Lucas County Circuit.

Authorities are presented on behalf of the plaintiff that go to the full extent of sustaining this position. But authorities on this question are not uniform, are not an unbroken line, and we think that the authorities which are opposed to this position are weightier and are supported by better reasoning. One of the cases cited in support of the contention that the consideration may be inquired into, notwithstanding a nominal consideration is mentioned, is Steele v. Worthington, 2 Ohio 182, which seems to fully sustain that point; and on this point, though they do not all bear directly upon it, are cited Conklin v. Hancock, 67 Ohio St. 455 [66 N. E. 518]; Groves v. Groves, 65 Ohio St. 442 [62 N. E. 1044]; Vail v. McMillan, 17 Ohio St. 617; Harvey v. Alexander, 1 Rand. (Va.) 219 [10 Am. Dec. 519]; Jones, Real Property, 298, 301, 302; Waite, Fraudulent Conveyances, Secs. 220 and 221; Hetrick v. Gregg, 10 Dec. 462 (8 N. P. 24, 26); Campbell Printing Press & Mfg. Co. v. Bellman Bros., 5 Circ. Dec. 389 (11 R. 360); Paulding v. Chrome Steel Co., 94 N. C. 334; Burdick v. Johnson, 7 Hun. (N. Y.) 488; Sawyer v. Turpin, 91 U. S. 114 [23 L. Ed. 235]. But we think the law is correctly laid down in Steele v. Worthington, supra, and in the case of Harvey v. Alexander, supra. I read from the syllabus:

"Where the consideration expressed in a deed is 'love and affection,' and 'one dollar,' parol proof of other valuable consideration, is admissible."

It was said by the court in delivering the opinion:

"The counsel for the appellant, considering this deed as voluntary on the face of it, contended that proof of valuable consideration was inadmissible, as being inconsistent with the deed. But the court is of the opinion that the question whether evidence inconsistent with the deed can be admitted does not arise in this cause. This is not the case of a deed purporting to be for good consideration only. It is in express terms, for valuable as well as for good consideration. It is true that the valuable consideration expressed is only one dollar. But one dollar, viewed as a consideration, is as much a valuable consideration as a million of dollars. The real question is whether a deed purporting to be for 'love and affection,' and for 'one dollar,' and assailed as being fraudulent as to creditors, can be supported by evidence showing that in addition to the one dollar expressed, full value was received by the grantor. This question may be

Cole v. Merchants Nat. Bank.

simplified by supposing the deed to have been between the same parties, and for the same purposes, and that the only consideration expressed in the deed was the sum of one dollar, paid by the grantee. It could hardly be doubted that the evidence would be admissible in that case. Indeed, the principle of the objection made by counsel for the appellant, that the evidence would be inconsistent with the deed, does not apply to such a case. It is believed to have been the practice at an earlier period, both in England and in this country, for deeds not to express the actual sum, but a nominal one only, and yet the court had not seen a single case in which it has been held incompetent for the party claiming under the deed to aver and prove the sum really given.'

I think counsel for plaintiff did cite one common pleas decision in this state where that very thing was held. Now it does not seem to us to be reasonable that parties dealing in good faith and innocently with respect to property, and feeling that nobody else in the world is interested in the transaction but themselves, and that therefore they may if they please name any consideration, and that it will not concern or affect anybody else if it afterwards develops that the grantor has creditors, those creditors, without regard to the good faith of the transaction, and what the consideration actually was, may successfully insist upon the nominal consideration of one dollar being regarded conclusively as the only consideration upon which the conveyance was made. These technical rules and presumptions must be founded upon reason, upon what is supposed to be the general and uniform, or nearly uniform, practices of men. In certain of the cases cited, where the character of the estate is fixed by the character of the consideration named, so as to fix the direction of the descent, so as to determine upon whom the property shall devolve in the event of the death of the grantee, intestate, it is perfectly reasonable to hold that the consideration named in the deed, whether a valuable or a good consideration, shall not be open to contradiction upon the part of mere volunteers; that is to say those upon whom the estate is cast, or upon whom it might have been cast had a different consideration been named. It is reasonable to hold that the grantee and grantor intended to determine the course of descent, whether it should be regarded as ancestral or non-ancestral property, and

Lucas County Circuit.

they had a right to determine this, and those taking under the deed as mere volunteers might be with justice conclusively estopped from inquiring into the real consideration. That seems to be the ground of this rule. But in case of a deed charged to be fraudulent because voluntary, and where it is urged that the character of the deed as between the parties thereto is irrevocably fixed by the recital of a nominal consideration, and where an attempt is made to show that the deed was not in fact voluntarily, but was supported by a substantial, valuable consideration, and further, that the grantor had no knowledge of other creditors, should it be said that a conclusive presumption arises, that the parties intended that this deed should be fixed in its character as a voluntary conveyance, even though not in fact voluntary, thereby permitting other creditors to seize the property?

