Where an issue is sent by a court of equity to be tried by a
jury in a court of law, and exceptions are taken during the
progress of the trial at law, these exceptions must be brought
before the court of equity and there decided, in order to give this
Court cognizance of them when the case is brought up by appeal.
A question, whether or not certain conveyances were fraudulent,
was properly submitted to the jury. Fraud is often a mixed question
of law and fact, and the jury can be instructed upon matters of
law.
A note held by a bank for a debt due to it, and renewed from
time to time with the same maker and endorser, is sufficient to
constitute the bank a creditor in claiming to have conveyances set
aside as fraudulent, although the note was not due when the
conveyances were made, and the present note was renewed
afterwards.
Where the original debtor had made a conveyance of property to a
trustee for the purpose of securing his endorser, it was not
necessary to pursue and exhaust that trust property before
proceeding against the endorser and his property. A judgment had
been obtained against the administrator of the endorser, which
fixed his liability.
This judgment against the administrator in which a
devastavit had been suggested, and a return of
nulla
bona to an execution, was good evidence against the surety of
the administrator, and also against the fraudulent grantee of the
intestate.
Although the creditor has a remedy against the surety of the
administrator by a suit at law upon the bond, yet he may also file
a bill in chancery against all the parties who are concerned in the
alleged fraud, and such other persons as are interested in the
estate.
Although by the laws which prevail in the District of Columbia,
the personal estate of a deceased person should be resorted to for
the payment of debts before applying to the realty; yet where the
administrator was found guilty of a
devastavit, and the
personal property was chiefly left in the hands of the surety, who
was also the person charged with being a fraudulent grantee of the
intestate, the general rule is not applicable.
In a bill against the fraudulent grantee, it is not necessary to
aver a deficiency of the personal estate of the deceased; it is
sufficient to aver the fraud and the waste of the personal assets
by such grantee, who was also the personal representative.
The bill was filed in the circuit court by the President,
Directors, and Company of the Bank of Potomac, Elijah Dallett and
Elijah Dallett, Jr., trading under the firm of Elijah Dallett
Page 48 U. S. 221
& Co., William H. Miller, and A. C. Cazenove & Co., who
sue in behalf of themselves and such other creditors of the estate
of Edward McLaughlin, deceased, as will make themselves parties and
contribute to the expense of this suit, against Edward Sheehy, in
his own right and as administrator of Edward McLaughlin, and Ann
Sheehy, wife of said Edward and one of the children and heirs at
law of said Edward McLaughlin, Bridget, otherwise called Biddy
McLaughlin, another of the children and heirs at law of said Edward
McLaughlin, and surety for said Edward Sheehy's administration on
said estate, and Edmund I. Lee, trustee under a deed of trust from
the said Edward Sheehy.
The narrative of the case is as follows.
Edward Sheehy's notes, endorsed by Edward McLaughlin, were
discounted at the Bank of Potomac as follows,
viz.:
1828 -- Dec. 12, 1 note for . . . . . . . $2,000
1830 -- Jan. 15, 1 note for . . . . . . . 2,000
Feb. 5, 1 note for . . . . . . . 2,000
And they were curtailed and renewed from time to time, until
they all became due the 20th January, 1832,
viz.:
1 note for . . . . . . . . . . . $1,375
1 note for . . . . . . . . . . . 1,900
1 note for . . . . . . . . . . . 1,975
------
Amounting to . . . . . . . . $5,250
when they were amalgamated, and one note substituted for the
three, which note was renewed from time to time until 15-18 April,
1834, when it became due and was protested.
Whilst these notes were running on, namely, on 27 September,
1830, one James Robinson conveyed certain property in Alexandria to
Bridget McLaughlin, who was the daughter of Edward McLaughlin, the
endorser of the above notes. Sheehy, the maker, was married to
another daughter. One of the allegations in the bill was that this
property was secretly paid for by Edward McLaughlin, who, it was
alleged, procured it to be conveyed to his daughter for the purpose
of placing it out of the reach of his creditors.
