Joseph Buffum versus Levi Green and B. Snow

Joseph Buffum versus Levi Green and B. Snow.

An insolvent debitó may give a preference to one creditor by paying his debt in full, to the exclusion of all other creditors, provided it be done with good faith.

It is not essential to the valid delivery of a deed, that the grantee be present— a delivery to a third person for his use is good, if he afterwards assent, and the thing granted shall be said to rest in him from the time of such delivery.

The liability of a grantee as a surety for the grantor, is a good consideration to support an absolute conveyance of laud against a creditor of the grantor.

If a debtor convey land to this ci editor in payment, and the creditor accept the same, it will” operate as apayment to the extent of the value of the land, although there was no agreed price for the land.

This was a writ of entry, in which the demandant counted upon his own seizin, of a tract of land in West-moreland, in this county, and upon a disseizin by the tenant. The cause was tried here upon the general issue, at October term, 1828, and a verdict taken by com sent for the demandant, subject to the opinion of the court upon the following case.

•Both parties derived their titles from D. D-who was agreed to have been formerly lawfully seized of the demanded premises in fee simple.

The demandant, having sued out a writ in his own name against D. D. in which.he declared upon a note dated May 12, 1824, for $200, caused the demanded premises to be attached by virtue thereof, on the 16th August, 1826, and having obtained an execution in that suit, caused it, to be duly extended upon the same premises on the 19th April, 1827.

D. D*. having resided for several years in said Westmore-land, and having become wholly insolvent,, went to Belchertown, in Massachusetts, where, on the 15th June, 1826, lie made a deed, which purported to be a conveyance of the demanded premises to the tenants in fee simple. It did not appear, that the grantees, or either of them were present when the deed was made, nor that there had been any previous agreement between the grantor and the grantees on the subject.

D. D. took the deed, and having put it in a trunk at Westmoreland, left this state, and has not since return, ed. But on the 25th July, 1826, he wrote a letter, dated at Albany, to N. D. informing him where the deed might be found, and giving this direction; “be sure to let the deed be delivered and put on record before the title is snatched away by less deserving creditors.” The deed was found in the trunk at Westmoreland, and on the 15th August, 1826, delivered to a son of Levi Green, who caused it to be recorded in the registry of deeds on the same day. Green was not at home when the deed was delivered to his son, ami sent to be recorded, but returned soon afterwards,'and being informed what had been done, said that the deed was on record in season, and in the morning of the 16th August, 1826, took the deed into his custody, and in the course of a day or two afterwards took possession of the land.

It did not appear, that Snow had any knowledge of the deed until the 20th August, 1826. But soon after that time he employed an agent to take care of the land, and the agent and Green made a lease of it to one Tuel on the 1st September, 1826.

It was admitted by the demandant, that the amount clue from D. D. to Green and Snow, and the amount of debts for which they were liable as his sureties, exceeded, at the time the deed was executed, the value of the land.

There was found in the trank at Westmoreland with the said deed, a bill of sale made by D. D. to Green and Snow, of a pew in the meeting house and some hay in the barn. This bill of sale was delivered to Green and Snow, but the hay and pew were attached by other creditors and never came to the possession of Green and Snow.

There was also found with said deed in the trunk a list of books, with directions to deliver them to another creditor as part security for his debt; also a list of certain notes against D. D. wdiich he wished to have sued and secured. Writs were made on those notes in pursuance of his instructions and property attached on the 15th August, 1826, without the knowledge of the creditors. The conveyances made as aforesaid, and the attachments covered all the estate both real and personal of D. D. which could be attached.

It also appeared, that Green, on the 16th August, 1826, sued out a writ against D. D. on one of his notes and caused the demanded premises to be attached^ which, suit is still pending.

It was admitted by the demandant, that D. D. made the said deed to Green and Snow from preference to secure their said debts. And it appeared that the said debts due from D. D. to Green and Snow were due to them severally, and not jointly.

J. Pm her, for the demandant

contended, that the deed of D. D. was not duly delivered to the tenants. It was not in Green’s hands until the 16th August. The delivery of the instrument to his son, and the conveyance of it to the register’s office, did not constitute a delivery to the tenants. A delivery to Green was not a delivery to Snow, because they were not partners, nor joint purchasers, nor joint creditors. Their interests were totally disconnected and several, and in what proportions they were to take is in no way ascertained, unless it be in proportion to the debts due to them respectively. Green was not the agent of Snow to receive the delivery, and a subsequent delivery to Snow and assent by him cannot make it good by relation, to the prejudice of an innocent creditor, who bad attached the land.

But if the deed was well delivered, it cannot prevail against creditors, unless a full consideration was paid, or debts to the full amount discharged, as a ground for the conveyance. Here nothing was paid; no debt was discharged in fact; no sum was agreed to be paid, or discharged; no price for the land was fixed; no notes or sureties were given up. If it could be supposed, that the notes which Snow and Green herd against D. D. might form a consideration for the deed, yet still their liabilities as sureties could not form a good consideration, and in that case the consideration would be inadequate.

It is apparent that there, was a secret trust or confidence, as there were to be after-proceedings to settle what should be allowed for the land.: The conveyance appears upon the face of the deed to have been absolute; but it was not in fact so. The grantees hold the land in trust until it shall be settled whether it is to go in full discharge of the debts or in part payment. The suit brought by Green on one of his notes is decisive proof, that he did not consider that note discharged by the deed. Indeed no one of the notes is discharged, as the deed acknowledges the receipt of the consideration, an#D. D. is estopped thereby to say, that those demands, or any part of them, are discharged by the deed, there being no agreement, that they should be so. Then all the pretended consideration fails.

