Doe on dem. O'Daniel v. Crawford, 15 N.C. 197, 4 Dev. 197 (1833)

Dec. 1833 · Supreme Court of North Carolina

15 N.C. 197, 4 Dev. 197

Doe on dem. of John O’Daniel v. John Crawford.

Indebtedness at the time of making a voluntary conveyance of part only of the grantor’s property is, in respect to subsequent creditors seeking satis faction of the property conveyed, only evidence of fraud, the consideration of which belongs to the jury; but inrespect to prior creditors whose debts can be otherwise satisfied, it constitutes fraud in law, to be declared by the court.

A voluntary conveyance will never be upheld to defeat a prior creditor, whatever be the amount of his demand; although the grantor reserve property amply sufficient to satisfy the debt, and the necessity of resorting to that conveyed, arise from the wasting of that reserved, many years after the conveyance.

Nor is there any exception from these principles in favor of dispositions made by parents in advancement of children; the principle is universal in its application, that the voluntary conveyance yields to the prior debt so far as is necessary to its satisfaction.

The functions of the court and jury in questions of fraud considered and distinguished, and the cases of Morgan v. McClelland, (ante 3 vol.p. 83,) Mordecai v. Parker, (Ib.p. 437,) and the cases in which this court held the retaining of possession by a vendor, but evidence to be left to the jury, and not a fact per se, establishing fraud in law, referred to and affirmed.

Ejectment tried in Orange Superior Court, at Autumn Term 1832, before Martin, Judge.

Both parties claimed title to the premises in dispute, under one Henry O’Daniel, and on the trial, the plaintiff produced a deed made the 11th of April 1809, by which Henry O’Daniel, in consideration of love and affection, and of five shillings recited to have been paid, granted, bargain and sold the premises to several of his children, (of whom the lessor of the plaintiff was one,) in the usual form as far as the habendum, which was in these words: “ to “ have and hold thesaid land with the appurtenances, unto “ him,the said Henry O’ Daniel, his heirs and assigns forev-1 ‘ er, to the only proper use, benefit and behoof of them, “ the said John. &e, (naming the grantees) their heirs “and assignees, from” — then followed-a covenant of general warranty, after which was this clause, — “with “making this reserve, that is to say, the land is to re- “ main mine till ray death, and if I should many, bo “ her who she may, I leave her my small house, that “stands over the cellar, with an a ere lot of ground, with “ the privilege of water and wood to support it, and “ firewood for her, and the fifth part of the orchard “ during her life or widowhood, and at her death or “ marriage, the whole is to return to my son.”

■ The defendant showed sundry judgments and executions against Henry O’Daniel, a levy by the sheriff, a sale at which the defendant became the purchaser,’ and a deed from the sheriff. One of these judgments was rendered in 1822, for the sum of three dollars principal, and twelve dollars interest, being the balance due upon a bond executed by-Ilcnry O’Daniel in May 1808, for £ 12 10. This was the only debt shown to have been due before the execution of the conveyance under which the plaintiff claimed; the other judgments being founded upon debts contracted in 1822.

To encounter the defendant’s case, the plaintiff proved that previously to the execution of the conveyance, Henry O’Daniel had declared that he intended to convey the land to his children after his death, because they had assisted him in paying for it, and also proved that they by their labor, had contributed towards such payment.

The plaintiff also proved that at the time of the conveyance, and for several years thereafter, II O’Daniel was in possession of personal property of the value of $ 500, all of which however had been sold, consumed or wasted, before the sale by the sheriff.

The presiding Judge after remarking to the jury, that the question had beeii raised in argument, how far a person indebted was permitted to dispose of his property by voluntary conveyance — stated, that it was a general principle that a man should be just before he was permitted to be generous. If he was indebted, and voluntarily conveyed such a portion of his estate as left an insufficiency for the payment of his debts, that such conveyance was inoperative as to the debts which he then owed. If he was indebted and disposed of a part of his property by voluntary conveyances, leaving enough to satisfy the claims of his creditors, but by some casualty or accident the property reserved should be destroyed, when there bad not been any delay in the creditors in endeavoring to obtain their debts, and no improper indulgence given by them, that a voluntary conveyance under such circumstances would be invalid to defeat such debts.

