Case Name: Cronie v. Hart & als.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1868-04
Citations: 18 Gratt. 739
Docket Number: 
Parties: *Cronie v. Hart & als.
Judges: The other judges concurred in the opinion of Rives, J.
Reporter: Virginia Reports
Volume: 59
Pages: 772–775

Head Matter:
*Cronie v. Hart & als.
April Term, 1868,
Richmond.
i. Conveyance to Wife — Biff to Set Aside — Case at Bar. —There is a conveyance of land to a trustee for the separate use of M, the wife of C, who is indebted at the time. Creditors of C file a bill charging' that the conveyance is fraudulent, and intended to hinder and delay the creditors of C, and that the consideration of the deed was paid by C; and C and and the trustee are made parties defendants. C and M answer, denying the fraud; and C says, he had executed a deed to E conveying his property to secure his creditors, which had been 'sold, and the proceeds were then in the hands of E; and he exhibits the deed, which provides for the debts of some of the plaintiffs. He says further, that $2,000 of the purchase money was derived from the sale of M’s interest in her father’s estate ; and the balance was derived from the profits of the Land. Heed:
It is error to set aside the deed before directing:
ist. Same — Same—Same.—That E should be made a party, and having an account of the trust fund in his hands, and having it applied to the payment of such of the debts of the plaintiffs as were secured by that deed.
2d. Same — Same—Same.—An enquiry whether there was any agreement that the proceeds of the sale of the wife’s property should be applied to her use; and whether it had been so applied.
3d. Same — Same—Same. —Whether the debts could not be paid out of the rents and profits in five years. Code of 1860, ch. 186, § 9.
In June, 1866, Hart, Hayes & Co., and others, creditors of Henry R. Cronie, filed their bill in the Circuit *Court of the county of Henrico, in which, after setting out the indebtedness of Cronie to the plaintiffs, which was for the most part by judgments rendered in the county court of Caroline county, they state that Cronie, who had lived in Caroline county in 1860, had afterwards removed to the county of Henrico, where he had accumulated a large amount of money, which he had endeavored to conceal from his creditors; and they charge, that in pursuance of this fraudulent purpose, he did, about the 8th of October, 1861, purchase of Robert A. Lancaster, a parcel of land in the county of Henrico, which they describe; and fraudulently procured said Lancaster and wife to convey the same to Wellington Goddin in trust, for the sole and separate use of Mary E. Cronie, the wife of the said Henry R. Cronie. A copy of this deed is filed with the bill.
They further charge, that the whole consideration for the said sale moved from Henry R. Cronie, and that the conveyance to Mary E. Cronie is wholly voluntary, and the result of a fraudulent agreement, between the said Henry and the said Mary to elude and defraud the plaintiffs and others, the creditors of the said Henry; and that he is, in fact, the sole owner of said land. They charge that Cronie has no personal property known to the plaintiffs out of which their judgments can be satisfied. And making Cronie and his wife and Wellington Goddin, the trustee, parties defendants, they call upon them to answer all and every matter and averment alleged in the bill; and they pray that the land, or so much as may be necessary for the purpose, may be sold, and the proceeds of sale applied to the payment of the debts of the plaintiffs; or that the deed may be declared null and void, and that the land may be subjected to the liens of their judgments; and for general relief.
Henry R. Cronie and Mrs. Cronie filed separate answers. Cronie, in his answer, admits the plaintiffs’ judgments. He says that he lived at the Bowling Green, in Caroline county, in 1860, and under the political excitement then existing, he was compelled to leave that place, and he removed to Richmond. That it is not true that at the time the judgments were rendered against him he was wholly without means to discharge them. That he owned a house and lot at the Bowling Green for which he had given $1,600, and a stock of goods and furniture worth at least $1,000, all of which he conveyed to Eustace Moncure as trustee, with instructions that the proceeds of the property, when sold, should be used to pay off all the defendant’s honest debts. That the property had been sold, and the trust fund still remained in the hands of the trustee; though owing to his inability to be present to protect his interests it sold for but $1,250. He denies that he had endeavored fraudulently to conceal his property from his creditors. He denies that the land mentioned in the bill was purchased with his money; he says, the money was derived from the sale of Mary 35. Cronie’s undivided interest in her father’s estate, consisting- of land and negroes, to Thomas J. Roach for the sum of $2,000, and from the products of the land. He denies that the conveyance from Lancaster and wife to Goddin was fraudulently procured by him; or tha t any consideration for the. sale moved from him; or that the said conveyance was voluntary on his part; or that any fraudulent agreement existed or exists between himself and his wife; or that he is sole owner, or is entitled to any interest in the land referred to. Denies all the allegations of the bill inconsistent with the answer; and all the fraud, combination and confederations charged or insinuated in the bill.
