Glenn v. Grover

Tuck, J., delivered the opinion of this court. After having carefully examined the record in this case, we can perceive no reason for dissenting from the opinion of the chancellor. It is well settled, that a debtor in failing circumstances may prefer one creditor to another, by a transfer of his property made in good faith; and it is equally clear, that if such a transaction be assailed on the ground of fraud, the onus of proof is upon the party impeaching the assignment. The question presented by this record, therefore, is, whether the deeds from Grover to McColm were made bona fide, and upon sufficient consideration.

Upon the latter of these points there can be no room for doubt. Grover was considerably indebted to McColm at the date of the first deed; the property was sold at what appears to have been its value, and was paid for, in part, by discharging a balance due thereon by Grover, and as to the residue, by releasing so much of McColm’s claim against him. As to the property conveyed by the last deed, it is equally clear that it was assigned in payment of advances made by McColm to Grover after the first deed. The complainant offered no evidence that Grover was not thus indebted to McColm.

But it is insisted that the fact of indebtedness should have been showm affirmatively by the defendants, because there being special interrogatories in the bill on this point, so much of the answers as relates to the consideration is not responsive, but in the nature of new matter. We cannot concur in this view of the case. The bill charges, that the first deed was made without consideration and fraud ²²⁶ ulenty, to hinder, delay and defraud the creditors of Grover, and to cover and screen from them the property mentioned in it for his own benefit;” and that McColm received the deed, knowing this to be its design. And as to the second, it is alleged, that the parties thereto were influenced by the same motive, and “that the consideration therein mentioned was merely colorable, and was not paid at the time”’ of its execution.

The defendants were required to answer generally, and special interrogatories were also propounded predicated upon some of these averments. They not only had a right to answer all these allegations, whether specially interrogated or not, but it was incumbent on them to have answered fully, and if they had not it would have been ground for exceptions to the answer. A defendant would be deprived of the benefit which the law gives him of being his own witness as to all matters which he may answer responsively, if the complainant could so frame his bill and interrogatories as to allow certain portions of the answer, (and perhaps the most immaterial-,) to be evidence for the defendant, and make new matter of the rest, though responsive as to the subjects really in controversy between the parties. The complainant exhibits these deeds, alleging that they are fraudulent and-void as against Grover’s creditors.

He calls upon the defendants to answer this charge, and insists that this must be done, not by merely denying the fraud, and thus requiring proof thereof from the complainant, but by showing affirmatively what the consideration was upon which the conveyance was executed — a fact, indeed, of which the complainant himself had, by exhibiting the deeds, offered prima facie proof. Faringer vs. Ramsay, 2 Md. Rep., 365 . We have no doubt that in such a case the positive denial in the answers must be met in the usual way— by the oath of two witnesses, or by that of one with pregnant circumstances. But then, we are told that so many badges of fraud attend this case that the burden of proof is.shifted from the appellant to the appellees, and for this purpose reference is made to the insolvency of Grover at the time the- deeds were exe ²²⁷ cuted, the fact that they comprised nearly all his property, his possession thereof from the dates of the conveyances, at a rent that equalled only the interest on the alleged purchase money, and the inconsistencies between the answers of the defendants, and Grover’s statement at the time he petitioned under the insolvent laws, as to the character of the deeds, and of his possession of the property.

There is little force in the objection that Grover was insolvent and transferred all his property in payment of this one claim, provided it was done in good faith. Preferences are allowed. They always presuppose that there are creditors against whom the assignment is to operate; and it is generally true, that in such cases the debtors are embarrassed, if not insolvent, yet this cannot affect the validity of the conveyance. Indeed it furnishes the strongest motive to the creditor for requiring security for his claim, or for obtaining payment in property or otherwise.

In the case of a deed without consideration the argument now urged applies with great force. Worthington, et al., vs. Shipley, 5 Gill, 449 . And even where there is a debt due from the grantor to the grantee, the amount of the property conveyed compared with the debt intended to be secured or paid, and the number, amount and character of his other debts,