On 24 November, 1830, Sheehy conveyed a lot of ground in the
Town of Alexandria to Edmund I. Lee, in trust, to secure McLaughlin
against his endorsements in the bank, as far as the sum of $3,950.
Lee was to sell it whenever McLaughlin requested him, in writing,
to do so.
On 6 November, 1832, Edward McLaughlin conveyed to his daughter
Bridget four lots in Alexandria, in fee simple, reserving to
himself a life estate.
Page 48 U. S. 222
On 15 March, 1833, Sheehy and wife conveyed to McLaughlin
certain other real property and slaves, and other personal
property. It was an indemnity against loss from the endorsement of
McLaughlin upon the notes in question and other notes.
On 9 November, 1833, McLaughlin executed another deed in fee
simple of certain property to his daughter Bridget.
In April, 1834, the note mentioned in the beginning of this
narrative became due and was protested. Its amount was $5,250.
In May, 1834, the Bank of Potomac brought suit upon the note,
and in August, 1834, obtained judgment by default, against Edward
McLaughlin.
On 15 September, 1834, McLaughlin executed another deed for
certain other property in fee simple to his daughter Bridget.
In September, 1834, after the execution of the above deed,
McLaughlin died.
On 12 November, 1834, Sheehy took out letters of administration
upon his estate, and Bridget McLaughlin became the security upon
his bond. It is not necessary to state the appraisement, or the
measures pursued by other creditors than the Bank of Potomac. No
administration account was filed.
In June, 1835, the judgment which the bank had obtained against
McLaughlin in his lifetime was revived, by
scire facias,
against his administrator, upon which an execution was issued. The
return was that no effects of the said McLaughlin, in the hands of
his administrator, were to be found whereon to levy the said
execution.
In April, 1836, the bank brought an action against Sheehy,
suggesting a
devastavit, and in June, 1837, obtained a
judgment against him
de bonis propriis. Execution was also
issued upon this, the return to which was that no goods and
chattels of the said Sheehy were to be found.
In January, 1838, the bank filed its bill on the equity side of
the court, suing for itself and such other creditors of the estate
of Edward McLaughlin as chose to make themselves parties and
contribute to the expense of the suit. The bill recited the above
facts; averred that a large amount of personal property came into
the hands of the administrator; that the said administrator, and
his said surety, combining together to defraud the creditors of the
said McLaughlin, caused his personal estate to be appraised at
prices greatly below its value, and then sent off the said slaves
to distant parts for sale, where they
Page 48 U. S. 223
were actually sold for sums greatly exceeding the said
appraisement; that no account of the sales of the said McLaughlin's
personal estate had ever been returned to the said orphans' court,
nor had the said administrator ever made any settlement of his
administration accounts; that large sums of money of the said
estate yet remain unaccounted for, and misapplied to their own use
by the said administrator and his surety; that McLaughlin had
combined and confederated with his daughter Bridget fraudulently to
convey and transfer his property to her, with a view to protect it
from liability for his debts; that all the said deeds were
fraudulent and void; that the deceased left no real estate, having
thus conveyed it all fraudulently away; that his personal estate
had been made away with and misapplied by the administrator and his
surety, the said Bridget; that the bank had a right to be
substituted to the benefit of the trust deeds. The bill then prayed
a discovery and account of the personal estate; that the fraudulent
deeds might be set aside and annulled, and the property mentioned
in them be applied to the payment of the debts of the estate, and
for general relief.
A supplemental bill and answer were filed in the course of the
proceedings, which did not essentially vary the state of the
case.
