Hull v. Wm. Deering & Co.

McSherry, J., delivered the opinion of the Court. The decree appealed from in this case vacated and set aside as fraudulent a deed of trust executed by Otho Hull to William Eubank, and dated on the twenty-third day of September, 1890. The deed, in which Hull is named the party of the first part, Eubank the party of the second part, and Lou E. Hull, the wife of Otho Hull, the party of the third part, conveys certain real estate lying in Washington County, Maryland, to the party of the second part in trust, “to secure to said Lou E. Hull the payment of the sum of ¡eight thousand dollars, evidenced by a bond of said Otho Hull of even date-with” the deed, “and payable on de ⁴²⁹ mand.” The consideration set forth in this deed is, first, natural love and affection; second, the fact that the wife had joined with Otho Hull in conveying to William T. Fitzpatrick a tract of land containing sixty acres, lying in Appomatox County, Virginia, which land was her separate estate, and which Fitzpatrick conveyed immediately afterwards to Hull; and thirdly, the sum of one dollar. The bill of complaint assailing this conveyance was filed February the ninth, 1891. ..Amongst other things it alleges that Hull and his brother, D. Frank Hull, were, in x888 and 1889, engaged in business in Hagerstown as partners, under the firm name of D. F. & Otho Hull; that they became indebted to the appellees in a considerable amount, and that, in addition to-this indebtedness, Otho Hull also individually owed the plaintiffs several hundred dollars.

Upon both of these claims foreign attachments were issued against Otho Hull before the bill was filed, and in both proceedings judgments appear to have been subsequently confessed by the defendant. The bill averred that the deed of trust was fraudulent, and that it had been made with intent to hinder, delay and defraud the appellees and other creditors of Otho Hull, many of whom, holding liens on the same property conveyed by the deed, were joined as co-defendants. The answer of Hull and wife denied the material allegations of the bill, and insisted that if there was anything due to the appellees, it was due by the firm of D. F. & Otho Hull, and that there were sufficient assets belonging to that firm with which to pay its indebtedness. There is little or no difficulty about the law of this case.

A voluntary conveyance made by a husband directly to his wife or to a trustee for her benefit, in prejudice of the rights of the grantor’s subsisting creditors is, under Art. 45, sec. 1, of the Code, invalid. Such a conveyance is in prejudice of the rights of creditors when it strips the grantor of property which otherwise would have been available for the payment of his debts and leaves him in possesion of no other property which can be discovered or reached. A debtor ⁴³⁰ has no right by a conveyance of this character to impede, hinder or delay his creditors in recovering payment of their claims; and it matters not, so far as respects its validity, how much intangible, hidden or concealed property may remain, if by a voluntary conveyance to his wife, or to another for her benefit, he renders it impossible, or even more difficult, for his creditors to enforce payment of the sums that are due to them. So far, then, as the considération of natural love and affection and the nominal consideration of one dollar are concerned, the deed would be invalid as against creditors subsisting at its date whom it hinders and delays ; and if nothing else remained to support it, it would of necessity fall when assailed by any one entitled to question it.

There remains the other consideration stated in the deed, viz., the conveyance by the wife of her separate estate situated in the State of Virginia. It is claimed by the appellant, Otho Hull, that this property was very valuable in consequence of large deposits of minerals and clay, and in his testimony he estimated it to be worth as much as ten thousand dollars. But he is supported in this by no other witness. On the contrary, the overwhelming weight of the evidence clearly and conclusively .demonstrates that this Appomattox County land is of trifling value; that it contained no mineral deposits, and that it was worth only from two and a-half to three dollars per acre.

Estimating it at even the highest of the figures named, its utmost value would not exceed one hundred and eighty dollars. A consideration amounting to no more than that sum would be wholly inadequate to support the deed of trust against the grantor’s attacking creditors. The value of- Hull’s interest in the property conveyed by the deed of trust has been ascertained by a sale of that property and the payment of the liens upon it. The amount remaining, which has been treated as standing in the place of the property, is largely in excess of the sum of one hundred and eighty dollars.

Upon the hypothesis that Ótho Hull was indebted when ⁴³¹ he executed the deed of trust in an amount larger than the value of his available and tangible assets, the deed, supported by the insufficient considerations alluded to, cannot prevail against the grantor’s creditors except to the extent to be presently stated. And this brings us to an examination of Hull’s financial condition at the date of the execution of the deed. Whilst he has testified that he then possessed both real and personal property, situated in the State of Virginia, and had on deposit to his credit in a Lynchburg bánk some fifteen hundred dollars, the certificates furnished by the Clerk of Bedford County, Virginia, and found in the record, show that by far the most valuable part of the real estate, the title to which appeared by the deed he exhibited to stand in his own name, he had conveyed to his wife long prior to his examination as a witness. He suppressed all reference to this latter