Court Opinion

ID: 6236583
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:33:56.27194+00
Date Added: 2024-06-11T08:58:04.100650
License: Public Domain

Mr. Justice Sterrett
delivered the opinion of the court,
In March 1864 John R. Mowry died intestate, seised of the undivided moiety of real estate which he and his brother Andrew purchased and held as tenants in common. He left surviving him a widow and four sons. In August of the same year, Josiah, one of the sons, executed aud delivered to his uncle, Andrew Mowry, a deed for all his right, title and interest in his father’s real estate. Several years thereafter Andrew Mowry and the other three sons made deeds of general assignment, conveying the property in trust for creditors, &e., to Joseph Ickes, who subsequently sold the assigned estate; and, after paying the creditors, there remained a surplus to he divided among the assignors, or such persons as might be entitled thereto. It was conceded that Andrew Mowry was entitled to one-half and each of the three nephews to one-eighth of the surplus, and it was accordingly appropriated to them respectively. The present contention arose in regard to the remaining one-eighth, which was claimed, on the one hand, by Andrew, as purchaser of the interest formerly owned by Josiah, and, on the other, by the appellees, as creditors of Josiah, who alleged that their respective debts had been contracted solely on the faith of declarations made by Andrew to the effect that notwithstanding the conveyance to him, Josiah was still the rightful owner of the interest he originally had in his 'father’s estate. The single question therefore was, whether Andrew or those creditors of Josiah were entitled to that portion of -the- surplus.
The auditor found that the conveyance from Josiah to his uncle was without' consideration and for the purpose, on the part of both vendor and vendee, of defrauding the creditors of Josiah; that *380Andrew subsequently declared to Samuel Dubbs and Susanna Mowry, the appellees to whom the fund was awarded, that Josiah still retained his interest in the property thus fraudulently conveyed, and that they loaned the money and became creditors of Josiah solely on the faith of the representations made by Andrew. These facts were fully established by the testimony.
The legal title to Josiah’s interest in his father’s estate appeared by the record to have been regularly conveyed to Andrew, who, by his deed of assignment, passed the same to' his assignee. Under these circumstances, in the absence of actual or constructive notice that the conveyance from Josiah to Andrew was fraudulent, the purchaser from the assignee' took a good title, unaffected by the fraud. The interest of Josiah being thus converted into money, the surplus of all the interests, after paying debts of the assignors, was prima facie payable to them according to their respective interests in the assigned estate; but the appellees, who had become creditors of Josiah on-the faith of appellant’s representations, interposed and asserted their right to that part of the fund in preference to him; and why were they not. entitled to it? It is difficult to see upon what principle of equity he could be permitted to take the fund as against those who gave credit to Josiah on the faith of the representations that the interest he had in his father’s estate still belonged to him. As between the parties to the fraudulent conveyance, neither law nor equity would lend its aid to either of them; and thus while the appellant might, as against Josiah, claim and hold the surplus, he stands in a very different relation to the appellees, who were induced solely by his representations to do that by which they will be greatly prejudiced if they are excluded from participation in the fund. In view of the facts found by the auditor, he is estopped from claiming the fund as against them. There would be no equity in permitting him to take it to their exclusion.
It is contended that inasmuch as the claims of the appellees arose after the assignment and are not debts against either of the assignors; they have no interest in the funds arising from sale of the assigned estate. This would be true if it were not for the important fact that they gave credit to their debtor solely on the faith of appellant’s representations, and he is the only one who is resisting their claim to the fund. As general creditors of the assigned estate, without more, they would have no standing, but, upon the facts found by the auditor, their right to the fund in question is superior to that of the appellant.
Decree affirmed and appeal dismissed at the costs of the appellant.