Hennon v. McClane

Chief Justice Agnew

delivered the opinion of the court, January 6th 1879.

The question of actual or intentional fraud was fairly submitted to the jury, and is put at rest by the verdict. The question of legal fraud stands on a different footing. That may be the result of the bargain itself without any intended fraud, where the terms of the bargain upon the face of the transaction must hinder and delay creditors. It is well settled that one in debt cannot convey away all his property to his wife or children, by way of settlement merely, and without an adequate consideration. Nor can he convey his property in consideration of a. support for himself or those dependent upon him, where the effect is to deprive his creditors of the means of payment of their debts. Indeed the decisions do not stop here, for the statute of 13 Eliz. being directed against conveyances that hinder and delay creditors, as well as those made with a covinous intent, bargains which are not ordinary sales to pay debts, but which are unusual and tie up property out of the reach of creditors, preventing the collection of their debts in the ordinary course of law, are held to be against the statute, and therefore fraudulent in law. Thus, a sale of all a man’s property to his sons on bonds, "not due for a long time, is invalid, on the ground of hindering and delaying. In such a case, the law determines the intent to be fraud'ulent on the face of the transaction, which, on its front, shows that it must necéssarily prejudice the right of creditors : for otherwise it would be in the power of the debtor to impose his own terms of payment regardless of their rights : Kepner v. Burkhardt, 5 Barr 478; Johnston v. Harvy, 2 P. & W. 82 ; Adlum v. Yard, 1 Rawle 163; Sanders v. Wagonseller, 7 Harris 248. In this view of the law the charge of the learned judge, which placed the case wholly on the ■ground off the intentional fraud is scarcely accurate, except on the supposition that he did not consider it necessary to answer the propositions made, because of the absence of sufficient evidence of the existence of debts at the time, to be prejudiced by the sale of Cole to MeClane. So far as the evidence is laid before us, this appears-to be so. Certainly it is too weak to require a reversal for misdirection, the transaction being entirely fair in fact. If there were evidence of actual existing debts, the evidence ought to have been furnished upon the paper-books. What we have is very small, uncertain, and stale. We discover no substantial error in the record.

Judgment affirmed.