Dutton v. Jackson ( 1840 )

Johns, Jr., Chancellor.

In this case, it appears from the testimony that the condition of the grantor placed him under circumstances peculiarly calculated to render him subject to the fraud and imposition in which he participated. The fraud perpetrated was intended and contrived by both grantor and grantee¿ to deprive the wife of alimony out of the land granted; she having instituted legal proceedings to obtain a divorce. The grantee, the present defendant, was privy and party, advising and approving, and at the same time informing the grantor that by the conveyance to him his; wife would be defeated of her claim of dower. It also appears the parties did not intend a clear gift or conveyance of the entire interest, but evidently designed to invest the grantee with the legal title, the grantor retaining the possession and the beneficial interest or control; and that he did, during his life, remain in possession and control of the land, as owner thereof, managing and using the property for his own benefit, without interference or interruption on the part of the grantee. There can be no doubt that in this case, at the time of the execution of the deed, a fraud was intended and perpetrated. Shall the grantee be allowed, under such a deed, to enforce his claim to the fee simple interest or title in the land against the children of the grantor, who claim as heirs at law, when by so doing he will be allowed to take advantage of his own fraudulent act ? During the life of the father, he acted not as the person having both the legal and beneficial interest, but evidently in accordance with the understanding and agreement existing, and proved by his own declarations to have subsisted between them. It is not necessary for me, in a case like this, to decide as to the effect of voluntary conveyances. It is true they are void only as to creditors; for a man may give his property away, and it would bind him and all claiming under him. But that is not this case. The character of this transaction is very different. The defendant is relying on his risrht to retain that which he derived under a fraudulent grant made to him by his own advice; and the question is, shall he, to the prejudice of the children, retain the title thus fraudulently acquired ? ' It does appear to me contrary to every principle of equity to allow such a deed to stand or to avail the party thus lending himself, not only as a willing instrument but as an active and efficient agent- in the fraud. It would be allowing that which had its origin and whole foundation in fraud to acquire by time a validity which in its inception it did not possess. The settled rule of law and equity is, that fraud taints and vitiates so thoroughly the whole transaction that it is thereby rendered utterly void. Therefore, I am of opinion that this deed, being by the parties at the time of its execution contrived for the purpose of perpetrating a fraud, is void; and, although it might be questioned whether the grantor, who was particeps criminis, would be permitted to come into a court of equity for relief, as he could not come with clean hands, the same objection does not apply to those claiming under him. 2 Ves. Jr. 295. The rule of equity precluding the party, I apprehend, is founded on principles of public policy and is strictly personal, the main scope and design of which would be rendered more effectual by sustaining the legal and equitable title of the heirs of the deceased grantor against the claim of the surviving grantee. For the deed being void for fraud no title ever passed to the defendant; the decree of the Chancellor, therefore, in declaring the transaction fraudulent, only ascertains and announces that which law, as well as equity,settles,viz: that no legal or valid deed ever existed. The power of the Court is not called into action to undo any thing, but simply to determine whether the parties, by the conveyance they attempted to make and execute, mutually intended to perpetrate a fraud; and, if so, the fraud and covin of the parties, not the decree of the Court, makes the instrument void. It is true, during the life of both parties, the equality in guilt may preclude either party from coming into chancery for relief, when there exists no evidence of actual imposition or fraud practiced by the grantee on the grantor; for that appearing would afford good ground for relief to the grantor, as thereby the case would vary, and he could no longer^be considered in the light of a particeps criminis, but by the advantage taken of his situation and the imposition practiced upon him would be the person injured and defrauded. If the present case will not justify the action of a court of equity in favor of the heirs at law, because it does not appear that Jackson intended to“defraud Dutton, although the transaction by both parties is admitted to be done, and so declared, for a fraudulent purpose, I cannot imagine a case in which, where the grantor is particeps in the fraud, the heirs can be relieved. That the heirs should be entitled to relief, upon the strong equity their claim presents, would appear reasonable and just. The reason of the rule of equity which generally excludes a particeps eriminis cannot apply to the heirs; they can come with clean hands and claim the judgment of the Court, determining and declaring the fraud; nor are they, as in the cases of fair, voluntary conveyances, concluded by the law of estoppel. For these reasons let there be a decree declaring the deed fraudulent and void, and'also a perpetual injunction.

Decree reversed by the Court of Errors and Appeals, at the June Term, 1840. 3 Harring. R. 98.