Flynn v. Williams, 29 N.C. 32, 7 Ired. 32 (1846)

Dec. 1846 · Supreme Court of North Carolina

29 N.C. 32, 7 Ired. 32

DEN ON DEMISE OF CORNELIUS FLYNN, vs. JOHN W. WILLIAMS, & AL.

A, being seized and possessed of an estate in fee in a tract of land, subject to a limitation over to B, in the event of A’s dying without issue, made a fraudulent conveyance of the land. Afterwards B died, leaving A, his heir at law. Held, that after the death of B the whole estate was liable to the satisfaction of A’s creditors.

The Act, regarding fraudulent alienations of property, makes the fradulent conveyance absolutely void, and in that way prevents the passing of any estate, as against creditors, &c.

The cases of Haffner v. Irwin, 1 Ired. 498, Hoke v. Henderson, 3 Dev. 15, Picket v. Picket, 3 Dev. 6, and Flynn v. Williams, 1 Ired. 509.

Appeal from the Superior Court of Law of Beaufort County, at the Fall Term, 1846, his Honor Judge Bailey, presiding.

The plaintiff and defendants each claim the land in dispute under Joseph R. Hanrahan. The case is as follows : Walter Hanrahan died previous to the year 1823, having duly made his last will and testament, in which he devised to Joseph R. Hanrahan, his son, in fee, the lands in question, and in a subsequent part of the will he devises as follows : “ In case my son Joseph R. Hanrahan should have no issue at the time of his death, I then devise the aforesaid lands already given him, to my son William K. Hanrahan.” Walter Hanrahan left three sons, James, Joseph R. and William K. Hanrahan. Of these James died the first after his father, without having any issue, and then William, who died in 1834 and without having had issue, and leaving Joseph his heir at law, and the latter, died in 1837. In 1827, one Christie obtained a judgment in the County Court of Beaufort, against Joseph R. Hanrahan, and to defeat this claim, Hanrahan, on the 14fh December, 1826, conveyed the lands in question to the lessor of the plaintiff, without any valuable consideration, at which time the suit was pending. After the death of Joseph R. Hanrahan, various creditors of his, upon debts contracted after the date of his deed to the lessor of the plaintiff, obtained judgments against his heirs, and the lands in dispute, were, under executions issuing on said judgments, sold by the sheriff of Beaufort County, and James O’K. Williams, the father of the defendants, purchased them.

The plaintiff requested the Court to instruct the jury “ that notwithstanding they might be satisfied of the existence of a fraudulent intention, on the part of Joseph R, Hanrahan, to defeat the anticipated recovery of Christie in making the deed to Flynn, yet, this fraudulent intention avoided the deed, only so far as it conveyed the estate, which was then in Joseph R. Hanrahan and liable to be sold under execution : That, as to the contingent estate, which was then in William K. Hanrahan, and afterwards descended to Joseph by the death of William, the deed could not be avoided by the existence of such fraudulent intention, but that said estate was conveyed to the said Flynn.” His Honor refused to give such instructions, but charged the jury “ that if Joseph R. Han-rahan intended, by his deed to Flynn, to defeat the anticipated recovery by Christie, the deed was void as to Christie, and by conclusion of law was also void, as to the subsequent creditors of Hanrahan, under whom the defendants claimed.” A verdict was found for the de-fendanls and the plaintiff appealed.

Rodman, for the plaintiff, submitted the following argument.

Both parties claim through Joseph R. Hanrahan. It is admitted that the deed from Joseph R. Hanrahan to the plaintiff, for the lands described in the declaration, passed the title to the plaintiff against the grantor and his heirs. It was so decided in Flynn v. Williams, 1 Ired. 509. But the defendants contend that the deed was fraudulent and void as to them, claiming under creditors of the grantor.

The plaintiff requested the Court below to instruct the jury, that, although the deed in question might be (and it must be admitted in this argument that it was) fraudulent, and therefore void so far as it operated or professed to pass the determinable estate that was then vested in the grantor, yet that in law it could not be held fraudulent and void any farther. The Court on the contrary instructed the jury, that, if made with the intent to defraud Christie of his anticipated recovery, it was utterly void.