Woodbury, on the same side

argued, that about one third of the supposed consideration for this conveyance having been a mere liability by the grantees as sureties for the grantor, the other two thirds was not alone an adequate consideration. On what principle could that one third be a valid consideration for an absolute conveyance against the-creditors of the grantor ?

Nothing had been paid — nothing might ever be paid by the granices. A mere liability could only be a consideration for a mortgage. The authorities cited seem to be good law on this point. 2 Greenl. 88; 3 Dyer, 295, a. Had the grantees, before the deed was delivered, voluntarily paid the debts, or agreed to pay them at all events, and discharge the grantor, either of these might have furnished a good consideration. But the case shows that all their payments were after the delivery of the deed, and that there was no agreement on the subject.

If the whole supposed consideration had been an absolute and direct debt to a larger amount than the value of the land, the transaction might still be fraudulent, if there was any secret trust, or if the debt was not discharged by the land. In this case, every circumstance, which usually attends and indicates fraud, existed. If the transaction was fraudulent in law, nothing could attend it, which is not found here. Possession after the sale could not have existed, because the grantor absconded, and the selection of grantees who were creditors was nescessary to cover the fraud. The cover would be ©f- fectual, if no part of the debt was discharged, or agreed to be discharged. There would be a debt, embarrassment, absconding, perfect secrecy in the transaction, a conveyance of all other property, which could be reached by process, no money paid, no discharges, no notes given up, or agreed to be given up. All these existed here. And further, one of the very notes now set up as paid by the land, was subsequently put in suit.

The secret trust is manifest. Had there been no such trust, the conveyance would have been a mortgage, or the notes would have been given up or discharged when, the deed was delivered.

Every possible door to fraud is thus left open. The price of the land to be any thing or nothing. The time when it is to he fixed, six months, six years, or never. The mode of fixing undetermined, whether by themselves or referees, or sale by auction, or by a jury. Nor will it answer to fix it afterwards, in any of these ways. No court can make a contract for the parties, and thus convert a fraudulent contract into a fair sale.

With respect to the adequacy of the consideration, we are not to look to the value of the land, but the agreed value, the agregatio mentium. It is just as fraudulent for a debtor to sell a farm to a creditor for $500, which is worth $1000, as to sell it to one who is not a creditor for that sum. And it makes the case neither more nor less fraudulent, if the debtor owes the creditor beyond the real value of the land.

Here the price was agreed, or it was not. If it was not, the court cannot make a price for them afterwards; and the parties cannot afterwards adopt a mode to fix it, not agreed upon at the time. If they can, any fraudulent sale may be cloaked.

No case can be found, where a deed has been held to he valid against creditors, unless there was an express contract as to the price of the land, previous to any attachment. Until there is such a contract, the sale is inchoate and incomplete.

In assignments there is always a provision ⅛ the instrument, that the goods or property shall be sold and turned into money, or the assignee takes them at a fixed price; and the debts to be paid are specified. Otherwise every avenue to fraud would be left open; and the claims of a creditor, when the assignment should be made to him, might still be enforced in whole or in part, as his caprice or pleasure might prescribe. 5 Mass. Rep. 48, Hatch v. Smith, eta.; 12 ditto, 464, Harrison v. The Trustees of Phillip's Academy; 6 ditto, 343; 5 ditto, 154; 5 Johns. 344.

Ilanderson, for the tenants.

If one sell his land to defraud his creditors, yet the title of his grantee is good, if he be a bona fide purchaser for a valuable consideration without notice of such design. 14 Mass. Rep. 247.

A debtor in insolvent circumstances may bona fide give a preference to one creditor to the exclusion of others. And such preference is valid. He may even assign all his effects for the benefit of particular creditors, to the exclusion of others. C Mass. Rep. 342; 5 Johns. 412: 14 Johns. 458; 5 Mass. Rep. 49; 15 Johns. 571; 15 Mass. Rep. 74; 17 ditto, 556; 5 D. & E. 235; 8 ditto, 529; 1 Binn. Rep. 514.

A deed takes effect from its delivery. 2 Bl. Com..304, 307; Co. Litt. 46, b; Shep. Touch. 55, 58, 72; 8 Mass. Rep. 239; 9 ditto, 310; 2 Johns. 234; 4 ditto, 233. The delivery of a deed may be by words, or by acts without words. And the delivery may be either to the grantee, or to a third person who has no special authority, for the use of the grantee. 12 Johns. 536; Cowper’s Rep. 204; Shep. Touch. 57, 58; 1 N. II. Rep. 357.

It is not essential to the valid delivery of a deed, that the grantee be present, and that it be made to and accepted by, him personally. A delivery at tbe register’s office or any where else, in the absence of the grantor is good if he afterwards assent and take the deed. 12 Mass. Rep, 460; 17 ditto, M0; 9 ditto, 310; 1 N. XI. Rep. 357; Shep. Touch. 58; 12 Johns. jVK'.

Every man is presumed to assent to a grant, made for his benefit, 1 Binn. 318.

All such acts as give estates directly, or by way of use, are good at first, and the thing granted when the deed of grant is delivered to the grantee’s use, shall vest in the grantee before he has notice of the grant, or agree to accept of the thing granted; * so, that if lands be granted immediately by feoffment, gift, &c. the things granted shall be said to be in the grantee, and the grant good before notice or agreement, until disagreement. Shep. Touch. 283; 6 Mass. Rep. 24; 2 Ventris, 138; 1 Shower, 308; 1 Binn. 502 — 503, and 518 — 520.

The delivery of the deed to Green and the acceptance by him enures to the benefit of Snow, and is a good delivery to vest the title in him. If a feoffment be made to A and B by deed, and livery is made to A in the absence of B, in the name of both, the livery is godd to pass the estate to both. A difference is taken between two attornies, who have but a naked authority and two grantees, who have the interest. Co. Litt. 49, b.