Case Name: John T. J. Wilson and Joseph M. Cleland, Appellants, vs. Luke Lott in his own right and as Executor of Mary Thomas, deceased, Appellee
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1853
Citations: 5 Fla. 305
Docket Number: 
Parties: John T. J. Wilson and Joseph M. Cleland, Appellants, vs. Luke Lott in his own right and as Executor of Mary Thomas, deceased, Appellee.
Judges: 
Reporter: Florida Reports
Volume: 5
Pages: 305–326

Head Matter:
John T. J. Wilson and Joseph M. Cleland, Appellants, vs. Luke Lott in his own right and as Executor of Mary Thomas, deceased, Appellee.
1. Fraud is not to be presumed, but must be proved; and this Is the general rule, as well in equity as at law.
g. In equity, fraud will sometimes be presumed from tbe 'nature and subject of the bargain itself, being such as no man, not under some delusion, would make, on the one hand, and as no honest and fair man would accept, on the other; and it will be presumed from tbe circumstances and condition of the parties contracting; and these instances form exceptions to the general rule.
3. Where one greatly indebted, although not actually insolvent, with the avowed design of removing from the country, makes a sale of all his property, real and personal, receiving payment paitly in cash, partly in a debt due by him to the vendee, and for the residue tbe promissory notes of the vendee, which were subsequently paid, and possession of the property sold followed and accompanied the conveyance: Held, Not to constitute evidence of fraud although it appeared that tbe vendee was tbe mother-in-law of tbe vendor; and that-, owing to subsequent misconduct of the vendor, the proceeds of tbe sale were lost to bis creditors.
4. Where it appeared that subsequently to tbe sale, upon tbe entreaties of the vendee, who was unwilling to be separated from her daughter, and upon her promise to remember her grand children liberally in her will, the vendor yielded to the said solicitations and promises, abandoned bis intention of removing, and resided with the vendee, but never assumed any dominion or control over the property sold, it ivas held that it did not constitute such a possession in tbe vendor from which a secret trust in his favor would be inferred, so as to make the transaction fraudulent by construction of law.
Appeal from a decree of the Circuit Court for Jackson County;
Wilson and Cleland filed their bill of complaint against Lnke Lott in his own right and as Executor of M’ary Thom as deceased, alleging that Lott, in March 1839, conveyed to Mary Thomas his interest in certain lots in Marianna, and also a tract of land situated in Jackson County ; that Lott being the owner of an interest in certain pre-emption claims likewise’conveyed it to said Mary Thomas in her life time, and that at. the’ date of these conveyances Lott transferred and conveyed to said Mary Thomas all his other property of every name, nature and description. The bill sets forth that at the time of these transfers and conveyances., Lott was largely indebted to many persons, and among them to complainants, who instituted separate suits against him ’and recovered judgments in March 1840, in each case for $4,434 39; that the executions which issued thereon were, in consequence of the transfers and conveyances which bad been made, returned “ nulla bona.” It charges that the said transfers and conveyances were concocted and contrived in fraud, covin, collusion and guile, to the end and purpose, and with the intent and design to elude and deceive, hinder, circumvent, delay and defraud the creditors of said Lott in general, and especially complainants. That a merely nominal and fictitious consideration, if any, was given or known in these transactions, and that if any money passed it was borrowed for the purpose and immediately returned to the lender, and that if notes were given they have never been enforced, and were given as a pretence to cover tbe real nature of the transactions.