The plaintiff’s counsel then moved the court to instruct the jury, that a voluntary conveyance was valid against creditors, unless the conveyor was insolvent at the time, or in failing circumstances, which instruction the Judge declined to give, but did instruct the jury that where a debtor making a voluntary conveyance of part of his estate, reserved to himself sufficient property to pay his debts, such conveyance was effectual against those who were his creditors at the time of the conveyance. And that ivi the case before them, if the conveyance was bona fide, and the grantor reserved to himself at the time, property sufficient to pay his debts, his life estate reserved being liable therefor, then the deed under which the plaintiff claimed, was effectual to pass the remainder in the premises, notwithstanding the small debt proven to JUa"” bee,, due at the time.

Under these instructions the jury found for the de- ■ fendant, and judgment being”rendered upon the verdict, the plaintiff appealed to this court, where the cause ivas twice argued, once at June term last and once during the present term by Winston for the plaintiff Nash, contra„

The court being divided in opinion, the Judges delivered their judgments seriatim, as follows :

Gaston, Judge.

This was an action of ejectment, and upon the trial the plaintiff endeavored to shew a title in his lessor by a deed from I-lenry O’Daniel to his children, and the defendant sot up a title under a sale and conveyance from the sheriff upon executions issued against Henry 'O’Daniel subsequent to the delivery of this deed. The controversy turned mainly upon the question whether O’Daniel’s deed was fraudulent and void as against the creditors in these executions. The jury found a verdict for the defendant, and judgment having been rendered accordingly, the plaintiff appealed to this court.

We have not the right to decide, nor the means of knowing whether the verdict of the jury was correct or incorrect. The facts testified are brought before us so far only as to enable us to see the application of the charge of the Judge, and to ascertain whether’ in the instructions given, or in the instructions refused, any error has been committed which might have led the jury toan improper conclusion. The appellant excepts to a part of the charge as erroneous in law, and also complains that the Judge refused to give certain instructions which were prayed for by him, and which in law' ought to have been given.

The part of the charge excepted to is in these wordsr “ that the question had been raised in the argument how “far a person indebted, was permitted to dispose of his “property by a voluntary conveyance — that it was a “ general principle that a man should be just before he “ was generous. If he was indebted and voluntarily “conveyed such a portion of his estate as left an insuf- “ ficiency for the payment of his debts, that such convey- “ was inoperative as to the debts which he then owed. “ If he was indebted and disposed of a part of his property by voluntary conveyances, leaving enough to “satisfy the claims of his creditors, hut by some casn- “ alty or accident the property reserved should bo destroyed, when there had not been any delay in the creditors endeavoring to obtain their debts, and no improper indulgence given by them, that a voluntary “conveyance under such circumstances would be inval- ‘‘ id to defeat such debts.” In a subsequent part of the charge after declining to give the instructions asked for by the plaintiff, the Judge laid down the above rule in a form more favorable to the voluntary donee. I do not however deem it necessary to examine the effect of fliis subsequent modification, because upon deliberate reflection, I am satisfied that the plaintiff lias no cause of complaint against the part of the charge excepted to, and that no rule more favorable to voluntary conveyances than the rule there stated can be tolerated, without violence to morality, public policy anti long established law.

