Huggins v. Perrine

STONE, J.

In the great case of Reade v. Livingston, 3 Johns. Ch. 481 , Chancellor Kent, with his accustomed research and ability, reviewed and collated the numerous decisions bearing on the question presented by this record; and, after asserting the doctrine, that a voluntary settlement or conveyance, made by one indebted at the time, was fraudulent and void as against such debts, irrespective of their amount or the value of the property conveyed, he proceeded further to declare, that subsequent creditors might impeach such settlement or conveyance, on the ground of prior indebtedness; and that such conveyance or settlement would be declared fraudulent and void as against the latter class of creditors, if the antecedent debts wore sufficient in amount to afford reasonable evidence of a fraudulent intent: that to justify this conclusion, it was not necessary to show the absolute insolvency of the settler.

In our own courts, this question has been frequently considered. In Miller v. Thompson, 3 Porter, 196 , the case of Reade v. Livingston, supra, was quoted approv *399 ingly, and tbe general principle asserted, that voluntary conveyances by persons indebted are absolutely void as to such debts. See, also, Moore v. Spence, 6 Ala. 506 . In Elliott v. Horn, 10 Ala. 348 , it was decided, that a purchase of land by a father, in the name of his son, for the purpose of defrauding his creditors, was void, as well against subsequent purchasers as antecedent creditors. The principles of these two cases were re-affirmed in Thomas v. DeGraffenreid, 17 Ala. 611 ; Foote v. Cobb, 18 Ala. 585 ; Gannard v. Eslava, 20 Ala. 732 ; Lightfoot v. Stiles, 26 Ala. 443 .

In Corprew v. Arthur, 15 Ala. 525 , this court pretty clearly indicated a disinclination to go the extreme length of the English decisions, in construing the statutes against fraudulent conveyances; and while it is conceded that an intention to defraud will vitiate a conveyance, even at the instance of a subsequent purchaser, it is said that a conveyance purely voluntary will be upheld against one who subsequently purchases with notice. — See Lightfoot v. Stiles, supra; Fisk v. Stubbs, and Spencer v. Godwin, at the present term.

This subject is very fully considered in American Leading Oases, vol. 1, pp. 49 to 85. On pages 71-2, it is said, that a voluntary conveyance is not void against subsequent creditors, unless it be actually fraudulent; that a colorable conveyance, accompanied by the presumption of a secret trust for the benefit of him whose debts are sought to be enforced, is void, whether the debts be precedent or subsequent; and that such voluntary conveyance is always fraudulent against those subsequent creditors, whose injury is actually contemplated. It is further said, and well sustained by authority, that “an intent actually to defraud creditors is to be legally inferred from the grantor’s being insolvent at the time, or greatly embarrassed, or so largely indebted that his conveyance necessarily has the effect to hinder and defraud ci’editors; and a voluntary conveyance, made under such circumstances, may be set aside by a subsequent creditor.” Reade v. Livingston, supra ; Hutchison v. Kelly, 1 Rob. Va. 125.

*400 It is contended for appellant, that the present is only a case of advancement by Mr. Huggins to his children ; and that as there was no conveyance in fact made by him, it is not within the statute of frauds. Mr. White, in this entire transaction, acted as the agent and friend of Mr. Huggins. He did not purchase for himself, or with his own money. Stripping this case of all machinery, Mr. Huggins, at his own sale, bought a one-fourth interest in the land, and paid for it with his own means. He subsequently declared that he intended this property for his children; and the endorsement by White on Huggins’ deed to him, as proved by complainant’s witness, shows that White had made a deed to the children. This is nothing more nor less than a gift by Huggins to his children; and as our statute embraces “every gift, grant or conveyance, * * * by writing or otherwise, * * * * to the intent or purpose to delay, hinder -or defraud creditors,” we think the case is clearly within the statute. — Clay’s Digest, 254, § 2.

We have thus far considered this case upon the legal presumptions. The testimony certainly fails to make a case favorable to the'interests of the appellants. At the time of the purchase, Mr. Huggins was ruinously insolvent. He purchased not only the property in controversy, but other real estate; and invariably took the title in the name of his friend White. Long after the purchase of this property, he leased it in his own name for ten years, exercising unlimited control over the premises. His children were all minors, — not of the ages when children are usually advanced. These circumstances force us to conclude, that Mr. Huggins’ object was to delay, hinder and defraud his creditors ; and under the authorities cited in the-briefs of counsel, as well as those above, a subsequent creditor may set aside a conveyance thus made.

We have disposed of the only point made in argument for the appellant. The equity of the bill is supported by the case of Watts v. Gayle & Bower, 20 Ala. 817 .

The decree of the chancellor is affirmed.