Syester v. Brewer

• Decision Date: 27 June 1867
• Parties: ANDREW K. SYESTER, Trustee of BENJAMIN CUSHWA, an Insolvent debtor, v. DAVID BREWER and others.
• Court: Maryland Court of Appeals

27 Md. 288

ANDREW K. SYESTER, Trustee of BENJAMIN CUSHWA, an Insolvent debtor, v. DAVID BREWER and others.

Court of Appeals of Maryland

June 27, 1867

APPEAL from the Circuit Court for Washington County, as a Court of Equity.

The bill in this cause was filed on the 22d day of November 1852, by William Ditto, trustee for the benefit of the creditors of Benjamin Cushwa, an insolvent debtor, to set aside a deed executed on the 14th day of November, 1826, by the said Benjamin to his brother, John Cushwa, as void under the insolvent laws of this State.

The bill alleged, amongst other things, that Benjamin Cushwa applied for the benefit of the insolvent laws on the 19th of December, 1826; that his brother John was appointed his provisional trustee and accepted the trust, but died in the year 1845, before said trust was completed, and that subsequently, in April, 1849, the complainant was appointed the permanent trustee of said insolvent. That the said Benjamin at the time of his application was largely indebted to sundry persons, and amongst them his brother John was the largest creditor, to whom he then owed about $7,300; that the said Benjamin, with a view and under an expectation of being and becoming an insolvent debtor, executed the said deed of the 14th of November, 1826, conveying to his brother absolutely all his real estate, which was large and valuable in payment of the debt he then owed him, thereby to give an undue and improper preference to his brother, as a creditor and to deceive and defraud his other creditors; that the said deed was fraudulent and void, as being made with a view and under an expectation of being and becoming an applicant for the benefit of the said insolvent laws. The bill further alleged that a certain Henry Seibert, one of the creditors of the said Benjamin, at the time of his said application, and to whom he owed about twenty-eight hundred dollars, did, as such creditor, file allegations against the said Benjamin to prevent his getting a full and final discharge under the provisions of said insolvent laws; that the first of said allegations charged that the said deed was made by the said Benjamin to his brother, with a view and under an expectation of being and becoming an insolvent debtor, and thereby to give an undue and improper preference to his said brother, as one of his creditors; that the second allegation charged the said Benjamin with having conveyed the real estate mentioned in said deed to his brother with a view and under an expectation of being and becoming an insolvent debtor, and with intent thereby to deceive his creditors or some of them or to secure the same, or to receive or expect some profit or advantage thereby. That issues were joined by the said Benjamin on the allegations, and they were fully and fairly tried by a jury at the March Term, 1827, of Washington County Court, and a verdict of guilty found on said allegations, and a judgment rendered on said verdict, whereby the said Benjamin was prevented from obtaining his final discharge under the insolvent laws; that the said allegations, verdict and judgment thereon, by their legal operation made the said deed absolutely null and void, so that no title passed thereby to the said John Cushwa, the grantee therein named to the real estate described in said deed, but that the same vested in the said John, as the trustee of the said insolvent, for the benefit of his creditors, and that it was the duty of the said John, as such trustee, to have sold the same and applied the proceeds of such sale towards the payment of all the creditors of the said insolvent, according to their respective rights and priorities, and thus have closed his trust.