That the obligations of justice arc superior to the daims of affection, and that no man can rightfully bestow a favor at the expense of his creditor, is not questioned in the ingenious and able argument which has been urged on the part of the appellant. But it is asked may not these obligations and claims be reconciled — may not justice and generosity be both consulted — and is not this harmonious discharge of both classes of duty provided for, when the donor takes care, while giving away a part of his property, to reserve what will probably be sufficient to answer the demands of his creditors ? To the morality of such an arrangement, it seems to me there are obvious and unanswerable objections. It does not provide for the discharge of duties of different grades in their relative order. It does not even place the demands of right on a footing with the claims for bounty, but inverts the order for moral preference. It secures the latter — confessedly of inferior and imperfect obligation— beyond the correction of mistake and the reach of casualty, while it exposes the former — those of superior and. perfect obligation — to all the dangers arising from error of judgment and the contingencies of time an$ xnisphance. jf} contrary to probability, enough has not in fact been reserved for the creditor, and either he must lose the debt Qr .¡.¡1C ¿onco pc disappointed of the gift, can it be a question of morals on whom the loss should fall ? In the estimate of conscience no man owns more than what remains after the satisfaction of the just dues to others, and every donation which he makes is of the property of his creditor if by such g’ift they arc defeated. The duty of the debtor is to pay his creditor if ho have the ability to do so. The donee ought not to hold, and honestly cannot hold tiie property given, if it be needed for the payment of a creditor of the donor prior to the gift. Public policy is in this respect, as it always ought to be, consistent with the injunctions of morality and will not admit of the adoption of a rule less strict or precise. That credit which is indispensable for the commerce of life, can Scarcely be commanded in any country, where a debtor has the power to jeopard an existing debt by the gratuitous alienation of his effects. It would be strange if the common law, which has been termed the perfection of reason, had not recognized these dictates of justice and maxims of policy. In the progress of society, when with the refinements of life the artifices of deceit had greatly multiplied, it might well have been deemed expedient by the Legislative authority to interfere with positive enactments, the more explicitly to denounce, and the more effectually to embarrass and defeat contrivances at unfair alienation, which threatened injury to creditors and purchasers. The well known statutes of the 13th Elizabeth, almost expressly re-enacted by our act of 1715, and of the 27th of Elizabeth, were enacted for this end. But Lord Coke calls on the student to notice with respect to the first of these statutes, that it uses the words “declared,ordained and enacted,” and remarks “by force “ of which word declared it appeareth what the law was “before the making of the statute.” Co. Lit. 76 a. 290 b. Lord Mansfield observes in the case of Codogan v. Kennett, Cowper 434, “that the principles and rules of the “ common law as now universally known and under- “ stood, are so strong against fraud in every shape that ;s the common laiv was calculated to attain every end “proposed by these statutes.” Whether the observation of this great judge be’ correct or notin its full extent, particularly in reference to the statute of 27th Elizabeth, there can be little doubt, and so it lias been declared by this court in the case of Morgan v. McClelland, (3 Dev. 83.) to be perfectly correct with respect to alienations attempted against existing rights. Certainly ever since the statute of the 7 3th Elizabeth either upon common law principles or by construction of that statute, a voluntary disposition of property has always been held void against a prior creditor thereby attempted to be defeated.

Distinction as to equitable relief between cases of actual fraud, and fraud presumed only from the conveyance being voluntary: in the former equity relieves ; in the latter the creditor is-left to his leg4 re»edy.

But it has been here insisted, and the Judge below was required by the plaintiff soto instruct the jury, that this doctrine was subject to a very important modification overlooked and disregarded indeed in many decisions and elementary treatises, but unequivocally declared in certain late adjudications of English Chancellors. It is said that these adjudications clearly recognize the principle, that a gift to a child or any other disposition founded on a consideration of blood or affection may be permitted to disappoint a prior creditor, if at the lime of the gift the donor or settler was not insolvent or largely indebted. In my judgment no such principle is asserted or implied in any of these adjudications. Before we enter upon the examination of these cases, it may not be amiss, to state that although a Court of Equity generally claims and exercises jurisdiction in matters of fraud, it is not every case of a conveyance which is fraudulent as against creditors or purchasers, which is a fit subject for the relief of that court. According to the distinction taken by Lord Ilardwicke, in Burnett v. Musgrove, (2 Vesey 57,) where a voluntary conveyance is made without actual fraud, a Court of Equity will say to him who complains of it, take your remedy at law ; but whenever the conveyance is attended with actual fraud, though the possession may be recovered by ejectment, a Court of Equity will entertain a bill to set aside a conveyance— which is, as he expresses it, “ a distinction between ac- “ tual fraud and fraud presumed- only from the conveyance being voluntary.” The case of Nash v. Wilkinson and the others relied upon by the appellant’s comiser were on bills brought by subsequent creditors to have c0nvcyances set aside as fraudulent, and the property applied to the satisfaction of the debts of the settler or donor. In such bills the complainants usually charge that the person making the conveyance was indebted at the time of the voluntary conveyance, and must allege that the conveyance was made with intent to defeat, hinder or delay creditors. If they succeed in showing this fraudulent purpose, the settlement is avoided, the property becomes assets and all the creditors are permitted to come in upon this property for the satisfaction of their demands. The intent to hinder and delay a creditor is sufficient, and it is not necessary to show that such intent was prosecuted with success. If in truth there be prior creditors yet unsatisfied, and who have no means of satisfaction except out of the property attempted to be given away, and it is asked what is then the rule of a Court of Equity, in any case fit for the exercise of its jurisdiction, I answer in the language of Lord Hardwicke, (Townsend v. Windham, 2 Ves. 10.) “I knew of “ no case on the I3th Elizabeth where aman indebted at “the time makes a voluntary conveyance to a child “ and dies indebted, but that it shall be considered a “part of his estate for the benefit of his creditors.”— But if such prior ci*editors have been actually paid off, the complainants may neverthelsss insist that the conveyance was made with an actual intent to defeat them, or that it was made with an intent to defeat subsequent creditors or some of them. To establish or to repel either of these allegations, the degree of indebtedness of the settler, and his pecuniary ability, at the time of the conveyance, circumstances attending the transaction itself, and furnishing an indication of the motives which induced it, become very interesting matters of enquiry. Some of the chancellors will not draw an inference of fraudulent intent in such a case from an embarrassment short of what is tantamount to insolvency, while others, consider a large or a considerable indebtedness as fur- ’ nishi ng sufficient evidence of this in ten f. But it is believed that no adjudication of an English Chancellor, no dictum of a judge in an English Court of Equity, can be found, which warrants the idea that a voluntary conveyance to a child will be upheld to defeat a prior creditor whatever may be the amount of his demand.