The defendant filed with his answer the deed of trust executed by him to Moncure; and also the deed by which he and his wife conveyed to Roach the wife’s undivided interest in the estate of her father George B. Earish, on «the consideration of the sum of two thousand dollars. This deed is dated November 1st, 1860. The interest did not take effect in possession until after the death of Mrs. Cronie’s mother, who was alive when the answer was filed. He also filed a copy of the will of Earish, the father of Mrs. Cronie.
Mrs. Cronie; in her answer, says, the property was purchased for her sole and separate use, and conveyed to Mr. Goddin as trustee; but that no part of the means of her husband entered into the consideration of the purchase. She refers to and adopts the answer of her husband, and denies all the fraud, &c., charged in the bill.
In May, 1867, the cause came on to be heard upon the bill, answers and exhibits, when the court held that the deed from Lancaster and wife to Goddin was null and void as to the creditors of Cronie; and the cause was referred to one of the commissioners of the court to ascertain and state the amount of the debts of the defendant Cronie, and to whom due.
The commissioner reported a number of debts due to the plaintiff and others, amounting to upwards of $2,400; and the cause coming on again to be heard on the 8th of November, 1867, it was decreed, that unless the defendant Henry R. Cronie do pay to the several parties named in the report the sums reported due to them within ninety days, commissioners named should proceed to sell the land described in the bill, or so ‘much as should be necessary, upon the terms of one-fourth cash and the residue at four and eight months, and deposit the money in bank. From this decree, Mary 15. Cronie by Henry R. Cronie, her next friend, applied to this court for an appeal, which was allowed.
Johnson & Guigon, for the appellant.
Page & Maury, for the appellees.
Bills to Subject Land — Inquiring into Rents and Profits. — In Horton, v. Bond, 28 Gratt. 820, Busks, J., delivering the opinion of the court, said: “Before a court of equity can properly order a sale of the debtor’s land to satisfy a judgment lien, it must be made to appear to the court that the rents and profits of the land in five years will not discharge said judgment. Code of 1873, ch. 182, § 9. And this must be made to appear even against fraudulent alienees. Cronie v. Hart and others, 18 Gratt. 739.” See also, foot-note to Horton v. Bond, 28 Gratt. 815.

Opinion:
*DRIVES, J.
This is a bill by judgment creditors of the husband, to set aside as fraudulent a settlement upon his wife. Its allegations are that the husband was wholly insolvent, and that the consideration for the deed of 8th October, 1861, whereby the land therein described was conveyed to a trustee for the separate use of the wife, moved from him alone, and that the deed was the product of a fraudulent agreement between himself and wife to defraud his creditors, and that the husband was in truth the owner of the land conveyed. These charges of fraud are distinctly denied in the answers of both husband and wife. The husband in his answer denies his insolvency; and as proof of his ability as well as intention to provide for his creditors, exhibits his trust deed of 29th August, 1860, by which he dedicated his property, estimated at $2,600, to their satisfaction. He then proceeds affirmatively to state how the settlement came to be made, namely: that the purchase money to the extent of two thousand dollars was derived from the sale of his wife's undivided interest in her father's estate to one Thomas J. Roach; and in corroboration thereof, exhibits the will of her father to establish her interest, and also the deed of himself and wife, of 1st November, 1860, conveying this interest to said Roach, and acknowledging the receipt of two thousand dollars therefor. He accounts for the balance of the purchase money to procure the deed to the wife, by stating it was derived from the products of the land. This is the state of the pleadings. No proofs were taken. The court thereupon proceeded to decree, upon default of payment within ninety days, the sale of the land in question.