In May, 1838, Bridget filed her answer, which was afterwards
withdrawn, and another filed in May, 1842. Sheehy and wife filed
their answer in May, 1839. The answer of Bridget denied all the
allegations in the bill, and especially a legal recovery against
Sheehy for said debt, but, if proved, contested that she was bound
for the same, being no party thereto. She further admitted giving
the bond as surety for Sheehy, but denied that it was binding on
her or that personal property of more value than $1,653.28 came to
his hands, as shown in the inventory thereof. She denied any
combination to defraud the creditors of Edward McLaughlin by
undervaluing his personal estate or selling it higher than the
appraisement or not having it accounted for. She denied the
existence of any indebtedness now by Edward McLaughlin, or at his
death, as endorser for Sheehy, which existed in September, 1830,
and averred that notice of protest was necessary to make him so
liable, which had never taken place, and that the deed then given
to her was not fraudulent as to the bank. She further averred that
the deeds were not void, because Sheehy was the principal debtor,
and possessed sufficient real estate then to satisfy the debt. She
further alleged, that the real estate of her father was liable in
the hands of his heirs only for specialty debts, which this was
not. She proceeded to deny fraud in the various other
Page 48 U. S. 224
deeds to her, and to allege a moneyed consideration therefor.
She admitted the conveyances in trust by Sheehy, and averred that
the bank had never requested the land held in trust to be conveyed
and applied to the discharge of this debt, or it would have been
done, and that it ought now to be done before a resort to the
personal estate. She denied the validity of the judgments against
Sheehy as affecting her, and proceeded to answer the special
interrogatories addressed to her.
Sheehy and wife, in their answer, denied all fraud in the
inventory or management of the estate; admitted that no account of
his administration had been rendered by Sheehy, but averred his
readiness to do so; that although he was the nominal administrator,
yet Bridget McLaughlin transacted all the business, and denied all
combination with Bridget, or with any other person, to defraud the
creditors of Edward McLauglin.
In April, 1839, the court passed a decree for the sale of the
property mentioned in the two deeds of Sheehy to Lee, of 24
November, 1830, and Sheehy and wife to Edward McLaughlin, of 15
March, 1833. The reports of sale need not be further adverted
to.
In May, 1843, the cause standing under a general replication and
issue, the court ordered it to be tried at law, for the purpose of
ascertaining:
1st. Whether any and what valuable consideration was paid or
given, and by whom, to James Robinson for the property conveyed by
him to the said Bridget McLaughlin in the bill mentioned, and
whether the said property, in the said deed mentioned, was
purchased
bona fide by the said Bridget, with her own
funds.
2d. Whether the deeds of 6 November, 1832, and 9 November, 1833,
in the bill mentioned, from the said Edward McLaughlin and the said
Bridget McLaughlin, or either, and which of said deeds, were or was
made with intent to hinder, delay, or defraud the complainants of
their just and lawful actions as creditors of the said Edward
McLaughlin, or whether the said deeds were made for valuable
consideration, and
bona fide.
3d. Whether the deed 15 September, 1834, from the said Edward
McLaughlin to the said Bridget, was made with a like intent to
hinder or delay the said complainants, or
bona fide, and
for valuable consideration.
The jury, being unable to agree, were discharged, and the record
transferred to Washington County, where the cause was tried at
March term, 1844. The certificate was as follows:
"Upon the first issue joined the jury say, that the valuable
consideration expressed in the deed referred to in the said
issue
Page 48 U. S. 225
was paid by Bridget McLaughlin to said James Robertson, and that
the said property mentioned in said deed was purchased
bona
fide by the said Bridget, with her own funds."
"And we find, as to the second of the said issues, that the said
deeds of 6 November, 1832, and 9 November, 1833, in the said bill
mentioned, from said Edward McLaughlin to said Bridget McLaughlin,
were, and both and each of them were made by the said Edward with
intent to hinder, delay, and defraud the said complainants of their
just and lawful action as creditors of the said Edward McLaughlin,
and that the said Bridget had notice of said intent, and that they
were not, nor were either of them, made for an adequate valuable
consideration, nor were either of them made
bona fide
between the said parties."
