Case Name: Seth Norton vs. Horace Norton
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1850-09
Citations: 5 Cush. 524
Docket Number: 
Parties: Seth Norton vs. Horace Norton.
Judges: 
Reporter: Massachusetts Reports
Volume: 59
Pages: 524–531

Head Matter:
Seth Norton vs. Horace Norton.
A license from the court of probate, authorizing an administrator, whose intestate has conveyed real estate, with intent to defraud creditors, to sell the same for the payment of debts, under the provisions of the Rev. Sts. c. 71, is sufficient within § 3, of that chapter, if it is in a general form, authorizing the sale of so much of the land conveyed, as may be necessary to- raise a certain sum for the purpose of paying the intestate’s debts and incidental expenses; and when public notice is given of the application for such license, in the manner provided in § 8, all persons interested are bound thereby.
Real estate, conveyed by an intestate, in his lifetime, without adequate consideration, and by way of gift, either in whole or in part, may be sold by his administrator, under the provisions of the Rev. Sts. c. 71, to pay the debts of the intestate, as estate conveyed by him with intent to defraud his creditors, if, at the time of the conveyance, the intestate thereby rendered himself unable to pay his then existing creditors.
The proceeds of a sale by an administrator of real estate conveyed by his intestate with intent to defraud creditors, although such conveyance was void at the time as against then existing creditors only, are applicable to the payment of all the creditors alike.
If an administrator receives payment of a note given for the purchase-money of an estate, conveyed by his intestate to defraud creditors, he does not thereby ratify the conveyance; unless the payment is received with full knowledge of all the facts, and the administrator is a party in interest, in which case it might be otherwise.
The grantee of land, conveyed by an intestate, in his lifetime, with intent to defraud creditors, who has acted on such conveyance, and is himself a creditor, is not estopped thereby, as one of tbe creditors of the estate, from availing himself of the fraudulent character of the conveyance.
Where an administrator, having obtained a license to sell so much of certain real estate, conveyed by his intestate in his lifetime, as should be necessary to raise the sum mentioned in the license, to pay the debts of the intestate as therein stated, brings a writ of entry to recover the real estate so conveyed, the effect of a judgment in his favor will be to vest in him so much of the estate, as may be required to be sold for the purpose mentioned in the license, and the residue will remain the property of the tenant; unless the conveyance by the intestate is tainted with actual fraud.
This was a writ of entry, brought by the plaintiff as the administrator of Gideon Canfield, and tried in this court on the issue of mil disseisin before Metcalf J., by whom it was reserved, after a verdict for the demandant, and reported for the consideration of the whole court.
The land demanded was part of a farm, originally belonging to the plaintiff’s intestate, -who, on the 6th of February 1846, conveyed the same to his two sons, Theron and Marcus R. for the consideration of" $2000, for which each of the grantees gave his note for $1000, payable on demand, with interest annually, after the 1st of April, 1847, when they were to have possession.
The grantor, at the time of this conveyance, stated that ho thought he did not owe but $1500, which sum would pay all his debts; and there was no evidence to show that either the grantor or his sons knew or supposed otherwise; nor was it contended, that there was any intent to defraud the creditors of the grantor, or to avoid payment of his debts; but there was evidence, that the parties regarded the farm as worth more than $2000, and that the value beyond that sum was considered as a gift to the sons.
On the 1st of March, 1847, the grantor died, and the plaintiff was appointed his administrator. The estate proved insolvent, and commissioners were appointed, who allowed claims to the amount of $3250.75. The inventory returned was of real estate, $740, and personal estate, $1910.94, amounting together to $2650.94.
It having been referred to an auditor to state the condition of the intestate at the time of the conveyance to his sons, the auditor reported that his indebtedness, at that time, was $2754.25; of which sum $970.77 was due on promissory notes, on which the intestate was a joint promisor with his son Theron; that if these notes were for the debts of Gideon Canfield alone and the other joint promisor was a surety, then the sum first named was the amount of the intestate’s indebtedness, at the time in question; but if the last-named sum, or any part thereof, was a joint debt as between the copromisors, then to the amount of such joint debt one half thereof was to be deducted from the sum of $2754.35, and the balance was to be taken as the amount of the intestate’s indebtedness, on the 6th of February, 1846. In regard to the amount of Gideon Canfield’s assets at that time, the auditor reported, that “ evidence was offered tending to show, that the assets of said Gideon, at the time of the conveyance, besides the farm, amounted to $2800.”
The demandant, in his capacity of administrator, had received of Theron Canfield $1000.66, and of Marcus- $382.50, being the balance due on their notes of $1000 each, given to the intestate on the purchase above stated, the residue having been paid to the intestate before his death. No part of either of these 'sums had ever been offered to be refunded by the administrator. One of the debts, reported upon and allowed by the commissioner, was in favor of Theron Canfield, for $795.29, being the amount paid by him on the note above mentioned as surety for Gideon Canfield.
