In a suit in equity brought by a judgment creditor to set aside
as fraudulent another judgment against the debtor and the sale
thereunder to the plaintiff in the latter of land of the debtor, it
was held that the burden of proof was on the plaintiff, and that
the latter judgment had not been successfully impeached.
The plaintiff could not avail himself of the objection that the
debtor did not plead the statute of limitations to a part of the
claim in the suit which resulted in the latter judgment; the debtor
was at liberty to waive the plea, and there was sufficient in the
relations of the parties and in the circumstances of the case to
warrant him in doing so.
In equity. Decree dismissing the bill. Complainants appealed.
The case is stated in the opinion.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
This is an appeal by Thomas H. Allen and two other persons,
partners under the name of Allen Nugent & Co., and Thomas H.
Allen individually, from a decree of the Circuit Court of the
United States for the Eastern District of Arkansas dismissing their
bill in a suit in equity brought by them against Benjamin H. Smith
and the heirs at law of William H. Todd, deceased, and Levi H.
Springer, administrator of Todd, to set aside as fraudulent and
void as against the plaintiffs, as creditors of Todd a judgment
recovered by Smith against Todd, and the sale of certain lands of
Todd to Smith on execution on that judgment, and for a sale of
those lands under judgments obtained by the plaintiffs and the
payment of those judgments out of the proceeds of such sale.
The substance of the bill is that in January, 1875, Todd
executed three promissory notes, payable in one, two, and three
years, respectively, from their date in favor of one Cohen, each
for $1,666.66, with ten percent interest; that Allen Nugent &
Co. became the owners of those notes, and brought
Page 129 U. S. 466
suit on the first two of them, which fell due, in the Circuit
Court of Chicot County, Arkansas, by attachment against Todd, and
levied on his interest in certain land in Chicot County on the 18th
of June, 1877; that on February 2, 1878, they obtained judgment in
that suit against Todd for $4,341.64, with ten percent interest
from that date, the judgment declaring that it was a lien upon the
property attached; that like proceedings were had by them by
attachment of the same land in a suit on the third note, in the
Circuit Court of the United States for the Eastern District of
Arkansas, and a judgment was recovered by them against Todd in that
suit, on the 19th of April, 1878, for $2,206.47, with ten percent
interest from that date, the judgment declaring that it was a lien
on the land; that in both of those suits, Todd was personally
summoned; that on the 13th of July, 1876, Todd made another note in
favor of Thomas H. Allen & Co., of which firm Thomas H. Allen
was a member, for $1,507.58, payable thirty days from date; that a
judgment was recovered by them on that note against Todd, in a
court in Pennsylvania, on July 17, 1877, for $1,637.33; that that
judgment was duly assigned to Allen and he brought suit on it in
the Circuit Court of Chicot County against Todd, by attachment;
that the interest of Todd in the land before mentioned was attached
in that suit, and personal service was also had upon Todd, and
Allen recovered judgment in the suit against Todd, on February 2,
1877, for $1,683.83, with interest from that date, and that the
judgment declared that it was a lien on the land attached.
The bill further alleges that at the time of the execution of
the four notes and afterwards, and up to and after the 1st of
August, 1876, and at the time of the levy of the three attachments,
Todd was the owner of an undivided half interest in a plantation
called the "Bellevue Plantation," in Chicot County, with certain
exceptions, which plantation contained the land mentioned as having
been so attached and other land; that at the July term, 1876, of
the Circuit Court of Chicot County, judgments were obtained against
Todd in favor of J. McMurray & Co. and of Jurey & Gillis;
that a decree in favor of one Halliday, enforceable by
execution,
Page 129 U. S. 467
already existed against him in that court, and other creditors
of his were pressing him; that, finding himself thus in failing
circumstances, he conspired with the defendant Smith, who was his
son-in-law, to transfer to Smith a large and valuable part of his
property to save it from his creditors; that in pursuance of that
design, notwithstanding Smith was largely indebted to Todd after
January, 1869, for unpaid purchase money for the half interest in
the Bellevue plantation, which Smith had purchased from Todd, and
although Smith resided on that plantation, and controlled the crops
raised on it, and his services had been taken into account in the
adjustments and payments from time to time between the parties, and
Smith had kept another manager almost the entire time on a
plantation of Todd's called "Yellow Bayou," and there was in fact
nothing due from Todd to Smith for services, Smith, in pursuance of
such fraudulent purpose, brought suit against Todd in the Circuit
Court of Chicot County on the 4th of August, 1876, for the sum of
$8,000, for pretended services not paid for, which had been
rendered by Smith for Todd in managing his Yellow Bayou plantation,
and his half interest in the Bellevue plantation, from January,
1869, to that date at $1,000 a year and interest, and caused an
attachment to be issued, which was levied on August 8, 1876, by
direction of Smith, on all the personal property of Todd on the two
plantations; that on the 14th of August, 1876, the Yellow Bayou
plantation was sold to satisfy Halliday's decree; that after
applying its proceeds, a balance still remained due to Halliday;
that such balance, and the McMurray judgments, amounted to $1,285;
that executions were issued on those judgments, and for the balance
due Halliday, and on September 28, 1876, to satisfy them, the half