The decisions in courts of Law, in relation to conveyances, alleged to be in fraud of creditors, are in precise conformity with those asserted in Equity. The law annuls not voluntary conveyances as such, but fraudulent conveyances. Conveyances are not necessarily fraudulent because they arc voluntary, nor are they necessarily fair because made on valuable consideration ; but a voluntary conveyance is necessarily and in law fraudulent when opposed to the claim of a prior credit- or. Where the creditors who allege an intent to defraud, arc subsequent to the gratuitous alienation, there the language of Lord Mansfield is pertinent and applicable. “ A voluntary conveyance may be good against credit- “ ors notwithstanding its being voluntary. The cir- “ cumstance of a man being indebted at the time, is an “ argument of fraud, but the question is whether the act “ done, is a bonafde transaction, or a trick and contri- “ vanee to defeat creditors.” (Cowper, 434.) But where the controversy is between a prior creditor and a voluntary donee, where such prior creditor must lose his debt if the gift be held valid, there the language of the Judges in the case of Nunn & Ludsbrooke v. Wilsmore, in (8 Term, 521,) proclaims the established rule, ** if the deed be voluntary, the law says it is fraudulent.” A gift as against such a creditor seems to me as fraudulent and void at common law, as an alienation for value after the teste of an execution against a judgment creditor. The tribunal which ascertains facts, is not needed to pass on the question of actual intent in the one case more than in the other. The fact itself, that the creditor is thereby hindered in the language of this court, in the case of Mordecai v. Parker, (ante 2 vol. p. 427,) “ establishes the intent and nothing can be heard against it.” A proper construction of the statute brings mo to the same result. Every gift of a part of a debt- or’s property by lessening the fund on which his then existing creditors rely for payment, has a necessary tendency to hinder and delay them in the collection of their just dues and demands. The law regards every act of a rational being as done with intent to accomplish an effect which it has a tendency to produce, when that effect is actually produced by it. A gift therefore of a debtor’s property, set up to defeat a creditor in the collection of his demand, comes within the enacting words of the statute, and although it may not have been for a positively dishonest purpose, it cannot be brought within the proviso, for that protects such only as are made bona fide and for a consideration of value.

The rule thus asserted seems to be regarded, on the part of the appellant as harsh and unfeeling. If however it be the rule of law, it must, however rigorous, be inflexibly maintained. But in truth, is it as a general rule, rigorous? And if so, against whom? It establishes no more than that he who would give away property, and he who would hold what is attempted to be given, wdien the transaction endangers existing rights, must at their peril take care to secure these rights from injury. If the alienation permitted to stand will defeat such rights, an honest donor cannot complain that the Jaw will not permit such a result, but deny efficacy to his heedless act. Has the donee a right to complain? If the debt were large, it seems to be admitted that the rule would operate no injustice; and if it be small, can it be any great hardship on him who has received a bounty to relieve the property from the trifling incumbrance w'ith which it was burthened? Thus may justice and liberality be properly reconciled, and the claims of affection i’e-ceive regard without violence to rights of higher obligation.

