Bank of the United States v. Lee - 38 U.S. 107 (1839)
U.S. Supreme Court
Bank of the United States v. Lee, 38 U.S. 13 Pet. 107 107 (1839)
Bank of the United States v. Lee
38 U.S. (13 Pet.) 107
R.B.L., in 1809, then residing in Virginia, for a valuable consideration made a conveyance in trust for the benefit of his wife of certain personal property, and slaves, which deed was duly recorded according to the provisions of the act of the Legislature of Virginia. The property thus conveyed remained in the possession of the husband and wife while they resided in Virginia, and in 1814, R.B.L. removed to the District of Columbia with his wife and family and brought with him the slaves and property conveyed in trust for his wife. In 1817, R.B.L. borrowed a sum of money of the Bank of the United States on his promissory note, endorsed by one of the trustees named in the deed of trust
of 1809. At the time the loan was made, R.B.L. executed a deed of trust of eleven slaves, and among them were the slaves and the household furniture conveyed by the deed of 1809, to secure the bank for the amount of the loan. In 1827, R.B.L. died, entirely insolvent. During his residence in Washington, being in reduced circumstances, he sold some of the slaves, conveyed by the deed of 1809, for the support of his family, without objection by his wife or her trustees. In 1834, the debt to the bank being unpaid, a bill was filed against Mrs. E.L., the wife of R.B.L., and the trustees, in order to compel the surrender of the remaining slaves and the household furniture to the trustee for the bank for the sale of the same to satisfy the debt due to the bank. Held that the deed of 1809, vesting the property in Mrs. L.'s trustees, was effectual, according to the laws of Virginia, to protect the title thereto against the subsequent creditors or purchasers from R.B. Lee, and that the removal of R.B.L. and his wife into the District of Columbia with the property conveyed to the trustees for the use of Mrs. L. did not affect or impair the validity of the deed of trust.
A liberal construction should be given to the clause of the Virginia statute for the suppression of fraud. This is the well established rule in the construction of the statute of Elizabeth, which the first section of the Virginia statute substantially adopts.
If A sells or conveys his lands or slaves to B, and then produces to another his previous paper title and obtains credit on the goods or lands by pledging them for money loaned, he is guilty of fraud, and if the true owner stands by and does not make his title known, he will be bound to make good the contract on the principle that he who holds his peace when he ought to have spoken, shall not be heard now that he should be silent. He is deemed in equity a party to the fraud.
The appellant filed a bill in the circuit court stating that in 1817, Richard Bland Lee represented himself to be the owner of certain after-mentioned property then in his possession; that he applied to the bank for a loan of $6,000, and offered to convey the said property in trust to secure the repayment of said sum of money; that the loan was made, and a deed of trust executed and delivered on 11 June, 1817, to Richard Smith, as trustee; that the said Lee died in 1827, intestate and insolvent, leaving said debt unpaid; that no administration was taken on his estate; that his widow, Elizabeth Lee, the defendant, has taken possession of said property and withholds it from said trustee, alleging that it had been previously conveyed by her said husband in January, 1809, to trustees for her use.
The bill charges that the said deed of 9 January, 1809, if ever made, was a voluntary and fraudulent deed, and therefore void against the complainants, who are bona fide purchasers for a
valuable consideration without notice; that the considerations expressed in the said deed are false, or if true, insufficient to give it solidity; that at the date of the said deed, Richard Bland Lee was largely indebted, and incompetent at law to make the same; that if the said deed had every legal requisite, it was executed in Virginia, and never was recorded in Washington County, in the District of Columbia, to which place the said Lee and his wife removed, bringing with them the said property, or was other notice given to the public then of its existence; that E. J. Lee, the surviving trustee, in the deed of 9 January, 1809, and Mrs. Lee herself knew that the complainant had loaned the $6,000 to Richard Bland Lee upon his representations that he was the owner of the said property and that Richard Bland Lee had conveyed the same to Richard Smith to secure the payment of the said sum of money, and never communicated to the complainants or to Smith until several years after the death of Richard Bland Lee the existence of the deed of 9 January, 1809.
The bill prayed that the deed of 9 January may be produced, the execution thereof and the recitals therein fully proved, and that it may be declared fraudulent and void against the complainants.
Elizabeth Lee in her answer admits the loan and the execution of the deed to Richard Smith, but avers she was ignorant of its execution until long after it had been delivered, and never consented thereto; she denies any knowledge of the representations made by Richard Bland Lee respecting the ownership of said property when he applied for the loan.
She says that on 9 January, 1809, she and her husband, then living and having a long time before dwelt in Fairfax County, Virginia, and the property in the deed mentioned therein being in the said county, she agreed with her husband to relinquish her right of dower in certain lands in Spotsylvania County, Virginia in which her husband held five-eighths of eight thousand acres; also to convey her right in certain Fairfax land containing two thousand one hundred acres, her separate property, to trustees, to secure a debt of $10,034 28 due from her husband to Judge Washington, in consideration of which, and of her execution of the conveyances and relinquishment of her dower, her husband agreed to convey to E. J. Lee, William Maffit, and R. Coleman certain slaves, &c., of which those mentioned in the bill of complaint are part, for her use; that it was agreed that her said husband should be authorized to sell any part of the said property, with consent of a majority of the said trustees, provided he should convey to the said trustees other property to the full value of that sold. She avers that in execution of this agreement and in consideration of the deed of the slaves, &c., of 9 January, 1809, she executed the deed of the Spotsylvania land and relinquished her dower therein; that on 9 January, 1809, she conveyed the land in Fairfax to secure Judge Washington's debt, and on the same day
her husband, in fulfillment of his part of the agreement, made and executed the deed of 9 January, 1809, to E. J. Lee, Maffit, and Coleman, of the slaves, &c., which deed was duly proved and recorded in Fairfax County Court within eight months from its date, in which said county she still continued for some time to reside with her husband, and where she continued to hold the said property. The deeds are exhibited with the answer.
She declares the agreement to have been bona fide and without fraud, and claims to be the owner of said property. She admits her husband sold part of the property with the consent of her trustees, and other part under the pressure of great distress, without their consent after they removed to Washington; that her husband died in 1827; that they lived together until his death; and that her possession of the property, being domestic servants and household furniture, could not be separated from his, and was consistent with the deed.
The case is stated more at large in the opinion of the Court.
The circuit court decreed that the bill should be dismissed, and the complainants prosecuted this appeal.