"And as to the third of the said issues, we find that the deed
of 15 September, 1834, from the said Edward McLaughlin to the said
Bridget, was made with a like intent to hinder and delay the said
complainants, and was not
bona fide, and the same was not
made for a valuable consideration."
"And we find upon the second and third issues for the
complainants."
In the course of this trial, sundry bills of exceptions were
taken, which it is unnecessary to specify, because the points made
were not brought before the court which sent the issue to be tried
at law, and therefore it was held that they should not come before
this Court for review.
In June, 1845, the Circuit Court of Alexandria passed the
following final decree:
"The court, on consideration of the above matters, do now here,
this 10 June, 1845, order, adjudge, and decree, that the aforesaid
deed from James Robertson to Bridget McLaughlin, dated 27
September, 1830, in the bill of the complainants mentioned, was not
made with intent to hinder or defraud the creditors of the said
Edward McLaughlin, and is not fraudulent and void. And they do
further adjudge and decree that the several deeds dated 6 November,
1832, and 9 November, 1833, and 15 September, 1834, from the said
Edward McLaughlin to his daughter, the said Bridget McLaughlin,
were made without valuable consideration, and were made with intent
to delay, hinder, and defraud the creditors of the said Edward
McLaughlin, and are, therefore, fraudulent and void as against
them, and that the said deeds be set aside and annulled."
"And the court, proceeding to grant to the complainants such
relief as they are entitled to, and as sought in their said bills,
do further adjudge, order, and decree, that the real estate
described
Page 48 U. S. 226
and mentioned in the above last-mentioned deeds, from the said
Edward to the said Bridget McLaughlin, and by this decree declared
fraudulent and void, be subjected to the payment of the debts of
the complainants, in the manner hereinafter directed, and that the
commissioners hereinafter named do proceed to make out of the said
property, by a sale of the same, or so much thereof as may be
requisite, and in such lots as to the said commissioners shall seem
best, at public auction, to the highest bidder, after giving thirty
days' notice of the time, place, and terms of sale, by publication
in the
Alexandria Gazette, the following several sums,
that is to say [proceeding then to distribute the fund amongst the
creditors]."
An appeal from this decree brought the case up to this
Court.
Page 48 U. S. 227
MR. JUSTICE WOODBURY delivered the opinion of the Court.
(He first gave a synopsis of the bill and answers, and then,
after some reference to the evidence, proceeded as follows:)
A preliminary point to be considered in this case is in respect
to the exceptions made at the trial by a jury of the issue at law,
sent from the court of chancery, or the equity side of the circuit
court of the United States. On the return of that issue to the
equity side of the court, exceptions to the rulings were not made,
or renewed against the correctness of the finding of the verdict,
and consequently no opinion on them has ever been rendered by the
court sitting in chancery. It is quite clear, then, that they are
not before us on this appeal, which is only from a decree on the
equity side of that court.
We wish it to be distinctly understood as a matter of practice
in like cases that this Court cannot express any opinion on matters
ruled in any other court or side of the court than that appealed
from, and if it be necessary to go into other courts to get
verdicts or decisions on any portion of the case in its progress
below, any objections to rulings on the points arising in those
trials or decisions must be presented for revision to the court
which orders the issue, and be acted upon there, if we are expected
to take cognizance of them here.
Brockett
v. Brockett, 3 How. 691;
Van Ness v.
Van Ness, 6 How. 62;
Mayhew v. Soper, 10
Gill & Johns. 372. Such, too, is substantially
Page 48 U. S. 228
the doctrine in England. 2 Daniell, Ch.Pr. 746; Bootle v.
Blundell, 19 Ves. 500.
It is next objected that there was an error in the court in
ordering such an issue to be tried by a jury, as it did in the
present case. But we are not satisfied that, in referring the
question of fraud in the conveyances to a jury for their verdict to
aid the court in its inquiries, anything improper was submitted. It
did not, as has been contended, refer a question of law only. Fraud
is often, as here, a mixed question of law and fact.
