Farquharson v. McDonald

• Decision Date: 31 December 1870
• Citation: 49 Tenn. 404
• Parties: R. Farquharson v. R. A. McDonald.
• Court: Tennessee Supreme Court

49 Tenn. 404

R. Farquharson

v.R. A. McDonald.

Supreme Court of Tennessee.

December Term, 1870.

FROM LINCOLN.

Appeal from the decree of the Chancery Court at Fayetteville, JOHN P. STEELE, Ch., presiding.

John C. Brown, for complainants, insisted that an assignment reserving benefits to the maker is void: 3 Yer., 503;4 Yer., 541; Meigs, 583; Trabue v. Willis, Ib., 584; Peacock v. Tompkins, Ib., 328; Sugg v. Tillman, 2 Swan, 208. Exception in deed: 2 Washb. Real Prop., 686, sec. 57; 1 Smith's Lead. Cas., 480 (Teague's case); 1 Sanford, Ch. 83, 251, 348; U. S. Eq. Dig., 555, 559; Beaumont v. Dailey, MS., from Clarksville, decided at Nashville, December, 1867, affirming Sugg v. Tillman, and holding a deed void by reason of this clause, “Reserving only for myself a sufficiency for the supply of my family;” March v. Trigg, MS., at the same term, where the deed was held void by reason of this clause, “I convey all my household and kitchen furniture and farming utensils, over and above what the law exempts from execution at law.” On articles consumable in the use: Meigs' 584; 5 Hum., 496. Possession as a badge of fraud: 4 Yer., 550;3 Yer., 502; Meigs, 584; 5 Cow., 566; 17 Ves., 196; citing Trayner's case, 3 Coke, 80; 1 Smith's Lead. Cas., 71, 81; 1 Tenn., 91;3 Yer., 475;4 Yer., 164;7 Yer., 440;8 Hum., 717;3 Yer., 502;5 Hum., 496;4 Yer., 541;8 Yer., 419; Meigs, 281; 3 Head, 578. Reservations in a deed for the benefit of the grantor: Doyle v. Smith, 1 Cold., 20; citing 9 Sm. & Mar., 433; 14 Johns., 458;4 Yer., 548. Fraud in part avoids the whole deed: 4 Yer., 541; Hyslop v. Clark, 14 Johns. Clause in deed for exclusion of creditors: 7 Paige, 570;Wilds v. Rawlings, 1 Head, 36;11 Hum., 283;Mayer v. Pulliam, 2 Head, 347. Acceptance of deed: Mills v. Haines, 3 Head, 336. Failure to prove considerations alleged in deed: 3 Head, 578;2 Pet., 39. Postponing creditors unreasonably, 4 Yer., 548; 3 Pars. on Contr., 485, n. 6. Form of probate: Code, 2058; 3 Head, 486;3 Cold., 505.

John M. Bright, for defendants, cited, on fraud in law: Code, 1759; Ang. on Asgt's, 8, 9; Hefner v. Metcalf, 1 Head, 577; Bur. on Asg'ts, 404, 407. Preferring creditors: Ang. on Asg'ts, 1; Hill. on Trust., 1; 1 Head, 557. Postponement of creditors: 1 Hare & Wal. L. C., 91; Roane v. Bank of Nashville, 1 Head, 531;Bennett v. Union Bank, 5 Hum., 616;1 Head, 577; Bur. on Asg'ts, 404, 407. Clause limiting time for presenting claim: Ang. on Asg'ts, 71, 72, 73; Hill. on Trust., 476, top and n.; 6 Paige, 415;2 Paige, 490;2 Head, 346. Reserved property: Darwin v. Handley, 3 Yer., 502;Sommerville v. Horton, 4 Yer., 544;Young v. Pate & Kernigog, 4 Yer., 164;Simpson v. Mitchell, 8 Yer., 417; Trabue v. Willis, Meigs, 583; Peacock v. Tompkins, Meigs, 328, 331; 1 Hare & Wal. L. C., 92, 93; Sugg v. Tillman, 2 Swan, 208;Goodrich v. Downs, 6 Hill (N. Y.), 438; Ang. on Asg'ts, 137; Bur. on Asg'ts, 244; 4 Kent, 468. Property may be separated before adverse right attaches: Ang. on Asg'ts., 67; Bur. on Asg'ts, 324; State v. Haggard, 1 Hum., 392. Description of property conveyed: Charlton v. Lay, 5 Hum., 497;Barker v. Wheelip, 5 Hum., 329. Consumable articles: 5 Hum., 498; 5 Sneed, 629. Retention of property by vendor: Bumpas v. Dotson, 7 Hum., 317;Mitchell v. Beal, 8 Yer., 142; Manning v. Killough, 7 Yer., 444;4 Yer., 541. Reserving surplus: Code, 2013; Ang. Asg'ts, 128; Bur. on Asg'ts, 320. Fraud in law: 5 Hum., 616; 1 Hare & Wal., 96; Richards v. Ewing, 11 Hum., 327;Neuffer v. Pardue, 3 Sneed, 191;Lasell v. Tucker, 5 Sneed, 33;McGavock v. Deery, 1 Cold., 266; Doyle v. Smith, Ib., 19. If the deed was void as to the excepted property, it was good as to the rest. Assent of creditors. This question is not in issue: 1 Tenn., 509; Cooke, 173; Ang. on Asg'ts, 188; Brashier v. West, 7 Pet., 608; Heis. Dig., 520, and cases cited. Formal assent not required. He attacked Mills v. Haines, 3 Head, 335;Galt v. Dibbrell, 10 Yer., 147, and Green v. Demoss; citing Acton v. Woodgate, 8 Cond. Eng., Ch., Rep., 99. Distinguished between deeds made to a trustee, and those made direct to creditors, &c., citing McKinnon v. Stewart, 1 Eng. L. & E., 158, 164; Ang. on Asg'ts, 169, 170, 173, 175, 186 and n.; Halcey v. Whitney, 4 Mason, 206; 4 Ib., 183; Widgery v. Haskell, 4 Mason, 144; 4 Johns., 522, 529;11 Wend., 248;9 Serg. & Rawle, 244; 7 Wheat., --; 11 Wheat., 78;1 Binney, 502; 3 Mau. & Selw., 371; 2 Gall., 557; 2 John., 283; 5 New H., 71; 3 Day, 348; 2 Conn., 579; 3 Hum., 446;3 Yer., 257;4 Cold., 630;1 Head, 186. Acceptance by trustee: Bur. on Asg'ts, 347, 351 and n. Registration law makes deed take effect from registration, and so dispenses with acceptance: Code, 2072, 2073; Tucker's Com., (269) 261; Burgin v. Burgin, 1 Ire. L., 453; Hutchison's Miss. Code, 606, sec. 5; Henderson v. Downing, 24 Miss. (2 Cushm.), 114. Reserving power of revocation until acceptance would avoid deed: 2 Johns. Ch., 576. Assignment of chose: Keyes v. Bush, 2 Paige, 311; Bur. on Asg'ts, 349. Attacking creditors excluded: Hill. on Trust., 472, top; Furman v. Fisher, 4 Cold., 626;Coleman v. Pinkard, 2 Hum., 185;Thurman v. Shelton, 10 Yer., 383;3 Head, 335;6 Cold., 624; 2 Eng. L. R., 15; 20 Eng. L. R., --; Hare & Wal. L. C., 96, and cases cited: Hill. on Trust., 470, 471 and n.

