Parkman v. Welch
Parkman v. Welch
Opinion of the Court
delivered the opinion of the Court. This is a a bill in equity, in which the plaintiff seeks to redeem certain parcels of land situated in Federal street, in the city of Boston, being lots No. 42 and 46. The bill prays for an account of moneys due on the mortgages, and also that Welch may be or dered to contribute in aid of the plaintiff in the redemption of one of the mortgages set forth in the bill, and for such other and further relief as the nature and circumstances of the case shall require.
The leading facts in the case, as stated in the bill and admitted by the answer, are the following : Benjamin Crombie, on the 2d of August, 1824, was seised in fee of three parcels of land, being lots No. 42, 44 and 46, in Federal street, and being thus seised, on the same day, conveyed in mortgage lot No. 42 to Peter C. Brooks, to secure the payment of a sum of money ; and on the 8th of February, 1825, Crombie conveyed by another mortgage, the lots No. 42, 44 and 46 to Brooks, to secure the payment of a further sum of money. On the 1st of March, 1827, Crombie conveyed the equity of redemption of lot No. 44 to the defendant Welch. On the 18tli ol February, 1829, Crombie conveyed to We'Jch nine several parcels of real estate, including lots No. 42 H.d 46
At the Court of Common Pleas holden on the first Tuesday of July, 1834, the plaintiff recovered judgment against Crombie for $5363-40 damages, and $9'65 costs. An execution hav‘ng issued upon this judgment, it was levied on the equity of redemption of lots No. 42 and 46, and the same, being exposed for sale at public auction, according to law, was purchased by the plaintiff and conveyed to him by the officer by deed bearing date the 8th of October, 1834.
On the 10th of December, 1834, Welch conveyed to the defendant Adams the mortgage which included lots No. 42, 44 and 46, and on the same day Adams executed and delivered to Welch a release of the lot No. 44 from the mortgage. ^
Upon the preceding statement of the paper title of the parties, it is very apparent, that if the various conveyances were valid in law, no title remained in Crombie at the time of the execution of the plaintiff, and he could have no interest in the mortgaged premises which would authorize him to maintain this bill, inasmuch as the deed of Crombie to Welch, of February 18th, 1829, on the face of it conveyed all the interest of Crombie in the lots No. 42 and 46. The plaintiff, fully aware of this, seeks to avoid the deed of February 1829, from Crombie to Welch. He charges in his bill, that this deed was made by fraud and covin between the parties, that Crombie was deeply indebted at the time of the making of this deed, and that the same was on a secret trust for the benefit of Crombie, and sr may be avoided by his creditors. Welch, in his answer, de nies that the deed was fraudulent, and alleges that the sairn was made bond fide and not under any secret trust.
The plaintiff must also avoid the effect of the deed of Wclcl, to MTntyre, of August 25th, 1834, and for this purpose he alleges, that this conveyance was received by MTntyre with
M‘Intyre denies all such knowledge, or any participation with Welch in any design to defraud the creditors of Crombie.
The defendant Welch admits, in his answer, “ that he believes Crombie was not solvent in February 1829, although that fact would depend upon many circumstances, such as pressure or abundance n the money market, the rise and fall of real and personal es.ate, and other similar causes operating upon a man who had a large amount of property in his possession, and owed a large amount of debts.”
The deposition of Crombie is in the case. Also certain articles of agreement between Welch and M‘Intyre executed on the 3d of February, 1834.
Several questions arise in the present case.
1. Was the conveyance of Crombie to Welch of February 1829, a bona fide transaction, or was it made upon a secret trust between the parties, inconsistent with the face of the deed ?
2. Was the deponent M‘Intyre so far cognizant of the nature and object of that conveyance and the real character of Welch’s interest under it, that it may be avoided in his hands, he claiming under the deed of Welch to him executed August 25th, 1834 ?
3. Does the St. 13 Eliz. c. 5, avoid conveyances made upon a secret trust and with a fraudulent intent, as well in favor of subsequent as previous creditors ?
4. Is there a legal claim for contribution as to lot No. 44, against those holding the mortgage, originally including lots No. 42, 44 and 46 ?
Our first inquiry is as to the validity of the conveyance of Crombie to Welch. Was this a bond fide transaction between the parties, or was there a secret trust inconsistent with the face of the deed ?