The question is, therefore, made, whether this decree was not premature, and whether there should not have been a reference to a master to ascertain whether, and to what extent, a good consideration existed for the settlement «'aforesaid; whether there should not have been some account required of the trust fund, so as to fix the amount due; and, finally, whether there should not have been an enquiry, under the ninth section of chapter 186 of the Code, p. 771, into the sufficiency of the rents and profits of said real estate to satisfy these creditors in five years.
It is contended, with much ingenuity, that the deed to Roach imports a conversion to the husband, and extinguishes by the wife's privity her interest in the fund. This is perhaps so on the face of the instrument; but inasmuch as it discloses the sale of the wife's contingent interest, it is open in equity to proof that the husband was permitted to receive the fund arising therefrom upon an express trust for the settlement thereof upon the wife. That there was such understanding is rendered probable by the fact that the husband, having by his deed of 29th August, 1860, disposed of all his property for the benefit of his creditors, could scarcely have procured his wife's assent to the sale of her contingent interest in her father's estate, and to his receipt of the proceeds, without some agreement on his part to invest it for her separate use. The fraud was responsively denied; it was not proven; and this affirmative statement of the origin and character of this settlement was prima facie corroborated by the exhibits and the facts and dates of the transaction. It was erroneous, therefore, to assume the fraud as established, and to pretermit a reference to the master to report the facts of such alleged settlement.
Judgment creditors are not to be delayed in the enforcement of their liens, unless in conformity with the principles and practices of the court, to which they resort. If the want of a settlement of the trust subject, devoted by the debtor to these creditors, was the only ground for delaying the sale prayed for, it might, perhaps, be disregarded ; but when, on another account, a reference was ^necessary, and no further delay would be incurred, it was proper to direct the trustee to be made a party, and to require him to render his account before the same master to whom the other enquiry had been directed.
In respect to the third and last enquiry suggested, it will be seen, the language of the Code is very clear. After declaring, that "the lien of a judgment may always be enforced in a court of equity," it does not authorize such court to decree a sale of real estate, or any part thereof, unless 'it appear to such court that the rents and profits of the real estate, subject to the lien, will not satisfy the judgment in five years." This enactment was doubtless designed to clear up the difficulties arising under our decisions of Haley v. Williams, 1 Leigh 140; Blow v. Maynard, 2 Id. 29; Tennent's heirs v. Patton, 6 Id. 196; McClung v. Beirne, 10 Id. 394; and McNew v. Smith, 5 Id. 84, cited by the counsel for the defendants in error; and to fix the grounds and extent of equitable jurisdiction in the enforcement of judgment liens. These cases left it in doubt what were the precise limits of the discretion to be exercised in decreeing satisfaction out of the rents and profits; so that it was peculiarly fit for the Assembly to step in and regulate the matter by positive enactment. This it has done in language clear enough to comprehend all imaginable cases; nor does it seem to me there is any ground to suppose from the report of the revisors, as was ingeniously contended for, that the case of original equitable jurisdiction to set aside a fraudulent conveyance was not designed to be embraced by these terms.
But under the authority of Manns v. Flinn's adm'r, 10 Leigh 93, it is contended that it is now too late to raise this objection in this court; or rather to treat it as a ground of reversal. That was the case of an interlocutory ^decree where the party having ample opportunity to apply to the court to alter the decree in that particular, and failing to do so, could not object to an affirmance, whereby the cause was remanded, with direction to alter the decree and direct satisfaction out of the rents* and profits, if such alteration be asked, and if the debt can be satisfied out of the rents and profits within a reasonable time. Here, however, for reasons already assigned, this is not a case of affirmance, and there being a necessity for reversing the decree on distinct grounds of error, the principle of this decision does not apply; and the appellant has an excuse for not raising this question below, because the controversy was directed wholly to the liability of this land, to the liens that were asserted by the bill.
Por these reasons, I am of opinion the decree in this cause should be reversed, and the cause remanded with a view to the en-quiries I have indicated.
