Pulsifer v. Waterman

• Decision Date: 07 March 1882
• Citation: 73 Me. 233
• Parties: JOHN R. PULSIFER v. ISAAC D. WATERMAN.
• Court: Maine Supreme Court

73 Me. 233

JOHN R. PULSIFER v. ISAAC D. WATERMAN.

Supreme Judicial Court of Maine.

March 7, 1882

ON exceptions, and motion to set aside the verdict.

An action on the case under the provisions of R. S., c. 113, § 51, against the defendant for aiding in the fraudulent transfer and concealment of certain real estate of Jabez Waterman, the father of the defendant, and a debtor of the plaintiff.

The relation of debtor and creditor between Jabez Waterman and the plaintiff, was shown by a note dated February 8, 1877, in which one C. A. Foster was the maker, Jabez Waterman was the payee and first indorser, and the plaintiff was the second indorser. It went to protest April 12, 1877, was paid by the plaintiff, and passed into a judgment against Waterman's estate, at the September term, 1878.

The alleged fraudulent conveyance was a deed of real estate from Jabez Waterman to the defendant, dated February 16, 1877, and recorded April 6, 1877.

Jabez Waterman died April 2, 1877, and his estate was rendered insolvent.

The defendant inter alia, claimed and testified that the deed from his father to him of February 16, 1877, was in pursuance of a contract and agreement made between them in 1846, that if the defendant would stay with his father and " see him and mother through," and assist in paying certain debts, the defendant was to have one-half the property, and the father would give him a deed any time he wished it

Other material facts stated in the opinion.

W W. Bolster, for the plaintiff, cited: R. S., c. 113, § 51; c. 66, § 23; Spaulding v. Fisher, 57 Me. 411; Hovey v. Chase, 52 Me. 304; Darby v Hayford, 56 Me. 246; Laughton v. Harden, 68 Me 210; Pratt v. Curtis, 6 N. B. R. 139; Oxnard v. Swanton, 39 Me. 125; Cunningham v. Horton, 57 Me. 420; Soule v. Winslow, 66 Me. 477.

N. and J. A. Morrill, for the defendant.

Supposing the alleged fraud on the part of Jabez Waterman, and the alleged knowledge of the same on the part of the defendant to be proved, yet the case shows such a state of facts, by reason of the death of Mr. Waterman, senior, and the insolvency of his estate, as will not entitle the plaintiff to aid in this action; the legislature did not contemplate the application of this statute to such a case, and such an application would be unjust and inequitable to other creditors. The statute prescribes certain conditions within which the creditor must bring or find himself before he can maintain an action thereunder. Quimby v. Carter, 20 Me. 221; Herrick v. Osborne, 39 Me. 232. The property must be such as would be liable, but for the conveyance or transfer, to be taken by the creditor in the particular manner named, to satisfy his demand; for the conveyance of exempted property, no matter if the debtor was ignorant of the law and had ever so fraudulent intent, would furnish no ground for an action under the statute.

There has not been a moment since the plaintiff's claim against Jabez Waterman became certain, that he has had, or could in any way have had, any distinct portion of Jabez Waterman's property applied toward the satisfaction of his debt; his rights as a creditor, are only in common with all other creditors, to have the property applied pro rata to the satisfaction of their debts. The case differs from Spaulding v. Fisher, 57 Me. 411; there the money had been liable to attachment and seizure, although the house was not; here, no property has ever been so liable on plaintiff's claim. That an executor or administrator acting as the representative of the creditors could avoid any fraudulent transfer of property personal or real, and apply it or its value to the satisfaction of creditors' claims cannot be doubted, but the remedy is exceedingly simple, aided by the provisions of R. S., c. 64, § 65, as amended by laws of 1874, c. 168, and not by the statute here relied upon.

Such an application of the statute is contrary to the provisions and policy of the law for the distribution of the estate of persons deceased, insolvent, and in its application would be wholly inconsistent therewith. Caswell v. Caswell, 28 Me. 234; R. S., c. 71, § 22; Thatcher v. Jones, 31 Me. 532; Philbrook v. Handly, 27 Me. 55; Platt v. Jones, 59 Me. 244.

