therein described, as against every person except creditors of the vendor.74

75

§ 7. The effect of setting aside conveyance.-Where a conveyance is set aside by creditors of the grantor as fraudulent as against creditors, it is set aside only as to such creditors, and does not operate to revest title in the grantor, his heirs, or one claiming under him, and the heirs of a grantor in a fraudulent conveyance cannot claim the property as against the grantee where the creditors' claims have afterwards been satisfied by the grantee.? Any surplus resulting from the property after the payment of the claims of creditors belongs to the grantee.”

76

8. Right to recover property fraudulently conveyed.-A court of equity will afford no relief to a debtor who has transferred his property for the purpose of defrauding his creditors, and subsequently seeks, as against the transferee to reclaim or recover back the same, or its proceeds, nor will the law aid his heirs, assignees, privies, etc., to recover it back.78 A reconveyance thereof will not

74. Blantin v. Whitaker, 30 Tenn. 313.

Where a gift of slaves is made, either by deed or parol, with a view to defraud creditors, and the donee holds them as his own for three years, the absolute title to such slaves is vested in the donee, as against the donor and his creditors. Marr v. Rucker, 20 Tenn. 348.

75. Claflin v. Lisso, 27 Fed. 420; Bohn v. Weeks, 50 Ill. App. 236; Phoenix Ins. Co. v. Fidder, 133 Ind. 557, 33 N. E. 270; Smith v. Hutchcraft, 2 Ky. L. Rep. 65. Compare Horton v. Kelly, 40 Minn. 193, 41 N. W. 1031, as to effect of setting aside a fraudulent conveyance of a homestead.

76. Keeton v. Bandy, 25 Ky. L. Rep. 233, 74 S. W. 1047.

77. See Right to proceeds and profits, chap. XIV, § 15, infra.

78. N. Y.-Solinger v. Earl, 82 N. Y. 393, money secretly paid to induce certain creditors to unite with other creditors in a composition of debts cannot be recovered.

U. S.-Dent v. Ferguson, 132 U. S. 50, 10 Sup. Ct. 13, 33 L. Ed. 242; Schemerhorn v. DeChambrun, 64 Fed. 195, 12 C. C. A. 81.

Ark.-Britt v. Aylett, 11 Ark. 475, 52 Am. Dec. 282.

Colo.-Lathrop v. Pollard, 6 Colo.

424.

Conn.-Nichols v. McCarthy, 53 Conn. 299, 23 Atl. 95, 55 Am. Rep. 105; Chapin v. Pease, 10 Conn. 69, 25 Am. Dec. 56.

Del.-Jackson v. Duton, 3 Harr. 98; Hollis v. Morris, 2 Harr. 128.

be enforced though provided for by an agreement entered into at the time of the conveyance or subsequently." But, although a

conveyance in fraud of creditors is valid between the parties, and the fraudulent grantor is estopped by his own act, yet, if the grantee has executed and delivered a reconveyance to him, he has a right to the benefit of it, and if the deed of reconveyance is taken from him, and withheld by the alienee, he may have a judgment for its redelivery, and for an account of the rents and profits.80 One who has collusively suffered a judgment and an extent of an execution upon his land, cannot maintain an action to recover back the land, upon the ground that the judgment was fraudulent as against his creditors.81 Where an owner, in view of a possible judgment being rendered against him, conveys his property to another with intent to defeat the satisfaction of the same, he cannot after judgment in his favor have the aid of a court of equity to compel the grantee to reconvey to him the property, although the grantee agreed to do so upon request.

tion of an enforceable promise or covenant, written or parol; Jones v. Read, 33 Ky. 540, secret bond for reconveyance on payment of a certain

sum.

Md.-Freeman v. Sedwick, 6 Gill, 28, 46 Am. Dec. 650.

Mass.-Canton V. Dorchester, 8 Cush. 525.

Mich.-Poppe v. Poppe, 114 Mich.

649.

Mo.-Mitchell v. Henley, 110 Mo. 598, 19 S. W. 993, the grantee may plead the fraud in defense of an action on a contract to reconvey, where it lies yet in contract and is merely executory.

N. H.-Stockwell v. Stockwell, 72 N. H. 69, 54 Atl. 701.

N. J.-Eyre v. Eyre, 19 N. J. Eq. 42.

N. C.-York v. Merritt, 77 N. C. 213; Jackson v. Marshall, 5 N. C. 323, 3 Am. Dec. 695; Vick v. Flowers, 5 N. C. 321. See Smith v. Bowen, 3 N. C. 483, 2 Hayw. 296; Smith v. 3 N. C. 408, 2 Hayw. 229.

82 But where the grantor in a

Pa.-Guggenheimer's Appeal, 1 Pa. Cas. 526, 4 Atl. 46. See Reynolds v. Boland, 202 Pa. St. 642, 52 Atl. 19. Tex.-Farrell v. Duffy, 5 Tex. Civ. App. 435, 27 S. W. 20.

Can.-Emes v. Barber, 15 Grant Ch. (U. C.) 679.

Compare Greffin's Ex'r v. Lopez, 5 Mart. (La.) 145.

80. Moore v. Livingston, 14 How. Pr. (N. Y). 1.

81. Franklin v. Stagg, 22 Mo. 193.

82. Carson v. Beliles, 28 Ky. L. Rep. 272, 89 S. W. 208, 1 L. R. A. 1007; Pride v. Andrew, 51 Ohio St. 405, 38 N. E. 84. But see Rivera v. White (Tex. 1901), 63 S. W. 125, where a husband, fearing that alimony would be decreed against him in a divorce suit, conveyed land on the understanding that the grantee would sell the land for his benefit, or reconvey it when he desired, a recovery of the land by the husband would not be denied because of the intent with which it was conveyed, it not appearing that any alimony was decreed.