On the 7th of September, 1847, Theron and Marcus having previously made partition of the estate conveyed to them by their father, Marcus conveyed his share thereof to the tenant, subject to the right of dower of the grantor’s widow, and to a mortgage mentioned in the deed to the tenant; and evidence was introduced to show, that the tenant, at the time of the conveyance, had knowledge of the gift above mentioned.
On the 4th of July, 1848, the demandant presented a petition to the judge of probate, setting forth that he was the administrator of the estate of Gideon Canfield; that the estate had been represented and proved to be insolvent; that commissioners had been appointed thereon, who had reported the debts due from the same; that the goods and effects comprised in the inventory had been fully administered, and the proceeds thereof ratably divided among and paid to the creditors, whose claims were allowed by the commissioners ; that there was still due and unpaid to the creditors the amount of $1020.16 ; that several of the creditors had represented to the petitioner, that the intestate, in his lifetime, had conveyed away certain real estate described in the petition, with intent to defraud his creditors; that the intestate died within five years, to wit, on the first Monday of March, 1847; that the creditors above mentioned had requested the petitioner, and had required of him, to make sale of so much of the said real estate as might be necessary for the payment of the sum aforesaid, with interest and charges ; wherefore the petitioner prayed, that he might be authorized and empowered to make sale of so much of the said real estate, as might be necessary for the purpose aforesaid. Due notice of this pe titian having been ordered and given to all persons interested, by publishing the same three weeks successively in a newspaper designated by the court, the judge of probate, on the first Tuesday of August following, passed an order reciting the petition and licensing the petitioner to sell at public auction, within one year, so much of the said real estate, as would raise the sum of $1200 for the purposes aforesaid, and to execute conveyances thereof accordingly.
The demandant entered upon the demanded premises on the 4th of August, 1848, and the writ was dated the same day.
Several objections to the demandant’s right to recover, on this evidence, were taken by the tenant, and overruled by the judge, who instructed the jury, that if in the conveyance from Gideon Canfield, there was a gift of some value beyond the consideration of $2000, which was made and received as a gift, and the tenant knew that fact, when he purchased of Marcus, they might return a verdict for the demandant.
The jury, under these instructions, returned a verdict for the demandant subject to the opinion of the whole court. If the. demandant is entitled to maintain this action, such judgment is to be entered as the court may order; otherwise a new trial is to be had, or the demandant is to become nonsuit, according to the direction of the court.
I. Sumner and B. Palmer, for the tenant.
H. W. Bishop, for the demandant.

Opinion:
The opinion was delivered at the September term, 1851.
Dewey, J.
The questions arising in the present case, as to the validity of the license to the administrator, to sell the real estate of the intestate, have been substantially decided in the case of Yeomans v. Brown, 8 Met. 51. The construction there given to the Rev. Sts. c. 71, § 8, was, that a license in the general form here used was a valid license, and that it was not absolutely requisite, that the specific portion of the estate to be sold should be designated, either in the petition, or in the order for sale. The provisions are general, applying to all cases oí applications to sell real estate for the payment of debts ; and although we can perceive many benefits, that would result from a more specific designation of the particular land to be sold, and a special order for the sale of a specific part, especially in cases where it is proposed to sell land in the possession of one claiming adversely, the decision of this court, in the case already referred to, has settled the construction of the statute. The present case differs from that, in respect to the adverse party, as in this the adverse party claims by deed from the intestate, and there was a public notice given of the application; this seems to be sufficient for the purpose, and all persons interested to prevent such order must act upon the notice. The case of Arnold v. Sabin, 1 Cush. 525, is to the point of the sufficiency of such general notice, in reference to the appointment of an administrator.
Supposing the license to sell the real estate of the intestate duly obtained, the next question is, whether the land demanded in this action is included in the estate liable to be thus sold. By Rev. Sts. c. 71, § 11, the real estate liable to be sold for the payment of debts includes " all that the deceased may have conveyed, with intent to defraud his creditors." But in the report of the present case, it is distinctly stated, " that it was not contended that there was any intent to defraud the creditors of the said Gideon." Unless the fact, that the conveyance was partly by way of gift, controls the statement in the report, it is difficult to see how this is a case within the provisions of the statute.
Looking at the object of the statute, and the reasonableness of extending the provision for a sale equally to land transferred for some fraudulent purpose, and to land professedly conveyed by one in debt, without any consideration other than love and affection, we should suppose, that both species of conveyance would be liable to be set aside, after the death of the grantor, if the payment of his existing debts required it. The conveyance of property by way of gift, by one deeply in debt, if thereby he becomes incapacitated to pay his debts, is legally fraudulent as to his creditors ; and, if in the present case, such should be found to have been the fact, as to the circumstances attending this conveyance, it may be deemed in law fraudulent, though no such fraudulent intention existed in the mind of the grantor, he not properly considering the amount of his indebtedness, or the extent of his assets.