Seward v.
Jackson, 8 Cow. 406, 439;
Brogden v. Walker's
Executor, 2 Har. & Johns. 291. And it might be very useful
to have the views of a jury on it, taking care to instruct them
concerning the law, and leaving to their exclusive consideration,
as was probably done here, merely the facts as connected with that
law. Such feigned issues are not for the assistance of parties so
much as of the court. 2 Daniell, Ch.Pr. 730. And though they may
not always be well made up, yet, as the court are influenced by the
finding or not, as seems to it proper, 19 Ves. 500;
Allen v.
Blunt, 3 Story 746, it is very rare that ordering such an
issue can be deemed a ground of error. It may, however, be conceded
that if such an issue be one of mere law, or idle, or impertinent,
it is erroneous. 2 Daniell, Ch.Pr. 315, 420, 730;
Nicol v.
Vaughan, 5 Bligh 540-545; 3 Ves. & Beam. 43. Disregarding,
then, those exceptions made in the trial of this feigned issue, as
not being legally before us, and overruling the objection to the
propriety of the issue itself, the finding of the jury, and the
opinion of the court sitting in chancery on that part of the case
relating to the fraudulent conveyances, would seem to be correct.
At least this Court appears bound to consider it so, U.S.
prima
facie, and we see nothing in the evidence itself, if
reconsidered here, which would show the weight of it not to accord
with their results. 2 Rand. 398;
Hoye v. Penn, 1 Bland Ch.
28;
Kipp v. Hanna, 2 Bland 26; 2 Har. & Johns.
292.
Those results are that all the deeds except the first one were
fraudulent against creditors. The next inquiry is whether the
plaintiffs can legally be considered creditors at the time these
deeds were executed. It is true there must usually be a debt
preexisting.
Sexton v.
Wheaton, 8 Wheat. 229. In our view, a preexisting
debt by a note, which was only renewed afterwards, with the same
endorser, continued to be the same preexisting debt for this
purpose as it stood originally, both as to the maker and endorser.
They both regarded it virtually as the same, as no new
consideration ever arose between the parties. Especially on the
equity side of this Court and of the circuit court below, where the
question arises, such a case
Page 48 U. S. 229
ought to be regarded as much within the mischief of the statutes
against fraudulent conveyances as if the action leading to judgment
against the administrator had been on the original endorsement of
the original note.
But further it is objected that the debt here, at the time of
the conveyances, was not absolute, as it should be in order to
predicate fraud concerning it. But a contingent debt, likely to
become absolute and which afterwards does become absolute, is, both
on principle and precedent, enough to furnish a motive to make a
fraudulent conveyance to hinder or avoid its eventual payment. And
this may be presumed to have been done here, provided circumstances
exist indicative of fraud.
King v.
Thompson, 9 Pet. 220;
Heighe v. Farmers'
Bank, 5 Har. & Johns. 68. Such circumstances must exist,
and when the liability is contingent, like that of a warrantor or
endorser, the conveyance cannot be considered as
per se
fraudulent.
Seward v. Jackson, 8 Cow. 406, 439. But all
the attendant facts here were scrutinized, and the inference of
fraud seems to have been fairly deduced from the whole. 5 Gill
& Johns. 533.
There is another objection to a recovery by this bill in equity,
because the original debtor, Sheehy, had made a conveyance in trust
to Lee for the indemnity of Edward McLaughlin, and it is argued
that the plaintiffs should have resorted to that rather than to a
suit against the administrator of Edward McLaughlin. But where the
maker and endorser have both had their liability fixed on a note,
an action will lie against either. Here both had become liable,
else the endorser had not, for the latter is never liable unless
the maker is also, and that the endorser had here become liable is
to presumed strongly from the actual recovery against his
administrator.
