Marshall & Spears v. Hutchison
Marshall & Spears v. Hutchison
Opinion of the Court
delivered the opinion of the Court. — Judge Marshall did not sit in this case.
The appellants exhibited their bill against James E. Hutchison, Joseph Tucker, and Caleb Morris, setting up claims upon Hutchison and charging him with having made a fraudulent disposition of his property, with a view to hinder, delay, and defraud his creditors, and more especially in the pretended sale and conveyance of two hundred and fifty acres of land to the defendant Tucker. They obtained an attachment against the land, prayed that the conveyance thereof to Tucker, might be set aside, and that it might be subjected to the payment of their debts.
The Circuit Court dismissed their bill with costs, and to reverse that decree they have appealed to this Court.
The particular allegations of fraud in the bill are, that Hutchison, an insolvent debtor, made the conveyance to Tucker upon a consideration, if not altogether, to a very great extent, false and pretended, and that Tucker and Morris, being his brothers-in-law, confederated with him in the fraudulent arrangement, for the purpose thereby of hindering, delaying, and defrauding his creditors.
The deed from Hutchison and wife to Tucker, made an exhibit by the complainants, bears date the 24th January, 1842, was duly acknowledged by Hutchison on the same day, and on the day following by his wife, and re
The complainants charge that Hutchison was not indebted, if at all, to Tucker and Morris, in any thing like the sums thus recited in the deed.
Tucker, in his answer, admits the insolvency of Hutchison, and that the debt due him at the date of the deed, is overstated more than $2,000. As to the debts to Morris and Robinson, he believes them to be correctly stated. He then makes the following explanation as to Hutchison’s indebtedness to him, his purchase from him of the land in controversy, and the execution of the deed.
That his wife, an elder sister of Hutchison, had been in the habit ever since her marriage, of taking in weav-r ing, and of manufacturing janes andlinsey, &c., selling it in her own name and on her own account, and of appropriating the proceeds as she pleased, to her separate use. That she had also been in the habit of loaning money and taking notes payable to herself: That she and her brother, the defendant, had had dealings for many years; she had done weaving for his family, sold him articles of her manufacture, and loaned him money at various times. That a large sum was also due his wife from her brother, as the executor of his father, which she had received or taken his note payable to herself for the amount. That on the 23d January, 1842, his wife held two notes upon said Hutchison, one dated in August, 1841, for $5,494, and the other dated about same time, for $568. He believed these to be just debts, then due, and wholly unpaid. That he himself, at same time, held a note upon the defendant, Hutchison, for $1,157 24, dated and due the 29th February, 1840, which was also a just debt. That on the said 23d January, 1S42, Hutchison came to his house and informed him of his embarrassments and of his intention to surrender up his prop
That upon consultation after Hutchison left, he and his wife agreed that the arrangement proposed would be improper, and that he should not go into it. On the day following, he saw Hutchison and informed him of the dissatisfaction with the proposition of the day preceding, and refused to go into it or any arrangement of the kind. He then proposed to purchase from Hutchison the two hundred and fifty acres of land at $50 per acre. The notes for $5,494 and for $568, to Mrs. Tucker, and the note to himself for $1,389, to go in payment. That he would also pay Morris his note on Hutchison, amounting with interest, to $1,796, and would also pay the note to Robinson for $1,666 66, for which he was security; the balance to be paid, provided the wife of Hutchison relinquished her right of dower and not otherwise, and to be paid to her. That Hutchison acceded to this proposition and the deed was executed in pursuance thereto. That Hutchison, before he saw him on the 24th, had furnished the' draftsman of the deed with a memorandum of the notes held on him by Tucker and wife, for the purpose of having a deed of trust or mortgage drawn upon his slaves, to secure the payment thereof; discovering that the note of the preceeding day for $7,494, had been put down, instead of the one for $5,494, he suggested to Hutchison that it was wrong and he would not stand it. That some conversation passed between Hutchison and the draftsman, and he supposed the alteration would be made, but when the deed was read, he discovered it had not been done. He was then unwilling to inform the draftsman that the amount of the note had been mis-stated by Hutchison, not knowing what had passed between them upon the subject, and believing that it would be a need
We have been thus particular in regard to the answer of the defendant, Tucker, inasmuch as we think the case turns very much upon the facts stated by him.
The answer of Hutchison corresponds substantially, in all the material facts, with that of Tucker. He states that the two notes to Mrs. Tucker, the one for $5,494, and the other for $568, were subsisting and just debts; and he goes somewhat into detail in reference to their origin and the items of which they were composed. That the debts to defendants, Tucker and Morris, and Robin* son, were also just. That although greatly in debt, his failure to him was sudden and unexpected. That being anxious to save from the general wreck of his property, a small portion for the support of his wife and children, he hastily concluded to place in the hands of his sister, Mrs. Tucker, $2,000, and to secure her and her husband by a mortgage upon his slaves. To this arrangement his sister did not consent, but understanding her husband as consenting, he executed a note to her for $7,494, in place of the one which she held on him for $5,494. This was on the 23d January, 1842, and on the day following he made out a statement of his liabilities to Tucker and wife, and gave it to the draftsman of the deed to prepare a mortgage’. In this statement he put down the note which he had drawn for $7,494. But before the writings were drawn, the defendant, Tucker, saw him and told him his wife had not consented to the proposed arrangement'of the day before, and said she believed it would be
The proposition to purchase the land he states as stated by Tucker, with this difference, that besides the amount to be paid to his wife for her dower, Tucker proposed to make her a donation of a thousand dollars more. That the deed was drawn according to the memorandum furnished the draftsman for the mortgage, so far as related to the amount of the debt to Tucker and wife. He supposed near $2,000 would be going to his wife for her dower, and that the statement of the amount of the Tucker debt would not be material. But he states explicitly, that the proposed arrangement by him in reference to the $2,000, had been abandoned when the deed was drawn, and that said sum, except as compensation for his wife’s dower, constituted no part of the consideration for the deed.
