Smyth v. Carlisle

A fraudulent grant may be purged of the fraud by matter ex post facto, whereby the fraudulent contract is abandoned, and the grant confirmed for a good *419and adequate consideration bond fide. 3 Met. 332, Oriental Bank v. Haskins. But if a deed, made expressly to defraud creditors, may be avoided by subsequent creditors, because a fraud on them, how can the assent of the existing creditors purge the fraud, so that the subsequent creditors cannot take advantage of it ? If the rights of subsequent creditors were only to be worked out through the instrumentality of the existing creditors, so that the deed, being avoided by an existing creditor, the subsequent creditors were to be let in, and in no other way, then the assent of all the existing creditors wmuld be sufficient. But a subsequent creditor may, in a case like this, assert his rights by an independent suit.

If, prior to the existence of the plaintiff’s debt, there had been a settlement of the liabilities of Farrar, and he had agreed to take the land of which he held an absolute title, for a fair consideration, in discharge of so much due him from Carlisle, then the fraud would have been purged, the trust in favor of Carlisle would have been extinguished, and the plaintiff could have had no ground of objection. But this was not done. The trust remained, not only up to the time of the contraction of the plaintiff’s debt, but up to the time of the levy.

If the conveyance was originally intended as a fraud on creditors generally, it remained a fraud as to subsequent creditors. Carlisle had an interest in the land, covered from the creditors by a secret trust, and an actual fraud. This furnishes a good reason why the plaintiff should impeach the deed. 19 Pick. 231, Parkman v. Welch; 4 Greenl. 165, Howe v. Ward; 3 Wend. 411, Wadsworth v. Havens; 2 Mason 252, Bean v. Smith.

Judgment on the verdict.