The next objection is that the judgment against the
administrator of the endorser, the only evidence of a debt offered
here, is no evidence against the surety of the administrator, or
against a fraudulent grantee of the intestate debtor, as is Bridget
McLaughlin. But we think otherwise. The administrator and his
intestate are privies, and the former is liable after one recovery
against the goods in his hands, and another against himself,
suggesting a devastavit on a return of
nulla bona. 2
Brock. 213, 214.
If the administrator, then, in such case, be estopped, as he is,
to deny the indebtedness of the debtor whom he represents, so must
be his surety,
prima facie at least. 1 Brock. 135, 268; 4
Johns.Ch. 620; 2 Rand. 398. So in a bill in chancery, charging,
like this, fraud in the administrator and a grantee, we think that
such a judgment, till impeached, is good against the fraudulent
grantee.
Birely v. Staley, 5 Gill & Johns. 433;
Page 48 U. S. 230
Alston v. Munford, 1 Brock. 279; 2 Rand. 398. As to the
heir, the question is different, and the force of the recovery may
be much less. 2 Leigh 84;
Bank of United States v.
Ritchie, 8 Pet. 128; 4 Har. & Johns. 270, 271;
1 Munf. 437, 455. Not being a privy in estate or deed with the
administrator, it may not be
res judicata or even
prima facie valid, so as to bind either the heir or a
devisee. 1 Brock. 145, 247; 1 Munf. 1, 437, 445; 5 Gill &
Johns. 433. But a fraudulent grantee stands in a different
relation, and his rights are in several respects unlike theirs.
The form of proceeding which has been adopted here against the
surety is also excepted to. There is another mode, to be sure, of
proceeding against the surety, which is on the administration bond.
But in that case, a judgment like this against the administrator
would be presumptive evidence against the surety, though open,
perhaps, to proof, if any existed, of collusion or fraud in the
judgment. In this way also, though the creditor has a double
remedy, if the surety has combined to commit a fraud and waste of
the estate, and may proceed against him for that in a bill, or
proceed on the administration bond, yet this double remedy is not
unusual nor exceptionable, and bills like these may well include
all who have colluded with the administrator, or improperly
intermeddled with the property, like executors
de son
tort. Holland v. Orion, 1 Mylne & Keen 240; 1
Vez.Sr. 105; 2 Keen 534; Story Eq.Pl. § 178.
Chamberlayne v.
Temple, 2 Rand. 398. But whether fraud is charged or not, such
bills should usually include all persons who may be affected by
being interested in the estate. Story Eq.Pl. § 178;
Bowsher v.
Watkins, 1 Russ. & Mylne 277. This is expedient in order
to settle all the liabilities and exceptions in one proceeding and
to ascertain how much ought to be charged on real and how much on
the personal estate. Story Eq.Pl. §§ 172-176. Here the collusion
and waste are imputed to both the administrator and surety, and the
same surety is charged with fraud in the purchase of the land, and
this proceeding against them, whatever other remedy may exist, must
therefore be deemed proper. Story Eq.Pl. § 178; 1 Mylne & Keen
237, 240; 1 Russ. & Mylne 281, note; 5 Gill & Johns. 432,
453; 2 Rand. 398, 399; 10 Gill & Johns. 65, 100.
The next objection is that by the laws prevailing in Alexandria,
the first resort for payment of such a debt should be to the
personal estate, before going to the real. There seems to be not
much doubt of this, as a general principle, under the laws of
Maryland, by 5 Geo. 2, c. 7, before the cession of the northern
portion of the District of Columbia. Those laws were adopted in
that district February 27, 1801, 2 Stat. 103, 756;
Page 48 U. S. 231
1 Har. & Johns. 469; 2 Har. & McHen. 12; and her laws in
this respect appear to have been extended to Alexandria, June 24,
1812. Davis, Laws of District of Columbia 264. The laws of Virginia
prevailing there before do not seem on this point to have been
materially different. 2 Leigh 84; 2 Lomax, Ex. 512. There, the real
estate was made liable for certain debts, under an act of
Parliament, as early as 1732, extending in terms to the Colonies.