The plaintiff submits that the Court erred both in giving and refusing instruction.

It is believed to be undisputed, that if this deed be valid as against the defendants, there is no obstacle to the plaintiff’s recovery.

1. The validity of this deed to the plaintiff must be decided by the state of facts which existed at the time when it was made. The fraudulent intent required to avoid must be an intent then. entertained; circumstances ex post facto cannot affect it. There can be no doubt but that the devise to William K. Hanrahan, on the contingency of Joseph R. Hanrahan’s dying without leaving issue, was a good executory devise. The estate given to Joseph by the will of Walter Hanrahan, was a fee liable to determine on the death of Joseph without issue and limited over to William on that contingency. This determinable estate was all the estate, which was in Joseph at the making of the deed from him to plaintiff. After that time he acquired a new and distinct estate — the residue o.f the absolute fee by descent from his brother William. The estate, which he had previous to this descent by the death of William, was a separate and distinct estate from the ultimate contingent fee which was in William. This appears from the case oí Goodtitle dem. Vincent v. White, 15 East. 174. It may be further illustrated by the hypothesis, that Walter Hanrahan had devised the estate which he in fact did devise to William, to a stranger to whom Joseph would not have been heir — or that William had devised his estate to a stranger. In either of these cases Joseph’s estate would have been extinguished on his death without leaving issue, as actually happened. But the fact of William being a stranger or making the supposed devise, would not have altered the estate in Joseph under the will of Walter: the hypothesis shows, therefore, that the ultimate fee was not in Joseph at the time of making the deed, but came to him by descent from William afterwards. Joseph was one of the presumptive heirs of William, but their respective estates in these lands were as distinct, as if that accidental personal relation had not existed.

If this position be correct then, Joseph had no interest in the ultimate contingent fee, but merely an expectancy as an heir presumptive, which he could pass by estoppel only, which was not liable to execution and not within the Statute 13th Elizabeth.

•2. But should it be held that the severance of the two estates was not so complete as is supposed, and that Joseph did have an interest in the ultimate fee by reason of the possibility that his determinable fee might be converted into an absolute fee by his death, leaving issue, in that case even, the plaintiff submits that that interest, whatever it might be called, was, 1st, not of a nature to be subject to execution, and consequently, 2dly, was not within the Statute 13th Elizabeth.

1st. It was not subject to execution. Nothing is liable to execution, but “ all vested legal interests of the debtor which he himself can legally sell. Knight v. Leah, 2 Dev. and Bat. 135. The words can “ legally sell,” here obviously mean, can sell by some instrument of conveyance operating by way of passing an estate, and not one which operates merely by estoppel. 3 Dev. 270. The interest of Joseph in the lands, over and above his determinable fee, (if any thing) could only be propped by estoppel. 4 Kent Com. p. 266 and note : it céoi not come within the rule laid down as above in Knight v. Leah. A possibility can not be sold under execution. Gentry v. Wagstaff, 3 Dev. 270. If at the date of this deed to the plaintiff, the estate of Joseph had been sold under a fieri facias, the purchaser would have acquired the estate then in him, viz : a fee which determined by his death and nothing more — not the estate which subsequently descended from William and which is in controversy in this suit.

2. If the interest of Joseph in the lands over and above his determinable fee was not liable to sale under execution, then the deed passing this interest to the plaintiff by force of the estoppel is not within the 13 Eliz : 1st Rev. St. ch. 50, sec. 1. See 1 Story’s Eq. p. 362, s. 367-8, and authorities cited. Joseph’s interest above mentioned would come within the class of estates, which embraces copyholds stocks, &c. which have been held excluded from the statute for this reason. If that interest be not within the purview of the statute, there is nothing to avoid Joseph’s deed to plaintiff, for though it has been said that the common law is so strong against fraud, that it might have answered all the purposes of the statute, yet the statute has superseded the common law or at least the two are strictly co-extensive. The deed is so far avoided only as it deprives creditors of what was liable to them, viz: the fee which has determined long since.

The plaintiff relies principally on the point above presented, but submits all those made by the instructions given and those prayed for and refused.

