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Sexton v. Wheaton. 8 W. made in the letter, and dissuade her husband from sending it without changing its language; had he seen them separate, with a belief on her part, that the proper alterations would be made in it, he would have felt the injustice of charging her with participating in a fraud. That act cannot be criminal in a wife, because it was not communicated, which, if communicated, would be innocent. Admitting the representations of this letter to be untrue, they cannot be charged on the wife, since she disapproved of them, and believed that it would not be sent in its exceptionable form. :
So much is a wife supposed to be under the control of her husband, that the law in this district will not permit her estate to pass by a
conveyance executed by herself, until she has been examined [ * 241 ] * apart from her husband by persons in whom the law con
fides, and has declared to them that she has executed the deed freely, and without constraint. It would be a strange inconsistency if a court of chancery were to decree that the mere knowledge of a letter containing a misrepresentation respecting her property, should produce a forfeiture of it, although she had not concurred in its statements, had dissuaded her husband from sending it, and be lieved he had not sent it. · Without discussing the conduct of Mr. Wheaton, in this transaction, it is sufficient to say that it cannot affect the estate previously vested in his wife. The cause, therefore, must depend on the fairness and legality of the conveyance to her.
The allegation, that the purchase-money was derived from her private individual funds, is supported by circumstances which may disclose fair motives for the conveyance, but which are not sufficient to prove that the consideration, in point of law, moved from her. It must, therefore, be considered as a voluntary conveyance; and, if sustained, must be sustained on the principle, that it was made under circumstances which do not impeach its validity when so considered.
The bill does not charge Mr. Wheaton with having been indebted in January, 1807, when this conveyance was made. The fact that he was indebted cannot be assumed. Indeed, there is no ground in the record for assuming it. The answers aver that he was not
indebted, and they are not contradicted by any testimony [ * 242 ] in the cause. * His inability to pay his debts in 1811, or
1812, is no proof of his having been in the same situation in January, 1807. The debts with which he was then overwhelmed, were contracted after that date. This conveyance, therefore, must be considered as a voluntary settlement made on his wife, by a man who was not indebted at the time. Can it be sustained against subsequent creditors ?
Sexton v. Wheaton. 8 W.
It would seem to be a consequence of that absolute power which a man possesses over his own property, that he may make any disposition of it which does not interfere with the existing rights of others, and such disposition, if it be fair and real, will be valid. The limitations on this power are those only which are prescribed by law.
The law which is considered by the plaintiff's counsel as limiting this power in the case at bar, is the statute of 13 Eliz. c. 5, against fraudulent conveyances, which is understood to be in force in the county of Washington. That statute enacts, that " for the avoiding and abolishing of feigned, covenous, and fraudulent feoffments,” &c., " which feoffments," &c., " are devised and contrived of malice, fraud, covin, collusion, or guile, to the end, purpose, and intent, to delay, hinder, or defraud creditors, and others, of their just and lawful actions," &c., “ not only to the let or hindrance of the due course and execution of law and justice, but also to the overthrow of all plain dealing, bargaining, and chevisance between man and man. Be it, therefore, declared,” &c., “ that all and every feoffment,” &c., “made to, or for, any intent or purpose before declared and expressed, shall be * from henceforth deemed and taken (only as against [ * 243 ] that person,” &c., “whose actions,” &c., “ shall or might be in anywise disturbed,” &c.) “ to be clearly and utterly void."
In construing this statute, the courts have considered every conveyance not made on consideration deemed valuable in law, as void against previous creditors. With respect to subsequent creditors, the application of this statute appears to have admitted of some doubt.
In the case of Shaw v. Standish, 2 Vern. 326, which was decided in 1695, it is said by counsel, in argument, “ that there was a difference between purchasers and creditors, for the statute of 13 Elizabeth makes not every voluntary conveyance, but only fraudulent conveyances, void as against creditors; so that as to creditors, it is not sufficient to say the conveyance was voluntary, but must show they were creditors at the time of the conveyance made, or, by some other circumstances, make it appear that the conveyance was made with intent to deceive or defraud a creditor.”
Although this distinction was taken in the case of a subsequent purchaser, and was, therefore, not essential in the cause which was before the court, and is advanced only by counsel in argument, yet it shows that the opinion that a voluntary conveyance was not absolutely void as to subsequent creditors, prevailed extensively.
In the case of Taylor v. Jones, 2 Atk. 600, a bill was brought by creditors to be paid their debts out of stock vested by the husband, in trustees, for the benefit of himself for life, of his wife for
Sexton v. Wheaton. 8 W.
[ * 244 ] life, and afterwards, for the benefit of children. * Lord
Hardwicke decreed the deed of trust to be void against subsequent as well as preceding creditors.
There are circumstances in this case which appear to have influ. enced the chancellor, and to diminish its bearing, on the naked question of a voluntary deed being absolutely void, merely because it is voluntary.
Lord Hardwicke said, “now, in the present case, here is a trust left to the husband in the first place, under this deed ; and his continuing in possession is fraudulent as to the creditors, the plain. tiffs."
His lordship, afterwards, says: “ And it is very probable that the creditors, after the settlement, trusted Edward Jones, the debtor, upon the supposition that he was the owner of this stock, upon see. ing him in possession."
This case, undoubtedly, if standing alone, would go far in show. ing the opinion of Lord Hardwicke to have been that a voluntary conveyance would be void against subsequent as well as preceding creditors; but the circumstances that the settler was indebted at the time, and remained in possession of the property as its apparent owner, were certainly material; and, although they do not appear to have decided the cause, leave some doubt how far this opinion should apply to cases not attended by those circumstances.