The other judges concurred in the opinion of Rives, J.
JOYNLS, J.,
read the decree of the court as follows:
The court is of opinion, that before proceeding to declare the conveyance of the tract of land in the proceedings mentioned from Robert A. Lancaster and wife to Wellington Goddin, in trust for the separate use of the appellant, to be null and void as to the creditors of the appellee Henry R. Cronie, the said Circuit Court should have directed an enquiry by a commissioner to ascertain whether or not the appellant united with her husband, the said Henry R. Cronie, in the deed of November 1, 1860, conveying the contingent interest of the appellant under the will of her father to Thomas J. Roach, upon an agreement that the money paid by the said Roach to the said Henrj'- R. Cronie as the consideration of said deed, or any *part thereof, should be invested and secured by the said Henry R. Cronie for the separate use and benefit of the appellant; and if so, whether the said sum, or any part thereof, or an equivalent for it, was applied by said Henry R. Cronie, in pursuance of such agreement, towards the payment of the purchase money of the tract of land aforesaid conveyed by the said Lancaster and wife in trust for the appellant as aforesaid; the court being further of opinion, that if there was such an agreement in reference to the money received by said Henry R. Cronie under the said deed of November 1, 1860, and if the said money, or any part thereof, was, in pursuance of said agreement, applied by said Cronie towards the payment of the purchase money of the said tract of land, then to the extent of the sum so applied, the trust in favor of the appellant created by the deed aforesaid from said Lancaster and wife, is valid against the creditors of said Henry R. Cronie.
And the court is further of opinion, that inasmuch as some of the creditors of Henry R. Cronie, whose claims are reported by the commissioner, are provided for by the deed of trust of August 29, 1860, in the proceedings.mentioned, it would be contrary to equity to allow them to disturb the settlement made upon the appellant by the said deed, of November 1, 1860, until they have exhausted the fund thus provided for the payment of their debts; and it would also be contrary to equity, in case the tract of land aforesaid should not sell for enough to pay all the debts, to allow the creditors thus provided for to participate with other creditors in the proceeds of the sale of such land in proportion to the full amount of their debts, leaving them to resort to the fund provided by the deed of August 29, 1860, for the payment of the residue of their said debts. The court is, therefore, of opinion, that the *said Circuit Court should have required the plaintiffs in that court to amend their bill and make BJ. Moncure, the trustee in the said deed of trust of August 29, 1860, a party defendant, and should have proceeded to take an account of the said trust fund, and to apply the same to the debts provided for by the said deed, so as to ascertain the balances, if anjq remaining due upon the said debts.
And the court is further of opinion, that the said Circuit Court should not have proceeded to decree a sale of the said tract of land, without first ascertaining by evidence, or by an enquiry by a commissioner, in pursuance of the provision of ch. 186, 'i 9 of the Code of 1860, that the debts chargeable upon the said land could not be satisfied by the rents and profits thereof in five years.
The court is, therefore, of opinion, that the said decree of November 8, 1867, and the previous decree of May 4, 1867, are erroneous. Wherefore it is decreed and ordered that the said decrees be reversed and annulled so far as they are hereinbe-fore declared to be erroneous, and that the same be affirmed in all other respects; and that the appellees, except Henry R. Cronie and Wellington Goddin, and except William R. W. Garrett, executor of Rewis W. Garrett, deceased, out of their own estate, and the said William R. W. Garrett, executor of Rewis W. Garrett, deceased, out of the assets of his testator in his hands, pay to the next friend of the appellant his costs by him expended in the prosecution of the appeal aforesaid here. And the cause is remanded to the said Circuit Court for further proceedings to be had therein, in conformity with this opinion and decree. And it is further ordered, that the costs hereby decreed to be paid to the appellants shall, after the same shall have been paid, upon the application of any of the parties who shall have paid the same or any part thereof, be apportioned and distributed by the said ^Circuit Court among the several parties liable for the same under this decree, in proportion to the amount of their respective debts asrej>orted by the commissioner, so that each of said parties shall, as among themselves, bear only his ratable proportion thereof; which is ordered to be certified, &c.
Decree reversed.