Lobstein v. Lehn , 20 Ill. App. 254 ( 1886 )

Moran, J.

We have examined the record with care, and while we are satisfied that there was Iona fide due to Kasch and Van Deursen the amount allowed to them by the written agreement, at the time the absolute deed was made, we are not able to conclude that they at that time knew or were informed or put on notice that Lehn owed any other debts. Lehn, it is true, said that he owed a little debt, and Kasch and Van Deursen gave him in cash some $233 to pay such debt; Kasch and Tan Deursen appear to have acted in good faith, with the honest intention of securing their claim, and so managing the real estate that Lehn might realize something out of it after the payment of the debts which were liens upon it, and with no intention to aid him to hinder or delay complainant or any other creditor. They were guilty of no actual fraud, though in taking an absolute deed, which, by a secret agreement be. tween them and the grantor, was in fact but a mortgage, they were guilty of what, as to the creditors, may have been a fraud in law—a constructive fraud.

But in such case the rule in equity is that when a security or conveyance is set aside as constructively fraudulent, it may be upheld, in favor of those not guilty of any actual fraud, to the extent of the actual consideration, and be vacated only as to the excess. Phelps et al. v. Curts et al., 80 Ill. 114, and cases there cited.

The decree of the court below was, in its result to the par. ties in interest, in accordance with this rule, and where justice is achieved by the decree, a mere technical error will not authorize a reversal.

Judgment affirmed.