Moore v. Wood

• Decision Date: 30 November 1881
• Citation: 1881 WL 10643,100 Ill. 451
• Parties: MARQUIS D. MOORE, Admr.v.BENJAMIN WOOD et al.
• Court: Illinois Supreme Court

100 Ill. 451

1881 WL 10643 (Ill.)

MARQUIS D. MOORE, Admr.

v.BENJAMIN WOOD et al.

Supreme Court of Illinois.

Filed at Mt. Vernon May 11, 1881.Rehearing denied November Term, 1881.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Fourth District;--heard in that court on appeal from the Circuit Court of Madison county; the Hon. WILLIAM H. SNYDER, Judge, presiding.

Mr. H. S. PETTINGILL, and Mr. F. W. BURNETT, for the appellant.

Messrs. KROME & HADLEY, for the appellees.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

This case comes here by appeal from the decision of the Appellate Court for the Fourth District. Bill in chancery was filed in the circuit court of Madison county by Marquis D. Moore, administrator of the estate of William H. Segar, deceased, against Benjamin Wood and Isham W. Johnson, to set aside a conveyance of real estate executed by Wood to Johnson on the 15th day of March, 1877, on the ground that such conveyance was made to hinder and delay creditors. On hearing, the circuit court found that the conveyance was made to hinder and delay creditors, and decreed that the same was fraudulent and void as against the rights of creditors, and should therefore be set aside, etc. The Appellate Court reversed this decree, and directed that the bill be dismissed.

There are a few facts which we deem of controlling importance about which there is no dispute. Wood and wife were childless, and Johnson, being a nephew of Mrs. Wood, and an orphan, when about eight years of age was adopted by them as a member of their family, and he continued to reside with them as such until after the transactions involved in this controversy. Wood was indebted in an amount equal to or in excess of the entire value of all of his property, a portion of which, it is claimed, was to Johnson. He conveyed all of his real estate except the right of homestead, and assumed to sell the bulk of his personal property, including farming machinery and implements (not retaining any personal property subject to execution), to Johnson. The alleged consideration for this was the satisfaction of Johnson's debt, the assumption by him of certain other preferred debts of Wood, and the furnishing to Wood and wife of a support on the land during their lives. Wood and wife continued to occupy the principal dwelling house after as before the conveyance, and there was no outward and visible change of ownership at or near the conveyance and alleged sale of any of the property. Both before and after that time Wood and Johnson indiscriminately, and as convenience seemed to require, used and controlled the property. By the express terms of the agreement of sale, pursuant to which the conveyance was made, Wood and wife were to remain in the dwelling house and have a living off the place.

About this there is no dispute. Both Johnson and Wood admit in their answers, and testify, when examined as witnesses, to this effect. The deed shows no such reservation, but the admitted fact is, Johnson accepted it in secret trust for this use of Wood and wife, and he has so held it since.

Johnson, in giving his testimony, says: “The bargain was that I was to assume the debts on the land, pay Mosier and John Atkins; I agreed to take everything there was there; he said if I could save myself, all he asked of me was to give him a home as long as he lived; the consideration that I have already stated was for the personal property and real estate; Wood said all he asked was for me to give him a living; Wood and family have had a living upon the premises since March, 1877; I can't say how much money Wood has received from produce of the farm, because the money is all kept with him that is used on the farm, and whenever there is enough to pay a debt it is paid out; he has charge of the money, and takes out what he needs; Wood does not render me an account of the money he uses; he uses the money as he pleases; Mr. Wood receives from the farm the support of himself and family.”

Again, he said: “Wood gets all the proceeds of the farm, and uses what he wants out of it.”

Wood, in testifying, said that a part of the consideration for the transfer was that he and his family were to have a living off the place, and also that he used for that purpose what was necessary, and kept no account of the amount. He says that all the money from the proceeds of the place is left in the care of his wife, and this has been used in purchasing supplies for his family, and in paying off the debts assumed by Johnson. Wood says he himself paid about $1168, assumed by Johnson, to John Atkins, in part from the proceeds of sales of apples, and in part from money obtained for other products of the farm.

So far as regards the personal property, the sale was clearly within the second resolution in Twyne's case, (3 Coke's Rep. 80,) 1 Smith's Leading Cases, 33, and voidable at the instance of creditors. Thornton v. Davenport, 1 Scam. 296; Kitchell v. Bratton, Id. 300; Rhines v. Phelps et al. 3 Gilm. 455; Funk v. Staats, 24 Ill. 633; Rozier v. Williams, 92 Id. 187.

We think the conveyance of the real estate was also equally voidable at the instance of creditors. A debtor can not convey real estate to another to be held wholly or in part in secret trust for himself, so as to cut off the rights of existing creditors; for although, as was observed in Lukin v. Aird, 6 Wallace, 78, “such a transaction may be upon a valuable consideration, but it lacks the element of good faith; for while it professes to be an absolute conveyance on its face, there is a concealed agreement between the parties to it inconsistent with its terms, securing a benefit to the grantor at the expense of those he owes. A trust thus secretly created, whether so intended or not, is a fraud on creditors, because it places beyond their reach a...