It has not been denied by the counsel for the appellant, if a voluntary settlement is necessarily fraudulent as against a prior creditor,the judge was right in laying down this position as a principle of law. It may not be amiss however to state that where certain acts are regarded only as badges of fraud, the conclusion becomes tlien a question of actual intent which cannot be pass. ed upon except through the intervention of the jury. So this court has ultimately decided on the much vexed controversy, whether a possession of the vendor or donor} inconsistent with the terms of the conveyance, be a fraud in law, or only evidence of a fraudulent design. There is no disposition to arraign or to question that determination. The right of the jury to pass on every question of fact, has been and ever will be guarded in this court with jealous care. But the law which arises upon facts the institutions of our country have wisely confided to ano. ther tribunal, and this courtis bound by the most sacred obligations to take care that the duty of administering that lawshall be exercised by theappropriatetribunal. There is no other mode by which we can rationally hope to preserve the law of the land, what it ought to be, a permanent, uniform and universal rule of' action. Any error of this tribunal may be deliberately and solemnly reviewed and corrected, and thus in a great degree, and to most practical purposes, may be stayed those fluctuations from which no human establishments can be absolutely exempt. If by a series of decisions in this country, and in that of our ancestors, for more than two centuries, it has been invariably held, as I fully believe it lias, that a debtor shall not be permitted to defeat an existing creditor by a gratuitous disposition of his effects, then surely this doctrine has become a rule of property which must govern all such dispositions, and is part of the established law of the land. Every alienation after the teste of an execution endangers the rights of a judgment creditor, and therefore by the common law, was regarded and is still regarded with us as unavailing against such rights. Every gratuitous alienation endangers the rights of existing creditors, and therefore shall not impede the assertion of these rights^ The law will not permit such alienations to postpone those whom it orders to be preferred. The attempt to oppose these acts to those 'rights, the law prohibits as a fraud, and it W'ould be faithless to itself, if it did not enforqe tills prohibition by denying all efficacy to the forbidden act.

I am of opinion that the plaintiff has not sustained his exceptions to the charge of the judge, and that the judgment appealed from ought to be affirmed.

Sí/fimn, Chief-Justice

As I concur in the opinion delivered by my brother Gaston, I should be satisfied with merely saying that, were the question one of less consequence than it is. But upon a subject of such universal interest, involving the rights and security of creditors, I think it useful that the opinions of all the Judges should be fully known ; and therefore that it is proper for me to say, that I entirely concur both in his reasons and in the conclusions to which they hare led him.

I wish, also to state, that for the judgment the court is now giving we hare the authority of the clear opinion of Chief-Justice Henderson; who heard the arguments of this case at the last term and expressed himself strongly (that no construction could bo put on the statute but one Which absolutely avoids, as against prior creditors, conveyances not founded on a valuable consideration, without rendering the rights of creditors precarious — a danger which it is the sole object of the statute to obviate.

■ I will add a few observations upon the arguments at the bar for the plaintiff. It was admitted that if a donor be insolvent or in embarrassed circumstances, bis ¿¡ft is void and must be so pronounced by the court; upon the ground, that the circumstances attending the transaction itself, incontcstibly prove the intent. But it is said that no intent to defraud can be, or rather is necessarily to be collected, when the donor is not embarrassed and ids insolvency takes place long after the gift, because that circumstance occurring subsequently might never have happened and was not foreseen nor contemplated by the parties, and therefore is not evidence that the covinous purpose existed at time of the conveyance, and it is to the Intent then and then only we are to look.

