President of the Oriental Bank v. Haskins

Wilde, J.

Several exbeptions have been taken to the ruling of the court at the trial, as to the admission of evidence, and to the instructions given to the jury. These exceptions have been taken into consideration by the court, after hearing the arguments of counsel, and the opinion we have formed thereon I will now briefly state.

The tenant was permitted to prove by paroi the contents of a certain paper, being a written agreement whereby he had agreed to reconvey the demanded premises to the witness, on a certain contingency. It was testified by the witness, that this paper had been given up by him to the tenant, after they had made a new agreement by which the witness relinquished all claim, under said written agreement, for a reconveyance. And the tenant thereupon made affidavit, that he had made diligent search for said paper, and could not find it, and that he supposed ;t was destroyed. This evidence was decided to be sufficient to prove the loss or destruction of the written agreement, so as to admit secondary evidence of its contents ; and we are clearly of opinion, that it was rightly so decided. As between the parties, the paper had become of no importance, by reason of the *337 new agreement; and the destruction of it, if it was destroyed, would furnish no proof nor create any suspicion of a fraudulent design in its destruction. If it had continued a subsisting security, and had been voluntarily destroyed, it might have ad mitted a different inference, and the case of Blade v. Noland, 12 Wend. 173 , might perhaps have been applicable. But the primary evidence in this case repels the inference there made, and proves, as satisfactorily as the nature of the case admits, that the paper had been lost or destroyed ; and in either case, the secondary evidence was admissible.

The next question to be determined is, whether there are any legal exceptions to the instructions given to the jury.

It is objected in the first place, that the evidence disclosed a secret trust in the conveyance from John Haskins to the tenant, which rendered it fraudulent against creditors, and that the evidence of the fraudulent intent was conclusive. That this is not the law in respect to the sale and conveyance of personal property is unquestionable. A secret trust inconsistent with the terms of a sale of property is evidence of fraud, if not satisfactorily accounted for ; but it is not fraud per se, nor con elusive evidence of fraud. But it is contended, that there is a distinction between the conveyance of real and personal estate ; and there are dicta in support of such a distinction. But they do not seem to us to be well founded on principle or authority. The decision in the case of Cutler v. Dickinson, 8 Pick. 386 , is expressly to the contrary. In that case, it was decided that an absolute conveyance of land, the grantor taking back a writing not under seal, for a reconveyance on a condition, was not per se fraudulent as against creditors. That was a case in all respects similar to-the present, so far as it relates to the question under consideration, and is decisive'. A question somewhat similar has been much discussed, and upon which there are conflicting decisions. It was laid down by Buller, J. in Edwards v. Harben, 2 T. R. 596, as a general rule, that in the transfer of goods and chattels, the possession must accompany and follow the deed, and that an absolute conveyance without possession, was in point of law fraudulent, and not merel) *338 evidence of fraud. That this was not considered to be the law in ancient times, appears very clearly by Tmyne's ease, 3 Co. 80. It was in that case held, that a secret trust, and the pas session of the goods sold by the vendor after the sale, were only badges of fraud and were not fraudulent per se. And so it was considered in several subsequent cases. And so, I think, the, law is now held in England, notwithstanding the case of Edwards v. Harben, and some other cases. In this Commonwealth, it has been uniformly held that a sale of goods may be valid, although the possession does not accompany and follow the conveyance ; that the subsequent possession by the vendor is evidence of a secret trust and collusion between the parties, to be submitted to a jury ; but that it is not conclusive evidence of fraud. 15 Mass. 247 . 16 Mass. 279 . 1 Pick. 295 . 399. 2 Met. 263 . See also Cowp. 432. 2 Bulst. 226. 2 Bos. & Pul. 60. Ry. & Mood. 312. 4 Barn. & Cres. 654. 1 M. & S. 254. 4 Taunt. 823. 8 Taunt. 838. 3 Barn. & Adolph. 498. 7 Wend. 438 3 Cow. 166 . 8 Cow. 453 . 3 Yerg. 475 . 502.

