Citizens' Mutual Insurance v. Foster ( 1886 )

Cooper, C. J.,

delivered the opinion of the court.

If the bill in this case had been exhibited to vacate the consent decree made in the proceeding in which Starke, assignee, etc., was complainant and the defendants hereto defendants, it would then have been material to allege and show the frauds and deceitful practices by which it was procured. But the complainant does not now seek to annul the compromise under which Starke parted with his title to the property in controversy. That compromise is the foundation of the claim which the complainant asserts. If it is set aside and the status quo ante restored, the result would be that the title to the property which is sought to be subjected to complainant’s demand would be vested in Starke, assignee for the benefit of creditors generally, as provided by the deed of assignment, and this would be an insuperable obstacle to the relief prayed. But complainant does not seek to do this; the sole purpose of its bill is to procure a decree affirming that the title acquired by the compromise was vested in Mrs. Foster in fraud of the rights of the creditors of her husband. If this be true, it is sufficient to support the bill; if it be not true, the complainant cannot subject the property, no matter how great may have been the fraud practiced upon Starke.

The°deed of assignment passed whatever title G. W. Foster before that time had had in the assets which were invested in the lands, and though G. W. Foster had taken the title in his own name he held the same in trust for Starke, the assignee. It does not, therefore, appear that Mrs. Foster acquired anything save the bare legal .title from G. W. Foster, and since his creditors could not have subjected that to the satisfaction of their debts, it was no fraud upon them that he conveyed it to his wife. The real vendor to Mrs. Foster was Starke, and, as we have said, it is not proposed to subject his title to sale by the present proceeding. The solé ground, therefore, on which the complainant can have the relief prayed, is that G. W. Foster paid the purchase-money to Starke, in consideration of which the conveyance was made to Mrs. Foster. This is the material fact to be established by the complainant to entitle it to relief. This fact is not proved, but is disproved by the testimony adduced. A part of the purchase-money was paid out of the rents accruing on the lands conveyed by Starke. These rents did not belong to G. W. Foster but to Starke, the assignee, and by the compromise passed to Mrs. Foster. This was, therefore, her money, and not G. W. Foster’s. Another portion of the money paid was advanced by a brother of G. W. Foster to Mrs. Foster. Now, it is evident that the creditors of G. W. Foster never had any sort of right to subject this money to the payment of their claims. The lender was under no liability to pay these debts, and the creditors were not defrauded, and could not be, by the fact that he loaned the sum to the wife of his insolvent brother. It may be that but for this insolvency G. W. Foster would himself have borrowed the money and would have taken the title to himself; but we know of no principle of law which gives to a creditor the benefit of a trade made by another, but which would have been made by the debtor but for his insolvency. Mr. Foster’s abilities as a financier may be great (the record shows them to be of no ordinary character), but creditors have no lien on them ánd no right to complain that the debtor devotes them to the benefit of his wife. The remainder of the purchase-money was paid by one Billups, who was, or thought that he would be, benefited by the compromise, but the money paid by Billups was not the money of G. W. Foster, and its investment in the lands did not defraud the complainant. Since the complainant has shown no right to subject the lands to the payment of its claim against G. W. Foster, it is immaterial whether the mortgages which rest upon it are valid or invalid. Complainant has no interest in this question.

The decree is affirmed.