Court Opinion

ID: 7985890
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:25:31.442398+00
Date Added: 2024-06-11T16:35:11.991602
License: Public Domain

Cooper, J.,
delivered the opinion of the court.
The demurrer of the defendant W. S. Simmons should have been sustained. His father, I. M. Simmons, never had any legal title to the land in controversy, nor did he have any equitable interest in it which a court of chancery would establish on an application by himself, or by any one claiming as a volunteer under him. This defendant having neither a legal nor an equitable title which it was necessary to divest in behalf of the complainants, and not being subject to any personal decree in favor of complainants, was indifferent to the result of this suit and was neither a necessary nor a proper party defendant. *
The-evidence leaves no doubt of the insolvency of I. M. Simmons at the time he purchased the land and procured a conveyance of it to be made to his wife, and we concur in the conclusion reached by the chancellor, that the purchase-money of the land in controversy was paid by him and not by his wife.
The complainants Ingram & Jennings do no occupy the position of creditors entitled to question the validity of the conveyance. Their debt was not existing at the time the purchase was made and there is an absence of any testimony that they were at all deceived by it, or gave credit to Simmons upon the faith of his ownership of the property. The extent of the evidence is that the conveyance was taken to the wife to defraud the then existing creditors of the husband. In Henry v. Fullerton, 13 Smed. & M. 631, and Vertner v. Humphreys, 14 Smed. & M. 130, it was held that voluntary *898conveyances were not necessarily void as to subsequent creditors ; that the presumption of fraud arising from indebtedness, or fraud in law might be repelled by proof of circumstances negativing actual fraud; but that if a subsequent creditor could show fraud in fact, as against pre-existing creditors, then the conveyance would be void both as to such creditors, and as to those whose debts were subsequently incurred. But these decisions were made before the adoption of the Code of 1857, in which a different .rule was enacted. Since that time to make a deed void as to subsequent creditors there must be proof of an intent to defraud them; it is not sufficient that there is an intent to defraud others whose debts were in existence at the time. Hilliard v. Cagle, 46 Miss. 309 ; Prestidge v. Cooper, 54 Miss. 74.
The decree rendered by the Chancery Court in 1867 in favor of the infant distributees of Anna A. Simmons for $3,342.57 was a personal decree against I. M. Simmons, and was not against him in his representative character as administrator of the estate of J. S. Simmons. In the proceedings therein he was spoken of as administrator of J. S. Simmons, to show the circumstances under which he had received and converted the property of the estate of Anna A. Simmons, but it was not attempted to fix any charge against the estate which he represented ; the object was to have an adjudication of the fact that a part of the funds in his hands had been realized by a sale of property to which the complainants in that case were entitled, and by the decree a debt was fixed against him as an individual and not as administrator. As to this debt the complainants Crosby and D. Jett Simmons were existing creditors of I. M. Simmons at the date of the conveyance to his wife and the land was properly subjected to sale for its payment.
I. M. • Simmons did not qualify as guardian to the complainants Crosby and D. Jett until the 29th of May, 1872, on which day he received and receipted for their proportion of the proceeds of real estate sold. This was subsequent *899to the purchase of the land and its conveyance to Mrs. Simmons, and as to this debt Crosby and D. Jett Simmons are subsequent creditors.
In Carlisle v. Tyndal, 49 Miss. 229, and Bernheim v. Beer, 56 Miss. 149, it was said that where a debtor purchased property, the title of which he caused to be invested in another for the pui’pose of defrauding his creditors, the creditor could proceed to subject it to the payment of his demand to the extent only of the funds of the debtor which had been invested in it. In neither of these cases was the point presented for adjudication, and we do not concur in the views indicated in the opinion of the judge who delivered the opinions.
Where property is purchased and the purchase-money paid by one, and the title taken to another, the law implies a trust in- favor of him whose money is invested, because it presumes his intention to have been to enjoy the fruits of his purchase ; -where the title is taken in the name of a wife or child this presumption yields to that of an advancement, and no trust arises in favor of the purchaser. In these cases it is the presumed intention of him whose money has procured the property which governs and controls, and if a different lawful intent is shown by satisfactory evidence, the presumption yields and effect is given to it. But where one indebted beyond his ability to pay makes a voluntary conveyance of his estate, or purchases with his own funds property, the title to which is taken to another, the law conclusively presumes that his motive is to defraud those to whom he is indebted. In such cases the intention is unlawful and no trust can be based upon it; but the law for the protection of the rights of those who are attempted to be defrauded, impresses upon the fraudulent holder of the title the character of trustee for them. It is the duty and not the will of the purchaser which is the foundation of this trust, but the property upon which the trust is impressed is the property which the grantee holds. If the circumstances under which a trust arises are such that it exists in favor of the purchaser, whose money has been invested *900in the property it is the whole of the property which is equit-abljr his, and the holder of the legal title cannot retain it upon repayment of the price at which it was bought. If, in cases of such purchases in fraud of creditors, a trust is raised bylaw for their benefit, because money which is in equity theirs, or which the creditor is bound by law to appropriate to their demands, has been invested in the property, why should a different rule be applied? If the property on a sale fails to-bring the amount invested in it by the fraudulent debtor, the fraudulent grantee cannot be required to make good the deficienc}'-. If there is a depreciation in value after the purchase by the debtor, or if the purchase by him was an improvident one, the loss falls'on the creditors. If on the other hand the purchase is an advantageous one, or the property increases in value, not by reason of the labor or at the expense of the trustee, why should he and not the creditors of the real purchaser derive the benefit?
A somewhat extended examination of the authorities has failed to discover any case in which it has been decided that the creditors of the fraudulent purchaser are' restricted in subjecting the property to the amount of the purchase-money paid by their debtor.
To us it seems clear that property so purchased is itself held by the grantee as trustee for the benefit of the creditors of the purchaser, and may be subjected to their demands as fully as it might have been if the debtor had taken title to himself and subsequently conveyed the property for the fraudulent purpose of evading the payment of his debts. To this effect are the following among other authorities: Doyle v. Sleeper, 1 Dana, 531; Whittlesey v. M’ Mahon, 10 Conn. 137 ; Miller v. Wilson, 15 Ohio, 108 ; Croft v. Arthur, 3 Dessau. 223; National Bank v. Sprague, 20 N. J. Eq. 13 ; Smith v. Parker, 41 Me. 452 ; Corey v. Greene, 51 Me. 114 ; Dockray v. Mason, 48 Me. .178 ; Demaree v. Driskell 3 Blackf. 115 ; McDowell v. Cochran, 11 Ill. ; Bay v. Cook, 31 Ill. 336.
The appellant, Mrs. Simmons, was not entitled to a home*901stead in the lands. It is not shown that the lands were occupied by her husband as a homestead at the time of the payment of the purchase-money by him, and it is shown that before his death he had removed therefrom.
Nor is she entitled to dower therein. The husband never had a title, legal or equitable, to the land, nor is there any trust raised by law in his favor. As to his creditors, Mrs. Simmons holds as trustee, not, however, because of any equity of the husband, but because of the equity of the creditors themselves. If the lands had been owned by the husband in his lifetime, and had been by him fraudulently conveyed, then, if upon a proceeding by the creditors the conveyance had been can-celled, the original title of the husband as between him and his creditors would have been restored. They would have then claimed to subject property to which he had the legal title, and having such title, his widow would be entitled to Rower. But this case differs from that. Here the husband never had in his lifetime any title whatever, and as a necessary consequence, his widow cannot claim dower.
The decree is reversed and cause remanded for a decree in the court below in accordance with the views herein expressed.