Court Opinion

ID: 8256649
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:21.544859+00
Date Added: 2024-06-11T16:43:01.005400
License: Public Domain

Mr. Justice Handy
delivered the opinion of the court.
This was a bill filed in the superior court of chancery, by the appellant, a judgment creditor of the appellee Murphy, to set aside certain purchases of the property of Murphy, made by the appellee Watson, and to subject the property to the payment of the appellant’s judgment.
The bill charges, in substance, that in the year 1841, Murphy was the owner of a plantation of about 1,500 acres of land, about forty slaves, stock, &c., and being much in debt, by an arrangement between him and Watson, his brother-in-law, the lands and other property were sold under two executions, which Watson had got the control of, and which he purchased on time, and paid for out of the proceeds of the property, and at the sheriff’s sales ; that Watson purchased the property nominally for himself, but really for the benefit of Murphy, who has remained in the possession and use of the property ever since. The purchases of the executions and of the property are charged to have been colorable and fraudulent as to the creditors .of Murphy, and made for his benefit, and. really with his means, in order to cover up his property and prevent its being subject to execution.
The answer of Watson denies all the fraud charged as to the purchases of the judgments and of the property, and claims to hold the property as a purchaser in good faith, and he denies all the particulars of fraud charged, and especially that there was *184any understanding whatever that the purchase was for Murphy’s benefit. The answer of Murphy is to the same effect.
Upon the final hearing on the pleadings and evidence, the chancellor dismissed the bill; and this appeal was thereupon taken.
This case has been very fully and ably presented on both sides by the arguments of counsel at the bar, which have aided us much in examining the particulars of the evidence contained in the voluminous record. The merits of the case depend rather upon the facts and conclusions to be drawn from them, than upon contested principles of law ; and though the points of fact are numerous, and many minute details have been considered in argument, we do not think it necessary to examine all those particulars, and will notice only the more striking features which, in our judgment, fix the legal character of the transactions in question. We will proceed to consider such points, and the legal conclusions arising from them.
It is shown by the record, that in December, 1840, the appellee, Murphy, was much involved in debt, and that there were two judgments against him, one held by A. W. Putnam, for $11,974.24, with interest from June, 1837, subject to a credit of about $2,600; and the other held by Reuben Collins, for $1,655, with interest from October, 1840; and that he was then indebted to the appellant in the sum for which a judgment was afterwards rendered against him for $11,907.67. Watson was his brother-in-law, and Murphy was then the owner and in possession of a plantation of 1,518 acres of land, about forty slaves, farming utensils, horses, sheep, and cattle, and other articles usual on such a cotton plantation ; one thousand bushels of corn, household and kitchen furniture, &c. In December, 1840, Putnam and Watson met at Murphy’s house, which was some twelve miles from Watson’s residence, and Watson purchased the judgment of Putnam, paying him about $2,000 in cash, and giving his individual notes, one for $4,100, due twelve months after date, and another for $4,428, due two years after date, which notes were afterwards seemed by a deed of trust upon the slaves purchased under the judgment; also *185another note signed by Watson and M. Watson and. Murphy, payable at the Commercial Bank of Natchez, twelve months after date, for about $4,000. The money in payment of these notes was received from Watson, but was not paid in full until 1846. The note payable at the Natchez bank was discounted there, and the name of Murphy is said to have been put upon it to comply with the rules of the bank, requiring several names on paper. It is also stated that the transfer of the judgment was suggested by Putnam, and that his reason for wishing to sell it was, that he feared he might lose the debt, as he had heard of persons running off their property, as Murphy was but a surety, and otherwise in debt, and he was getting some cash and securing the debt by the transfer. This is the account of the matter given by the witness Putnam in behalf of the appellees. But in several respects, his statements are inexplicable consistently with facts appearing in the case. 1st. It appears that the money paid and secured to him considerably exceeded the amount of money due on the judgment, the principal and interest, on which at the time of the transfer did not exceed $14,800, without taking into consideration the credits upon it. He states that there was paid by Murphy $1,000, but says nothing about the credit of $1,612, entered previously by himself upon the execution. These credits would reduce the amount to about $12,000. Yet the sum paid and secured by Watson appears to have been about $14,000 at the time of the transfer, according to his statement.- 2d. He states that only the note which had Murphy’s name upon it was payable at the Natchez bank. But it appears by the deed of trust made to him by Watson, that the two other notes were made payable in that bank. These circumstances show that this witness may be at fault in his recollection of the circumstances of the transaction. But, 3d. It is shown by the testimony x>f the officers of the bank, that no such note as that stated by the witness to have been discounted in that bank, was ever discounted there ; but on the contrary, that a note for $3,000 was discounted in the bank on the 3d March, 1840, for the benefit of Murphy, the avails of which were paid to the witness, and that no other note with the name of Watson, Murphy, and Putnam upon *186it appears by the books of the bank ever to have been discounted, except as a renewal of the note discounted in March, 1840.