Another objection to the instructions to the jury is much relied on by the counsel for the demandants, in regard to which there are several conflicting decisions in which the question has been very fully discussed. The objection is to that part of the charge in which the jury were instructed, that although they might be of opinion that the conveyance to the tenant was originally fraudulent as against creditors, yet if they should be of opinion, that there was no fraudulent intent in the subsequent settlement and adjustment of the concerns between the parties, and that there was no intention to delay or defraud creditors, and that the transaction was bond Jide and fair, then that the transaction would purge any supposed fraud in the deed. It is objected that the original conveyance to the tenant was absolutely void as against creditors, and not merely voidable by them, so that no subsequent transaction could purge the fraud. This objection is sustained by the cases of Preston v. Crofut, 1 Connect. 527, note, and Merrill v. Meachum, 5 Day, 341 . In the latter case, it was decided that a deed made with an intent to defraud creditors was absolutely void, and that no subsequent, act *339 of the parties could render the deed valid against creditors. In that case, the deed was not delivered to the grantee when it was made ; but when it was made known to him, he assented to it, and paid an adequate consideration for a part of the land, and reconveyed the residue to the first grantor. The case was decided upon a supposed distinction between the effects on a conveyance, by St. 13 Eliz. c. 5, and St. 27 Eliz. c. 4. Two of the judges, Smith and Ingersoll, dissented from the opinion of the majority of the judges, and for reasons, as it seems to us, very forcible and convincing. The distinction, however, on which these cases were decided, was maintained by Chancellor Kent, in Roberts v. Anderson, 3 Johns. Ch. 371 . The question was afterwards very fully discussed by Story, J. in Bean v. Smith, 2 Mason, 252 , and he fully concurred in the opinion expressed by the dissenting judges in Connecticut. He considered the distinction, on which those cases in Connecticut were decided, as entirely novel and unsupported by any previously adjudged case, or by any sufficient reason. And the same opinion was expressed by Parker, C. J. in Somes v. Brewer, 2 Pick. 198 . “ Great weight,” he said, “ should be attached to the opinion of such men as composed that court, and the more, as their opinion is unequivocally approved of and sanctioned by Mr. Chancellor Kent. Still as their decision runs counter to all our practical notions, and to many judicial decisions in this State ; as it was combatted with great force by a very eminent member of the Connecticut bench ; and as the decree of the chancellor of New York was reversed in the court of errors, conformably to the opinion of the common law judges of that S;ate ; we cannot think it will be adopted beyond the jurisdiction of Connecticut.” See also.4 Kent Com. (3d. ed.) 464, & note.

We entirely concur in the opinions expressed by Chief Justice Parker and Mr. Justice Story, and for the reasons by them assigned in the discussion of the question. We think there is no such distinction between the 13th and 27th of Eliz. as was maintained by the majority of the court in Connecticut, but that conveyances, fraudulent as against creditors or against subsc *340 quent purchasers, are voidable only, and not absolutely void ; and that if the fraudulent grantee conveys the estate to a bond fide purchaser for a valuable consideration, the conveyance is good, and the first grant will be purged of the fraud. And so we hold that such a fraudulent grant may be purged of the fraud by matter ex post facto, whereby the fraudulent intent is abandoned, and the grant confirmed for a good and adequate consideration bond fide. Comb. 222. 249. 1 Sid. 133. 1 New Rep. 332. 10 Johns. 185 . 12 Johns. 552 . 14 Johns. 407 . 1 Johns. Ch. 271 . And so it was held in Thomas v. Goodwin, 12 Mass. 140 . In that case, one who was summoned as trustee had received goods under circumstances indicative of fraud, and which would have fixed him as trustee ; but before the service of process upon him, he had paid debts of the principal to the amount of the goods received, and he was discharged. And a similar decision was made in Hutchins v. Sprague, 4 N. Hamp. 469.

These decisions are in accordance with the instructions to the jury in the present case, and we are of opinion that the exceptions taken cannot be maintained. Whether the jury found there was any fraud in the original conveyance does not appear. But if they did, we think it was competent for them to return a verdict for the tenant, if they believed from the evidence that the fraud was purged by a bond fide settlement, and a full payment for the land, before the plaintiffs’ attachment.

Judgment on the verdict.