Harting v. Jockers

Congee, J.

To the foregoing bill a general demurrer was sustained by the court below and the bill was dismissed.

It is insisted by appellee that this action of the Circuit Court was justified upon three grounds.

First. Appellant had an adequate remedy at law, and we are referred to See. 81, Chap. 3, Revised Statutes, and decisions thereon. That section provides that any executor or administrator or other person interested in an estate may, upon making the proper affidavit, have brought before the County Court any one supposed" to have assets of the estate,” when the question may be examined by the coult, and such order may be made as the case may require.

But this section provides for a proceeding to gather together the assets of the estate for its benefit, and to compel every one to account to the estate for what may belong to it, although in the hands of strangers. But the bill in this case sets out an arrangement by which the estate of Huester and his executors are bound as much as Huester would be if living. The contract between Huester and Jockers, as between themselves, their heirs or legal representatives, was binding and could not be avoided.

It is only the creditors of Huester that are defrauded, and they alone can complain; hence we think this objection to the bill is not tenable.

Second. That the contract was fully executed between deceased and Jockers, and therefore could not be set aside. No authority is given to sustain this proposition, and we presume none can be found.

When a debtor makes a contract which the law deems fraudulent, and whereby his creditors are defrauded of their rights, we know of no principal of law or equity which would prevent a court, of equity from annulling such fraudulent contract, and restoring the creditors to their legal rights, because the fraud has been consummated.

We think there was no adequate remedy in the County Court. Appellant’s claim had been allowed in that court against the estate, but it had no assets to pay the claim with, nor could the representatives of the estate ask that a voluntary conveyance, made by the deceased, be set aside. That could only be done by a creditor and by a creditors’ bill, by which the equitable powers of a court of chancery are called into action; hence we think the third objection to the bili is not well founded.

It is next insisted by appellee that “it must be alleged and proved that the grantor and grantee entered into the fraud; in other words, that the grantee knew the condition of grantor’s affairs, and knowingly, and thus fraudulently, made the contract.”

The fraud charged in the bill is a conclusion of law upon the facts stated, and it is not material what the intentions of the parties to the transaction were.

The contract, as set forth in the bill, was that the deceased transferred all his property to lookers, in consideration of being supported during his life, thereby rendering himself insolvent and unable to pay his debts, and this he can not legally do. As said in Annis v. Bonar, 86 Ill. 130: “It may be the motives of the parties were free from censure; hut the principle, it would seem, must, to every correct apprehension, bear its condemnation upon its statement. It is that a debtor may ti ansfer all his property to another, and thereby defeat his creditor in the collection of his debt, and yet enjoy the use of the property. * * * If the debtor may take a covenant for support and maintenance, he may prescribe, even to the minutest details, the kind and quality. The law allows no man, beyond the specific exemptions of the statute, by any form of contract or mode of disposing of property, whatever it may be, to secure the use of his property to himself, to the exclusion of his creditors.

“ The law will not speculate about what is actually passing in the donor’s mind, for the act need not be immoral or corrupt. The law does not concern itself about the private or secret motives which may influence the debtor. It does not deal,with his conscience. He may make a conveyance with the most upright intentions, really believing that he has a right to do so, and that it is his right and duty to do it, and yet, if the transfer is voluntary, and hinders, delays or defrauds creditors, it is fraudulent.” Bump on Fraudulent Conveyances, 266.

We think the demurrer to the bill was improperly sustained, and hence the decree of the Circuit Court will be reversed and the cause remanded.

Reversed and remanded.