grantor, or his heirs, or persons claiming under him,5 by setting aside and cancelling the instrument of transfer or conveyance and ordering the property conveyed to be restored to the grantor.56 But the fact that the grantee of a conveyance to defraud creditors induces the conveyance by reason of his intimacy with and influence over the grantor will not, where the grantor is not of a weak mind and the relation of attorney and client does not exist, enable the 55. N. Y.-Place v. Hayward, 117 N. Y. 487, 23 N. E. 25. D. C.-Fletcher v. Fletcher, 2 McArthur, 38. Ill.-Herrick v. Lynch, 150 Ill. 283, 37 N. E. 221, aff'g 49 Ill. App. 657. Iowa.-Wiley v. Carter, 77 Iowa, 751, 42 N. W. 566, recovery of amount paid on fraudulent note; Davidson v. Carter, 55 Iowa, 117, 7 N. W. 466. Ky.-Sanford v. Reed, 27 Ky. L. Rep. 431, 85 S. W. 213. Md.-Roman v. Mali, 42 Md. 513; Stewart v. Iglehart, 7 Gill & J. 132, 28 Am. Dec. 202. Mich.-Eldridge v. Sherman, 79 Mich. 484, 44 N. W. 948, recovery of property taken in foreclosure proceedings upon a mortgage procured by the fraud of the mortgagee. Miss.-O'Conner v. Ward, 60 Miss. 1025; Pewett v. Coopwood, 30 Miss. 369. N. C.-Pinckston v. Brown, 56 N. C. 494. Va.-Austin v. Winston, 1 Hen. & M. 33, 3 Am. Dec. 583, where the grantor is not so culpable as the grantee, it would seem that a court of equity ought not to altogether refuse relief to the grantor, but to apportion the relief granted to the degree of criminality in both parties so as on the one hand to avoid the encouragment of fraud, and on the other hand to prevent extortion and oppression. A grantor's wife who has no knowledge of the intended fraud may impeach a conveyance by her hus band, although she joined therein. Kitts v. Willson, 130 Ind. 492, 29 N. E. 401. 56. N. Y.-Goldsmith V. Goldsmith, 145 N. Y. 313, 39 N. E. 1067; Wood v. Rabe, 96 N. Y. 414, 48 Am. Rep. 640; Ingersoll v. Weld, 103 App. Div. 554, 93 N. Y. Supp. 291; Bingham v. Sheldon, 101 App. Div. 48, 91 N. Y. Supp. 917; Watkins v. Jones, 78 Hun, 496, 29 N. Y. Supp. 557; Goodenough V. Spencer, 2 Thomp. & C. 508, 15 Abb. Prac. N. S. 248. Ark.-Hutchinson v. Park (1904), 82 S. W. 843. Cal.-Donnelly v. Rees, 141 Cal. 56, 74 Pac. 433. Iowa.-Kervick V. Mitchell, 68 Iowa, 273, 24 N. W. 151, 26 N. W. 434. Ky.-Harper v. Harper, 85 Ky. 160, 8 Ky. L. Rep. 820, 3 S. W. 5, 7 Am. St. Rep. 583; Sanford v. Reed, 27 Ky. L. Rep. 431, 85 S. W. 213. Mo.-Holliway v. Holliway, 77 Mo. 342; Poston v. Balch, 69 Mo. 115. Wash.-Melbye V. Melbye, 15 Wash. 648, 47 Pac. 16; Rozell v. Vansyckle, 11 Wash. 79, 39 Pac. 270. Wis.-Kronskop v. Kronskop, 95 Wis. 296, 70 N. W. 475. 58 grantor to have such conveyance set aside as a fraud upon him." And the rule that a conveyance in fraud of creditors is valid and binding as against the fraudulent grantor does not prevent the avoidance of a fraudulent conveyance on the ground of the grantor's mental incapacity. Since the conveyance of his homestead by a grantor cannot be fraudulent as to his creditors, rescission of a deed thereto, executed with intent to defraud the creditors of the grantor, should not be denied on the ground that the parties were in pari delicto.59 § 4. Mutual rights and liabilities - Effect of transaction as to property rights in general.—An absolute conveyance or transfer of property, although made to defraud creditors, will convey the legal and equitable title to the grantee as between the parties, and as against all other persons except the creditors defrauded, and can be avoided only by creditors. 57. Renfrew v. McDonald, 11 Hun (N. Y.), 254. 58. Tatum v. Tatum, 101 Va. 77, 43 S. E. 184. 59. Sallee v. Sallee, 18 Ky. L. Rep. 74, 35 S. W. 437. See Homesteads, chap. IV, § 42, supra. 60. N. Y.-Davis v. Graves, 29 Barb. 480; Paddon v. Williams, 1 Rob. 240, 2 Abb. Pr. N. S. 88. U. S.-Claflin v. Lisso, 27 Fed. 420; Atwater v. Seeley, 2 Fed. 133, 1 McCrary, 264; Backhouse v. Jett, 2 Fed. Cas. No. 710, 1 Brock. 500. Ala.-Pond v. Wadsworth, 24 Ala. 531; Dearman v. Radcliffe, 5 Ala. 192; Rochelle v. Harrison, 8 Port. 351. Ark.