Earnshaw v. Stewart

Robinson, J., delivered the opinion of the Court. This is a bill to set aside an assignment of a life policy, made by a father to his four sons; also to set aside a bill of sale made to his son William, as being in fraud of the rights of his creditors. So far as concerns the life policy, it is sufficient to say, that the assignment is, under the Act of 1878, chapter 200, a valid assignment. This the Act declares in express terms.

It may not be easy to understand what the Legislature meant by “bona fide” as here used, unless they meant there must be an out and out assignment to the wife or children, and not one upon some secret.trust in favor of the assignor; or it may be they meant it to apply to assignments of life policies to creditors, which the same section of the Act authorized the insured to make. But be that as it may, it is clear, we think, that construing the Acts of 1862, chapter 9, and 1878, chapter, 200, together, the Legislature meant to confer upon the insured the right to make a voluntary assignment of & life policy to his wife or children, “free and clear” says the Act, “from all claims of the creditors of such insured per soils.” Elliott vs. Bryan, ante, page 368. In regard to the bill of sale, we see no reason why the decree below should be reversed. The question of fraud ⁵¹⁵ is one which must of course depend upon the facts and circumstances surrounding the transaction in controversy.

Now what are the facts surrounding the execution of this bill of sale ? In the first place, the father being in failing health makes, a few weeks before his death, a voluntary assignment of his life policy to his four sons. Three days afterwards, he makes a will in which he devises his real estate to his sons, subject to a mortgage held by the appellee. The only real estate belonging to him was the farm on which he lived, and which was sold after his death for less than five thousand dollars, not half ■enough to pay the mortgage debt.

A few days after the execution of his will, he makes a bill of sale, absolute on its face, to his son William, of all his personal property, we say all, because it embraces his crop of tobacco of the year previous, then in his barn, his crop of wheat just harvested, his growing crop of corn and tobacco, his horses, cattle, sheep and farming implements of every kind, everything in fact, except some household goods, valued at $90. The consideration set forth in the bill of sale is $1000, and the property embraced in it, sold for more than $2100, the crop of tobacco then in the barn, realizing more than the entire consideration. .. On the 31st of July, a few weeks after the execution of the bill of sale, the father died. On the 30th of November, the day on which the bill was filed by the creditors to set aside the bill of sale, a bill was filed by William, the son and grantee, alleging that the bill of sale was intended merely as a security for the payment of $1000, and praying among other