Opinion
(December Term, 1846.)
1. A, being seized and possessed of an estate in fee in a tract of land, subject to a limitation over to B in the event of A's dying without issue, made a fraudulent conveyance of the land. Afterwards B died, leaving A his heir at law. Held, that after the death of B the whole estate was liable to the satisfaction of A's creditors.
2. The act regarding fraudulent alienations of property makes the fraudulent conveyance absolutely void, and in that way prevents the passing of any estate as against creditors, etc.
APPEAL from BEAUFORT Fall Term, 1846; Bailey, J.
The plaintiff and defendants each claim the land in dispute under Joseph R. Hanrahan. Walter Hanrahan died previous to 1823, having duly made his last will and testament, in which he devised to (33) Joseph R. Hanrahan, his son, in fee, the lands in question, and in a subsequent part of the will be devises as follows: "In case my son Joseph R. Hanrahan should have no issue at the time of his death, I then devise the aforesaid lands already given him to my son William K. Hanrahan." Walter Hanrahan left three sons, James, Joseph R., and William K. Hanrahan. Of these, James died the first after his father, without having any issue, and then William, who died in 1834 and without having had issue, and leaving Joseph his heir at law, and the latter died in 1837. In 1827 one Christie obtained a judgment in the county court of Beaufort against Joseph R. Hanrahan, and to defeat this claim Hanrahan, on 14 December, 1826, conveyed the lands in question to the lessor of the plaintiff, without any valuable consideration, at which time the suit was pending. After the death of Joseph R. Hanrahan various creditors of his, upon debts contracted after the date of his deed to the lessor of the plaintiff, obtained judgments against his heirs, and the lands in dispute were, under execution issuing on said judgments, sold by the sheriff of Beaufort County, and James O'K. Williams, the father of the defendants, purchased them.
The plaintiff requested the court to instruct the jury "that notwithstanding they might be satisfied of the existence of a fraudulent intention on the part of Joseph R. Hanrahan to defeat the anticipated recovery of Christie in making the deed to Flynn, yet this fraudulent intention avoided the deed only so far as it conveyed the estate, which was then in Joseph R. Hanrahan and liable to be sold under execution; that, as to the contingent estate, which was then in William K. Hanrahan and afterwards descended to Joseph by the death of William, the deed could not be avoided by the existence of such fraudulent intention, but that said estate was conveyed to the said Flynn." His Honor refused to give such instructions, but charged the jury "that if Joseph R. (34) Hanrahan intended, by his deed to Flynn, to defeat the anticipated recovery by Christie, the deed was void as to Christie, and by conclusion of law was also void as to the subsequent creditors of Hanrahan, under whom the defendants claimed." A verdict was found for the defendants, and the plaintiff appealed.
Rodman for plaintiff.
Stanly, J. H. Bryan, and Shaw for defendants. (37)
In the opinion of his Honor we entirely concur. The very ingenious argument submitted to us in behalf of the plaintiff has failed to convince us that he is entitled to a verdict in this case. It is fallacious, and its fallacy consists in considering the act against fraudulent conveyances as operating on the estate of the fraudulent grantee, and not on the conveyance. The words of the act are plain and unambiguous: "All and any feofment, etc." — "at any time had or heretofore made, or at any time hereafter to be had or made, etc.," "to or for any purpose or intent to delay, hinder, and defraud creditors and others of their just and lawful actions, debts, and accounts shall be deemed and taken to be clearly and utterly void, frustrate, and of no effect." It is the conveyance with the act makes void. Haffner v. Irwin, 23 N.C. 498. The plaintiff, while he distinctly admits that the conveyance to Flynn is fraudulent as to Christie, contends that it is void only as to the estate which was then in Joseph R. Hanrahan, and not as to that which was contingent and dependent upon the death of William Hanrahan, for the reason that only the estate Joseph then had was liable to execution for his debts. Admit this to be so. Unfortunately for the plaintiff, he claimed both estates by the same conveyance, and by what alchemy he separates the two estates, so conveyed, so as to preserve the one while admitting the other to be void for fraud, we cannot well (38) perceive. It is a well established principle that when a statute makes a deed void for any cause, the whole deed is void, although mixed with illegal considerations, there may be others which are just and proper. Thus it is declared by the Court in Haffner v. Irwin, 23 N.C. 498: "If the hindrance from any part of the actual intent of the act done, so far the act against them is a malicious or wicked contrivance, and it is not to be questioned that a conveyance or assurance, tainted in part with a malicious or fraudulent intent, is by the statute made void as against creditors in toto." Here it is admitted that, at the time the conveyance was made to Flynn, Joseph R. Hanrahan had in the land an estate which was subject to Christie's claim, to wit, his defeasible estate in fee simple, and it is admitted it was made to defeat his debt. It was then, in part at least, tainted with a malicious and fraudulent intent, and is, according to the decision just cited, void in toto, that is, the conveyance or assurance is utterly void. It is inoperative even as color of title against a creditor until the latter has acquired a right of entry. Hoke v. Henderson, 14 N.C. 15; Pickett v. Pickett, ibid., 6. By the will of his father Joseph took an estate in fee, defeasible on his death without issue, when the estate was limited over to his brother William in fee. This remainder to the latter was good as an executory devise because it was limited to take effect during lives then in being. The death of William no farther affected the estate than to throw upon his heir the contingent estate devised to him, and Joseph was his heir at law, and upon his death without issue it passed, eo instanti, to his heirs at law. Whatever might be the effect of an estoppel or rebutter as between the present plaintiff and the heirs of Joseph R. Hanrahan and those claiming under them, it can certainly have no operation upon his creditors, in whose shoes the defendants stand. (39) In Flynn v. Williams, 23 N.C. 509, it is decided that Christie, by his purchase under his execution, acquired only the title which was in Joseph at that time, and which consequently expired with the life of Joseph. The case states that Christie's debt is still unsatisfied, and that the father of the defendants purchased at the sale by the sheriff under execution against the heirs of Joseph to satisfy debts contracted by him after the date of his deed to the plaintiff. The deed to the plaintiff being made to defraud Christie, a present creditor, it is utterly void as to subsequent creditors, for it is not bona fide. 1 St. Eq., 348, sec. 352, and the authorities there cited; and also page 352, sec. 361, where the same principle is stated. Taylor v. Jones, 2 Atk., 601; Newland on Contracts, 389. The plaintiff claims the land in controversy alone under that deed, and it being utterly void as against the creditors of the grantor, under whom the defendants claim, it confers upon the plaintiff no legal title against them, and the plaintiff cannot recover.
We are of opinion his Honor was right in refusing the instruction prayed for, and committed no error in his charge.
PER CURIAM. No error.
Cited: Stone v. Marshall, 52 N.C. 304; Morris v. Pearson, 79 N.C. 259; Cowles v. Coffey, 88 N.C. 342.