I agree that the fraudulent intent must move the par-fies to make the conveyance or exist in their minds at the time of its creation. But I cannot assent to the conclusion, that such an intent did not exist or may not-have existed, if the donor reserved property more than adequate to pay all the debts he then owed. On the contrary, it seems to me that what I consider the fraudulent intent is exhibited equally in both cases. What is a fraudulent intent, as described in the statute and by what acts is it to be manifested ? It is, to make a conveyance which may delay or hinder a creditor and to delay or-hindcr him. Now this is the necessary effect of every conveyance of a debtor’s property, and therefore, necessarily, the intent is that it should have that effect. The end in view must be to make the thing conveyed cease to be the property of him who conveys and become the property of him to whom it is conveyed, consequently to withdraw it from the creditor. There cannot be a conveyance, oven one for value, into which this intent does not enter. Hence the statute after enacting that all conveyances made with such intent shall be void, by the proviso, excepts from the peration of that enactment conveyances made bona fide and upon good, that is, valuable consideration. In such case the price is substituted for the thing conveyed; and the intent to withdraw the particular property although actually existing is not prima facie injurious to the creditor. But if there he mala fules that is, the further and distinct intention that the price, though an adequate one, shall not efficiently, for the purposes of the creditor, be a substitute for the property, but shall be so disposed of as to be beyond his reach then a conveyance for value is also avoided by the first broad words of the statute, and is not saved by falling within the proviso. Such must be the case with every conveyance not made upon valuable consideration. It must be founded, upon a design to exempt the estate from, the claim of the creditor, for the act of making the con* veyance can arise from no other intent, and inasmuch as no other fund replaces the property so intended to be exempted, that intent is injurious to the unsatisfied credit- or and amounts to covin within the statute. To set up the deed against the creditor, if it be effectual, hinders and defeats him. To make title under it in the donee arid to set it up against all the world was the very purpose of the deed. Wo cannot say that the parties intended to make the deed more than that it should he used in that way. Then if it was intended to constitute title in the donee and that title would defeat the creditor, the intention of making the deed must be to defeat him, which intention can be negatived only by the donee’s paying the debt. I grant that there is a difference between conveyances by insolvent and solvent donors ; but it does not consist in any difference of the intention of the parties as to the use to be made of the deed as a hindrance to the creditor. It consists only in the time when that use will be made of it. In both cases the purpose is to allege it against the creditor, though he thereby lose his debt, which is the fraudulent intent. In the former it is in contemplation to make that use of it immediately and absolutely to defeat the creditor, and this consequenc follows so directly that it is taken to he the sole object of the conveyance. Hence that was the intent of it. In the latter case, it is obvious that such.was not the sole purpose, because the debtor has other means of paying. But it is a purpose of it. The intention is to set up the deed against the creditor, whatever loss it may produce to him. It is'not supposed, it is true, that it will he immediately injurious to the creditor; for if lie receive his debt from the donor or raise it out of his other property, which the parties expect, it will not prove injurious. But .should that turn out otherwise, do not the parties mean that the donee shall, nevertheless, then insist on his deed and oppose it to the creditor ? And is not that necessarily the intention at the making of the deed and on which it was made ? It results in this: that the parties do not contemplate a use of the deed, which will presently work a loss to the creditor, but only such a one as will, in certain events have that operation. The intent of the deed is certain; the injurious effect contingent_ Tüe solvency or insolvency of the donor is not therefore the test of the intention; whether it be to hinder the creditors or not. It is only evidence of the expectations of the parlies as to the period when they would be under the necessity of giving that effect, practically to the deed. An express intent, different from that I have described cannot be required ; for that would be to make agift by an insolvent valid, if the donee was ignorant of the donor’s debts.

It will be observed, that I consider in reference to an existing debt, the intent to be inseparable from the act; and therefore I conceive the law so pronounces it through the court. For it is not clearer that the parties intended that the conveyance should pass the property to the donee, than that it should bar the right of the creditor to satisfaction out of that property, which is an intention that lie should be barred altogether, should it so happen that the debtor has not or shall not have other property, and such an intention in reference to either of those states of facts satisfies the statute.

As to subsequent creditors I cannot express myself more to my own satisfaction than Judge Gastos has already done.

DaNIeu, Judge

The defendant in this case resists the granting a new trial on two grounds. First, because the paper under which the lessor of the plaintiff sets up title to the land, is not a deed, but a testamentary writing, and should have been proven, as wills which pass real estate arc required by law to be proven. Secondly, that if the court should consider it a deeed; it was fraudulent as to the persons who were creditor’s of Henry O’Daniel at the time of its execution, and being declared fraudulent as to them, the law will make it fraudulent and void, as to subsequent creditors, and those who claim under them. I do not think the paper can be considered testamentary. I admit the form of the instrument is an immaterial circumstance, if the court can.collect from the writing that the maker intended it should be testamentary. (1 Phil. Rep. 1.) But I am unable to discover such an intention in the maker of the instrument. The maker has reserved to himself a life-estatc in tbc land — a circumstance which strongly rC-pels any thing like an intention to make the instrument operate as a will. No executor is appointed, there is in ft a consideration mentioned, and the maker in person acknowledged the instrument in open court to be his deed. I am of the opinion that the instrument is not a will, but a deed: a covenant to stand seised, which will pass the land to the remainder men, under and by the statute of uses, if it is not a fraudulent transaction. „

The second, point to be discussed is, whether the deed was fraudulent as to the creditors of the grantor. H. O’Daniel had two creditors at the time the deed was by him executed, the sum due to one of them, was £12 10; the sum due to the other is not known.

