. 23, 38; S. C. 11 Wend. R. 187. Nor are they sustained in Connecticut; In*115ghaham v. Wheeler, 6 Con. R. 277; or in Ohio, Atkinson v. Jordan, 5 Hammond’s R. 293. And though such a stipulation was sustained in Brashear v. West, 7 Peters’s R. 608, the court expressed great doubt whether it ought to be done on principle: and chancellor Kent strongly condemns them in his commentaries. 2 Kent’s Com. 534, 536. In 5 Johns. Ch. R. 329, such a condition was held to be oppressive on the creditors, and fraudulent, where the debtor assigned only a part of his property; and this doctrine was distinctly recognized by this court in Skipwith v. Cunningham. In Patterson’s deed, the whole beneficial interest in his property, is not conveyed: but six months possession and use is reserved. If six months use may be reserved, with equal propriety *may he reserve the use for a year, or six years. Such a case does not stand on the high ground on which the cases cited were sustained; and that especially, when in this case, no inventory of the property conveyed, accompanies the deed; and there is no specification of it in the instrument. We submit, that the stipulation for the release in this case, was fraudulent; and made the assignment void as to the appellants.

An assignment by an insolvent, though it does not stipulate for a release, will not be sustained, if it reserves a provision for the benefit of the debtor, or his family, at the expense of creditors. Murray v. Riggs, 15 Johns. R. 571, is contra; but that case has since been overruled: and the doctrine is fully settled, that the effect of such a reservation, is to invalidate the whole assignment. Austin v. Bell, 20 Johns. R. 442; Mackie v. Cairns, Hopkins’s R. 373; S. C. 5 Cowen’s R. 547; Grover v. Wakeman, 11 Wend. R. 187; Harris v. Sumner, 2 Pick. R. 129; Pessmore v. Fldridge, 12 Serg. & Rawle 198; Galt v. Dibrell, 10 Yerg. R. 140. On this principle Patterson’s deed was clearly void.

The provision in Patterson’s assignment, reserving to himself the possession and use of the property for six months, tended to delay and hinder creditors. It was a complete locking up of the property in his hands, for that time. Neither the creditors who accepted, nor those who rejected it, could touch the fund during that time. The deed too, was made, and put on record, on the day appointed by law for holding the court at which Kevan was to obtain judgment. It was made, without doubt, in view of that judgment, and was an attempt to exclude them, not by a bona fide surrender of the property, to other creditors, or to the creditors generally, but by an arrangement which was to cover it up for six months, from every body but Patterson himself. A provision to postpone a sale without the consent of the creditors, will not be good. 7 Paige’s R. 37. And where *the deed of trust shews an intention to prevent the sacrifice of the debtor’s property, the deed is void. Vernon v. Morton, 8 Dana’s R. 263; Ward v. Trotter, 3 Monroe’s R. 3.

The deed tends to defraud creditors. It not only puts the property out of their reach for six months, but from the nature of that property, it must, necessarily, be diminished in value, if not consumed by the use of it, during this period. An assignment which contains a provision thus directly diminishing or destroying the security intended for creditors, cannot be valid. On this principle it was held in a late case in Tennessee, that an assignment of things consumable in the use, to secure payment of debts, is fraudulent per se; if it provides that the grantor is to remain in the possession and use of them. Richmond v. Cradok, 1 Meigs’s R. 581.

The deed puts it in the power of the debtor to defraud his creditors to an indefinite extent. During the six months they were to remain in his hands, he might make away with the furniture, might collect debts due to him, sell the goods, and other unenumerated articles, and pocket the receipts without the possibility of detection. The reasoning of the judges in Dang v. Dee, 3 Rand. 410, as well as the point decided in that case, has a strong application to this view of the subject. See also Thompkins v. Wheeler, 16 Peters’s R. 116, 119.