-Doster V. Manistee Nat. Bank, 67 Ark. 325, 55 S. W. 137, 77 Am. St. Rep. 116, 48 L. R. A. 334; Meux v. Anthony, 11 Ark. 411, 52 Am. Dec. 274. Cal. Goad v. Moulton, 67 Cal. 536, 8 Pac. 63. Though both parties to a con Conn.-Wolfe v. Beecher Mfg. Co. 47 Conn. 231, an action by a grantor for damages to a freehold occupied by him, the title which had been conveyed to another in fraud of his creditors, cannot be maintained; Owen v. Dixon, 17 Conn. 492. Ill.-Moore v. Horsley, 156 Ill. 36, 40 N. E. 323; Lane v. Union Nat. Bank, 75 Ill. App. 299, aff'd 177 Ill. 171, 52 N. E. 361, 69 Am. St. Rep. 216. Ind.-Henry v. Stevens, 108 Ind. 281, 9 N. E. 356; Jones v. Reeder, 22 Ind. 111; Doe v. Hurd, 7 Blackf. 510. lowa. Fordyce v. Hicks, 76 Iowa, 41, 40 N. W. 79; Parker v. Parker, 56 Iowa, 111, 8 N. W. 806. Ky.-Lynch v. Sanders, 39 Ky. 59. Mass.-Leonard V. Bryant, 56 Mass. 32. Minn.-Brasie V. Minneapolis Brew. Co., 87 Minn. 456, 92 N. W. 340, 94 Am. St. Rep. 709, 67 L. R. A. 865. veyance, fraudulent as to the grantor's creditors, are privy to the fraud, yet if the deed is absolute and creates title in the grantee, he may recover possession as against the grantor, the fraud in the transaction not being an available defense to the latter.61 The grantee may maintain an action for the value of the property against his grantor where he has lost title by the acts of the Miss.-Walton v. Tusten, 49 Miss. 569. Mont.-Yoder V. Reynolds, 28 Mont. 183, 72 Pac. 417. N. H.-Jones v. Bryant, 13 N. H. 53, title passes to the grantee until some creditor defeats it by the levy of an execution, and, when defeated, it is rendered void only from the time of the levy. N. J.-Guest v. Barton, 32 N. J. Eq. 120, a debtor who has conveyed his property in order to defraud his creditors has no standing in the chancery court to question the fairness or adequacy of price obtained at a public sale of such premises under a creditor's bill to reach such property. N. C.-York v. Merritt, 80 N. C. 285. N. D.-Lockren v. Rustan, 9 N. D. 43, 81 N. W. 60. Pa.-Murphy v. Hubert, 16 Pa. St. 50; Patrick v. Smith, 2 Pa. Super. Ct. 13. 8. C.-Steinmeyer v. Steinmeyer, 64 S. C. 413, 42 S. E. 184, 92 Am. St. Rep. 809. Tenn.-Jacobi v. Schloss, 47 Tenn. 385; Williams v. Love, 23 Tenn. 62. Tex.-Biering v. Flett (1888), 7 S. W. 229; Robb v. Robb (Civ. App. 1897), 41 S. W. 92; Frank v. Frank (Civ. App. 1894), 25 S. W. 819. See Claybrooks v. Kelly, 61 Tex. 634. Wash.-Preston-Parton Milling Co. v. Horton, 22 Wash. 236, 60 Pac. 412, 79 Am. St. Rep. 928; Shoemake v. Finlayson, 22 Wash. 12, 60 Pac. 50. W. Va.-Poling v. Williams, 55 W. Va. 69, 46 S. E. 704. 61. N. Y.-Padden v. Williams, 2 Abb. Pr. N. S. 88. Ala.-Greenwood v. Coleman, 34 Ala. 150. Ga.-Goodwyn v. Goodwyn, 20 Ga. 600, if he has paid a consideration therefor. Ky.-Elmore v. Elmore, 20 Ky. L. Rep. 856, 58 S. W. 980; Jones v. Jenkins, 7 Ky. L. Rep. 408. N. C.-York v. Merritt, 80 N. C. 285. 8. C.-Broughton v. Broughton, 4 Rich. 491. Va.-Starke v. Littlepage, 4 Rand. 368, the fraudulent grantee may enforce such conveyance in a court of law and the debtor will not be allowed to defeat the claim by proving the fraud. If the grantor regains possession of the property, the grantee may recover possession from him, in the absence of proof that the grantor acquired such possession under a contract with the grantee. Wadsworth, 24 Ala. 531; Barker, 56 Ky. 292. Pond v. Bibb v. 62 64 grantor, unless the grantor was not in pari delicto with the grantee. Where a conveyance is made to defraud creditors, a resulting trust does not arise in favor of the grantor, and neither he nor his heirs have any interest in the property or its proceeds which can be asserted either in law or equity. A deed of trust in fraud of creditors entitles the grantee to hold as against the grantor and the beneficiaries, whether the trust is voluntary and without consideration or for a valuable consideration, whether it is by parol or in writing, and whether the grantee is in possession or not.65 An executory contract of the sale of chattels, made to defraud creditors, does not pass the title of the property as between the parties. The execution and recording of a conveyance of land by a debtor with intent to defraud creditors, made without consent of the grantee, who at once repudiated it, does not pass title.67 66 5. As to the title subsequently acquired.