But the said John Cushwa did not, however, as trustee as aforesaid, sell said real estate and apply the proceeds of such sale to the payment of the creditors of said insolvent as directed by law, but on the contrary suffered the said insolvent to hold and occupy the same, and to take and use the rents and profits thereof from the day the said deed was made, down to the day of his death, with the exception of a part thereof known as the "Knavel Farm," containing about one hundred and thirty acres of land, which the said John held and the profits of which he received, from about the year 1828 to the time of his death, the said Benjamin all the time aforesaid, down to the day of his death, and notwithstanding the said allegations, verdict and judgment, continuing in the possession of, receiving the rents and profits, and claiming the said real estate specified in said deed, as his property, and disposing of the same as his estate by his last will and testament. That John Cushwa died in the year 1845, leaving two children, one a son, named John S. Cushwa, the other a daughter, named Elizabeth, who married David Brewer, and all of whom resided in Washington county, and who were then claiming said property as the property of said John Cushwa, deceased, as conveyed to him by the said Benjamin, by the deed aforesaid. That the said Benjamin on or about the second day of March, in the year 1848, duly made his last will and testament, by which he devised said real estate to his widow and children, and died without having revoked or altered the same, and that his devisees were then in possession of and claiming said land by virtue of said last will and testament, alleging that the said deed made by the said Benjamin to the said John, was never intended by either of the said parties to the same, as an absolute deed, but distinctly understood by and between said parties to operate merely as a mortgage to secure the payment of a debt due by said Benjamin to his said brother, a considerable part of which they asserted he subsequently at different times had paid to him.

That to settle these claims of title by and between the heirs-at-law of the said John Cushwa and the devisees of the said Benjamin Cushwa, to said real estate, an action of ejectment had been instituted by the heirs-at-law of the said John, against the said Benjamin in his lifetime, and had, since his death, been continued against his executor and devisees in Washington County Court, and was then pending in the Circuit Court for said county, for the purpose of recovering the said real estate, which neither in law nor in equity belonged to either of said parties, but was trust property, belonging to the complainant as trustee aforesaid, and ought to be sold by him for the purposes of the trust aforesaid, there being creditors of the said insolvent, who were such at the time of his said application, whose claims and debts were still paid and unsatisfied.

The bill further charged that the said Benjamin in his lifetime, always claimed said real estate as his own, subject to the payment of a debt due by him to his said brother, which debt at the time he made said deed, amounted to the sum of seventy-three hundred dollars, and was the consideration of said deed, which was intended and understood by and between him and his brother, to be a mere mortgage of said land to secure the ultimate payment of said debt, and that although the said deed on its face and in its terms was absolute, yet in fact it was distinctly understood by and between them that the same should operate only as a mortgage for the purpose aforesaid, and that on his payment of the said debt, the land was to be reconveyed to him and his heirs by his brother. That he afterwards, from time to time, paid divers sums of money to his brother in part and on account of said debt, until the same was reduced to the sum of forty-six hundred and eighty-nine dollars and eighty-six cents, and for which balance he gave to his brother a note, on which, after the death of his brother, a suit was instituted by his administrators and a judgment obtained in Washington County Court, at the November term 1847; that since the death of said Benjamin, the said judgment had been revived by a sci. fa. and judgment thereon, and that on this judgment a fi. fa. had been issued and levied on said land, or the greater part of it, as the property of the said Benjamin, and the same had been sold by the sheriff under said fi. fa., and the said John S. Cushwa and David Brewer became the purchasers thereof, at the sum of fifty dollars, although the actual value of the same was not less than fifteen or sixteen thousand dollars, but that the sale had not been confirmed.

The bill prayed that the deed might be set aside as fraudulent and void, and the real estate intended to be conveyed thereby, be decreed to be sold by the complainant as trustee as aforesaid, for the benefit of the creditors of the said insolvent, and should the Court be of opinion after the final hearing of the cause that the said deed was not void, but that it was intended by the parties to it to operate merely as a mortgage to secure the payment of the debt due by Benjamin to his brother, and not as an absolute deed, that then the said real estate might be decreed to be sold by the said complainant as trustee as aforesaid, for the payment of the balance of the mortgage debt, and the residue of the purchase money be applied to the payment of the other creditors of the insolvent, according to their respective claims and priorities. The heirs-at-law of John Cushwa and the devisees of Benjamin Cushwa were made defendants and required to answer under oath. William Cushwa, executor of the will of the said Benjamin, and David Brewer, husband of one of the heirs-at-law of John Cushwa, as also James R Ward, trustee under said will, were likewise made defendants. Benjamin Cushwa, subsequent to the deed to his brother, executed three conveyances of valuable personal property in the nature of bills of sale or mortgages, to three different persons. John S....