Court Opinion

ID: 7984354
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:23:59.121496+00
Date Added: 2024-06-11T16:35:08.966661
License: Public Domain

Simeall, J.,
delivered the opinion of the court:
' This suit in chancery was brought by the complainants, appellees in this court, to vacate and cancel certain deeds, under which the defendant, Thomas Walton, the appellant, claimed title to the quarter section of land therein mentioned.
The complainants allege their title to be as follows; Eli Waites and Lebbeus French were partners in the purchase and sale of land; of the lands, “ so bought, held, and sold by said partnership,” was the quarter section in dispute. Each member of the firm was authorized to sell and convey lands belonging to the firm. On the 18th of June, 1851, “ French, in the name of.said partnership,” sold and conveyed, the quarter section to one Samuel M. Miller, which deed was duly acknowledged and recorded, and is exhibited with the bill. After this conveyance in 1858, said Waites sold and conveyed the same parcel of land to Martha L. Davis, who sold and conveyed to D. 0. Postwood; Walton became purchaser at sheriff’s safe, under judgment and execution against Postwood.
The land is wild, and never has been occupied and cultivated.
Walton, in his answer, denies the partnership between Waites and French, and the purchase of this quarter section on joint or partnership account; denies also any valid agree*574ment, authorising each member to sell and convey, so as to vest “ all the title of said Waites and French in a purchaser;” insists, that to constitute such authority, the agreement must be under seal; and there was no such agreement; that the deed made by French to Miller was absolutely void, as to the interest of Waites, that at its date, if a partnership ever existed, it had terminated; submits that the deed purporting to be by French and Waites, is not good to convey the interest of French; no consideration passed from Miller to French, but it was without consideration; the conveyance was made to Miller- to protect the land from judgments against Waites; French took at the same time from Miller a bond to reconvey the land; Miller knew the purpose of French; after this French “ conveyed the land to Waites in a settlement between them; ” French destroyed said bond, being advised it was of no value.
French in his deposition says: That he made the deed to Miller without consideration, to change the nominal ownership, so as to prevent Waites’ creditors from taking it, being bound as surety for Waites.- Miller was informed of the purpose, and gave a bond to reconvey. Afterwards Miller refused to reconvey, and in the summer of 1863 witness burned the “deed,” thinking it of no value. The partnership did not exist at the «date of the conveyance to Miller, though it had existed.
The land belonged to him individually, and was entered in his own name. Waites was to have an interest when he paid, which he never did.
The complainants place their right, to have dissipated, the cloud, which obscures their title, by the conveyances under which Walton claims, on .the ground that there vested in their ancestor, French, the entire title which w-as in Waites and French, by the deed from French to him in 1851.
Walton denies the partnership and the authority, of either party, to convey the lands as claimed, in the bill. There was testimony proving the partnership, but there was no evidence of such authority in the members of the firm to' *575convey. The deed to Miller, under which complainants derive title-, purports to have been made by Waites and French^ and is so signed, but was only acknowledged by French as “ his act and deed.” It devolved upon the complainants to show authority in French thus to convey the joint .interest, in order to overcome the denial of the answer. Failing to do so, the deed was only operative to pass the individual interest of French who executed it.
The complainants only show title to a moiety of the land. The other undivided half owned by Waites was transferred by his conveyance to Mrs. Davis, which came by mesne conveyances to the defendant Walton.
It is well settled that the complainants must exhibit a complete legal or equitable title to give them relief by cancellation against an opposing claim. He must be in the words of the statute, the “ true owner.” And must satisfy the Chancellor that the adverse claim is “shadowy,”' rather than substantial, “ apparent ” rather than “ real.” Huntington v. Allen, 44, Miss. Rep., 662; Banks v. Evans, 10, S. & M., 62; Boyd V. Thornton 13, S. & M., 344.
