McAlpine v. Hedges

• Decision Date: 06 September 1884
• Citation: 21 F. 689
• Parties: MCALPINE and others v. HEDGES and others.
• Court: United States Circuit Court, District of Indiana

21 F. 689

MCALPINE and others v. HEDGES and others.

United States Circuit Court, D. Indiana.

September 6, 1884

McDonald Butler & Mason, for plaintiffs.

Baker Hord & Hendricks, for respondents.

WOODS J.

The bill shows the recovery by the complainants of a judgment against John W. Hedges, and that shortly before the date of the judgment Hedges, for the purpose of defrauding the complainants, secretly conveyed certain real estate of which he was owner to another, who, in aid of the fraudulent design, conveyed the same to said Hedges and his wife, in whom the title in part remains, and that for the same fraudulent purpose the parties thereto had kept these deeds off the record and concealed the fact of their execution. To this bill the respondents Hedges and wife have interposed a plea of the statute of limitations, wherein it is alleged simply that the cause of action did not accrue within six years before the commencement of the suit. Is it a good plea?

If the action were at law, or governed by the Indiana Code, the averments of the bill in respect to the concealment of the alleged fraud should probably be regarded as an attempt to anticipate the defense, and consequently rejected or disregarded as immaterial upon consideration of the plea; or if this be not so, the plea should, perhaps, be construed as meaning that the alleged concealment had occurred and ended six years or more before the bringing of the action. But, the case being in equity, the allegations of the bill in respect to the secret nature and concealment of the fraud I suppose must be regarded as relevant and proper, and, since not specifically denied by the plea, must be taken as confessed and the plea construed as meaning that the fraud in its origin only-- that is, the making of the deeds-- occurred outside the statutory limit. So regarded, the plea, in my judgment, is not good. It is claimed that the bill shows no affirmative act of concealment after the execution of the deeds; and in some of the decided cases expressions have been used to the effect that affirmative subsequent acts of concealment are necessary to stop the running of the statute; but, when considered with reference to the facts upon which these decisions were made, they do not go to the full extent claimed for them. When a fraud is of a secret nature, and in the particular case has been conceived and executed upon such a plan as to secure continued secrecy, without further acts of concealment except silence, the statute ought not to run until there has been a discovery. In such a case it may well be said to have been a continuous concealment. The making of a fraudulent deed, and the keeping of it off the record by all the persons concerned in the cognizant of the transaction, combined with their purposed silence upon the subject, it certainly will not do to say is not a concealment, for which relief may be granted. See Meader v. Morton, 11 Wall. 442; Carr v. Hilton, 1 Curt.C.C. 238; Vane v. Vane, L.R. 8 Ch. 383; Rolfe v. Gregory, 4 De G.,J.& S. 576; Hovenden v. Annesley, 2 Schoales & L. 634; Buckner v. Calcote, 28 Miss. 568. Cited to the contrary: Wynne v. Cornelison, 52 Ind. 310; Jackson v. Buchanan, 59 Ind. 390; Musselman v. Kent, 33 Ind. 458; Pilcher v. Flinn, 30 Ind. 202; Boyd v. Boyd, 27 Ind. 429.

In respect to the question raised by the defendants Gerard, who have demurred to the bill, the proper conclusion may be less clear. As already stated, the bill shows that, as against the Hedges and their grantee in the alleged fraudulent deed, the judgment recovered by the complainants became, under the Indiana statutes concerning fraudulent conveyances, a valid lien upon the land in dispute. See In re Lowe, 19 F. 589. The charges of the bill against the Gerards are to the effect that after the rendition of the judgment, and while it remained of record an actual as well as apparent lien upon the land, Hedges and wife conveyed a described part of the real estate in question to one Garrison, 'who took the same subject to the lien of complainant's judgment, * * * having no knowledge of said unrecorded deeds, but fully believing said real estate to be the property of said John W. Hedges, as in fact it was,' and afterwards conveyed the same part to the Gerards, 'who took the same subject to said judgment, they having no knowledge of said unrecorded deeds, and supposing that they derived title only through John W. Hedges as owner, and not through him and his wife as tenants by entireties. ' Counsel for respondents say:

'We insist in this connection on the two following propositions: (1) That judgment liens are not within the protecting policy of our recording acts. (2) That the question of the ability of John W. Hedges and wife to convey to the Garrisons a good title, depends, not on the knowledge of the Garrisons of the existence or non-existence of all or any of the deeds in Hedges' chain of title, but it depended on the simple existence of those deeds, and the want of notice of the alleged fraudulent character of those deeds.

'The recording act of the state (Rev. St. 1881, Sec. 2931) provides 'that every conveyance, mortgage, etc., shall be recorded in the county where the lands lie,' and if not so recorded within the time prescribed in that section, 'shall be fraudulent and void as against any subsequent purchaser, lessee, or mortgagee, in good faith, for a valuable consideration.' A judicial decision was hardly necessary to establish the proposition that a judgment creditor is neither a purchaser, lessee, or mortgagee; but, nevertheless, the supreme court has decided that propositio

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