Peterson v. Farnum , 121 Mass. 476 ( 1877 )

Lord, J.

The rules applicable to a levy upon real estate, the title to which was once in the judgment debtor, are not necessarily those which apply to a levy upon real estate, the title to which was never in him. In the former case, the creditor is entitled to levy upon the estate, if it has been conveyed for the purpose of delaying, defeating or defrauding creditors; and if the grantee participates in the purpose of the grantor, it is immaterial whether the conveyance is a voluntary conveyance, or whether it is for the full value of the estate. Nor is it material, to the title of the fraudulent grantee, whether any or what consideration passed between the parties. The whole legal and equitable title passes by the conveyance, so far as relates to the grantor and his heirs. Neither he nor they can claim any right, title or interest in the granted estate.

When, however, money is paid by one for land and the conveyance is to a third person, the relation between the grantee and the one who pays the consideration is quite other than that of grantor and grantee. When such conveyance is made to a stranger, a trust results in favor of the one who pays the consideration, and, in the absence of all proof to the contrary, the legal estate only vests in the grantee, and that upon a naked trust in favor of the actual purchaser. The actual purchaser has an equitable estate, which the law recognizes, and which equity enforces. He has, even as against the grantee, the entire equitable estate.

If, therefore, this conveyance had been made to a stranger, it would have fallen directly within the words of the statute as to land subject to be levied on as the judgment debtor’s. Though the stranger has the mere legal estate with no beneficial interest whatever in the land, it may be levied on as the land of him who has the entire beneficial interest. Gen. Sts. a. 103, § 1. The person, who thus holds the legal estate, has no interest in the estate, beyond that merely nominal estate. As between him and the beneficial owner, as well as between him and the rest of the world, the whole valuable interest and estate is in the one who has paid for it.

This distinction was observed in the case of Inman v. Mead, 97 Mass. 310. In that case, the judgment debtor, Daniels, had held the fee of the estate and had conveyed it to one Cook; and the claim of the demandant was that the conveyance to Cook had been made with intent to defeat, delay and defraud the creditors of Daniels, and on a trust for him, express or implied, whereby he became entitled to a present conveyance. The learned judge who delivered the opinion in that case says: “ But the demandant’s counsel have endeavored in argument to make a distinction between cases where the only fact to be established is the right of a creditor against the judgment debtor himself, and cases where such a right may incidentally affect third persons ; and claim that if the defendant has no greater or other right to the land than Daniels had, then the judgment should be as conclusive against him as it would be against Daniels. But, whatever soundness there may be in this distinction, it is not, in our apprehension, applicable to the facts in the case. To support it, it must appear that the jury have found for the demand-ant both parts of his allegation, or at least the latter, namely, that the conveyance of Daniels to Cook was upon a trust under which the grantor was entitled to a present conveyance. This does not appear from the’ report of the evidence or from the verdict.” It will be perceived that while the court had this distinction in mind, it was found that the facts of that case did not warrant a decision of the point now under consideration.

We think, however, as well upon the intimation in that case, as upon principle, that the person who holds a mere naked fee in land, in trust for the one who has paid the purchase money, has no such interest in the land as that he can question the right of the cestui que trust or his heirs, in assigning or disposing of it, or to question the right of a judgment creditor to levy upon it. The judgment creditor succeeds to all the rights of the judgment debtor as fully as he could succeed to them by grant or otherwise.

This, however, is upon the supposition that the person in whose name the title is taken is a stranger. In this case, the title was taken in the name of the wife, and not in the name of a stranger. The rules of law are not the same in the two cases. In the case of a stranger, in the absence of all proof, the presumption is that the grantee takes a mere naked fee in trust for the real purchaser. In case of the conveyance to the wife of the party paying the purchase money, in the absence of all proof, the presumption is that she is to take the equitable as well as the legal estate, and the entire beneficial interest vests in her. In either case, however, it is simply a presumption in the absence of evidence as to the true interest of the parties. While, in the case of the stranger, it is competent to prove that the purpose and intention were to vest the entire estate in the grantee, equitable as well as legal, as a gift, or as payment or security for a discharge of an existing debt, so, in the case of a conveyance to a wife, the transaction is open to proof that it was not in tended to vest the equitable as well as the legal estate in her.

