Loudenback v. Foster
Loudenback v. Foster
Opinion of the Court
On the foregoing finding of facts, the district court was right in its holding that the land conveyed •by Martin to David Loudenbaek'was subject to the payment of the grantor’s indebtedness. Although no actual fraud was intended by David, and a full consideration was paid by him for the land, nevertheless he, knowing that Martin was insolvent, assumed to pay the claim of the insurance company, which, notwithstanding its mortgage security, was thereby preferred; and although the conveyance was in form absolute, nevertheless a secret trust was created in favor of Martin without any provision for his other creditors. The conveyance was, in fact, in trust to sell and apply the proceeds to the payment of the insurance company’s claim, the claim of the vendee secured by mortgage, and the purchase price of the laud sold by, David to Martin, the balance to be paid to Martin, who, iu the meantime, was to continue in possession of the land. All these dealings between David and Martin were had during the time Poster, a creditor of Martin, was seeking by due process of law to enforce his claim, and resulted in preventing him from obtaining satisfaction of his judgment by ordinary execution. A hindrance and delay of the creditor, caused by the trust assumed by David, constitute a constructive fraud and bring the case within section 6311 of Revised Statutes in relation to “ insolvent debtors.” Jamison v. McNally, 21 Ohio St. 295.
But having decreed the deed void, the district court erred in proceeding to order the sale of the land and directing the payment of Foster’s judgment from the proceeds, &c. There was
Cause remanded.
Reference
- Status
- Published