The rule in the case first given is based upon the supposed intention of the parties to the deed-I mean a case where the character of the estate is fixed by the deed for the purpose of devolution. Could it be fairly said that such intention to defeat the very purpose of the deed in cases like that at bar is so general and uniform that a conclusive legal presumption to that effect, to be enforced in all cases, should arise thereon? We think not. So that, with this question out of the way, the case stands substantially as it stood in the Federal court-on the evidence.

The evidence discloses that this deed was at the time it was made, as between the parties, in effect a mortgage. It was not recorded as a mortgage. It is contended that, it being in effect a mortgage, and not recorded as such within three days, as required by the statute, the preference sought to be given must be disregarded or set aside. But is was, in form, a deed, and took effect as a deed, and therefore we think it was proper, so far as the record of the paper was concerned, either under the recording acts or under Sec. 6343, to file it and have it recorded as a deed, and that this is so without respect to the question of its effect because of other agreements, aliunde the deed, making it a mortgage. We think this view is sustained by the case of Kemper v. Campbell, 44 Ohio St. 210 [6 N. E. 566]. There has

Cole v. Merchants Nat. Bank.

been no change in the statutes since this decision which would change that result.

It is also urged that this conveyance is to be treated as preferential within the meaning of the statute to the extent of the old debt owing by Mrs. Cole to Mr. Newton at the time this conveyance was made. It appears that there was then a mortgage resting upon the property in favor of the bank for $23,000; that she was indebted to Mr. Newton in the sum of $30,000 (there is some little question about the amount that she was in fact indebted to him at that time, but we will assume that it was $30,000 and that the new loan was $25,000) that if this transaction may be supported as a new loan it may not be supported as to the old indebtedness of $30,000. Counsel for plaintiff, in his brief make a very ingenious analysis of this statute, as it now stands-Sec. 6343-and undertakes to show that, if correctly construed, there can be no such thing as a valid preferential mortgage, i. e. based on a past consideration. But we think that he is wrong in his reasoning, and that he is led into error by giving too much weight and consideration to the proviso respecting mortgages and too little to the provision with respect to what shall render a conveyance invalid. We understand that the law is now, what it has been for a long time, in Ohio, that a valid preferential mortgage or deed may be made by the insolvent, provided he does not make the grantee or mortgagee a trustee for other creditors, and provided the grantee is in ignorance of the insolvency and purpose to prefer, or provided the consideration is not so grossly inadequate in case of a deed as to justify a court of equity in regarding the conveyance as in a measure voluntary. All such conveyances and mortgages are valid. Also we believe that even with knowledge of the insolvency of the mortgagor, the mortgagee may take a mortgage to secure loans made on the faith of the promise of such mortgagor given when the debtor was insolvent, thus to secure the debt. And that principle applies to the situation of Mr. Newton with respect to the $30,000.

This credit seems to have been given with the understanding that he should have this conveyance whenever he deemed it necessary for his security. This principle is recognized by this

Lucas County Circuit.

court in the case of Campbell Printing Press & Mfg. Co. v. Bellman, 5 Circ. Dec. 389 (11 R. 360), which we regard as still applicable to cases of like character arising under the present statute -that is to say, there has been no change in the statute that would make this authority inapplicable or obsolete.

It is our judgment that this conveyance should stand; that it is not vulnerable to the attack that has been made upon it. Whether it should stand as a deed or as a mortgage, whether the other creditors may have any right in any other action to insist upon its being regarded as a mortgage, rather than a deed, whether anything can be worked out for them upon that theory, or proceeding in that way, is a question not before us for consideration, and upon that we express no opinion. The petition will be dismissed at the costs of the plaintiff.

Haynes and Wildman, JJ., concur.

CHARGE TO JURY-ERROR.

[Hamilton (1st) Circuit Court, December 14, 1912.]

Jones, Smith and Swing, JJ.

ROBERT CHAMBERS V. DR. S. J. D. MEADE.

Instruction to Jury to Disregard Evidence at Choice Erroneous. It is error to charge a jury that they have the "right to disregard any evidence that you choose and consider that only which appeals to your sense of justice and fairness."

ERROR.

Ernst, Cassatt & Cottle, for plaintiff in error.

Millard Tyree, for defendant in error.

The plaintiff below sued for $500 for professional services,

and was given a verdict in full, with interest.