This doubt is strengthened by observing Lord Hardwicke's lan. guage in the case of Russell v. Hammond. His lordship said:
though he had hardly known one case, where the person (* 245 ] conveying was indebted at the time of the * conveyance,
that the conveyance had not been fraudulent, yet that, to be sure, there were cases of voluntary settlements that were not fraudulent, and those were where the persons making them were not indebted at the time, in which case subsequent debts would not shake such settlements.”
It would seem from the opinion expressed in this case, that Tay. lor v. Jones ? must have been decided on its circumstances.
The cases of Stileman v. Ashdown, and of Fitzer v. Fitzer and Stephens, reported in 2 Atk. 477 and 511, have been much relied on by the appellant; but neither is thought to establish the principle for which he contends. In Stileman v. Ashdown, the father had purchased an estate, which was conveyed jointly to himself and his son, and of which he remained in possession. After the death of the father, the son entered on the estate, and the bill was brought to sub
11 Atk. 13.
2 2 Atk. 600.
ject it to the payment of a judgment against the father, in his lifetime. The chancellor directed the estate to be sold, and one moiety to be paid to the creditor, and the residue to the son.
In giving his opinion, the chancellor put the case expressly on the ground that this, from its circumstances, was not to be considered as an advancement to the son. He says, too: “A father, here, was in possession of the whole estate, and must, necessarily, appear to be the visible owner of it; and the creditor, too, would have had a right, by virtue of an elegit, to have laid hold of a moiety, so that it differs extremely from all the other cases."
* In the same case, the chancellor lays down the rule [ * 246 ] which he supposed to govern in the case of voluntary settlements. “ It is not necessary," he says, “that a man should be actually indebted at the time of a voluntary settlement to make it fraudulent; for, if a man does it with a view to his being indebted at a future time, it is equally fraudulent, and ought to be set aside."
The real principle, then, of this case is, that a voluntary conveyance to a wife or child, made by a person not indebted at the time, is valid, unless it were made with a view to being indebted at a future time.
In the case of Fitzer v. Fitzer and Stephens, the deed was set aside, because it was made for the benefit of the husband, and the principal point discussed was the consideration. The lord chancellor said: “ It is certain, that every conveyance of the husband that is voluntary, and for his own benefit, is fraudulent against creditors.” After stating the operation of the deed, he added : " Then consider it as an assignment which the husband himself may make use of to fence against creditors, and, consequently, it is fraudulent."
This case, then, does not decide that a conveyance to a wife or child, is fraudulent against subsequent creditors because it is voluntary, but because it is made for the benefit of the settler, or with a view to the contracting of future debts.
The case of Peacock v. Monk, in 1 Vesey, 127, turned on two points. The first was that there was a proviso to the deed which amounted to a power of revocation, which, the chancellor said, * had always been considered as a mark of fraud; and, [ * 247 ] 2. That, being executed on the same day with his will, it was to be considered as a testamentary act.
In the case of Walker v. Burrows, 1 Atk. 93, Lord Hardwicke, adverting to the statute 13 Elizabeth, said that it was necessary to prove that the person conveying was indebted at the time of making
Sexton v. Wheaton. 8 W. the settlement, or immediately afterwards, in order to avoid the deed.
Lord Hardwicke maintained the same opinion in the case of Townshend v. Windham, reported in 2 Vesey, 1. In that case, he said: “If there is a voluntary conveyance of real estate or chattel interest, by one not indebted at the time, though he afterwards become indebted, if that voluntary conveyance was for a child, and no partieular evidence or badge of fraud to deceive or defraud subsequent creditors, that will be good; but if any mark of fraud, collusion, or intent to deceive subsequent creditors, appears, that will make it void; otherwise not, but it will stand, though afterwards he becomes indebted.”
A review of all the decisions of Lord Hardwicke, will show his opinion to have been, that a voluntary conveyance to a child by a man not indebted at the time, if a real and bonâ fide conveyance, not made with a fraudulent intent, is good against subsequent creditors.
The decisions made since the time of Lord Hardwicke maintain the same principle.
In Stephens v. Olive, 2 Bro. Ch. Rep. 90, Edward Olive, ( * 248 ] by deed, dated the 7th of May, *1774, settled his real estate
on himself for life, remainder to his wife for life, with remainders over for the benefit of his children. By another deed, of the same date, he mortgaged the same estate to Philip Mighil, to secure the repayment of 500 pounds, with interest. On the 6th of March, 1775, he became indebted to George Stephens. This suit was brought by the executors of George Stephens to set aside the conveyance, because it was voluntary and fraudulent as to creditors. The master of the rolls held “that a settlement after marriage, in favor of the wife and children, by a person not indebted at the time, was good against subsequent creditors ; " " and that, although the settler was indebted, yet, if the debt was secured by mortgage, the settlement was good.”
In the case of Lush v. Wilkinson, the husband conveyed lease hold estate in trust, to pay, after his decease, an annuity to his wife for life, and after her decease, the premises charged with the annuity for himself and his executors. A bill was brought by subsequent creditors to set aside this conveyance. The master of the rolls sustained the conveyance, and, after expressing his doubts of the right of the plaintiff to come into court without proving some antecedent debt, said, “a single debt will not do. Every man must be indebted
15 Ves. 384.