Schaller v. Wright

Citation70 Iowa 667,28 N.W. 460
PartiesSCHALLER, ASSIGNEE, ETC., v. WRIGHT.
Decision Date14 June 1886
CourtUnited States State Supreme Court of Iowa

OPINION TEXT STARTS HERE

Appeal from Sac district court.

Action in chancery, to set aside a deed conveying real estate, on the ground that it was executed for the purpose of hindering and defrauding creditors. A demurrer to the petition was overruled, and, the defendant refusing to further plead, a decree was entered granting the relief sought in the petition. Defendant appeals.S. M. Elwood and W. A. Helsell, for appellant.

C. D. Goldsmith, for appellee.

BECK, J.

1. The petition alleges that John Wright, being insolvent, assigned and conveyed to plaintiff his property, for the benefit of his creditors, and that at the same time the assignment was made Wright conveyed to the defendant, his wife, certain lands, described in the petition, for the consideration of one dollar. It is averred that the conveyance to the wife was made for the purpose of hindering, delaying, and defrauding Wright's creditors, and it is shown that the debts of the assignor are largely in excess of his assets, including the property involved in this suit. The petition asks that the deed to defendant be set aside and declared void.

2. The defendant demurred to the petition, and her demurrer was overruled. It cannot be doubted that under the statute the assignee of an insolvent takes and holds the property as a trustee for the benefit of the creditors of the assignor. The deed of assignment vests in the assignee the title of all property of the assignor, even though it be not described and specified therein. Code, § 2117. The conveyance to the wife being voluntary, and fraudulent as to creditors, did not pass the title from the debtor beyond their reach. As to them, he is regarded as the owner of the land, the deed to the wife being void for fraud. The statute provides for the assignment of property by insolvents, to the end that it may be appropriated to the payment of debts. It authorizes proceedings to subject the property of debtors to the payment of their debts. As between the creditors and the debtor who fraudulently conveys property to defeat them, he is regarded as holding the title to or an interest in the property conveyed, and it may, for that reason, be made subject to his debts. If he holds no such interest, the land will not permit the creditors to appropriate the property, for it would not suffer the property of another to be taken for his debts. It thus appears that the debtor did hold. as to the creditors, an interest in the property, and that it passed to the assignee. It is said that the assignee takes a derivative title from the debtor, and stands in his shoes. This is correct so far as persons other than creditors are concerned. As we have seen, as to the creditors, the assignee is regarded by law as holding an...

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