This witness does not positively state that the note discounted in bank was given in December, 1840 ; and if such a construction be given to his testimony, it is manifest that he was mistaken, for it is inconsistent with the books of the bank. But he is clear that a note of the parties was discounted in the bank at Natchez, and that it formed a part of the consideration given for the purchase of the judgment by Watson. It fully appears that no other such note was discounted but that given in March, 1840, which was signed by Murphy and its proceeds applied to his benefit. He was a party to that discount, and yet he does not undertake to give any explanation in relation to it; and if it had been applied to any other purpose than the purchase of the judgment, it is to be presumed that he would have explained it. It was certainly not applied to the part payment of the judgment, for no credit is given on account of it. Taking the testimony of this witness, then, in connection with the evidence derived from the books of the bank, and reconciling them as far as can be, the conclusion is not to be avoided that the proceeds of the discount obtained for the benefit of Murphy in March, 1840, constituted a part of the consideration of the transfer of the judgment by Putnam to Watson. Murphy thus supplied the means in part by which the judgment was purchased, and the transfer and the proceedings had under it cannot be permitted to stand as a protection against the claims of his creditors. The law condemns it as fraudulent in an essential part of it, and if fraudulent in part, it is void in toto as to the creditors of Murphy. For that reason, Watson can claim no protection by reason of his having paid the cash paid when the transfer of the judgment was made, or by his subsequent payment of the debt contracted by Watson on the note of the 3d March, 1840; because the consideration for the transfer was in part the money raised by Muvphy and paid to Putnam. If that consideration was vicious at the time, it could not be rendered valid by his subsequent payment of the money to the party who furnished it to Murphy.
Much less can he claim protection on account of his subse*187quent payment of the two notes secured by the deed of trust. He admits that he has had the products of the property since his purchase in January, 1841, and it sufficiently appears that, before the final payment of the debts, the crops were amply equal to the payment of all that Watson paid on account of the purchase of the judgment. Thus the money has been substantially paid by the property of Murphy, and if the transaction is condemned under the force of legal rules, it cannot receive a more favorable consideration in a court of equity on account of any hardship occasioned to Watson, for loss of money paid by him.
Many other reasons, having much force, have been urged, to show that the purchase of the property was fraudulent. But the view we have taken of the foundation upon which the title of Watson rests renders it unnecessary to give particular consideration to these reasons, so far as they are applicable to the sale under the execution obtained from Putnam.
As to the validity of the sale of the land and other property under the execution obtained from Collins, we think it must be considered as a part of the same transaction as the purchase of the slaves, and made with the same object. The purchase of the judgment was made about the same time as the other, on credit, but for its full amount bearing interest, the products of the place being sufficient to pay that as well as the other debts contracted, Murphy remaining on the place, the arrangement that Collins should run the land up to a certain price at the sale, the low price at which the land sold, $500, and the fact that the land and other property sold under the execution were sold for an amount exceeding considerably the money due on the execution, and that all the property Murphy had was thereby sold and purchased by Watson; all these circumstances tend to cast suspicion upon the sale. When it is considered that the sale of this property was intimately connected with the previous sale, and was necessary to carry out the purpose intended by that sale, these suspicious circumstances must force the mind to the conclusion that this sale partakes of the same vicious character as the former one, and must be held fraudulent in law, and void as to Murphy’s creditors.
*188We have viewed this transaction, as we are bound to do, through the medium of the rules which the law has prescribed, not with reference to any motives of benevolence which may have actuated the purchaser of this property towards his relatives. However praiseworthy such motives may have been, in point of private feeling, they are such as the law condemns, and we but pronounce its judgment, in declaring the purchases void as to the creditors of Murphy.
The decree is reversed, and a decree ordered for the appellant, according to the prayer of the bill.
The appellees, by their counsel, filed a petition for a reargument of this cause; but the court refused to grant a reargument.