Fraud is a compound question of law and fact — the judgment of law on facts and intents. If the conveyance v'as made with an intent, and for the purpose to delay, hinder or defraud debts and accounts, then the law declares the conveyance fraudulent and void, QAct of 1715, c. 38.) This act is nearly a copy of the Statute of the 13th Elizabeth. 'Whether a conveyance was made with the intent to hinder, delay or defraud creditors is a question of fact, and in a court of law is to be determined by the jury. If the jury find the intent of the maker to have been fraudulent, the deed then becomes void in law. It is not an irresistible inference or conclusion of law, that the indebtedness of .the donor or grantor, at the time of executing the conveyance, makes it fraudulent and void; no, hot even for the debts then in being; but it is only a badge or argument of fraud which may be repelled by other evidence. Let us en-quire how the law stands upon this subject as to creditors at the time of conveyance. First, in the courts of law where the jury find the fact of intent or purpose, and the court pronounces the law upon the fact so found by the jury. Secondly, in a court of equity, where the chancellor pronounces both upon the fact, and the law. I think it will be found that the decisions in both courts have been substantially the same. If there is any difference of opinion, it arises from the manner the cases have been reported. In Twyne’s case, (3 Coke’s. Rep. 80,) the court said, “when a man being greatly indebted to sundry persons, makes a gift to his son, or any of his blood, without consideration,” that would be fraudulent. Cadogan v. Kennet, (Cowp. 432.) Lord Mansfield says, that a man being indebted at the time of a voluntary conveyance, is an argument of fraud. In Doe v. Routledge, (Cowp. 711,) Lord Mansfield says again, “ one great circumstance which should always be attended to in these transactions is, whether the person was indebted at the time he made the settlement, if he was, it is a strong badge of fraud.” His Lordship does not pretend to say it is per se fraudulent. In the saíne case, page 708, he remarks that the statute does not say a voluntary settlement shall be void. To be sure it is very difficult against fair honest creditors to support a voluntary settlement. It is laid down in a case by Hale, that a voluntary settlement may be good. Iii Salmon v. Bennet, (1 Day 527,) the Supreme Court of Errors of Connecticut, declare the rulé, that mere indebtedness at the time will not in all cases render a voluntary conveyance void as to creditors. That an actual or express intent to defraud, need not be proven, for this would be impracticable in many instances, when the conveyance ought not to be established, and it may be collected from the circumstance of the case. In this case a voluntary conveyance to a child was held valid against existing creditors; the grantor having left at the time ample funds, unincumbered for the payment of his debts. But if the grantor be considerably indebted and embarrassed, or if the gift be unreasonably dispropor-tioned to his property, and leaving scanty provision for his debts, the conveyance would be void. In the courts of Equity where the Chancellor finds the facts and applies the law, it has nearly become an invariable rule to consider a man actually indebted and conveying voluntarily, always means to defraud existing creditors. — . Lord Hardxvicke expressed himself to that effect in the case in Townsend v. Windham, (2 Ves. 1.) The rule seoms to have been strictly followed until the case of Lush v. Wilkinson, (5 Ves. 384.) This was a fishing’ bill filed by a subsequent creditor against the executor an(j w[,iow 0f — Cawood, praying an account ,of the personal estate, debts, &c. and that the deed of settlement made by Cawood for the benefit of his wife, might be declared fraudulent and void, as against creditors being voluntary. The bill charged that the deed of Settlement was subsequent to the marriage, and that Cawood was then in insolvent circumstances, or was •then indebted to several persons. The widow by her answer, stated that the deed was openly and bona jide executed, She denied her husband was insolvent at the time of executing it, or at any other time; she stated, that beside two debts, (which the property included in the deed, sought to be set aside was mortgaged to pay,) that her husband did not owe above a hundred pounds, and that his personal property considerably exceeded what he owed. No evidence was produced by the plaintiff.— Lord Mvanly, master of the Rolls, said he had great doubt whether the plaintiff had a right to come- without proving any antecedent debt, (he then reflects and recollects the widow admitted in her answer, he owed debts to the amount of ¡8100.) He then says a single debt will not do. Every man must be indebted for the common bills of his house, though he pay them every week. It must depend upon this, whether he was iii insolvent circumstances at the timo. The bill was dismissed. In Montague v. Lord Sandwich, (12 Vesey, 136,) younger children brought the bill, and not creditors. Lord Roshjn declared that post nuptial settlements were void, as to those wdio were creditors prior to the date of the deed. He directed an enquiry whether the maker was indebted previously to the making the deed, and to what amount. In Kidney v. Cousmaker, (12 Vesey, 155,) the question arose whether a voluntary settlement after marriage, was fraudulent as to creditors. — . Sir William Grant, master of Rolls, said, “though there had been much controversy, and a variety of decisions upon the question whether such a settlement is fraudulent as to any creditors except such as were creditors at the time, I am disposed to follow the latest decision, that of Montague v. Lord ’Sandwich, which is that • the settlement is fraudulent only as against such creditors at the'time.” The master of the Rolls did not reflect that if the deed was fraudulent and void under the statute of 13 'Elizabeth, it necessarily must be so altogether ; for if a part be void by virtue of a statute, the rule is that the whole is void ; neither did he remark that the bill in the case that governed him, was not filed by creditors. In the case of Reade v. Livingston, (3 Johnson, C. Rep. 481,) the Chancellor of New-York has collected - and remarked on all the cases, both at law and in Equity, up to the time of that decision. He brought his mind to the conclusion that a voluntary conveyance made by a man indebted at the time, was in law, fraudulent as to those who were creditors at the time, but only presumptive evidence of an intent to defraud as to subsequent creditors. He says, that as to prior creditors, “the presumption of law ip this case, does not depend, upon the amount of the debts, or the extent of the property in settlement, or the circumstances of the party.” I think Chancellor Kent stands alone upon the aforesaid' doctrine. My opinion is the same as that given by the master of the Rolls, in the case of Richardson v. Smallwood, (1 Jacobs, 552.) He there says being indebted is only one circumstance from which evidence of the fraudulent intention may be drawn.