Tbe bill further charges that Mary Thomas was in no sort of condition, either by age, ability, babit or inclination, to enter into sucb an extensive engagement, being an aged widow, having neither the time, capacity or disposition for such investments. That she never occupied or improved the town lots, and never cleared, planted or improved the land, but that said Lott had been in tbe receipt and enjoyment of tbe profits and income of allthat Lott was the son-in-law of Mrs. Thomas, at whoso house he and his family resided without any apparent and real difference or exclusiveness of interest, and that she became the bailee of all his property for its protection, and to cover it from his, creditors. It alleges, further, that before her death Mary Thomas made her will, by which she devised and bequeathed to her .grand-children, to wit, the children of-■said Lott, all her property, .reserving a life estate to her daughter, the wife -of said Lett, and appointing said Lott Executor thereof. The bill concludes by praying that the transfers and conveyances referred to be set aside as fraudulent and void -as to creditors, and that it be decreed that •said Mary Thomas in her life time, was a trustee -of the «creditors of said Lott, and that said property be held to be subject to their debts and sold .to pay the claims of complainants.
Defendant in his answer, states that in the latter period -of the year 1838, or early in 1839,. he proposed to emigrate to Texas, and that preparatory to this movement lie sold all his property, both real and personal, except notes .and accounts, to the said Mary Thomas. He declares that his •intended movement to Texas was the only inducement with him to sell his property, and in the most pointed and unequivocal terms denies the truth of the allegation in the bill, of an intention on his part to defraud his creditors. He denies that there was any fraud, actual .or constructive, in the sale of his property, and asserts that the transfer ;and conveyance thereof was for a feM .and valuable consideration, and proceeds to state in detail the valuations placed on the different parts of the property sold; that as ■■soon as the conveyances were completed, the property was delivered to Mrs. Thomas, and she continued to possess •and enjoy and control every part of it until her death.
The answer further states that the consideration for which •defendant sold the property was paid in the following manner, vizu Mary Thomas paid the defendant one thousand dollars in cash, one thousand dollars in his own notes which be had given her some time previous for a negro man, and two mules — assumed the payment of his stock note due the Union Bank for $1,333 33, and for the balance she gave him two notes which she paid before her death. The money paid defendant, he states he applied in various ways to his own use, but the great part of it ho believes he lost at bragg. Defendant admitted that from the time of the said sale to Mary Thomas he and his family resided with her, but for reasons which he circumstantially states. He alleges that at the time he sold his interest in the pre-emption claims (eight in number) he entered into an obligation by which be bound himself in the penal sum of two thousand dollars that the entries of all said pre-emption claims should be effected ; that entries could be made of only four of said claims, for the reason that assignments of the other four could not be obtained from the persons entitled to them. That, he was also hound by his said obligation to remain with and overseer for the said Mary Thomas until the price of the four pre-emption claims of which entries could not he effected, being $1200 00, should be satisfied by bis personal services or those of a person to be hired by him to supply bis place, and in compliaDce with this undertaking he remained with her. That when the time arrived when he was at liberty to leave without violating his engagement, his mother-in-law, Mrs. Thomas, begged him to remain with her until she could settle her affairs, promising, if he would, to accompany him to Texas. That while engaged in settling her affairs the infirmities of age were daily drawing her nearer to the grave, and defendant in consideration of her situation, added to her entreaties, and a promise of a liberal provision by ber will for bis children, consented to remain with her until her death. The answer farther denies that he enjoyed in any way o.r shaipd with Mrs. Thomas, the rents and profits of any part of the property, and that if he intermeddled with the property originally hers or that which she acquired by purchase from him, it was as her agent and overseer.
Allen II. Bush, a witness for complainant, testified that Mary Thomas resided at the place now .occupied by Luke Lott from the year 1836 or 1837, to the period of her death which took place in 1817 or 1818. Luke Lott resided at the same place from the same period to the present time, except for a short time in the year 1837 or 1838, when he resided in Marianna. Mrs. Thomas was the mother-in-law of Lott and appeared to be on good terms with him ; their personal relations were of the most friendly and confidential kind, and their associations were free and unreserved. That during the years 1836-7-S-9, and 1810, Lott was not a man of much wealth. Witness thinks he was not free from debt, but that he was in embarrassed circumstances, considerably.in debt for a greater part if not the whole of the time alluded to. Thinks Mrs. Thomas in 18-38 was not wealthy, but was in comfortable circumstances —cannot say in what her property consisted, and cannot say whether her fortune or circumstances were such as to induce her to enter into speculations. The common reputation seemed to be against the fairness of the contracts between Lott and Mrs. Thomas.
