Court Opinion

ID: 6482442
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:06:33.418782+00
Date Added: 2024-06-11T15:54:12.203855
License: Public Domain

*531OPINION OP THE -PULL COÜRT BY
AUSTIN, J.
H. R. Macfarlane et al. vs. Thomas Spencer, Thomas Spencer, Jr., Chas. N. Spencer and R. R. Hind; and H. Rl Maefarlane et al. vs. Thomas Spencer and Thomas Spencer, Jr.
The above entitled cases were tried together by consent on the appeal to this Court taken from the decision of the Chancellor, setting aside as -fraudulent and void as to creditors two deeds of land on the Island of Hawaii, executed to the defendant, Thomas Spencer, Jr., the one by the defendant Thomas Spencer, as attorney for Chas. N. Spencer, and the other by the Government by the procurement of said Thomas Spencer. The said deed from Chas. N. Spencer bears date of December 12, 1876, and is of 2,520 acres of land in the District of Hilo, known as the Ahupuaaof Waipunalei. The Chancellor finds that the said Thomas Spencer was then insolvent, and the real owner of the land conveyed; and that the deed was void as to creditors of Thomas Spencer. Upon this question and also as to the validity of the said deed from the Government to Thomas Spencer, dr., new evidence was offered and secured before us, and we now come to examine the case upon all the evidence presented.
Upon the evidence before the Chancellor we think his finding that on December 12, 1876, the defendant, Thomas Spencer, was insolvent; and that the deed then made to his son, said Thomas Spencer, Jr., was void as to creditors of Thomas Spencer, was just; and ujjon duly considering the new evidence upon these points we do not think that finding should be overruled.
By the sworn answer of the defendant, Thomas Spencer, in the case relating to the said conveyance by the Government to the defendant, Thomas Spencer, Jr., the said Thomas Spencer avers that in September, 1877, when said Government deed was made, and long before that, he was insolvent. This is strong evidence against him. In terms it does not include December 12, 1876, but it would ordinarily be construed to do so.
*532It is conclusively shown that Thomas Spencer was insolvent in 1874, and from thence to May 31, 1875. Upon that clay an unsecured debt of $55,000 against him was assigned to John S. McGrew for $1,000. This was kept on foot by John S. McGrew, but it is now stated by the witnesses Green and Walker before us, that they understood McGrew in the purchase was friendly to Spencer, and held it substantially for his «benefit at the price he paid or at least at less than its face. 'Thereafter and on the 23d of December, 1876, and after the •date of the deed now in question, Messrs. Green and Macfar-Jane before assuming the agency of the plantation of Thomas Spencer, required of Dr. McGrew an agreement to which Spencer was a nominal party, but which he did not execute, by which McGrew agreed with them in consideration in substance of their assuming such agency, and advancing money to carry on said plantation that he, McGrew, would postpone to any claims they might thereby have against said Thomas Spencer until May 1, 1880, all of his large indebtedness against Thomas Spencer, except the sum of $22,750. By this agreement Messrs. Green and Macfarlane stood better than Thomas Spencer, and better than all other creditors of his ; but McGrew expressly retains his claims against Spencer, and we do not think that there is evidence sufficient to show that the debt of $55,000 or the large surplus besides that over $25,750 held by McGrew against Thomas Spencer were ever released or satisfied. The witnesses Green and Walker swear that they considered Thomas Spencer solvent in 1876, and Mr-Green says, if they had not so considered him they would not have gone on advancing to him thereafter, as they did,large sums of money to carry on his plantation, manifestly, their advances and their opinion as to his solvency were based upon the execution and delivery of the agreement of McGrew with them above referred to, and but for the agreement they would have considered Thomas Spencer insolvent. So when the deed of December 12, 1876, was executed both these wit*533nesses would. have considered Thomas Spencer insolvent. .But if the deed of December 12 had been executed at the same time, or after the said agreement of-McGrew dated December 23, 1876, still the financial indebtedness of Thomas Spencer was not a penny less than it was on December 12, 1876, and we have no doubt that he was then and ever since had been insolvent, and that said deed, for that reason, was void as to his creditors and as to the plaintiffs in this suit. It may be true that in December, 1876, by the enhanced values of his plantation interest incident to the establishment of the Reciprocity Treaty on September 1, 1876, and on account of the great hopes thereby engendered, the defendant Thomas believed that he was solvent, but it was manifestly a mistake, and because of his insolvency the said deed to Thomas Spencer, Jr., was void as to the plaintiffs.
The plaintiffs represent all the creditors, and there are prior and subsequent creditors. Having 'arrived at the conclusion that the defendant Thomas Spencer, was insolvent when the conveyance attacked was made, it is unnecessary to' consider the different .legal positions of prior and subsequent creditors. No case can be found sustaining as against creditors, a conveyance, without a valuable consideration made by an insolvent debtor.
We have examined the case of Baker vs. Gilman in the 52 Barb., p. 26, referred to by the defendant’s counsel, which holds that a creditor consenting to a conveyance by a debtor would be estopped from questioning it.
In that case the debt of the creditor was nearly all a subsequent debt, and at the time of the conveyance there was no other valid debt against the debtor. In a case where, as here, the grantor was insolvent when he made the grant, we think no principal of estoppel would apply to any creditor.
. As to the land called Hakoa conveyed September 29, 1877, by the procurement of Thomas Spencer to Thomas Spencer, Jr., it appears, as above stated, that Thomas Spencer was *534then insolvent. It is claimed tliat the consideration therefore, of $1,110 was paid on behalf of Thomas Spencer, Jr., and out of his funds. New proofs are presented. The plantation books referred to by the Chancellor are produced. Thomas Spencer swears positively that the funds used in the purchase w-ere those of Thomas Spencer, Jr., and no satisfactory proof showing otherwise is made.
As to the land of Hakoa, therefore, the decree of the Chancellor is reversed, and the remainder of the decree affirmed.
F. M. Hatch for plaintiffs.
A. S. Hartwell for defendants.
Honolulu, September 23, 1882.