Reehling v. Byers

• Decision Date: 17 May 1880
• Citation: 94 Pa. 316
• Parties: Reehling, Assignee, v. Byers et al.
• Court: Pennsylvania Supreme Court

94 Pa. 316

Reehling, Assignee, v. Byers et al.

Supreme Court of Pennsylvania.

May 17, 1880

May 4 1880

1. A son, who was in embarrassed circumstances, was indebted to his father in the sum of $550. To secure the debt the father purchased from the son a tract of land for $1350, deducting therefrom the amount of the son's debt to him, and paying the balance of the purchase-money in cash. This balance the son immediately expended in paying other debts. A few days thereafter another creditor obtained an award against the son, and afterwards a judgment under which the land was sold as the property of the son. The purchaser obtained possession. The father subsequently made an assignment for the benefit of creditors, and his assignee brought ejectment to secure the land. Held, that in the absence of evidence of fraudulent intent on the part of the father, the court should have instructed the jury to find for plaintiff.

2. The fact that the son conveyed with intent to defraud was immaterial in the absence of fraudulent intent on the part of the father. And if the motive of the latter was to secure his own debts, his purchase cannot be impeached because he paid the difference between the amount of his debt and the price agreed upon in money. It is the motive of the creditor which is to be looked into, and if that was honest and lawful the intent of the debtor does not enter into the question. One cannot be prejudiced by the fraud of another of which he has no notice.

3. Business dealings between parents and children, and other near relatives, are not per se fraudulent; they must be treated just as are the transactions between ordinary debtors and creditors, and where the bona fides of their transactions is attacked the fraud alleged must be clearly proved.

Before MERCUR, GORDON, PAXSON, TRUNKEY and STERRETT, JJ.

SHARSWOOD C. J., and GREEN, J., absent.

Error to the Court of Common Pleas of York county: Of May Term 1880, No. 95.

Ejectment by C. F. Reehling, assignee for the benefit of creditors of Isaac Taylor, against William R. Byers, tenant, and the widow and heirs of Joel Brinton, deceased, for two tracts of land in York county.

The material facts were as follows: On the 23d of June 1876, W H. Taylor conveyed the property in dispute to his father Isaac Taylor, for a consideration of $1350. On the 1st of April 1873, W. H. Taylor became surety for one Kurtz, in a note to Joel Brinton, for $1000. Several years thereafter Kurtz absconded, leaving his debts unpaid. On the 10th of April 1876, Brinton brought suit on his note, and obtained judgment by arbitration against W. H. Taylor on the 27th of June 1876, for $1134.50. An appeal having been taken judgment was obtained after trial in court on the 26th of February 1879, for $1174 and costs. On the 5th of March 1877, a fi. fa. issued on said judgment, and the property conveyed as aforesaid by W. H. Taylor to Isaac Taylor was levied upon and condemned. On the 2d of June 1877, the property was sold as the property of W. H. Taylor to the plaintiff in the execution, Joel Brinton, for the sum of $722. After proceedings were had before two justices, W. H. Taylor, as tenant of Isaac Taylor, was ejected by the sheriff, and W. R. Byers, as tenant of Joel Brinton, was put into possession of the premises. On the 28th of December 1877, Isaac Taylor made an assignment for the benefit of creditors to the plaintiff, Reehling, who brought this action on the 25th of January 1878.

It was contended by the defendants that the deed from W. H. Taylor to his father was fraudulent and void as to Joel Brinton.

In relation to this deed the following facts were disclosed by the evidence: On the 12th of April 1868, W. H. Taylor being in need of money in his business, borrowed from his father $1420, for which he gave him his note. By sundry payments this note was reduced on April 1st 1874, to $550, for which he gave his father a new note. On the 1st of April 1873, W. H. Taylor was also indebted to his sister in the sum of $589.64, for which he also gave her a note of that date. In January 1876, she notified her brother that she needed this money, and at that time his father also demanded additional security for his note. To meet these demands, W. H. Taylor offered to sell the property in dispute to his father for $1350, which was its full value, the purchase-money less the amount of the father's note, to be paid in cash. In pursuance of this arrangement, on the 23d of June, the conveyance was made. Isaac Taylor's note amounting with interest to $591.25 was deducted from the purchase-money, and the balance of the purchase-money $758.75 was paid by him, partly in cash, and partly in United States bonds. In order to raise the money he borrowed from Sarah Meredith $219.25, for which he gave to her his note. Out of said balance of $758.75, W. H. Taylor, on that day, paid the note of Sarah Meredith, amounting with interest, to $704.75, and with the $54, which then remained, he paid other debts.

