Court Opinion

ID: 6573102
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:31:49.453247+00
Date Added: 2024-06-11T15:56:58.641336
License: Public Domain

Swift, Ch. J.
Fraudulent and voluntary conveyances are void as to creditors; but in the case of a voluntary conveyance, a distinction is made between the children of the grantor and strangers. Mere indebtedness at the time *543will not, in all cases, render a voluntary conveyance void as to creditors, where it is a provision for a child in consideration of love and affection ; for if all gifts by way of settlement to children, by men in affluent and prosperous circum*544stances, were to be rendered void upon a reverse of fortune, it would involve children in the ruin of their parents, and in many cases might produce a greater evil than that intended to be remedied. Nor will all such conveyances be valid ; *545for then it would be in the power of parents to provide for their children at the expense of their creditors. Nor is it necessary that an actual or express intent to defraud creditors should be proved ; for this would be impracticable in *546many instances, where the conveyance ought not be established. It may be collected from the circumstances of the case. But in all cases where such intent can be shewn, the conveyance would be void, whether the grantor was indebted or not. *547In order to enable parents to make a suitable provision for their children, and to prevent them from defrauding creditors, these principles have been adopted, which appear to be founded in good policy. Where there is no actual fraudulent *548intent, and a voluntary conveyance is made to a child in consideration of love and affection, if the grantor is in prosperous circumstances, unembarrassed, and not considerably indebted, and the gift is a reasonable provision for the child *549according to his state and condition in life, comprehending but a small portion of his estate, leaving ample funds unincumbered for the payment of the grantor's debts ; then such conveyance will be valid against conveyances existing at the *550time. But though there be no fraudulent intent, yet if the grantor was considerably indebted and embarrassed at the time, and on the eve of a bankruptcy ; or if the value of the gift be unreasonble, considering the condition *551in life of the grantor, disproportioned to his property, and leaving a scanty provision for the payment of his debts ; then such conveyance will be void as to creditors. In the case under consideration, it is manifest there was no fraudulent intent ; the *552gift constituted but a small part of his estate ; was a reasonable provision by the father for the son, according to their condition and circumstances; and much more than sufficient for the payment of the debt due to the plaintiff remained in the hands of the grantor. I am, therefore, of opinion that *553the indebtedness of the grantor at the time of the conveyance, the only circumstance that can operate against it, is not such as ought to set it aside, especially as a great length of time has elapsed, and the estate has passed into the hands of a bona fide purchaser, for a valuable consideration.
*554In this opinion Trumbull, Edmond, Smith, Brainard, Baldwin, Goddard and Hosmer, Js. concurred.
Gourd, J.
There is no case, I trust, in which a conveyance to a child, founded upon natural affection, has been adjudged void, as to creditors, for the mere want of a valua*555ble consideration ; though there are several adjudications the other way. The question in Doe v. Manning, it should be recollected, arose under the statute 27 Eliz. : and it is familiar to the profession, that purchasers, for whose protec*556tion that statute was made, have always been more favoured in the construction of it, than creditors, under that of the 13 Eliz. The former not having trusted to the personal responsibility of the grantor, but having advanced money, *557only upon a conveyance of the specific property in controversy, and in confidence of acquiring an immediate title to it, are regarded as having a higher equity than general creditors. This diversity of construction is agreeable to all analogy. *558Hence, the construction of the statute 27 Eliz. has always been more rigorous, as against conveyances not founded on valuable consideration, than that of the statute 13 Eliz.
As to creditors, the want of a valuable consideration may be, under circumstances, a badge of fraud ; but does not, per se, render the conveyance fraudulent. Whether an actual fraudulent intent is necessary, to render it so, is a distinct question. It is sufficient, for the present purpose. that something more than the mere absence of a valuable consideration, must appear, in order to invalidate such a grant. Evidence of indebtedness, at the time, at least, and, as I conceive, of indebtedness, amounting, or approximating, to embarrassment, must be shown. For if any degree of indebtedness, however small, would defeat such conveyances ; they would, virtually, be per se fraudulent : since no individual, perhaps, or, at least, hardly any one, in the community, is at any time, absolutely free from debt. And as I discover, in this case, no such evidence, as I suppose, the rule requires ; I cannot pronounce the conveyance to Salmon Sherwood, fraudulent. Holding this opinion, it is. of course, unnecessary for me to consider, whether the deed to the defendant would be void, as against creditors, supposing the first conveyance to have been so.
Judgment to be given for the defendant.