In the argument of this question, the counsel for the plaintiff suggested, that in reference to the evidence of fraud, whatever fact was particularly and specifical: charged in the bill, and not
Having disposed of this preliminary question, we proceed to state the views of the Court as to the validity of the deed from Crombieto Welch, of February 18th, 1829. It seems to us, very clearly, that this deed is fraudulent and void in law. There are many of the badges of fraud connected with this conveyance. The facts in the case and the inferences of law, entirely control the general declaration of Welch, that the sale was not fraudulent. Without attempting to enumerate all the circumstances of fraud developed in the course of these negotiations between the parties, we can say that we do not find any sufficient evidence of a legal consideration for the deed of February 1829. It is not even alleged by the defendant Welch, in his answer, that any money was paid, any notes discharged, or any accountable written promise given by him to Crombie for
As to the indebtedness of Crombie, it was sufficiently shown by the answer of Welch. Actual insolvency of the grantor is .not required to render his conveyance, when made without consideration, void as against creditors. Such a doctrine has been sometimes advanced as respects creditors whose debts accrued after the making the conveyance, but this is not supported by the authorites. All that is necessary to entitle a creditor
2. Can it be avoided as to M‘Intyre, who holds under a deed from Welch ?
Prior to the levy of execution of the plaintiff, Welch had conveyed this right in equity to the defendant M‘Intyre, and if M‘Intyre was a bond fide purchaser without notice of the nature of the title held by Welch, the conveyance to M‘In tyre would be effectual to pass to him the title, divested of the taint of fraud, and would place the property beyond the reach of bond fide creditors. The bill charges that this conveyance to M‘Intyre was made with knowledge on his part, of the nature of the conveyance from Crombie to Welch, and with a view of aiding Welch to perfect his title as against the creditors of Crombie. These charges are denied by M‘Intyre m his answer, and the
3. But it was further objected, that the deed from Crombie to Welch cannot be impeached by the plaintiff, because he was not a creditor of Crombie at the time that conveyance was made ; and this raises the question, whether the effect of the statute of 13 Eliz. c. 5, is to avoid conveyances made upon secret trust and with fraudulent intent, as well in favor of subsequent as previous creditors. On this subject we apprehend the law is well settled. In England, and in several of the States of the Union, the question has been litigated, whether a voluntary conveyance untainted with fraud might be avoided by subsequent creditors of the grantor. In the decisions of these cases, while the court have held that such voluntary conveyances would be good as against subsequent creditors, they have uniformly maintained the opinion, that a conveyance fraudulent at the time of making it, might be avoided in favor of subsequent creditors. On this point we refer to Sexton v. Wheaton, 8 Wheat. 229; Benton v. Jones, 8 Connect. R. 190; Howe v. Ward, 4 Greenleaf, 195; Wadsworth v. Havens, 3 Wendell, 411; 1 Story’s Comm. on Equity, 352. The same doctrine seems to be fully recognized by our Court in the cases of Damon v. Bryant, 2 Pick. 411; Bennett v Bedford Bank, 11 Mass. R. 422.
In this bill the plaintiff also prays that the defendant Welch maybe ordered to contribute towards discharging the mortgage' of lots No. 42, 44 and 46, such proportional sum as the value of lot No. 44 bears to the value of all the lots described in the mortgage, or that a sum equivalent to such proportional share be deducted from the money to be paid in redemption of the mortgage. We do not consider this as a proper case foi contribution. Such a case would arise where several mortgaged parcels had been transferred by the mortgagor to different
A recurrence to the facts in the present case will readily show the propriety of the application of the rule just stated, to this case. The original mortgage to Brooks embraced the three lots No. 42, 44 and 46, each bound to contribute its proportionate share to redeem the mortgage. The interest of Crombie in lot No. 44 was in 1827 conveyed to Welch, and in 1833 by him conveyed to C. D. Coolidge. On the 8th of August, 1834, Welch became the assignee of the mortgage from Brooks. This was the situation of the parties when the plaintiff became the owner of the rights in equity of redeeming lots No. 42 and 46. It will be perceived that the right of
We shall direct a reference to a master to ascertain the value of the several lots 42, 44 and 46, at the date of the mortgage, that there may be abated from the amount due on the mortgage the sum that would have been ratably chargeable on lot No. 44. Also, that he state an account of moneys due on the mortgage, preparatory to a final decree.
Reference
- Full Case Name
- Daniel Parkman versus John Welch
- Status
- Published