Court Opinion

ID: 3494199
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:02:14.262573+00
Date Added: 2024-06-11T14:15:12.401136
License: Public Domain

ON REHEARING.
After our opinion, in this cause, reported ante, 161, defendants made application for a rehearing, which was granted upon one question only, namely: Whether the defendants, J.W. Lynch, Donna G.A. Lynch and George Alfred Lynch (the children of defendant Bion I. Lynch) are equitably entitled to a lien upon the properties involved in this litigation.
We pointed out in our former opinion, ante, 161, that the deeds given by defendant Bion I. Lynch to his three children were fraudulent as to the creditors of the Citizens Bank of North Adams, a copartnership, of which Bion I. Lynch was a partner, and that no relationship of debtor and creditor existed between the father and his children.
Counsel for the children now insists that, insofar as they are concerned, the facts involve only constructive fraud, and that, therefore, these defendants are entitled to a lien on the various properties described in the fraudulent deeds for moneys paid by them on behalf of their father in good faith. We are cited to decisions of this court and others throughout the country, which, it is claimed, sustain the position taken. Defendants' contention is based upon the assumed premise that the children acted in good faith and that they were not knowingly participants in the making of the respective fraudulent conveyances. The difficulty *Page 166 
with this contention is that the assumed premise is erroneous.
The record is replete with testimony indicating actual participation by the children in the fraud, and knowledge upon their part that the acceptance of the deeds from their father would constitute a fraud upon the creditors of the bank. In such a case a court of equity will not give its aid for the purpose of extricating the parties from the position they have voluntarily taken.
"While conveyances made in fraud of creditors are valid as between the parties themselves, they are absolutely void as to creditors, and as to them it is immaterial whether the grantee paid any consideration or not. If the purpose of both the grantor and the grantee is to defraud the grantor's creditors, the title to the land, as to creditors, is regarded in equity the same as though no conveyance had been made, and the title still stood in the grantor. The wise theory of the law is that a creditor, trusting the debtor upon the faith of his owning the land, is entitled to the first lien upon it, where the grantee has participated in the fraud of the grantor, the debtor. This is the long and well-established rule.Sands v. Codwise, 4 Johns. (N.Y.) 536 (4 Am. Dec. 305); Shand
v. Hanley, 71 N.Y. 319; Davis v. Leopold, 87 N.Y. 620; Wiley,Banks  Co. v. Knight, 27 Ala. 336; Daisy Roller Mills v. Ward,6 N.D. 317 (70 N.W. 271). In this last case will be found a valuable discussion of the subject, and a citation of authorities." Morley Brothers v. Stringer, 133 Mich. 690.
We find no reason for disturbing the decree heretofore affirmed. Plaintiff will recover costs.