—It is held in some states that where a fraudulent grantor subsequently acquires title to the property conveyed by purchase at an execution or mortgage foreclosure sale of such property, under an execution issued under a judgment, or a mortgage made, prior to the conveyance, or by conveyance to him by the purchaser at such sale, the title so acquired does not inure to the benefit of the fraudulent grantee under the covenants of warranty in the deed to him, as the vendor 62. Nichols v. Patten, 18 Me. 231, 35 Am. Dec. 713; Hoeser v. Kraeka, 29 Tex. 450, where the grantor has kept possession and disposed of the property. 63. Hays v. Windsor, 130 Cal. 230, 62 Pac. 395. 64. N. Y.-Robertson v. Sayre, 124 N. Y. 97, 31 N. E. 250, 30 Am. St. Rep. 627, aff'g 53 Hun, 490, 6 N. Y. Supp. 649, and it is immaterial that the grantee was not a participant in the fraud. Ala.-Heinz v. White, 105 Ala. 670, 17 So. 185. Iowa.-Howland v. Knox, 59 Iowa, 46, 12 N. W. 777. Wash.-Preston-Parton Milling Co. v. Horton, 22 Wash. 236, 60 Pac. 412, 77 Am. St. Rep. 928, no interest remains upon which a judgment subsequently acquired can attach. W. Va.-Poling v. Williams, 55 W. Va. 69, 46 S. E. 704. 65. Murphy v. Hubert, 16 Pa. St. 50. 66. Rochelle v. Harrison, 8 Port. (Ala.) 351. 67. Witz v. Lockridge, 39 W. Va. 463, 19 S. E. 876; Guggenheimer v. Lockridge, 39 W. Va. 457, 19 S. E. 874. is not remitted to his former title.68 But, in other states, it is held that, as the debtor's fraudulent conveyance was valid as to the grantee despite its invalidity as to creditors, the judgment debtor cannot defeat it by a subsequently acquired title, but that he and all claiming the title under him with notice will be estopped by his former and fraudulent deed, and the title so acquired will inure to the former fraudulent grantee." § 6. Adverse possession as between grantor and grantee.If a debtor causes land, to a conveyance of which he is entitled, to be conveyed to a third person for the purpose of defrauding his creditors, he nevertheless may acquire, as against his fraudulent grantee, a title by adverse possession sufficiently long continued ;70 but where his possession is intended to be in subordination to his grantee's title, it cannot be adverse." The possession of land by a fraudulent purchaser has been held not to be adverse to the vendor, but in trust for him.72 But it has also been held that in an action by the purchaser of land at an execution sale, seeking to make a third party, who had previously purchased the land of the execution defendant, a trustee thereof against his will, his possession must be treated as adverse to that of his vendor from the time possession is taken under the purchase sought to be avoided."3 A deed purporting to convey an estate in fee simple, though fraudulent in law or fact, is such an assurance of title as, coupled with seven years' uninterrupted adverse possession under and by virtue thereof, will vest in the possessor an indefeasible title to the land 68. Thompson v. Hammond, 1 Edw. Ch. (N. Y.) 497; Gilliland v. Fenn, 90 Ala. 230, 8 So. 15, 9 L. R. A. 413. 69. Spindler v. Atkinson, 3 Md. 409, 56 Am. Dec. 755; Perry v. Calvert, 22 Mo. 361; Heileman v. Eisner, 52 N. J. L. 378, 20 Atl. 46; Hallyburton v. Slagle, 130 N. C. 482, 41 S. E. 877. 70. Elwell v. Hinckley, 138 Mass. 225. 71. Williams v. Higgins, 69 Ala. 517. 72. Daniel v. McHenry, 67 Ky. 277. Possession by grantee under bond for title, where no consideration has been paid, is not sufficient adverse possession as against the grantor. Brandenburgh v. Louisville Tin, etc., Co., 18 Ky. L. Rep. 297, 36 S. W. 7. 73. Bobb v. Woodward, 50 Mo. 95. |