The question is whether the court is satisfied that the deed was within the purview of the statute, that it was made to hinder and delay his creditors by placing the property out of their reach ; if it was, then the deed is void by the statute. The master of the Rolls goes on then further to remark, “ and if it be once shown that it is a deed which as against any of the creditors cannot stand, then the property becomes assets and is applicable to the payment of debts generally; all the creditors come in at whatever times their debts may have arisen: that.” he says, “is decided.” Ibid 558. The foregoing decision was made in the year 1822, and is the last on the subject I have seen in the Chancery Reports* To make void a voluntary conveyance it must appear to have been executed for the purpose of defrauding creditors. Wrixon v. Cotter. (1 Chitty’s Digest 300, who quotes Ridgw. P. C. 295.) The principles contained in the case of Richardson v. Small,xvood, arc in accordance with these delivered by Lord Mansfield in Cadogan v. Kennett. These rules are approved of by Lord Manners in the case of Grogan v. Cooke. (2 Ball and B. 234.) This opinion will not run in conflict with that of Doe v. Manning, (9 East. 59.) — That was the case of a purchaser, and the decision was not under the statute of the 13th of Elia. but under the 27"th Etica. Even in that case Lord EUenborough said that nothing but the decisions that had been previously made governed him, for if it was res integra he probably would have come to very different conclusions. This opinion does not clash with McRee v. Houston, (2 Murph. 429,) for that was a decision upon our act of 1784, (Rev. c. 225.) I understand the Judge who tried the case now before us, to have charged the jury, that a voluntary deed which would be good against existing creditors, might become void as to the same creditors if the property reserved by the donor should happen to be destroyed by casualty or accident, when there had not been any delay in the creditors in endeavoring to obtain their debt. I think he erred in this part of his charge, for if the deed was not fraudulent and void as to the creditors, at its execution, no subsequent casualty or accident could makb it void. In Doe v. Routledge, (Cowp. 710,) Lord Mansfield says “ a custom has prevailed and leant extremely to construe voluntary settlement fraudulent against creditors.” But if the circumstances of the transaction show it was not fraudulent at the time, if is not within the meaning of the statute though no money was paid.— O’Daniel was possessed of personal property of the value of five or six hundred dollars at the date of the conveyance and he reserved to himself a life estate in the land ; he owed two small debts — and must we say from these facts Ümt he made the conveyance for the intent and purpose “ to hinder and delay” these two creditors? Policy may call for such a decision, but I cannot bring my mind to believe it is within the meaning of the Le-gisiature which passed the statutes. My associates think otherwise and the law upon this point may now be considered as settled. I think a new trial should be granted

Per Curiam — Judgment affirmed.