Tessier v. Wyse, 3 Bland 44; 2 Bland Ch. 325. But still,
"in a creditor's suit" or bill, the personal estate should first
appear on the hearing to be insufficient. 1 Brock. 79; 2 Bland 317,
347;
Wyse v. Smith, 4 Gill & Johns. 302; 2 Har. &
McHen. 12. It does so appear here in substance. Here it is alleged,
and not denied, that the personal estate has never been accounted
for by the administrator or surety. It would seem on the evidence
to have been left chiefly in charge of the surety, and to have been
improperly applied to her own use. The objection, therefore, comes
with a very ill grace from her. The administrator has also been
found guilty of a
devastavit in respect to it, and it is
manifest there never was enough, either as sold or appraised, to
defray the debt of the bank alone. Under these circumstances, then,
a resort was proper to the real estate.
Gordon's Adm'r v.
Frederick, 1 Munf. 1; 2 Bland 347.
It is further objected that such a resort cannot be had unless
it is averred in the bill as well as proved that the personal
estate has been all exhausted in the payment of debts. The fact of
the personal estate's being exhausted in some way before the real
is taken from the heir, as heir, and applied, may, as before
remarked, be proper to be first proved. But the necessity to aver
it in so many words, even in the bill to charge an heir, is
questionable. 1 Brock. 79; 2 Lomax, Ex. 250; 2 Story Eq.Pl. §§ 174,
176.
See forms in 2 Grattan 532 and 3 Grattan 371; equity
Draftsman 157, 161, 180;
Tessier v. Wyse, 3 Bland 44. Such
an averment does not affect the merits, because, whether averred or
not, the court will not generally charge the land till satisfied
that the personal estate has been wasted or is insufficient.
Stevens v. Gregg, 10 Gill & Johns. 143. And it is
usual also to have the prayer of the bill state in some way that
the personal assets are insufficient. Such is the form in
Beall
v. Taylor, 2 Grattan 532. But this deficiency need not be
alleged to have arisen from the actual payment of debts. Some seem
to consider it enough to aver that waste has been committed of the
personal estate. 2 Bland Ch. 347. Others that it will suffice to
state and to show judgment against it and execution unsatisfied.
Rhodes v. Cousins, 6 Rand. 190;
Liggat v. Morgan,
2 Leigh 84. The English practice is not to require any
Page 48 U. S. 232
averment that the personal estate is exhausted, but merely to
ask the land to be charged if the personal estate be not enough. 3
Bland 43;
Davy v. Pepys, Plowden 439; 3 P.Wms. 92, 333. So
is it in New York.
Thompson v. Bruce, 4 Johns.Ch. 620. It
would seem also to be permissible in Virginia, where the heir or
devisee for such debts as are chargeable on the land is joined in a
creditor's bill with the executor or administrator, to examine into
the condition of the personal estate irrespective of any averment
about its sufficiency, and if found to be enough, to dismiss the
bill as to the heir, 1 Brock. 79, and if not enough, to sustain the
bill against the heir for the deficiency. Such seems to be the
practice also in some other places. 4 Johns.Ch. 621; Story Eq.Pl.
§§ 172, 174, 176;
Hammond v. Hammond, 2 Bland Ch. 306,
359;
Tessier v. Wyse, 3 Bland 59;
Gibson v.
McCormick, 10 Gill & Johns. 65.
Many of the cases in Maryland, looking to the propriety of a
fuller and direct averment that a deficiency has happened from the
payment of debts, arise under laws passed since 1801, and after her
prior laws had been adopted in this district, and relate to heirs
or devisees, rather than fraudulent grantees.
Gibson v.
