Lyons v. Field , 56 Ky. 543 ( 1856 )

Judge Simpson

delivered the opinion of the court:

A. J. Field conveyed hjs real estate, slaves, and personal property to R. H. Field and Jas. H. Shankiin, in trust, for the payment of specified debts, by deed duly recorded.

Lyons, a creditor of A. J. Field, who was not a beneficiary under the deed, attached one of the slaves therein conveyed, insisting that the sale and conveyance were fraudulent as to said slave, on the sole ground that the possession thereof had not been changed, but still remained with the grantor.

The doctrine is well settled that an absolute sale of slaves and personal estate must be followed and accompanied by possession, or it is fraudulent per se. It is, however, equally well settled by the repeated adjudications of this court, that mortgages and deeds of trust made to secure the payment of debía, not being absolute sales of the property, but only creating an incumbrance thereon, are not embraced by this rule of law.

2 By the act of 1820, (Stat. Law, 449,) any sale of persona! estate, by a trustee, was invalid, unless made with the consent of the grantor in the deed of trust, and he joined in the deed of transfer. 3. There is no substantial diffeience between a deed of trust conveying property to pay debts, and one to secure the payment of debts. The object is the samo, that is, that the propei ty conveyed shall be applied to the payment of the debts. In equity, it belongs tQ the grantor, subject to the payment of the debt and what remains belongs to the grantor-

But it is contended that there is an essential difference between a mortgage and a deed of trust for the payment of debts, and that the latter is an absolute sale of the property to the trustees, in which the grantor retains no interest whatever.

They are, however, both regarded in this state as merely incumbrances upon the property. The interest of the grantor, whether the conveyance be by mortgage or by deed of trust, is liable to execution. (Revised Statutes, 327.) And by the act of 1820, (1 Statute Law, 440,) sales of real or personal estate thereafter made by a trustee, under, and by virtue of a deed of trust, unless the maker of the deed should join in the deed or writing evidencing the sale or transfer, were rendered invalid.

It was attempted, in the argument of the case, to draw a distinction between a deed of trust made to pay debts and one made to secure the payment of debts. There is not, however, any substantial difference between them. The object, is the same, that is, that the property conveyed shall be applied to the payment of the grantor’s debt, and in either case he has a right to pay the debts, and thereby remove the incumbrance. In equity the property conveyed, subject to the incumbrance on it, created by the deed of trust, belongs to the grantor. Whatever may remain after the debts are paid belongs to him, not as is contended, because he. becomes a beneficiary to that extent under the deed, but because he is the owner of the. property, and has conveyed it in trust for a special object, which, being accomplished, determines the trust, and by operation of law, reinvests him with an equitable right to the residue of the property

To sustain the distinction contended for, the case of Butler vs. Miller, 15 B. Monroe, 617, was relied on with great apparent earnestness. It was decided in that,case that the statute of 1820 did not apply to cases where the maker of the deed, by which the trust is created, has no interest either in the property conveyed or in the execution of the trust; and that as the grantor had conveyed the property absolutely to the. trustees, to be held by them for the purposes mentioned in the deed, and had no further interest in it. that it was not necessary for him to join in the deed of conveyance executed to the purchaser by the trustees. The nature and character of the deed of trust referred to, would seem to be sufficiently indicated. by what was said by the court, with respect to its effect and legal operation; but as its legal effe t only was slated in the opinion, and the reporter failed in the statement of the facts of the case to set out the provisions of the deed, the counsel for the appellant has been mislead, and has concluded that it was an ordinary deed of trust for the payment of debts.

The deed is now before us, and appears to have been executed by the grantor, in pursuance of an agreement between him and his creditors, to convey the property, in payment and satisfaction of the debls due to the latter. It was in fact an absolute sale of certain property, made by the grantor to his creditors, by which his debts were fully paid off and discharged. But, as the creditors were numerous, they had the title conveyed to trustees, who held the property for their use and benefit. The grantor had made an absolute sale of the property, he had thereby paid off and discharged his debts, the property belonged to his creditors, and they alone were interested in the execution of the trust. There is no similitude whatever between that deed, and the deed by which the slave in contest was conveyed to the appellees.

The chancellor decided that the slave was not subject £o attachment, and thatdecision was clearly right.

Wherefore, the judgment is affirmed.