Pursel v. Armstrong

• Decision Date: 16 October 1877
• Citation: 37 Mich. 326
• Court: Michigan Supreme Court
• Parties: Isaiah W. Pursel and others v. James Armstrong, Elizabeth Armstrong and Andrew J. Armstrong

37 Mich. 326

Isaiah W. Pursel and others v. James Armstrong, Elizabeth Armstrong and Andrew J. Armstrong

Supreme Court of Michigan

October 16, 1877

Argued June 5, 1877

Appeal from Kalamazoo. (Hawes, J.)

Bill in aid of execution, to avoid a deed. Defendant appeals. Affirmed.

Decree affirmed, with costs.

Breese & Stearns for complainants appellee. Land conveyed fraudulently or for the purpose of delaying or hindering creditors, is subject to execution levy, and a judgment creditor may come into a court of equity without first showing the execution returned unsatisfied. Williams v Hubbard Walk. Ch. 28; Thayer v. Swift Har. Ch. 430; Lasher v Stafford 30 Mich. 369; Doak v. Runyan 33 Mich. 75; Pilling v Otis 13 Wis. 495. A conveyance of which the substantial consideration is the future support of the grantor and family, is fraudulent and void as to prior creditors. Church v. Chapin 35 Vt. 223; Albee v. Webster 16 N.H. 362; Coolidge v. Melvin 42 N.H. 510. A conveyance made to defraud creditors will not be supported by an indebtedness to the grantee and a valuable consideration (Pulliam v. Newberry 41 Ala. 168) or an adequate and fair consideration. Swineford v. Rogers 23 Cal. 234; 1 Story's Eq Jur. §§ 369 371; Robinson v. Holt 39 N.H. 557; Chapel v. Clapp 29 Ia 191. A voluntary conveyance is always fraudulent as to existing creditors. Enders v. Williams 1 Metc. (Ky.) 346; Jackson v. Myers 18 Johns. 425; 1 Story's Eq. Jr. § 359; 1 Amer. Lead. Cases 29-31.

May, Buck & Powers for defendant appellant. Only gross inadequacy of consideration is evidence of fraud. Surget v. Byers Hempst. 715; Burch v. Smith 15 Tex. 219. A conveyance is not fraudulent as to creditors unless the fraudulent purpose is shared by the grantee. Partelo v. Harris 26 Conn. 480; Fifield v. Gaston 12 Ia. 218; Steele v. Ward 25 It. 535; Drummond v. Couse 39 Ia. 442; Violett v. Violett 2 Dana 323; Brown v. Foree 7 B. Mon. 357; Brown v. Smith id. 361; Harrison v. Phillips 12 Mass. 456; Bridge v. Eggleston 14 Mass. 250; Byrne v. Becker 42 Mo. 264; Bancroft v. Blizzard 3 Ohio 30; Leach v. Francis 41 Vt. 670. The fact that a man in failing circumstances conveys to his son, is not prima facie evidence of fraud. King v. Russell 40 Tex. 124. A grantee cannot be divested because part of the consideration paid by him ought in equity to go to the grantor's creditors. Slater v. Dudley 18 Pick. 373.

OPINION

Graves, J.

Complainants being judgment creditors of the defendant James Armstrong levied on a farm of two hundred and forty acres he had owned, but of which he and his wife, the defendant Elizabeth, had just given a deed to his son the defendant Andrew.

This bill was then filed in aid of the execution, the complainants alleging that the deed to Andrew was in fraud of creditors. The defendants answered jointly and denied the fraud and set out a statement of the transaction and claimed that Andrew was a fair purchaser in good faith and for a valuable consideration. Testimony was taken and the circuit judge on final hearing decreed in favor of complainants and the defendant Andrew appealed.

On the 28th of February, 1873, the defendant James, as the answer states, was eighty-five years old and very infirm and incapable of managing his affairs. He was indebted to complainants and also to other parties besides his son Andrew in the sum, as the answer further states, of about two thousand dollars. The farm in question was then owned by him but it was mortgaged for other debts for about $ 3000. He was owner at the same time of personal property which the answer admits to have been worth $ 300. All the property real and personal was at that time formally transferred to his son, the defendant Andrew, the deed for the farm expressing a consideration of $ 2000 and purporting to convey the entire premises for that sum subject to the incumbrance by mortgage. No writings except the deed were executed and no securities were given to the old gentleman or his wife. Whatever were the undertakings of Andrew they were verbal. The old gentleman, the judgment debtor, was left without a dollar. The farm at this time as the proof shows was worth more than $ 14,000 and the answer admits it was valued in the trade at $ 12,000.

The answer professes to explain the transaction and show that it was definite and reasonable and distinguished by good faith: and both father and son in their statements as witnesses in their own behalf strenuously endeavor to clear it up and uphold it. The exposition by the answer is wordy enough, but very vague, and among its defects will be noticed the want of explanation concerning the amount and real particulars of consideration claimed to have proceeded from Andrew. Upon this subject there is a great deal of talk, but nothing satisfactory as to the extent of consideration or the ingredients of it, and the case suggests that this darkness and uncertainty are due to the real state of things and not by any means to inadvertence on the part of counsel. The statements upon the stand are especially infirm. That of the old gentleman differs from the case made in the answer and is in conflict with Andrew's evidence in many important points, and Andrew's testimony is very much at fault. It departs widely from the answer and so far as it seems to establish or elucidate any thing complete and tangible it points to an arrangement quite different from that foreshadowed there. In some important respects it is contradictory and in others altogether ambiguous and uncertain. No one can determine from it the real bargain it aims to establish. To distinguish and explain all the infirmities alluded to would require the reproduction of a large share of the record, and this is not needful.

One or two matters may be mentioned. The defendant Andrew contends that the expressed consideration is quite untrue and very much too small, and that in fact there was a large amount of consideration which consisted of debts his father owed him, and he at first testified that among these debts was the large item of $ 400 for his services in clearing twenty acres of land. His counsel accepting this representation as correct, has placed the item in the catalogue in his brief of the matters claimed to make up the purchase price of the farm, and has put special stress upon it. The record shows however that on cross-examination Andrew finally admitted that this $ 400 was fully paid him by his father long before the deed was given. There is also some confusion in regard to claims suggested on account of payments for store goods. In one place there appears to be an effort to cause the impression that on the occasion of working the farm on equal shares Andrew became a creditor of his father to a considerable amount for sums paid at stores and groceries for family supplies, and that the demands thus caused were accessory in some way to the consideration and entitled to weigh in favor of the validity of the transfer. It is noteworthy, however, that before the examination was finished it was drawn out that the store and grocery bills were required by the agreement for letting to be paid out of the undivided products and not by the old gentleman: and there are strong intimations certainly that Andrew handled every dollar of proceeds of the products without accounting to any body.

In fine, the versions given by the immediate parties are so full of inconsistencies and so chaotic and uncertain that no one can derive therefrom any clear notion...