He admits the justice of complainant’s demand, and denies any fraudulent intent to hinder and delay them in the collection thereof. Tucker subsequently took the deposition of Hutchison, in which he adopts, as part of his testimony, his entire answer.
In regard to the answer of defendant, Morris, who also married a sister of Hutchison, it need only be remarked, that he denies all fraud, insists upon the justice of his debt, and that he has a lien upon the land for the payment of it.
The only testimony taken by the complainants, was that of the Commissioner, who took in the defendant, Tucker’s property for taxation. This witness proves that in 1840, he gave in under the equalization law, $2,500, in 1841, $3,000, and in 1842, .$2,500. The list for the year 1842, was taken on the 12th January, and Tucker assigned as a reason why he gave in less under the equalization law than in the preceding year, that he expected to lose some portion of the debts due him. That he administered to him the usual oath, that the list given in by him was a true list of all his property subject to taxation. That some time after the institution of this suit, he gave in an additional sum under the equalization law of $7,500.
In reference to the two notes to Mrs. Tucker, in addition to the testimony of the defendant, Hutchison, it is in proof that she had been a very industrious and economical woman, and that an agreement had long existed between her and her husband, that she was to control and manage as she pleased, the proceeds of her domestic manufacture, and also the money coming to her from her father’s estate, amounting in 1837, to about ‡2,400, and was finally to dispose of what she might thus acquire as she thought proper. Under this arrangement she had been for twenty yeais, extensively engaged in the manufacture of jeans, and linsey, and linen, which she had disposed of in her own name, occasionally forwarding and vending articles thus manufactured by her, in Pitts-burg, Cincinnati, and elsewhere. That the proceeds of her industry and enterprise, in this way, sometimes exceeded five hundred dollars a year. That she had also been in the habit of loaning money and taking notes in her own name, and in a word, of trading and managing her business like an unmarried woman. It further appears, that for many years, she had been in the habit of furnishing her brother, the defendant, with articles of her manufacture, of weaving extensively for his family, and of loaning him money; and about two years before his failure or the conveyance of the land in contest, she held notes on him for largely over five thousand dollars. But without prosecuting the enquiry further in regard to the reason why the two notes in question were made payable to Mrs. Tucher, and the means she possessed of raising debts of such magnitude against her brother, it is sufficient to say we are satisfied that they were payable to her under the arrangement between her and her husband, and that they were just debts.
Whether a fund acquired by her under such circumstances, would in equity, be treated as her separate property, it is not necessary to decide. It is evident from the testimony, it was so regarded by her and her husband,
As to the note held by defendant, Tucker, in his own name, and the debt to Morris and Robinson, and which Tucker assumed to pay, in part consideration for the land, we think they are sustained by the testimony.
It is true in all the notes, except the one to Robinson, there is included usurious interest to a considerable amount; but that fact we deem unimportant in this controversy, as there is no evidence that it was included with any intention, by thereby swelling the demands, to prejudice or defraud the complainants or other creditors of Hutchison.
We come to the conclusion, then, that, the actual amount due Tucker, or Tucker and wife, from Hutchison, at the execution of the deed, was $7,451, and including interest upon the notes to Mrs. Tucker, it would be $7,612. This sum, with the amount Tucker assumed to pay Morris and Robinson, would amount to over §11,000, which exceeds the highest estimate of the value of the land, upon the supposition that there was only two hundred and fifty acres in the tract, and there is neither allegation nor proof that there was any more, by upwards of two thousand dollars. It seems to us, therefore, that in point of fact, there was no inadequacy of consideration, to say nothing of the amount stipulated to be paid to Mrs. Hutchison for her dower.
But it is insisted by counsel, that the purchase of the land was virtually carrying out, or an attempt to carry out the clearly fraudulent proposition of Hutchison on the 23d. That the amount, or nearly the amount proposed by Hutchison to be placed in the hands of his sister, for the benefit of his wife and children, was attempted to be secured to her in the sale of the land, besides the promised donation of a thousand dollars.
Tucker, as we have seen, states explicitly, in his answer, and Hutchison in his answer and deposition, that the proposition of the preceding day had been abandoned before the contract was made for the land. The testimony of Hutchison, equally important to the complainants as to the defendant, Tucker, as without it they have no
But it is further contended, that the attempted provision for Mis, H. was wholly invalid — that nothing in fact
In conclusion, we need only remark, that although the circumstances relied upon in support of the allegations of fraud, are calculated to throw some suspicion upon the transaction, yet when considered in connection with all the facts in the case, they are deemed insufficient to invalidate the conveyance.
Wherefore the decree is affirmed.
Reference
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- Marshall and Spears v. Hutchison, &c.
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