Lyman v. Cessford

• Decision Date: 16 October 1863
• Parties: LYMAN et al. v. CESSFORD et al
• Court: Iowa Supreme Court

15 Iowa 229

LYMAN et al. v. CESSFORD et al

Supreme Court of Iowa, Des Moines

October 16, 1863

Appeal from Cedar District Court.

BILL in equity to set aside certain conveyances upon the ground that they were made to defraud creditors. Decree for complainants and respondents appeal.

Reversed.

Piatt & Spicer for the appellants.

I. At voluntary conveyance executed by a grantor, while he is not in debt, and without any fraudulent intention, is valid as against subsequent creditors. Benton v. Jones, 8 Conn. 185; How v. More, 4 Greenl. 195; Parker v Proctor, 9 Mass. 390; Sexton v. Wheaton, 21 U.S. 229, 8 Wheat. 229, 5 L.Ed. 603; Hinds v Longworth, 24 U.S. 199, 11 Wheat. 199, 6 L.Ed. 454; Davis v. Herrick, 37 Me. 397; Martin v. Allen, 9 Humph. 591; Bennett v. Bedford Bank, 11 Mass. 423; Howard v. Williams, 1 Baily 575.

II. A deed valid when executed, cannot be rendered fraudulent by the subsequent embarrassment of the grantor. Brockett v. Wait, 4 Verm. 389. There must be a fraudulent intent. Styles v. Lightfoot, 26 Ala. 443; Davis v. Herrick, 37 Me. 397; Mansfield v. Watson, 2 Iowa 111; Fifield v. Gaston, 12 Iowa 218.

Clarke & Davis for the appellee.

I. A voluntary conveyance to a wife by a husband not indebted at the time, but with a view to future indebtedness, is void. 1 Story Eq. Jur., § 342; Reade v. Livingston, 3 Johns. Ch., 492; Parkman v. Welch, 19 Pick. 237; Russell v. Stinson, 3 Hey 1; Harrison v. Kramer et al., 3 Iowa 557; Felzon v. Filzer, 2 Ala. 477.

II. In this case the husband held himself out as the owner of the promises, and his wife contributed to the deception, and thereby charged herself with the consequences of his conduct Sexton v. Wheaton, 21 U.S. 229, 8 Wheat. 229, 5 L.Ed. 603; Hungerford v. Earle, 2 Verm. 261; Mannice v. The New York Dry Dock Company, 3 Ed. Ch., 123.

Hon. CALEB BALDWIN, Chief Justice, Hon. GEORGE G. WRIGHT, Judge, Hon. RALPH P. LOWE, Judge, from December 7 to December 24, 1863. Hon. GEORGE G. WRIGHT, Chief Justice, Hon. RALPH P. LOWE, Judge, from January 1, 1864, to the conclusion of the Term. ^[*]

OPINION

WRIGHT, J.

On the 23d of March, 1860, William Cessford, Jr., by contract with the School Fund Commissioner, was the equitable owner of the land in controversy, some part of the purchase money remaining unpaid. On that day he conveyed to his father, who immediately made a title to the said wife. She at once moved on to the land with her children. These deeds were filed for record, June 29, 1860. The object in making them, was to secure a home for the family, and though the consideration of $ 5,000 is named in each deed, nothing was actually paid; the land (in the language of the answer) being "given to the wife, so that in case of his (the husband's) death, or accident or misfortune, she would be secure in a home and maintenance." At this time the husband was entirely free from debt, but on the 4th of May, 1860, he contracted a debt to complainants, upon which they recovered a judgment, and based thereon, and the debtor's insolvency, filed this bill to subject these lands to its payment.

It will be observed that complainant's debt was contracted after these conveyances were made, and all legal title to the lands had passed from the husband. Counsel for appellees admit that the conveyance (for we shall speak of the two as one), though voluntary, will be upheld as against them, unless they have established one of these propositions: 1. That it was made with a fraudulent view to future indebtedness. 2. That the husband afterward held himself out to the world as such owner. 3. That the wife contributed to the alleged fraud so far as to be charged with the consequences of her conduct.

That a deed valid and bona fide, when made, cannot be rendered fraudulent by the subsequent embarrassments of the grantor, and that a voluntary conveyance, in the absence of fraudulent intent, is good against subsequent creditors, is, as already suggested, not controverted by counsel. Starting with this then, as a well-settled and admitted principle, our inquiry is directed to three propositions, one or all of which it is claimed the testimony sustains. Remarking that we should hesitate before admitting the correctness of the exceptions, without modification or explanation, regarding some of them as stated to broadly at least and liable to mislead, we neverthless conclude, giving them all the force claimed, that the testimony does not sustain either, and that as a consequence the Court below erred in granting the prayer of the bill.

That the husband had any intention, at the time of making this conveyance, to contract this, or any other debt; that he made it with a view to such or any indebtedness, there is no testimony whatever. There is nothing in this respect attending the conveyance, or the incurring of the indebtedness, which does not comport with the utmost honesty of purpose. It is true that he did in March contemplate changing his business, but there is no evidence that he expected to incur any debt, and if he did, he then had some other property. And fraud never ought to be or will be imputed, when the facts upon which it is predicated, may consist with honesty and purity of intention. Stiles v Lightfoot, 26 Ala. 443, and cases there cited. And when it is said that such conveyances will be set aside, if made with a view to future indebtedness, it is not meant that the simple fact of a subsequent indebtedness is sufficient to make it fraudulent. There must exist at the time on the part of the grantor a fraudulent view. Various methods may be resorted to, in order to establish the fraudulent purpose or intent, but until it is established either by positive proof or the exhibition of such facts as justify the inference of its actual existence, the conveyance though voluntary, will not be set aside at the instance of a subsequent creditor. It is true that a debt might be contracted so immediately after such a conveyance, of such an amount, and under such circumstances, as, without...