Thomas M. White, a witness for complainants, testified that in 1839 Mrs. Thomas lived in the town of Marianna in the'family of her son-in-law, Luke Lott — does not know what her occupation was at that time, nor can he say whether or not she was knowing to the indebtedness of Lott. Witness thinks Lott was largely indebted from general reputation.
Michael Lott, a witness for complainants, testified that a most perfeefunderstanding of friendship, respect, good. feeling and confidence existed, between Mrs. Thomas and Lott, and that there was a great deal of intimacy, confidence and unreserved communication between them, but he could not state whether she knew or was informed of the engagements, bargains and contracts of said Lott, or whether she was apprised of his general or special indebtedness in the years 1837 and 1838, or of his indebtedness to complainants.
Mrs. Sarah Hudson, a witness for defendant, who was a near neighbor of Mrs. Thomas, and intimate with her and Lott, states that she never knew Lott to make use of the property as his own after the sale, or to receive or enjoy the products of the farm or wages of the negroes, or sell any of the personal or real estate until after the death of Mrs. Thomas. She further testifies that she thought it was generally known as she heard both Lott and Mrs. Thomas say it, that Lott sold his property with the view ofremoving to Texas, and that he was to wait until he could ascertain whether all the pre-emption, claims could be perfected, and that finally he was prevailed on by Mrs. Thomas to stay and attend to her business for her. She further testifies that Lott was a favorite son-in-law of Mrs. Thomas, and they were always on good terms — that she always saw Mrs. Thomas exercising control over the property, and that if Lott sold any thing she was told by Mrs. Thomas that he always made a strict settlement with her.
John F. O. Thomas testified that he was living near Ochesee at the time of the sale to Mrs. Thomas' — that she took possession of the property immediately after the sale, and managed and possessed it for her exclusive benefit, and for her sole right — that Lott, after the sale, never made use of the property as his own, or received or enjoyed the products of the farm, &c., and that if he ever had any thing to do with the property i't was as overseer or agent until lie, witness, moved to the place, when he, witness, became manager and overseer of the negroes of Mrs. Thomas for about five years. He states that Mrs. Thomas and Lott were very friendly, and that she always placed a great dealof confidence in him, but he does not think that she ever knew any thing of Lott’s indebtedness. That after the sale Lott lived in one end of a double penned house and Mrs. Thomas in the other, but that Mrs. Thomas managed and controlled the property to suit herself — that he acted as overseer for five years and every thing was carried on by her directions. That Lott never- assumed any control after the sale, and that when he sold any thing it was by the directions of Mrs. Thomas, and he accounted to her for every thing.
Mrs. Susan C. Carraway testified that she lived with Mrs. Thomas at the time of the purchase by her of Lott’s property, and that Mrs. Thomas moved to the place shp purchased immediately after and managed and controlled and possessed the property for her own exclusive benefit, and in her sole right. That Lott assumed no control of the property after the sale, or use or sell any portion o.f it as his own, and that when he had any thing to do with it, he acted either as overseer or agent of Mrs. Thomas. She further states that it was generally known that Lott sold his property to Mrs. Thomas for the purpose of removing to Texas; that after the bargain was made Mrs. Thomas sent one of her sons to her house on Stafford Creek (where she resided) for her small trunk which contained her money • that witness saw the money some time before the sale and saw it counted to pay to Lott, but she does not know how much there was. Lott, she says, sold most of the crops, but as soon as he returned he gave Mrs. Thomas an account, of the sales and settled with her.
John G. Gamble testified that Lott was the owner of twenty shares of stock in the Union Bank of Florida, and that on the 27th June, 1839, he transferred the same to Mary Thomas. That the Bank held Lott’s stock note dated 28th December, 1838, for $1,333 33, and that upon the transfer of the shares aforesaid the stock note of Mary Thomas was substituted for that of said Lott.
