Court Opinion

ID: 5550119
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:33:18.245757+00
Date Added: 2024-06-11T08:35:03.003792
License: Public Domain

The Chancellor.
The bill seeks for discovery and relief, on the ground of fraud, against a deed of land, and a bill of sale of chattels, alleged to have been given by the elder to the younger Dunlap. The plaintiffs appear in the character of creditors, and the younger' Dunlap sets up a title as purchaser from the debtor. I do not discover, from a view of the pleadings and proofs, such traces of actual and direct fraud; as to feel myself warranted in directing the conveyance of the real estate to be delivered up and can-celled, as absolutely null and void. There is a marked *482difference between an interference actively to compel a party to reconvey or surrender a deed, and a refusal to aid a party who seeks a specific performance of a contract. If fraud be not clearly and satisfactorily made out, the court may refuse its aid, but will not take so decisive a step as setting aside, in toto, the assumed title; but will either make it subservient to the equity of the case, or leave the party complaining to his remedy at law against a contract founded on inadequacy of price, or other suspicious circumstances. (Young v. Clerk, Prec. in Chan. 538. Griffith v. Spralley, 2 Bro. 179. n. Day v. Newman, cited in Newland on Cont. 66.)
The only question with me has been, whether the plaintiffs ought to be left to their legal remedy, or whether the case affords sufficient ground for a limited interference, by allowing the deed of the real • estate to stand as a security only for such consideration as has been shown by the younger Dunlap. There appears to be very considerable inadequacy of price, even admitting the consideration expressed in the deed, and to allow the deed to stand as security only for the true sum due, would be doing justice to the parties, and granting a relief which cannot be afforded at law. A court of law can hold no middle course. The entire claim of each party must rest and be determined, at law, on the single point of the validity of. the deed; but'it is an ordinary case in this court, that a deed, though not absolutely void, yet, ifobtained under unequitable circumstances, should stand only as a security for the sum really due. (Proof v. Hines, Cases temp. Talb. 111. Grove v. Watt, 2 Schoale & Lefroy, 492.) A deed, fraudulent in fact, is absolutely void, and is not permitted to stand as a security for any purpose of reimbursement or indemnity; but it is otherwise with a deed obtained under suspicious or unequitable circumstances, or whichis only constructively fraudulent. (Sands v. Codwise, 4 Johns. Rep. 536. 598, 599. Lord Eldon, in 8 Ves: 283.) In Herne v. Meeres, (1 Vern. 465. 2 Bro. *483177. n. S. C.,) this last rule of equity is applied to a case like the present. A purchase at a great under value, and with other ill circumstances along with it, was set aside on terms, in favour of creditors. The Lord Chancellor observed, that, at law, where a conveyance was found to be fraudulent, the creditor comes in and avoids all, without repayment of any consideration money; but, in equity, where the court can decree back the principal and interest, there is no hurt done, and a lesser matter, in such a case, will serve to set a conveyance aside / and he, accordingly, decreed the purchaser to reconvey, upon payment of the consideration, with interest. The same principle is discoverable in the decision in Bennet v. Musgrove, (2 Ves. 51.,) though the case is imperfectly, or badly reported. A deed, with a small consideration, was set aside in favour of a creditor, on the • ground of fraud, so far as to let in his debt; and Lord Hardwicke observed, that the creditor was entitled to his remedy there, whether he could or could not have set aside the deed in an action at law. So, again, in How v. Weldon, (2 Ves. 516.,) a fraudulent deed was permitted to stand as a security only for the sum really advanced. Nothing can be more equitable than this mode of dealing with these conveyances, of such indecisive and dubious aspect, that they cannot either be entirely suppressed, or entirely supported, with satisfaction and safety.
Neither of the deeds have been regularly proved and . made exhibits in the cause, though they were produced on the hearing. This is alleged to have arisen from inadvertence ; and a motion has been made to enlarge publication, for the purpose of proving, formally, the execution of the deeds. Liberty to re-examine witnesses rests in discretion, and is to be governed by circumstances. This is the general rule; (Wyatt' s P. R. 420. 2 Ves. 270. Amb. 585.;) but, from the view I have taken of the case, this measure need hot be resorted to, There is very considerable proof (though not the most direct) of the execution of the deeds *484prior to the judgments. If, in fact, they were not so executed, the plaintiffs need not have come here, and they are at liberty to pursue their full and perfect remedy at law, by founded on the sheriff’s deed. But assuming the conveyance of the land to have been executed at its date, as the answer alleges, and which fact appears pretty evidently from the testimony of Shurtleff, one of the subscribing witnesses, then the question occurs, to what extent can relief be afforded against it ?