In assignments of debts, and furniture, it is usual to annex a schedule, to ascertain what is conveyed, and to put it out of the power of the debtor to commit frauds. Two of the judges in Boyd v. Smith, 4 Dallas’s R. 76, thought that the want of a schedule was fatal, even where the trustee had a right to take immediate possession of the property, and of the books and other evidences of debt. And in Wilt v. Franklin, 1 Binn. R. 502, though the court thought the want of a schedule was not fatal to the assignment, Tilghman, C. J., admitted it was always a suspicious circumstance.

*In such a deed as Patterson’s a schedule is indispensable to secure the creditors against frauds.

Spooner, for the appellee.

1. The declaration in this case, is copied from the form given in Carrington v. Anderson, 5 Munf. 32; which was sanctioned by the court of appeals, in that case; and again in effect sanctioned by the court, in Garland v. Jacobs, 2 Deigh 651. The objections that the allegation of damage is argumentative, and that there is no averment of a sale of the property, are answered by a reference to the declaration, which shews that both objections are unfounded.

2. The court in a case like this, will not presume that the deed is fraudulent, unless the terms of the instrument are such as to preclude any other inference. The principal objection urged, is, that the grantor is to remain in possession of the property for six months. Nothing is said about use or profits. Is this provision conclusive of fraud? or might it not be shewn that this stipulation was for the benefit of all the creditors? Three months are allowed to the creditors to accept the deed; it might require a month or two more to receive *116their acceptance after it was made, if some of them resided at a distance; as in fact one did reside in Scotland. The property could not be sold with propriety, until it was ascertained how many of the creditors were to participate in the proceeds of the property; and. to allow all a chance to bid. Cole’s adm’r v. M’Rae, 6 Rand. 644. If but few signed, it might have required a sale of only one half or less of the property, to pay such debts. The time allowed for signing the deed, brought it into the summer, an improper time for a sale; and it • was surely better that the property should be in the possession of a person who would take care of it, than that it should be subjected to the injury of removal, and the expense of keeping. The cases of Skipwith v. Cunningham, 8 Leigh 271; M’Cullough v. Somerville, Id. 415; 7 Peters’s R. 608, and Janney v. Barnes, 11 Leigh 100, are a complete answer to all the objections made to this deed. The objection of the want of a schedule of the property and debts conveyed, existed in these cases, but was not considered important. This deed of Patterson’s was signed by almost all his creditors, none of whom complained of fraud or the want of a schedule, nor of any of the conditions ; and if the parties interested in the deed, make no objections on these grounds, it is not for the appellants to do so.

*

Indemnifying Bonds.—See monographic *note*on “Statutory Bonds” appended to Goolsby v. Strother, 21 Gratt. 107.

†

Fraudulent Conveyances — Grantor Remaining in Possession — Release Clause—Postponement.—See on this subject, the principal case cited and approved In Dance v. Seaman, 11 Gratt. 782*(ssenate)*; Gordon v. Cannon, 18 Gratt. 395, 396. 398, 403, and *foot-note*; Williams v. Lord, 75 Va. 401; Long v. Meridan. etc., Co., 94 Va. 596, 605, 27 S E. Rep. 499; Hurst v. Leckie, 97 Va. 560, 31 S. E. Rep. 464 ; Gardner v. Johnston, 9 W. Va. 407. See monographic *note*on “ Fraudulent and Voluntary Conveyances ” appended to Cochran v. Paris, 11 Gratt. 348.

‡

Fraudulent Con veyances—Grantor—Competency as a Witness.—The character of grantor in a deed does 'not affect his competency as a witness. This is admitted to be law in William & Mary College v. Powell, 12 Gratt. 383, citing *Kevan*v. *Branch, 1 Gratt.*274, and Patteson v. Ford, 2 Gratt. 18. See also, citing the principal case for this proposition. Oliver v. Hayes, 1 Va. Dec. 188.

§See note to following case.

By the court.

Affirm the judgment.