Dewey v. Latson , 6 Cal. 609 ( 1856 )

The opinion of the Court was delivered by Mr. Chief Justice Murray.

Mr. Justice Heydenfeldt and Mr. Justice Terry concurred.

On an examination of the evidence in this case, I am satisfied that the Court below has fallen into an error in arriving at the conclusion that the sale by Latson to Winans is void, particularly as that conclusion seems to be predicated on the supposed inadequacy of consideration, and the fact that it was made in view of insolvency.

Neither of these conclusions appear'to be warranted by the record. As to the inadequacy of the price paid, it is shown that it is about equal to the estimated value of the services performed by Winans and Hyer for Latson, and that, as a matter of fact, the equity of redemption, so conveyed, was worth nothing or something, according to the amount that the property might ultimately sell for. As to the contemplated insolvency, it is not established by the evidence.

It is true that the defendant, Latson, threatened, in the event of a certain suit, to transfer this property, but the threat was made against another party, who is not complaining. The suit was never brought, and he did not apply for the benefit of the Insolvent Act until a year afterwards.

Granting that the price was inadequate—how was Dewey injured by the transaction ? Latson certainly had the right to estimate his property as low, or the services of Winans and Hyer as high, as he pleased. He was the owner of the equity of redemption in the land, and the rents of the premises, until foreclosure and sale. If he chose to part with these for an uncertain period, to discharge his obligations to other creditors, how could it operate a fraud on Dewey, whose rights were secured by mortgage and might be enforced by foreclosure.

If Latson had authorized Hyer to collect the rents, and apply them to the payment of the debt to himself and Winans, would it be pretended that Dewey, who had no right to the premises until the time for redemption had expired, could recover them in action at law ? How has he been injured by the sale, or how has his condition been changed, so as to enable him to set up this fraud, if any‘existed ? It is said that the conveyance was coupled with a secret trust, for the benefit of Latson. This fact is not fully established by the evidence; but, even if it were shown, a parol trust, made upon the execution of an absolute deed, would be void, and if it were not void, and Latson had an interest as against Winans in the property, it would be difficult to see how it could prejudice Dewey.

As between the parties, the deed was valid, and could only be avoided because it had the effect to hinder and delay creditors, which it could not possibly have done, so far as Dewey was concerned, as his rights could not be affected thereby. If he thought proper, upon the representations of Hyer, to refrain from enforcing his rights, that is his own concern; but it cannot affect the validity of a deed which one party had the right to execute and another to receive.

As we understand the case, Latson was indebted to Winans and Hyer, and, instead of collecting the rents of his property and paying them, he sells them the property itself. He was laboring under no legal disability, and might have parted with it for any price he pleased. The fact that he was not in solvent circumstances did not hinder him from making a bona fide sale of it, and no one but a creditor hindered, delayed and defrauded, has any right to complain. Hyer has collected the rents of the premises, as the agent or partner of Winans, and passed them to their joint account; and they can no more be recovered back than if paid to them by Latson himself.-

Judgment reversed and cause remanded.