84

85

86

83

fraudulent conveyance was not, owing to the relations of the parties, in pari delicto with the grantee, or where the owner merely leased the property and no title was thereby acquired by the grantee, or the transfer was a bailment, the bailee merely receiving the possession of the property from the debtor to aid him in defrauding his creditors, or where the grantor can show a right of recovery without disclosing the fraud, the rule that equity will not lend its aid to the grantor, when he seeks to recover back the property thus transferred in fraud of creditors, does not apply. And where the debtor abandons his fraudulent purpose and notifies the grantee of his intention to apply the property to the payment of his debts, he may, upon demand and refusal of the restoration of his property, recover the same for the benefit of his creditors.87 A subsequent agreement on the part of the grantee to reconvey, independent of the former transaction or after the transfer has been purged of the fraud, may be enforced by the grantor.88 A married woman who includes her separate property in a bill of sale by her husband, under the mistaken idea that it is necessary to thus protect it from her husband's creditors, may recover it back." An infant who joins in a bill of sale by his father of property owned by himself and his father to protect it from his father's creditors

83. Boyd v. De la Montaignie, 73 N. Y. 498, 29 Am. Rep. 197; Ingersoll v. Weld, 103 App. Div. (N. Y.) 554, 93 N. Y. Supp. 291; Freelove v. Cole, 41 Barb. (N. Y.) 318, aff'd 41 N. Y. 619; Vitoneno v. Corea, 92 Cal. 69, 28 Pac. 95; Beale v. Hall, 22 Ga. 431; Anbic v. Gil, 2 La. Ann. 342; Bartlett v. Bartlett, 15 Neb. 593, 19 N. W. 691; Fraser v. Rodney, 12 Grant Ch. (U. C.) 154, aff'g 11 Grant Ch. 426. See also § 3, supra, and cases there cited.

84. Perkins v. McCullough, 31 Or. 69, 49 Pac. 861.

85. Block v. Darling, 140 U. S. 234, 11 Sup. Ct. 832, 35 L. Ed. 476; Brown v. Thayer, 78 Mass. 1; Wat

son v. Harmon, 85 Mo. 43, if the bailee wrongfully converts the property to his own use he will be liable therefor; Gowan v. Gowan, 30 Mo. 472; Allgear v. Walsh, 24 Mo. App. 134.

86. Day v. Day, 17 Ont. App. 157; Haigh v. Kaye, L. R. 7 Ch. 469, 41 L. J. Ch. 567, 26 L. T. Rep. N. S. 675, 20 Wkly. Rep. 597.

87. Carll v. Emery, 148 Mass. 32, 18 N. E. 574, 12 Am. St. Rep. 515, 1 L. R. A. 618.

88. Songer v. Partridge, 107 Ill. 529; Taylor v. McMillan, 123 N. C. 390, 31 S. E. 730.

89. Bloomingdale v. Chittenden, 75 Mich. 305, 42 N. W. 836.

may recover it from the vendee, since it is not subject to his father's debts and hence there is no fraud on his part." And the fact that property once held by parties jointly was voluntarily conveyed by the complainant to defendant for the purpose of hindering and delaying complainant's creditors does not prevent a court of equity from favoring its return to the original owner.

91

9. Effect of voluntary reconveyance.-The moral obligation of a fraudulent grantee of land to reconvey the same to the grantor, in compliance with a verbal agreement made at the time of the conveyance, is a sufficient consideration to support a deed of reconveyance, as against creditors of such fraudulent grantee who had obtained no lien on the land before the reconveyance," and subsequent acts done by the fraudulent grantee, in execution of the moral duty to restore the property, should be favorably considered in equity." Where the grantee in a fraudulent conveyance voluntarily reconveys to the grantor, in fulfillment of his moral obligation to reconvey, although he could not have been compelled to reconvey, his voluntary reconveyance revests the title both in law and equity in the grantor, if the rights of no innocent third person have intervened," and

90. Bloomingdale v. Chittenden, 74 Mich. 698, 42 N. W. 166.

91. Buttlar v. Buttlar, 67 N. J. Eq. 136, 56 Atl. 722.

V.

92. Davis v. Graves, 29 Barb. (N. Y.) 480; Lafayette Second Nat. Bank v. Brady, 96 Ind. 498; Clark v. Rucker, 46 Ky. 583; Thomas v. Goodwin, 12 Mass. 140; Hutchins Sprague, 4 N. H. 469, 17 Am. Dec. 439; Powell v. Ivey, 88 N. C. 256; Mullanphy Sav. Bank v. Lyle, 75 Tenn. 431; Stanton v. Shaw, 62 Tenn. 12; Biccochi v. Casey-Swasey Co., 91 Tex. 259, 42 S. W. 963, 66 Am. St. Rep. 875.

93. White v. Brocaw, 14 Ohio St. 339.

94. Moore v. Livingston, 14 How. Pr. (N. Y.) 1; Cartledge v. McCoy, 98 Ga. 560, 25 S. E. 588; Springfield Homestead Assoc. v. Roll, 137 Ill. 205, 27 N. E. 184, 31 Am. St. Rep. 358; Lafayette Second Nat. Bank v. Brady, 96 Ind. 498; Biccochi v. CaseySwasey Co., 91 Tex. 259, the fraudulent grantor is not estopped, after such reconveyance by the grantee, to deny the rights of creditors of the latter on the ground that the title was permitted to remain in such grantee's name several years and he obtained credit on the faith of his

ownership. See Reconveyance by fraudulent grantee, chap. IV, § 34,

supra.