Joseph Thomas testified that he witnessed the execution of the deeds from Lott to Mrs. Thomas, and that they were fair conveyances, intended to convey absolutely all Lott’s interest in the property named, and for the consideration therein expressed ; that the transaction was a fair and honest one, and founded on a valuable consideration and that Mary Thomas took possession of the slaves and other property immediately after the sale. He further states that Lott had given his note to Mrs. Thomas for $1000 for a negro boy and two mules, and that Lott took this note as that much, cash in payment for the property sold Mrs. Thomas.
To discredit the testimony of John F. O. Thomas and Joseph Thomas, complainants procured the testimony of Ilobert L. Harrispn, who testified that he was acquainted with both of them, and that their general character or reputation for truth and veracity, was bad in the neighborhood in which they resided in Gadsden County, and ttiat he had no reason to believe it otherwise at the time he testified. That from, his knowledge of this general character of John F. O. Thomas and Joseph Thomas, he conld not believe either of them under oath in a cause in which they were under the influence of their interest or their affections.
A. L. Woodward for appellants.
1. Fraud is a question of intent, arising upon evidence. It may be imputed, ascertained and established by inference and deduction ; and it may also arise upon admission or proof of certain facts, as a presumption of law, not to be rebutted or repelled.
II. The vendee’s sanction or concurrence in tbe vendor’s intent to hinder, delay and defraud creditors, vitiates any agreement or contract, and renders it void as to their claims.
III. The unconditional and absolute sale of a man’s entire estate, he being largely indebted in proportion, or in amount equal to its full worth or value, his debts remaining wholly or the greater part unpaid, and the greater portion if not all the purchase price having been retained^ reserved and appropriated, applied and expended otherwise-such a transaction, with all its surrounding circumstances, creates the presumption of a fraudulent intent, which, unless rebutted and satisfactorily explained, becomes conclusive.
IV. A secret trust or reservation for the benefit of the vendor or his family, to the exclusion of all or of any of his creditors, renders' an agreement or bargain- and sale void in toto, or so far as their rights may be affected thereby.
-Y. The participaney, sanction or concurrence of the vendee, in the intent, purpose, or design of the vendor, to hinder, delay or defraud creditors, may be-presumed or inferred from the position, character, connection and circumstances, age, habits and pursuits or occupation of the respective parties to an agreement or bargain and sale, and such a presumption being raised, it becomes conclusive unless repelled and countervailed.
YI. A sale to pay a pre-existing debt, and the continuance of the vendor in possession, authorizes a legal presumption of an agreement or stipulation for the benefit of the vendor, not to be repelled or rebutted by evidence, and is fraudulent per se, and therefore null and void.
YII. The "weight of evidence and the force-of authority are in favor of appellants. — And cited 2 Kent. Com., 515 to 31-32; 1 Story’s Eq. Jur., 215, § 190, 297, § 369; 1 American Leading Cases, 55-56; Gressley’s Equity Ev., 473-489. How vs. Ward, 4 Greenleaf, 195, 207; Halbert vs. Grant, 4 B. Monroe, 584; Poague vs. Boyce, 6 J. J. Mar., 70; Harrison vs. Campbell, 6 Dana, 264; Stephen’s Adm’r. vs. Barnett, 7 Dana, 257; Herren vs. Morford, 9 Dana, 450; Kendall vs. Hughes, 7 B. Monroe, 368; Brown vs. Force, ib., 357; Brown vs. Smith, ib., 361; Walker vs. Cralle, 8 B. Monroe, 11; Borland vs. Walker, 7 Ala., 269; Borland vs. Mayo, 8 Ala., 104; Farmer’s Bank of Virginia vs. Douglass, 11 S. & M., 469; How vs. Camp, Walker’s Ch. Rep., 427; Sands vs. Codwise, 4 Johns. Rep., 537; Miller vs. Tollison, Harper’s Eq. Rep., 145; Brown vs. McDonald, 1 Hill’s Ch., 297, 303; Maples vs. Maples, Rice’s Equity, 300, 310; Hansford vs. Archer, 4 Hill, 270; Browning vs. Hart, 6 Barbour S. C. R., 91; Gibson vs. Love, 4 Florida Rep., 217; Barrow vs. Bailey, Fla. Rep., 1853, p. 19.