Taking the case most strongly in favor of creditors, it was only a case of a voluntary conveyance, or a conveyance made without adequate pecuniary consideration ; and such conveyance could not be impeached by subsequent creditors; and the inquiry, whether it can be avoided as fraudulent in law, must be with reference to the debts existing at the time of the conveyance. If his then present debts were not such as to incapacitate the grantor, from giving to his sons that part of the consideration for the conveyance, which was a gift, then the conveyance will be held good and effectual. The law Joes not forbid the conveying of property by way of gift, when one has adequate means left to pay his debts.
The conveyance of February 6th, 1846, being founded partly upon a gift, its validity will depend upon the state of the assets of the intestate and the amount of his debts, at that period. The auditor has reported the whole amount of the indebtedness of Gideon Canfield, at that date, to be §2,754.35. If the joint and several notes composing a part of this sum, and of the amount of §970.77 were debts of Gideon Canfield alone, and the other joint promisor is a mere surety, then the sum first named is to be taken to be the true amount of indebtedness of said Gideon. If on the other hand, the sum of .§970.77, or any part thereof, was really a joint debt as between the copromisors, then to the amount of such joint indebtedness, one half thereof is to be deducted from the sum of §2,754.35, and the balance is to be taken as the amount of the debts of Gideon Canfield on the 6th of February, 1846.
The next inquiry will be, what was the amount of the assets 1 The report says, that " evidence was offered tending to show that the assets of said Gideon at the time of the conveyance, besides the farm, amounted to §2800." But that question has not been passed upon or found by the jury, and the case must be submitted to a jury, upon that point, unless the facts should be agreed by the parties. If the result shows obviously a sufficiency of assets to pay the debts, and to make the gift to the extent it was made, the conveyance was a valid one. If otherwise, then it was fraudulent, as respects the then existing creditors.
It has already been stated, that it is only the then existing creditors, that could have avoided this conveyance, if the grantor had been still living. This presents another difficulty in the case. The then existing debts, upon the decease of the grantor, were allowed by the same commissioners, and paid out of the same common fund, as the debts subsequently contracted. The pro rata distribution, if an estate is insolvent, is the same for each. It is therefore impracticable to carry out the principle of subjecting the land conveyed by Gideon Canfield to be sold for the payment of preexisting debts exclusively, unless we adopt the principle of having a division of the assets into two classes. This we think is not to be allowed here; and we are of opinion, that though the ground of avoiding this conveyance is, that the land was liable to be taken to satisfy existing creditors only, yet when the conveyance is avoided, the proceeds of the sale will be assets generally, and other creditors will receive the benefit thereof incidentally.
The farther questions are, first, as to the effect of the receipt of payment, by the administrator, of the notes, given for the purchase-money of the land. This, it is contended by the defendant, was a ratification, by the administrator, of the sale. If this payment had been received with full knowledge of all the facts, and if the administrator was a party in interest like the heirs at law, such might be the effect; but we apprehend no such consequences will follow, in the present case, from the receipt of payment of the notes by the administrator. Equity will of course require, that in some mode the party paying the money shall be reimbursed or receive an equivalent, inasmuch as there was no moral fraud, and the contract has failed for causes not anticipated by the original parties. As the sum thus paid has been or must be applied by the administrator to the payment of the debts of the grantor, this will lessen, to the entire extent of the sum thus paid, the amount for which the land may be sold to pay debts ; and in this way the parties who have paid the money may be benefited to the amount which they have paid.
Another question relates to the debt allowed by the commissioners to Theron Canfield. It is argued, that inasmuch as he was one of the grantees under the deed, and has acted upon it and made partition with the other grantee, under whose title the defendant claims the land, Theron Canfield ought now to be estopped to set up the objection that this deed was fraudulent. This might be so, if he was the sole creditor. But this is not the case, and his claim is already allowed by the commissioners, is legally chargeable on the assets, and will be entitled to a pro rata dividend. The rights of other creditors, therefore, seem to require, that the debt to Theron Canfield should be computed as one of the debts for which the land is to be sold.
A further question has been considered by us, which bears materially upon the effect of the decision, that the administrator may maintain this action, if the state of the debts and the assets on the 6th of February, 1846, should establish this deed to have been legally fraudulent as to the creditors, namely, the effect of a recovery by the plaintiff in this action. And upon that point, the court are of opinion, that under the general order, to sell so much land as will raise the sum of $1,200, to pay the debts of the intestate, if the administrator brings his action to recover the real estate of the deceased, the effect of a judgment in his favor will be only to vest in him so much of the land, as may be required to be sold to raise the necessary sum to pay the debts, as stated in his order; and that the object of the recovery being thus accomplished, the estate remaining will be the estate of the defendant. The court will order a qualified judgment in such cases, reciting the order of sale and limiting the title to be acquired under the judgment to so much of the real estate described in the writ, as shall be required to be sold at public auction, to raise the sum stated in the order of the probate court. This qualified judgment, of course, will only be applicable to cases, where the transaction is not tainted with actual fraud, and where the conveyance is not made with the intent to delay creditors.