Walton takes exception to the complainant’s title, as utterly invalid, of no virtue in a court of equity, because no consideration was paid by Miller to French, and because the conveyance was made to place the property beyond the reach of creditors. It seems to us that this objection arises in a misconception of the doctrines of the courts respecting fraudulent conveyances. Such conveyances are entirely good as between the parties and all other persons, except those .who are injured, or intended to be injured, by them, to-wit, creditors of the grantor. Sherk v. Endress, 3 Watts & Serj. 255; Dyer v. Homer; 22 Pick., 253; Randall v. Philipps, 3 Mason, 378, et seq. The statute of frauds and perjuries of 1822 and 1857, in terms, makes the “ gift, grant, conveyance, * * contrived of covin, collusion * * to the intent * to hinder, delay or defraud creditors * * shall be from henceforth deemed and taken only as against those persons, their heirs, executors, * * whose • debts. * might *576by such practices * * be disturbed, hindered or delayed, to be utterly void. If only void as against the creditors and other persons injured, the statute by implication makes the conveyances, &c., good, as to all others.
There is a distinction between an executed and an executory fraudulent contract. As to the latter, the court, where the parties are equally participants in the fraud, in pari delicto-, will leave them in the predicament where they place themselves, by denying qny relief or interference. But where the contract is executed, as in this case, by a deed transferring the title to Miller, the court acts upon the same principle declining altogether to cancel the deed and restore the title to French. But the, effect is very different; in the former case, specific performance will be refused; in the latter, the fraudulent grantee remains owner of the.estate against the grantor and his heirs, and against all other persons except the creditors of the grantor.
A voluntary reconveyance by the fraudulent grantee to the original grantor will be fraudulent and void against the creditors of the former. Chapin v. Pease, 10 Conn., 69. The estate in the fraudulent grantee is complete and fully vested, so that it is subject to sale and conveyance, or to descent; the title cannot be impugned for the covin and collusion, in which it was contrived and transferred by any other person, except those injured by the deceit and fraud. No other person can assail the conveyance made to Miller, except the creditors of French. If French had not destroyed the agreement with Miller to reconvey, equity would have refused on his application a specific performance. The paper was of no value to French, and he lost nothing by its destruction.
An argument has been made, by the appellant, that inasmuch as the statute makes void the conveyance only against the creditors of the grantor, therefore the contract, or bond to reconvey, was obligatory and enforceable against Miller by French, and therefore the complainants have but a dry legal title, whilst the complete beneficial equitable title is in French. The statute was designed exclusively for the benefit *577of creditors, that is the import of the word “ only.” The rights of the immediate parties to the fraudulent conveyance are left to be dealt with by the common law. Ex turpi causa non actio oritur, a party applying to a court of equity for relief, must have an honest, and just claim. To extend aid to either party engaged in a conspiracy to cheat and defraud, would be to sanction the wrong and carry it to a successful consummation; therefore equity will not decree a specific performance of an agreement by the fraudulent grantee to reconvey the property to the debtor. Sweet v. Tinslor, 52 Barb., 271; Canton v. Dorchester, 8 Cush., 525; Grider v. Graham, 4 Bibb, 70; Baldwin v. Canthorne, 19 Vesey, 166; Ellington v. Currie, 5 Ire., Eq. Rep., 21.
We think that the complainants failed to establish a legal title to the entire tract, as averred in their bill. The utmost of their right is a title to Erench’s undivided moiety. If that be so, it is shown by the averments of the bill that Walton has acquired a title to the other half. In this aspect of the case, it was error to cancel the deeds under which Walton claims. A circumstance was brought out in the deposition of French, which tends to indicate that the entire title to the land was in him. He says that he individually entered the land in his own name; that Waites was to be interested, upon paying for another quarter section, which he never did. If this be so, the complainants may have title to the whole tract, but in a mode different from that stated in the bill.
- We are satisfied that the decree of the Chancellor is erroneous. It is reversed, and judgment rendered here, dismissing the bill, but without prejudice to the rights of either party at law.