The circumstances of the case are extremely unfavourable to the fairness of the transaction; and to give the conveyance absolute validity would be attended with the utmost danger to the rights of property. The very diminished control which the creditor now has over the person of the debtor, greatly enfeebles the common law remedy of imprisonment, as a means of coercion to justice ;■ and it becomes important to guard, with increased anxiety, against every possible contrivance to cover or withdraw property from the payment of debts. The bill of sale of the household furniture I consider as absolutely void. The defendants have not made out, in proof, any consideration on which it rested when it was made, and the fact of the articles being house- , hold goods, and continuing in the same possession after, as before the sale, is decisive against its validity. Lord Ellenborough ruled, in the case of Wordall v. Smith, (1 Campbell’s N. P. 332.,) that a concurrent possession with the assignor was colourable, and that there must be an exclusive possession under the assignment, or it is fraudulent and void as against creditors : and the inducements to the conveyance of the land seem not to have been altogether pure. When the elder Dunlap endorsed the notes upon which the judgments were obtained, it was, no doubt, done with the knowledge of the son, and the endorsement was accepted by the creditor, under the presumption (no doubt) that he was the owner of the real and personal estate of which he was then the visible possessor, and had been for *485many years the actual owner. The son was brought up in his father’s family, and taught his trade, and he continued to reside and work with his father until the age of thirty, and, in the eye of the public, the father’s possession of the real and personal estate remained unchanged. H¿ continued to receive the credit due to the owner of the property, and the son took no step, long after the date of the deed, to prevent the public from resting on a misplaced confidence in the soundness of that credit. He permitted the accounts with merchants, as with Walton, and Root Davidson, to continue to stand and accumulate in his father’s name, and upon the exclusive credit of his father, long after the alleged existence of the transfer of the estate to him. All the witnesses concur in the fact, that the father and son continued to reside together, down to the time of issuing the executions, in the same manner as they had always lived when the son was an avowed apprentice, or journeyman, and boarded with his father. In addition to all this, the deeds were never exhibited, by proof or registry, or otherwise made known to the public ; but it was a family transaction, very reservedly conducted, and attended with the continuance of the same exclusive, or at least mixed, possession. But the circumstance that weighs most strongly against the good faith and purity of the motives of the parties, is the fact that the debt of the plaintiffs existed against the father before the date of the conveyance. This appears clearly from the testimony of Walton and Leslie, and Thomas Dunlap. Adair was the person for whom the father was surety for the very debt from which the judgments originated ; and when Adair failed, the father complained that it was hard for him to pay the debt, as Adair had deceived him, and that he had offered to pay half of it; but, as Gardner had refused the proposition, he would not pay. And during the time of this repugnance in the elder Dunlap to pay, the son insisted upon the conveyance of the estate to him. It may be that this was done to give the son the preference as a *486bona fide creditor, but when so many inauspicious circum - stances occur, the claims of the son ought to be established with very great precision and certainty. He is not entitled ^<3 indulgence of much presumption in his favour.
The claim of the son, at the date of the deed, consisted of arrears of wages as a journeyman, and of expenditures upon the land.
1. His wages for three years and eight months, according to his answer, did not exceed 583 dollars. The fact of his working for that period, after he was of age, and the reasonableness of the charge at 18 dollars a month, exclusive of boarding, is sufficiently supported by proof.
2. The charge of repairing the buildings on the lot, prior to the summer of 1810, is unsupported by proof. There is no evidence of actual payments, nor any data by which any can be computed. The testimony, on this point, is perfectly vague; and indeed one of the witnesses, (Tayler,) who worked in the shop, says, that the buildings, prior to 1810, were erected by the father; and when we consider that the son, who had been in partnership with that same witness, had stock to the amount of 1,200 dollars, which, in 1810, he carried to Canada, there is no reason to presume any considerable previous expenditure on his father’s account. It was incumbent on him to have established the fact, and he has totally failed. But there is no doubt that the son built the painter’s shop, on the premises, in the autumn of 1810. All the witnesses concur in this fact; and for that improvement he ought to be refunded. It was, doubtless, done under the promise and expectation of a deed; and the land may be considered as an equitable pledge for his reimbursement. The only difficulty is in ascertaining the amount of that expenditure. Holland was the carpenter whom he employed to build the shop; and he says “ the probable expense was about 800 dollars.” This testimony is not sufficiently precise, but it is the best that this case has afforded.
*487There was, likewise, the sum of 75 dollars, which the younger Dunlap paid for the purchase of a small addition to the lot from L. Claw; and, if we deduct from these charges, the amount of the goods and chattels which he has wrongfully received, and which were not sold by the sheriff, and are enumerated in the bill of sale, and there valued at 348 dollars, the account will stand thus:
Wages due $583
Erecting shop 800
Paid L. Claw 75
$1,458
Credit on the bill of sale 348
$1,110
This sum of 1,110 dollars is the utmost for which I can, or ought to, permit the deed to stand as a security.
I shall, accordingly, allow to the defendant, William Dunlap, pin., his election, to pay, within 30 days from notice to his solicitor of this decree, the amount of the judgments upon the four notes mentioned in the bill, together with interest thereon, and the taxable costs of the plaintiffs, at law, and in this court; and that the plaintiffs shall, thereupon, convey to him, in fee, the premises mentioned in the deed of the 24th of December, 1810, and deliver into his possession the deeds of their title from the sheriff. But in default of such payment, or tender, that the defendant shall, within 30 days thereafter, convey the premises, in fee, to the plaintiffs ; and, at the same time, deliver into their possession the deed of the 24th of December, 1810, without being chargeable with any previous rents and profits, on condition of a previous payment, or tender, to him, by the plaintiffs, of the sum of 1,110 dollars ; and, in that case, neither party shall *488have costs as against the other. And if neither alternative be complied with, as aforesaid, that then the bill in this cause ... ..... shall stand dismissed without costs.
Decree accordingly.