Hazlewood v. Forrer

• Decision Date: 24 June 1897
• Citation: 94 Va. 703,27 S.E. 507
• Parties: HAZLEWOOD et al. v. FORRER.
• Court: Virginia Supreme Court

27 S.E. 507

94 Va. 703

HAZLEWOOD et al.

v.FORRER.

Supreme Court of Appeals of Virginia.

June 24, 1897.

Fraud on Creditors—Voluntary Conveyance— Actual Fraud — Security for Payments — Confirming Sale—Inadequacy of Price.

1. In a suit by a creditor to set aside a deed whereby the grantor conveyed all her real estate in trust for her son, in consideration of love and affection, and of his undertaking to pay sums secured on the land as they should become due, and to provide a home and care for her, with power to the trustee, at the request of the son, to sell and reinvest, but not to incumber the land or its proceeds, defendants denied the fraud, but gave no satisfactory explanation of the suspicious circumstances, and it appeared that both regarded the conveyance as a gift; that the grantor was largely indebted and insolvent; that the son knew that she was embarrassed, and that he had no means to pay the debts assumed; that she was a capable woman; and that he was incapable of conducting business. Held, that the conveyance was voluntary, fraudulent, and void.

2. Where there was actual fraud as against creditors, and both parties participated, the deed was void ab initio, and could not stand as security for payments made thereunder by the grantee.

3. It was not error to confirm a sale of land made under decree, because of inadequacy of the price, where the sales were well advertised and attended and fairly conducted, and the commissioners of sale made every effort to obtain a better p*rice, and two weeks were allowed objectors to obtain better bids, which they failed to do.

Appeal from corporation court of Roanoke.

Suit by James E. Forrer against Lucy C. Hazlewood and another. From a decree in favor of complainant, defendants appeal. Affirmed.

W. W. Berkeley, for appellants.

Smith & King, for appellee.

CARDWELL, J. This is an appeal from two decrees of the corporation court of Roanoke city setting aside, as voluntary, fraudulent, and void, a deed conveying grantor's real estate to a trustee for the benefit of her son, and confirming sales of the property made under the decree of the court. The deed was executed by Lucy C. Hazlewood November 18, 1891, conveying to E. D. Frazier all of her real estate, which consisted of two lots, with improvements thereon, situated in the city of Roanoke, in trust for grantor's son James Edward Kidd, with power to the trustee at any time, by the request of James Edward Kidd, to sell the property or any part thereof, provided the proceeds of any such sale be reinvested in other property of equal value with the property sold, but in no event is the property purchased by the proceeds of all or any of the property sold to be incumbered by deed of trust, mortgage, or other lien; and it is expressly provided that nothing in the deed is to be construed as a requirement compelling any vendee of the trustee and cestui que trust to see to the application of the proceeds of any sale made by them.

The consideration for this conveyance is set out as follows: "* * * Natural love and affection which the said Lucy C. Hazlewood has for her son Jas. Edward Kidd, and the further consideration of the payment, as they became due, by the said Jas. Edward Kidd, of certain sums of money owed by the said Lucy C. Hazlewood, viz.: One thousand dollars borrowed money, which is secured by a deed of trust on that certain lot of land situated in the city of Roanoke, Va., and on Railroad avenue, and other sums amounting to about eight hundred and eighty dollars, principal and interest, and secured by deed of trust on that certain lot or parcel of land situated on Wheat street, Belmont addition to the city of Roanoke, Va., and another sum of two hundred and fifty dollars, evidenced by several negotiable notes, and the further consideration that the said Jas. Edward Kidd provide a suitable and comfortable home for the said Lucy C. Hazlewood during the remainder of her life, to pay all doctors' bills, and the hire of competent nurses to attend and wait upon her in sickness and old age, and to furnish her with suitable clothing."

The defendants, Lucy C. Hazlewood and James Edward Kidd (appellants here), answered the bill filed by appellee, James E. Forrer, a creditor of Mrs, Hazlewood, who obtained his judgment against her a few days after the deed in question was executed and recorded, upon notes matured prior to the deed; the former filing her answer after this cause had been pending for some time before a commissioner engaged in stating the accounts and making the inquiries directed by a decree of the court upon the bill taken for confessed, and the latter not until the October term of the court, 1894, at which term the report of the commissioner was confirmed; and while both deny the allegations of the bill that the deed was made to hinder, delay, and defraud the creditors of the grantor, neither of them attempts a satisfactory explanation of the suspicious circumstances surrounding the ex-ecutlon of the deed, nor the damaging testimony adduced by the complainant to show fraud in the transaction. When examined as a witness on behalf of the defense, Mrs. Hazlewood was asked what was the consideration passed between her son and herself for the conveyance of November 18, 1891, and her answer was: "Well, I conveyed it because he was to pay up all liens upon the property, and to give me my support out of it in my lifetime, and care for me. I give my other son a great...