Court Opinion

ID: 6232820
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:25:48.921471+00
Date Added: 2024-06-11T08:57:56.095782
License: Public Domain

The opinion of the court was delivered, by
Thompson, J.
The validity of the bond in this case, and the lien of the judgment upon it, are very different things. The former may be the result of a fraudulent intent and combination to defraud creditors, and yet the parties be bound. There is no statute making it void as to them. It is only the parties intended to be defrauded who are to be protected against its binding force ; and as no one will be allowed to allege his own turpitude, it remains binding between the parties and assigns. But if the property out of which it grew never passed, by reason of fraud or being a covinous sale, then there was no interest in the vendees to which the lien could attach until after the creditors of the vendor were satisfied. That was the case by the finding of the auditor, and I am at a loss to discover the grounds upon which the court below overruled the auditor in making the distribution he reported. By order of the court, and consent of the parties, he had full authority to pass upon the question of fraud in the alleged sale of Daniel Roadarmel to his two sons, of his undivided interest in the real estate of his brother Peter deceased. The report of the auditor, fully supported by the evidence, shows as flagrant a case mf actual fraud against creditors in this sale as can be found in all the books. How, then, ■ as against these very creditors are we, consistently with principle, to hold that it did pass to the fraudulent vendees the land, so as to be the foundation of valid liens in favor of their creditors ? By reason of the fraud the property did not pass out of the reach of Daniel Roadarmel’s creditors, and until they are satisfied there can be no pretence of claim by the creditors of his sons. Their rights are no higher than that of their debtors. They must claim through them, and not above or beyond them. By the finding of the auditor the sons had no title in the premises as against the creditors of their father, and any decision which denies that is wrong. But this is denied by the decree of the court below, without giving us the benefit of its reasons. If the decree was rested upon the idea that the appellee was an innocent purchaser of the bond of Samuel and Richard Roadarmel to their father, all that can be said in the absence of proof to the contrary is, that nobody is disputing his title to what he bought, but only that he is not entitled to property belonging to others to satisfy it. _ If, before he purchased the bond, he had inquired of the claimants of the fund whether they would claim it as against him a creditor of the sons, and they had assured him they had no claim against the father, no doubt his title would have been perfect; but this he did not. His case is not, however, within the principle relating to secret equities. It is not an equity against the bond at all that is asserted, it is only that the fund claimed by the appellee in payment of his judgment is not the money of the obligees. The *310bond is not touched, nor is it the business of the appellants in this issue to impugn it in the least.
For these reasons we are of opinion the dourt below erred in overruling the auditor’s report, and in decreeing the fund to A. M. Brown’s payment in preference to the appellants’ claim. The decree must therefore be reversed, and a decree confirming the auditor’s report be entered; and the record is ordered to be remitted to the court below for that purpose.
Decree reversed and set aside, and a decree to be made as indicated above; costs to be paid by the appellee.