Stanly, J. II. Bryan and Shaw, for the defendants.

Nash, J.

In the opinion of his Honor we entirely concur. The very ingenious argument submitted to us in behalf of the plaintiff has failed to convince us that he is entitled to a verdict in this case. It is fallacious, and its fallacy consists in considering the Act, against fraudulent conveyances, as operating on the estate of the fraudulent grantee, and not on the conveyance. The words of the act are plain and unambigious. “ All and any feofment, &c.” — “at any time had or heretofore made, or at any time hereafter to be had or made, &c.” “to or for any purpose or intent to delay, hinder, and defraud creditors, and others of their just and lawful actions, debts, and accounts, shall be deemed and taken, to be clearly and utterly void, frustrate and of no effect.” It is the conveyance which the act makes void. Haffner v. Irwin, 1 Ired. 498. The plaintiff, while he distinctly admits, that the conveyance to Flynn is fraudulent as to Christie, contends that it is void, only as to the estate which was then in Joseph R. Hanrahan, and not as to that which was contingent and dependent upon the death of William Hanrahan, for the reason that only the estate Joseph then had was liable to execution for his debts. Admit this to be so. Unfortunately for the plaintiff, he claimed both estates by the same conveyance, and by what alchemy he separates the two estates, so conveyed, so as to preserve the one, while admitting the other to be void for fraud, we cannot well perceive. It is a well established principle, that when a statute makes a deed void, for any cause, the whole deed is void, although, mixed with illegal considerations, there may be others which are just and proper. Thus it is declared by the Court in the case of Haffner v. Irwin, 1st Ire. 498. “ If the hindrance form any part of the actual intent of the act done, so far the act against them is a malicious or wicked contrivance, and it is not to be questioned that a conveyance or assurance, tainted in part with a malicious or fraudulent intent, is by the statute made void as against creditors in toto.” Here it is admitted, that, at the time the conveyance was made to Fljmn, Joseph R. Hanrahan had in the land an estate, which was subject to Christie’s claim, to-wit: his defeasible estate in fee, simple, and it is admitted, it was made to defeat his debt. It was then, in part at least, tainted with a malicious and fraudulent intent, and is, according to the decision just cited, void in toto, that is, the conveyance or assurance is utterly void. It is inoperative even as colour of title against a creditor, until the latter has acquired a right of entry. Hoke v. Henderson, 3 Dev. 15. Pickett v. Pickett, Ibid 0. By the will of his father Joseph took an estate in fee, de-feasible on his death, without issue, when the estate was limited over to his brother William in fee. This remainder to the latter, was good as an executory devise, because it was limited to take effect during lives then in being. The death of William no farther affected the estate, than to throw upon his heir the contingent estate devised to him, and Joseph was his heir at law, and upon his death, without issue, it passed, eo instanti, to his heirs at law. Whatever might be the effect of an estoppel or rebutter, as between the present plaintiff and the heirs of Joseph R. Hanrahan and those claiming under them, it can certainly have no operation upon his creditors, in whose shoes the defendants stand. In the case of Flynn v. Williams, 1 Ire. 509, it is decided that Christie, by his purchase under his execution, acquired only the title which was in Joseph at that time, and which consequently expired with the life of Joseph. The case states, that Christie’s debt is still unsatisfied, and that the father of the defendants purchased, at the sale by the sherifF under execution against the heirs of Joseph, to satisfy debts contracted by him, after the date of his deed to the plaintiff. The deed to the plaintiff being made to defraud Christie, a present creditor, it is utterly void, as to subsequent creditors, for it is not bona fide, 1 Sto. Eq. 348, sec. 352, and the authorities there cited. And also page 352, sec. 361, where the same principle is stated. Taylor v. Jones, 2 Atk. 601, Newland on contracts 389. The plaintiff claims the land in controversy, alone under that deed, and it being utterly void as against the creditors of the grantor, under whom the defendants claim, it confers upon the plaintiff no legal title against them, and the plaintiff cannot recover.

We are of opinion his Honor was right in refusing the instruction prayed for, and committed no error in his charge.

Per Curiam. Judgment affirmed.