No creditor has a right to apply property to the payment of his individual debt as against other creditors of an insolvent estate, but it would be just as inconsistent to allow him to obtain payment under this statute. If the executor through ignorance or collusion with a single creditor, neglects to sell the real estate, as land fraudulently conveyed, or by the aid of a court of equity, obtain a cancellation of the fraudulent conveyance (as he may do, Caswell v. Caswell, supra; McLean v. Weeks, 65 Me. 418; Holland v. Cruft, 20 Pick. 321; Welsh v. Welsh, 105 Mass. 229,) such creditor, although unable by suit directly against the debtor's estate to satisfy his debt by levy on such property, may by suit against the party holding the conveyance, obtain an execution to be satisfied out of the same property, and thus obtain payment of his claim in preference to other creditors. Suppose that, in case the property in question be personal, the executor being unable to reach it, has brought suit for its value and recovered judgment, (Martin v. Root, 17 Mass. 222; Gibbens, Adm'r, v. Peeler, 8 Pick. 254; R. S., c. 64, § 37,) or, in case it be real, has by process in equity set aside the conveyance, whereby the property is lost to the grantee, still under the plaintiff's theory he may yet be liable to this action at the suit of a creditor, and in the first case would be obliged to pay three times its value, (twice to the creditor and once to the executor,) or, if the property could be reached, twice its value and lose the property.

The defendant is entitled to have the property, but he must pay twice its value and no more. Fogg v. Lawry, 71 Me. 215.

The plaintiff by taking his dividend from the estate of Jabez Waterman, thereby abandoned other remedies and cannot now maintain this action. See Trimbell v. Woodhead, U. S. S. C. Reporter, April 27, 1881; (102 U.S. 647); Martin v. Root, 17 Mass. 228; Bigelow on Estoppel, 535, et seq. ; Chaffee v. Bank, 71 Me. 514; Rapalee v. Stewart, 27 N.Y. 314; McLean v. Weeks, 61 Me. 280; also 65 Me. 417; Caswell v. Caswell, 28 Me. 232.

We think the evidence in regard to the contract, should have been submitted to the jury for the purpose of determining Jabez Waterman's intentions, as well as the defendant's honesty or dishonesty.

The residence of Isaac D. Waterman on the home place, the improvements that he made upon it, bring this case within the rule that courts of equity will enforce a specific performance of a contract within the statute of frauds, where the parol agreement has been partly carried into execution. 1 Story's Eq. Jur. 12 ed. § 759, and note 1; Potter v. Jacobs, 111 Mass. 32; Lobdell v. Lobdell, 36 N.Y. 327; Kurtz v. Hibner, 8 Am. Rep. 665, (Ill.); Hardesty v. Richardson, 22 Am. Rep. 57 (Md.); Burkholder v. Ludlam, 32 Am. Rep. 669; Neales v. Neales, 9 Wall. 1; McDowel v. Lucas, Reporter, May, 25, 1881. This rule seems to be well established in courts having full equity jurisdiction. In Wilton v. Harwood, 23 Me. 133, the court say, that if it were " intrusted with a general jurisdiction in equity, there might be no difficulty in decreeing a specific performance of the agreement, on the ground of part performance by the delivery and acceptance of possession, accompanied by the other acts above stated." Such jurisdiction was given by laws of 1874, c. 175.

VIRGIN J.

Case, to recover the amount of the defendant's liability under R. S., c. 113, § 51, for knowingly aiding his father, Jabez Waterman, in an alleged fraudulent transfer of the latter's farm, to secure it from creditors and to prevent its attachment and seizure on execution.

The relation of debtor and creditor which subsisted, at the time of the conveyance, between the grantor and the plaintiff, depended upon the contingent liability of a prior, to a subsequent indorser of a negotiable promissory note. Such a liability established that relation (Thatcher v. Jones, 31 Me. 528, 532); and it became fixed when the note was executed by the parties and put in the bank. Sargent v. Salmond, 27 Me. 539, 542-3; Thompson v. Thompson, 19 Me. 244; Howe v. Ward, 4 Me. 195. And although the liability was still conditional when the grantor deceased, it survived against his personal representative and ripened into an absolute indebtment against his estate, and the relation was not affected by his decease.

At the trial before the jury, the defendant contended, and being there overruled, now ably urges that, assuming the conveyance to have been fraudulent, still, inasmuch as the debtor died before his debt was payable and his estate was decreed insolvent before judgment was recovered, the farm could not be " seized on execution," and therefore the facts on which the plaintiff bases his action are not such as are contemplated by the statute.

It would seem to be a self-evident proposition that, such property of a debtor as, by positive statute provision, is exempted from attachment or seizure for the owner's debts, is not susceptible of fraudulent alienation; for no creditor can, in legal contemplation, be defrauded by his debtor's conveyance of property which is intangible by any civil process in behalf of such creditor. Legro v. Lord, 10 Me. 161, 165. And doubtless if the farm in question had been worth but five hundred dollars instead of twenty-five hundred dollars, and the debtor had seasonably filed the homestead certificate in accordance with the provisions of R. S., c. 81, § § 60 et seq. the plaintiff would have no legal cause to complain of the conveyance.

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