interest of Todd in 1,200 acres of the Bellevue plantation -- being
its most valuable part -- was sold, and bought in by Smith at less
than $3 an acre for an entire interest, when the same was at the
time reasonably worth from $20 to $30 an acre; that Todd, in
pursuance of his fraudulent scheme, did not redeem the lands from
the sale, and Smith afterwards received deeds therefor; that
afterwards, on December 19, 1876, Smith directed the sheriff to
release to Todd
Page 129 U. S. 468
115 bales of cotton, on which the attachment of Smith had been
levied on August 8, 1876, and to attach the interest of Todd in
that part of the Bellevue plantation which had been attached in the
suits of the plaintiffs, and also to attach some 60 other acres of
land which Smith claimed was a part of the Bellevue plantation;
that no steps were taken in the attachment suit of Smith against
Todd at the January term, 1877, of the Chicot Circuit Court, the
judgment in favor of Jurey & Gillis having been in the meantime
paid off by money raised from the sale of the cotton so released by
Smith; that at the July term, 1877, of the Chicot Circuit Court,
and after the levy, on June 18, 1877, of the attachments in the
suits by the plaintiffs, an appearance was entered by Todd in the
suit, and a pretended answer was filed for him to the complaint;
that one Mole, in whose charge and custody the property attached in
the suit was left, was at the time in charge of the Yellow Bayou
plantation, and he and others, as agents of Todd, had for years
been in charge of it; that five of the eight years' services
charged for by Smith were barred by limitation; that nevertheless
no defense was in good faith put in to the suit, the answer not
being sworn to, and no issue made; that the case was submitted to a
jury, and a verdict rendered, and a judgment entered for $8,000
against Todd, which declared that it was a lien upon the property
levied on under the attachment in the suit, from the date of the
levy, and that, on April 1, 1878, the said property was sold and
bought in by Smith for the nominal sum of $4,055.
The bill further alleges that the property on which the liens of
the plaintiffs are declared to rest is reasonably worth a large
sum, say, $20,000, and more than enough to pay off their demands,
if the fraudulent judgment in favor of Smith, and the sale
thereunder, should be set aside, and the property be sold at a fair
price.
Smith filed an answer to the bill, taking issue on its material
allegations and denying that there was anything collusive or
fraudulent in his obtaining his judgment and buying under it the
lands in question. The answer also avers that the suit was
vigorously contested by Todd; that Smith was justly
Page 129 U. S. 469
entitled to recover from Todd the whole amount for which the
judgment was rendered, and that at the time he acquired title to
the lands so purchased, they were subject to two mortgages, one of
which was for about $18,000, and the other of which had been
foreclosed, and a decree obtained, in October, 1881, fixing a lien
on the lands, superior to the title of Smith, for $9,743.
The heirs of Todd also put in an answer, taking issue as to the
material allegations of the bill and averring that Smith had had
continuously, from about the 1st of January, 1868, the supervision
and management of the Yellow Bayou and Bellevue plantations, as
long as Todd owned or controlled them, and had never received any
compensation for his services before the suit for the $8,000 was
brought, and that they and each of them believed that the judgment
was just, and that the sum was due to Smith from Todd.
Springer, the administrator of Todd, also put in an answer to
the same effect as that of Smith.
The bill did not waive an answer on oath, and all three answers
were sworn to.
Subsequently Smith and Springer filed a sworn amendment to their
answer setting up that letters of administration were granted to
Springer on the estate of Todd by the Probate Court of Chicot
County on the 4th of August, 1879, and that the demands of the
plaintiffs against the estate were not exhibited to the
administrator, as required by the statute, before the end of two
years from the granting of the letters.
The question to be decided in this case is exclusively one of
fact, and concerns the honesty and validity of the claim of Smith
against Todd. The claim is supported by a judgment, a copy of which
is contained in the record. The complaint in the suit was sworn to
by Smith on the 4th of August, 1876. The account filed with the
complaint states that the $8,000 is due for services rendered in
the supervision and management of Todd's Yellow Bayou plantation,
and his half interest in the Bellevue plantation, from January,
1869, to date at $1,000 per annum and interest. The attachment was
levied on the 5th of August, 1876, on cotton and other personal
Page 129 U. S. 470
property, and on certain land. On the 25th of July, 1877, Todd
filed his answer, denying each and every allegation of the
complaint, and on that day the case was tried by a jury, which
found a verdict for Smith, and assessed his damages at $8,000. The
burden of proof is on the plaintiffs in this suit to impeach that
judgment. We do not think they have successfully done it. It would
not be profitable to discuss the evidence.
Much comment is made on the fact that Todd did not plead the
statute of limitations of the state to a part of Smith's claim. But
this is not an objection of which the plaintiffs can avail
themselves. Todd was at liberty to waive the plea, and there was
evidently sufficient in the relations of the parties and in the
circumstances of the case to warrant him in doing so.
We have carefully considered the evidence, and the various
propositions advanced by the counsel for the appellant's in regard
to the facts, and are of opinion that the decree of the circuit
court was right, and that it must be
Affirmed.
MR. CHIEF JUSTICE FULLER was not a member of the Court when this
case was submitted, and took no part in its decision.