NICHOLSON, C. J., delivered the opinion of the Court.

On the 15th of July, 1865, R. A. McDonald executed to D. M. Perkins a conveyance in trust to various tracts of land, containing over two thousand acres, specifically described by metes and bounds, and various articles of personal property, specifically enumerated, together with notes, judgments and choses in action, which are set out in detail. After enumerating a number of articles of personal property, consisting of household furniture, two cotton gins, one gin band, three four-horse wagons, there follows this language, “all farming utensils, except such as are exempt from execution;” and then he proceeds, “one corn mill, one set of blacksmith tools, one cow, three yearlings, all the hogs and sheep, except the number exempt from execution,” etc. He conveys, also, all that portion of the crop due him as rent for the year 1865. The deed then contains the specific trusts. He first specifies three notes, held by Benjamin Fanning, for three thousand dollars each, on which Henry Kelso and James Fulton were securities; the said notes having been given for the Hines tract of land. He next specifies a bill of exchange for $15,000, on which D. M. Perkins was his indorser. He then adds, that he is indebted to many other persons, by notes, executed in his name or the firm name of McDonald and Kelso, of which he is desirous of securing the payment. For that purpose, he provides that the trustee will proceed, as speedily as possible, to collect the notes, and apply the proceeds in payment of the bill of exchange of $15,000. He is directed to collect the rents, and then he proceeds: “Now, if I should pay said debts hereinbefore provided for, by the 1st of September, 1866, then this deed to be void. But if I should fail to pay said debts, or any part thereof, then the said Perkins shall proceed to sell said lands and personal property, or a sufficiency thereof, for cash, at such time and place as he may select, on some portion of said described premises, and sell the same to the highest bidder, first having advertised the time, place and terms of sale, as required by law, and will apply the proceeds in payment, first, of said bill of exchange indorsed by said Perkins, say $15,000. Secondly, he will apply the proceeds, arising from the sale of the Hines tract of land, to the payment of said three notes, in favor of said Benjamin Fanning, for $3,000 each, etc. Thirdly, the said Perkins' trustee will pay all the other cla??ms, whether they be in my own name, or the firm of McDonald & Kelso, alike; and for that purpose he will pay the same pro rata; provided, he is only to pay such of said claims provided in the third place, as are presented by the 1st day of January, 1867,” etc. The said Perkins is authorized and empowered to divide said land into such lots and parcels as he shall deem best for the interest of the parties. Lastly, “the said Perkins will pay over to me the balance of said funds, if any should be left.”

The deed was proven by the two subscribing witnesses, before the Clerk of the County Court of Lincoln County, on the 15th of July, 1865, the day of its execution. The certificate of the County Court Clerk pursues the form of the probate set out in the Code, except that he does not certify that the witnesses deposed and said that the bargainer acknowledged the deed “in their presence;” these latter words being omitted. The deed was properly registered on the 17th of July, 1865.

About the 16th of August, 1865, R. Farquharson filed his bill of attachment against McDonald and Perkins, attacking the deed as fraudulent on its face; attaching the lands conveyed, and praying that the deed be set aside for fraud, and the land sold to satisfy his claim. In a short time, various other creditors of McDonald, to the number of nearly thirty, filed similar bills of attachment; all of which were consolidated and heard together.

McDonald and Perkins answer the consolidated bills jointly, and deny all the allegations which impute to them either fraud in law or in fact.

Afterward, Perkins filed his cross bill against the attaching creditors, in which he requires them to establish the justness of their claims, and insists that if the deed should be declared valid, they have forfeited any right to claim benefits under it, by attacking its validity.

Before proceeding to examine the several grounds on which the deed is assailed as fraudulent, it may not be improper to notice an objection to the authentication of the deed, which is not raised in the pleadings, but which has been somewhat discussed in the argument. The objection is, that the words “in their presence,” contained in the form for the Co...