It becomes necessary, therefore, in this case, to look into the facts, and see what were the claims of the parties and what issues were found by the jury. It is to be observed that there was no claim made at the trial that the husband and wife were jointly interested in the purchase, nor as to the rights of the parties in such case. Nor was the question raised, what would be the rights of the wife, if the husband had paid his own money for the purpose of vesting both the legal and equitable estate in her; nor whether, at the time of the conveyance to her, he was in a condition in which he could legally cause such conveyance to be made to her. The claim that she made was not under light deiived from her husband. Her claim was that she was the purchaser; that she paid her own money for the estate, and that the whole legal and equitable estate vested in her, without any right in her husband in law or equity; in fact, that she was the purchaser, in her own right, for her own benefit and with her own money. The demandant, however, denied this and contended that the husband was the purchaser, with his own money and for his own benefit. The real issue to the jury was, which purchased the estate, the husband or the wife ? If the wife, then the estate became hers legally and equitably, and the jury were rightfully instructed that she must prevail. If the husband was the purchaser, it did not follow of course that the property was liable to be levied upon as his, but his intent and purpose in the purchase were subjects of inquiry. The demandant took the burden of showing that it was not a purchase by the husband for the benefit of the wife, as would be presumed if nothing else appeared except payment of the purchase money by himself and conveyance to the wife; but that it was a purchase by himself for his own benefit, and with intent to defeat, delay and defraud creditors. Nor does the wife claim anything through or under her husband. She did not claim to hold any estate under him or any title derived from him. It was a simple question of fact, which bought the estate. The jury have settled that fact. Their verdict fixes the fact that her husband, and not she, bought the estate. It is easy to raise questions of difficult solution upon the facts which existed or which might be claimed to exist; but such questions were not raised; the tenant chose to put her claim upon the ground that she, with her own money, purchased the real estate independently of her husband, as independently as if he were a mere stranger, claiming nothing by, through or under iiim; and where the jury has found not only that she was not the purchaser, but that the husband was the real purchaser, and for a purpose entirely inconsistent with her claim, she cannot now claim that she stands in any different relation to the estate, or has any rights to the estate, that she would not have if she were a stranger to and not the wife of the judgment debtor.

In Persons v. Persons, 10 C. E. Green, 250, which was a bill by the husband directly against the wife to compel a conveyance to him of real estate which had been conveyed to her, but the purchase money for which he contended had been paid by him, the question tried was which paid the purchase money. The wife contended that it was paid by her out of her own money ; the husband contended that, although paid by the wife, it was paid by his money, the wife acting as his agent in the payment. The learned chancellor found that the money paid was the husband’s money, and, after recognizing the doctrine above stated — that, when the purchase money is paid by the husband and the conveyance is taken in the name of the wife, primd facie the whole estate vests in the wife —he cites many authorities, which have been recognized and acted upon in this Commonwealth, Edgerly v. Edgerly, 112 Mass. 175,) to show that such presumption may be rebutted by evidence that such was not the intent of the parties, and finds ample proof that such was not their intention in the defence of the wife in which no such claim was set up, but only the claim that the purchase was by her own money in her own right, claiming nothing under the husband. The same principle is also settled in New Hampshire. Tebbetts v. Tilton, 31 N. H. 273. Hall v. Young, 37 N. H. 134.

It is not necessary to decide in terms that under such circumstances a trust would always result to the husband, nor that, in this Commonwealth, such trust, if existing, could be enforced. It is only necessary to decide that, under the right which the statute gives a judgment creditor to levy his execution upon lands “ purchased, or directly or indirectly paid for by him,” (the judgment debtor,) “ the record title to which is retained by the vendor, or is conveyed to a third person, with intent to defeat, delay or defraud the creditors of the debtor, or on a trust for him express or implied, whereby he is entitled to a present conveyance,” no such person, in whom the title to land happens to be, has any right, as against the judgment creditor, upon the question whether the relation of debtor and creditor exists or tn what extent, other than the debtor himself has, and cannot therefore in any collateral proceeding contest the validity or amount of the debt; and we think, both upon principle and authority, that such is the law.

Another question which arose in the case is, whether the court • should have given the specific instruction asked for in relation to the payment of the $1000. The presiding judge is not required to adopt the precise phraseology of counsel, and, although the prayer which was refused asked for nothing which the tenant had not a right to ask, she is not aggrieved, because the judge in his own language in his charge to the jury gave the instruction asked for.

Another exception is to the refusal of the judge to give the instruction, that, if Christian F. Peterson was not aware of the incumbrance at the time of his conveyance, the demandant was not his creditor until 1870. The court rightfully ruled that such ignorance had no bearing upon the question when, in fact or in law, the relation of debtor and creditor commenced. The evidence was competent and proper upon the question of intent, and appears to have been admitted and allowed its proper weight on that issue.

The other exceptions need no particular discussion. The objection to the form of the officer’s return was manifestly waived. The deeds objected to, the building of a house by the husband upon the land, and the fact that no other property of his could be found, were all admissible to assist the jury in understanding the whole transaction, and in passing upon the question of fraud.

Exceptions overruled.