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United States Supreme Court

112 U.S. 144

Horbach  v.  Hill


There are several fatal objections to the decree in this case. In the First place, there is no evidence affecting the good faith of the sale and conveyance from Parker, Sr., to the defendant, in March, 1871. It was known that the deceased owed several debts, and as there were no personal effects, that the real property was liable to be sold for their payment. Under these circumstances, the price paid by the defendant is not shown to be inadequate. And there is no evidence that he had any knowledge of the debt of Parker, Sr., to the complainant. So, whatever may be suggested or surmised as to possible fraudulent intentions of Parker, Sr., in the conveyance, its validity cannot be questioned in the absence of any evidence of participation in them by the defendant. The fraud which will vitiate a sale must be mutual; that is, must be intended by both parties, or by one with knowledge of the other's purpose, and thus acquiesced in and furthered. Here all such participation was wanting on the part of the purchaser.

In the second place, if the conveyance by the father to the defendant be treated as invalid, the title to the lots passed by the administrator's sale, and the subsequent deed in pursuance of it. The master found that the purchase by Kennedy at that sale was in good faith, but was void because of his knowledge that the property was held by the deceased as mortgagee, and that the defendant acquired no title from Kennedy because of like notice. But the conclusion that the conveyance by the father to the son was a mortgage was a mere assumption, not warranted by the accompanying agreement. There was no obligation resting on the father to make the payments mentioned in that agreement and claim a reconveyance. He had an option to do so, and then he was not merely to repay the consideration given by the son, but in addition thereto he was to obtain a release of two bonds by him exceeding $3,000 in amount. Upon such release the vendee agreed to reconvey the lots for the original consideration and the expenses incurred on them. There were no extraneous facts shown to explain the object of executing the papers, such as a previous indebtedness of the father, or a liability on his part to secure the son against the bonds mentioned. Nor did it appear to whom the bonds were issued, nor for what consideration. Nor was it averred that the transaction was in any respect different from what the instruments imported-a sale to the son. The agreement can therefore be considered only as an independent contract to reconvey the lots on certain conditions. The assumption that the conveyance of the father to the son was a mortgage being unfounded, the objection to the purchase by Kennedy falls. That being valid, the deed received by him passed a good title, which he transferred to the defendant.

In the third place, there is no evidence that the complainant was a creditor of Parker, Sr., in March, 1871, when the conveyance was made to the defendant. The attachment suit was commenced by publication in August, 1877, and in December following judgment by default was rendered. This was more than six years after the conveyance. It does not appear when the alleged debt, upon which the attachment proceedings were founded, accrued. The allegation of the bill that Parker, Sr., was largely indebted to the complainant and others, and was insolvent when he conveyed to the defendant, is not sustained by the evidence. Indeed, there is no evidence in relation to his financial condition and means at that time. The testimony that he brought a summons in another suit against him to the office of the party who was then drawing the deed is contradicted; and, even had this been so, the fact would not militate against the validity of the transaction. He had a right to dispose of his property in the ordinary course of business for a valuable consideration, and the defendant had a right to purchase it. The complainant, not showing that he was at the time a creditor, cannot complain. Even a voluntary conveyance is good as against subsequent creditors, unless executed as a cover for future schemes of fraud.

So, in any way in which this case can be considered, the bill cannot be sustained. The decree must therefore be reversed, and the case remanded, with directions to dismiss the bill; and it is so ordered.

NotesEdit

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).