McCormick, 10 Gill & Johns. 102. The following cases were
those of heirs who were infants or lunatics, and hence requiring
the aid and vigilance of chancery to protect them, by having debts
clearly proved and the personal estate first exhausted. 3 Bland 49,
84;
United States Bank v.
Ritchie, 8 Pet. 128;
Wyse v. Smith, 4 Gill
& Johns. 302.
Considering, then, that in Maryland and Virginia no less than
elsewhere, something is permissible short of a direct averment as
to the exhaustion of the personal estate in the payment of debts in
a bill against an ordinary heir as such, certainly the reason does
not apply in a proceeding against a fraudulent grantee for anything
fuller or more direct, if so full. 5 Gill & Johns. 433. Such a
grantee has no protection, like the heir, from want of privity or
misconduct, and though he may be in fact the heir, as in this case,
yet he takes by his deed,
prior in tempore, and holds any
surplus after paying debts as a voluntary and good grantee in
respect to that surplus, and not as heir.
When, therefore, in a bill against such a fraudulent grantee,
the fraud is averred, as here, and a waste of the personal estate,
and the clause is stated to be made on that account, all is alleged
which seems necessary for full notice, and for a decree against
such grantee, if at the hearing the fraud is substantiated and the
personal assets are proved to be wasted or insufficient.
To show that the averments in this bill come quite up to the
usual standard in this respect, we need only cite from it
Page 48 U. S. 233
the following, as to Edward McLaughlin:
"That he left no real estate, having fraudulently conveyed and
disposed of the whole of it in favor of the said Bridget
McLaughlin, as before stated. That his personal estate has been
made away with, and misapplied by his administrator, and the surety
of said administrator, as before charged. Your orators are advised
that the personal estate of the said McLaughlin is, in the first
place, liable to the payment of their debts, if he left sufficient
for that purpose, and that the said administrator and his surety
are bound to render an account thereof. That if the said personal
estate be insufficient, then that the real estate, fraudulently
conveyed by him as aforesaid, is liable to make good any
deficiency."
Our conclusions, then, on this point are that these allegations
must be considered ample and explicit enough for a proceeding
against a fraudulent administrator and surety and fraudulent donee,
whether looking to the Maryland, Virginia, or English practice as
prevailing in Alexandria. Being also a proceeding in chancery, if
in some respect argumentative, the averment is clear enough not to
be mistaken, and opens for consideration the whole merits. Because,
as regards the defendants, if on principle they are answerable for
personal estate squandered and misapplied by themselves, and land
fraudulently conveyed to one of them is not to be shielded from
liability in consequence of the waste of personal estate by
herself, then the allegations here are the proper ones, and, being
the true ones also, need no amendment. The facts established under
them fully justify the decree below.
So far from the principal defendant's insisting or showing, at
the hearing in this case, that the personal assets were large
enough to pay this debt or have been so applied, and the land in
her possession has been thus relieved from the charge, she
contended that they were less in amount than the plaintiffs did,
and the latter prove clearly that she joined the administrator in
committing waste of what did exist -- that is, consumed the very
property she urges the creditors should resort to before calling on
her. And though she is an heir of Edward McLaughlin, the proceeding
here is against her not as heir, but as surety to a defaulting
administrator of the personal estate, and as fraudulent grantee of
the real estate.
There is no heir to this land, claiming it as heir, in any part
of these proceedings, but a grantee of it, claiming by a deed, and
which, if fraudulent, still entitles the grantee to hold it as
grantee against the heirs of the grantor, of whom there is one
other not here, and places the heirs as such entirely out of the
case --
hors de combat.
Page 48 U. S. 234
As no other question arises on the appeal which is material and
has not been arranged in submitting to a sale of the trust
property, it is only necessary to add that the judgment below must
be
Affirmed.
MR. JUSTICE McKINLEY dissented.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Alexandria, and was argued
by counsel. On consideration whereof it is now here ordered and
decreed by this Court that the decree of the said circuit court in
this cause be and the same is hereby affirmed with costs.
