Moritz v. Hoffman

• Decision Date: 30 April 1864
• Citation: 1864 WL 3090,35 Ill. 553
• Parties: MICHAEL MORITZv.FRANCIS A. HOFFMAN and wife, and ALEXANDER SILLER and wife.
• Court: Illinois Supreme Court

35 Ill. 553

1864 WL 3090 (Ill.)

MICHAEL MORITZ

v.FRANCIS A. HOFFMAN and wife, and ALEXANDER SILLER and wife.

Supreme Court of Illinois.

April Term, 1864.

APPEAL from Circuit Court of Du Page County.

The case is sufficiently stated by the court.

Garrison & Blanchard, for appellant.McAllister, Jewett & Jackson, for appellees.

BREESE, J.

This was a bill in chancery, exhibited in the circuit court of Du Page county, by appellant against appellees.

The case was heard on the bill, answers, replication and depositions, at the November term, 1863, and a decree entered against the complainant, dissolving the injunction and dismissing his bill at his costs. From this decree he brings this appeal to this court, and assigns the following errors: The decree should have been in favor of complainant and his bill of complaint ought not to have been dismissed.

The court erred in not granting the relief prayed, at least a part thereof.

The court erred in not decreeing two conveyances to Theodore Hoffman, mentioned and set forth in said bill of complaint, fraudulent and void, as against the judgment and execution of appellant, he being a creditor at the time the same was made, and also the conveyance to Bertha Siller.

The court erred in not decreeing said execution and judgment were a lien upon all the lands levied upon, especially the land sought to be conveyed to Theodore Hoffman.

Erred in not decreeing the lands deeded by F. A. Hoffman and wife to Siller's wife were subject to said judgment and execution, and especially in not decreeing the house and barn put thereon by Siller was subject to said execution.

The complainant was entitled to some relief in the premises and the court granted none.

The bill seeks to subject certain real estate, alleged to have been conveyed by defendant, in fraud of his creditors, the complainant being one, by virtue of a judgment recovered by him in the superior court of Chicago, to the payment of this judgment, on which he alleges an execution to Cook county had been returned “no property found,” and another, which issued to Du Page county, returned levied on the lands described in the levy, and which are the lands alleged to have been fraudulently conveyed.

The appellant makes several points, all of which we have considered. The first and most important is, that complainant being a creditor of appellees, at the time F. A. Hoffman made the voluntary deed to Theodore Hoffman, in trust for his wife, and such deed being clearly a gift, its only consideration expressed being love for his wife Cynthia, is per se fraudulent and void as against appellant's judgment and fi. fa. thereon.

No one will dispute the principle appellant seeks to establish, that a voluntary conveyance, when the grantor is indebted at the time of its execution, is presumptive evidence of fraud; and a fraudulent intent will be presumed, from the fact that the party conveying was indebted at the time the conveyance was executed, and that as to preëxisting creditors, every conveyance not made on a consideration valuable in law, is void. The principle is thus broadly stated, but it is subject to some qualification; to this extent, at least, that the debtor retains in his possession property sufficient to discharge all debts existing at the time of making the conveyance alleged to be fraudulent. If this was not permitted, trade of every description would be very much crippled, and instead of there being an active interchange of property, the whole business of the country would stagnate. No creditor, without a lien, has any right to complain that his debtor is giving away property to his wife or children, unless such creditor can establish the fact that he has not retained enough to satisfy existing debts. Such grantor must make himself insolvent by such gifts or conveyances, and to impeach them, fraud must be charged and proved. In Van Wyck v. Seward et al., 6 Paige Ch., 62, it was held, when a parent makes an advancement to his child and honestly and fairly retains in his hands sufficient property to pay all his debts, such child is not bound to refund the advancement for the benefit of creditors, although it should afterward happen that the parent does not pay his debts which existed at the time of making such advancement.

And the chancellor, in that case, further said, that the mere fact of an existing indebtedness does not render a voluntary conveyance absolutely fraudulent or void in law as against the creditors whose debts were previously contracted, if there was no intention on the part of the grantor to delay or defraud his creditors.

On appeal to the court of errors this doctrine was affirmed, and we believe the books are full of such cases. An objection to this doctrine we have never seen seriously urged by any court. In the case of Hindes, Lessee, v. Longworth, 11 Wheat., 213, it was said, that a deed from a parent to a child, for the consideration of love and affection, is not absolutely void as against creditors. It may be so under certain circumstaneces, but the mere fact of being in debt to a small amount would not make the deed fraudulent, if it could be shown that the grantor was in prosperous circumstances and unembarrassed, and that the gift to the child was a reasonable provision, according to his state and condition in life, and leaving enough for the payment of the debts of the grantor. The want of a valuable consideration may be a badge of fraud, but it is only presumptive, not conclusive evidence of it, and may be met and rebutted by evidence on the other side.

That this is sound and salutary doctrine, when applied to transactions between a parent and child, why should it be unsound and unsafe, when applied to transactions between a husband and his wife, through the intervention of a trustee? The obligation resting upon the husband to secure a home for his wife is quite as strong as a provision for a child, and to perform it is equally praiseworthy, but the estate secured to the wife must be in proportion to her state and condition in life, and the husband must leave enough for the payment of his debts.

In looking into the proofs in this cause, we find that at the time appellee, F. A. Hoffmann, conveyed this thirty acres of land to Theodore Hoffman, in trust for his wife, he was in very prosperous circumstances, wholly unembarrassed, and had means sufficient at that time to discharge all the then existing liabilities against him, and that the provision made for his wife was such as her state and condition in life warranted. Hoffman was then a banker, doing a large business in Chicago, receiving and paying out deposits daily and every hour in the day. Appellant was one of his customers and depositors, whose checks were promptly honored, until the disastrous financial occurrences of the spring of 1861. Appellant began to deposit with appellees soon after they commenced business in 1855. When the settlement was made on Mrs. Hoffman, the deposit amount of appellant showed a balance in his favor of about twelve hundred dollars. This account was constantly fluctuating by daily drafts made on it by appellant, and sums were paid in to replenish, so that at one period his credits amounted to but eight hundred dollars, and his check book, in evidence, shows that the whole amount for which appellant obtained his judgment was deposited by him since April, 1860. It cannot, therefore, be averred that the appellees were his debtors at the time of the...