Ilawkins and Campbell for appellees.

Opinion:
WRIGHT, C. J.:
In this case the bill charges in substance, that on the 13th March, 1839, the defendant Lott conveyed to Mary Thomas certain property in the town of Marianna, and a tract of land in Jackson County — that Lott was the owner of certain lands obtained by pre-emption, which he also conveyed to Mrs. Thomas- — that about the same time Lott also conveyed to Mrs. Thomas all his property, of every description- — -that Lott was then largely indebted to many persons in the County, and particularly to the complainants — -that in March, 1840, judgments were obtained at law by complainants, and executions were issued against Lott and returned " nulla bona" — that the sale to Mrs. Thomas was fraudulent as to creditors — that a merely nominal and fictitious consideration was paid, if any — that Mrs. Thomas was in no sort of condition to purchase, was an aged widow — that defendant Lott remained in possession of the property — that Mrs. Thomas lived with Lott, who was her son-in-law — that no separate account was kept of their affairs, and that shortly before the death of Mrs. Thomas, she made a will, devising all her estate to her .daughter, Lott's wife, and appointed Lott her executor.
The prayer of the bill is, that the conveyance from Lott .to Mary Thomas be set aside as being fraudulent, and that he he required to account as executor, &c.
The answer of the defendant, Lott, states, that in 1838 or '39, he had it in view to go to Texas, and with that intent sold all of his property, real and personal, except notes and accounts,, to Mary Thomas — -that he had no intention thereby to defraud his creditors — that the property sold went over into the possession of the vendee, who continued in possession untihher death — that she paid him the purchase money as agreed on, partly in money, partly in his own notes, and that he lived with his mother-in-law after the sale, and attended to her business as an agent or overseer. He denies all fraud and secret trust — in short denies all tbe facts set forth in the bill as a ground for tbe interference of a Court of Equity.
A Supplemental bill was afterwards filed, charging Mrs. Thomas, with knowledge of, and participation in, thefraud of the defendant, Lott. To this Lott answers in effect, that he does not believe that Mrs. Thomas knew of his indebtedness at or before the sale to ber.
The testimony of a number of witnesses was taken in the cause, hut it is sufficient to say that there is nothing in this to cast suspicion even, upon the truth of Lott's an.sWei'S. The complainants are therefore in this attitude — they have appealed to the conscience of Lott in relation to the facts on which they rely — he denies the facts charged, and they present no proof to contradict his answers.
It is true, as contended for on the part of the complainants, that fraud is in general, a question of intent, and may be presumed from circumstances, and in some cases the presumption is so strong as to be incapable of being repelled by proof, but in the 'case before us, the facts disclosed, to-witj that Lott was largely indebted, that he made the conveyance in question to his-mother-in-law, and that he conveyed his entire property, though these may be badges of fraud, yet to say that they constitute fraud in themselves, would be to carry the doctrine beyond the limits of reason or authority, and to shut out the light of wisdom and truth. Here by the evidence brought out by the complainants themselves, we have all these facts explained — all these badges of fraud removed, at least so far as Mrs. Thomas is concerned ; for she, it seems, knew nothing of Lott's indebtedness, or of his fraudulent intent, if it existed. She paid for the property purchased, what seems a full and adequate price.
From this state of the case, it follows that Mrs. Thomas must be deemed a bona ficle purchaser, for a valuable consideration, without notice even of Lott's indebtedness.
Let the decree of the Court below be affirmed.