The defendants offered to prove by a witness on the stand " that he met Taylor at Crull's store, in Newberry, about haymaking (am sure it was before harvest; the weather was warm) in 1876. He said, " You go to Joel Brinton and tell him that I am willing to pay half the amount of that note, so that I can get my property back, if he will settle." He said, " I wouldn't have sold it, only to get out of paying the bail money to Brinton. I would like to have it settled, so that I can get my property back, as I had it before, for this way I can do no business; the way my affairs now are." I said I would go and talk to Joel Brinton, and I went and talked with him a few days afterwards; and after that I came back to Newberry. My best recollection is that I went to his house and told him Joel Brinton said he would have either the whole or none. He appeared sorry that it couldn't be settled."

For the purpose of showing, in connection with the evidence already in evidence on behalf of the defendants, that the object, intent and purpose of the said W. H. Taylor was to hinder and delay Joel Brinton in the collection of his debt; to be followed by evidence of fraudulent collusion between W. H. Taylor and Isaac Taylor, the plaintiff's grantor.

Objected to and evidence admitted. No evidence as to fraudulent collusion was thereafter offered. There was no evidence that W. H. Taylor, at the time of the execution of the deed, had any other indebtedness than that due to his father, sister and Brinton.

When the defendants rested, the plaintiff asked the court to instruct the jury that there was no evidence of fraud to be submitted to them, and they must render a verdict for plaintiff, which the court refused.

The plaintiff, inter alia, presented the following points, which the court refused:

1. That under all the evidence in the case, the verdict should be for the plaintiff.

6. That there is no sufficient evidence in the cause either to implicate Isaac Taylor, the plaintiff's assignor, in any purpose or design, collusion or conspiracy, by purchase of the real estate claimed in this suit from William H. Taylor, to delay, hinder or defraud Joel Brinton, or any other creditor or creditors of said William H. Taylor, or with notice or knowledge of such purpose or design, to authorize the jury to find a verdict for the defendants, and that the verdict of the jury must be for the plaintiff.

The defendants presented the following points, to which are appended the answers of the court:

1. That if the jury believe, from the evidence, that W. H. Taylor sold and conveyed the premises in dispute in this suit, for the purpose of hindering, delaying and defeating Joel Brinton in the recovery of his debt, and that Isaac Taylor knew of such purpose, then the deed of William H. Taylor to Isaac Taylor is fraudulent and void as against Joel Brinton, and those claiming under him, and their verdict must be for the defendants.

Ans. " The principle of law is correctly stated. For its application to this case the jury is referred to the general charge, and to our answer to defendants' second point."

2. If the jury believe, from the evidence, that W. H. Taylor sold and conveyed the premises in dispute in this suit to Isaac Taylor, his father, for the purpose of hindering, delaying or defeating Joel Brinton in the recovery of his debt, and that Isaac Taylor had any manner of knowledge or notice of such purpose and intent of his son, W. H. Taylor, then the deed of W. H. Taylor to Isaac Taylor is fraudulent and void as to Joel Brinton, even though Isaac Taylor had actually paid a full price for the property, and these defendants claiming through Joel Brinton are entitled to their verdict.

Ans. " In the purchase of property from an insolvent debtor, a volunteer stands upon a different footing from a creditor. A volunteer who purchases with notice that the sale is made to hinder, delay or defraud the creditors of the vendor, is a participator in the fraud, and the conveyance is void under the statute of 13 Eliz. But a creditor has a right to secure his debt although he knows that some other creditors must lose in consequence, and that the object and purpose of the debtor is to secure and prefer him. Such knowledge would not render the conveyance void under the statute. But it is for the jury to say whether Isaac Taylor was a bona fide creditor of his son W. H. Taylor to the extent of the note he held, and whether the balance of the purchasemoney was honestly paid."

In the general charge, the court, Wickes, A. L. J.,...