Nicholson v. Schmucker

Briscoe, J., delivered the opinion of the Court. This is a proceeding, in equity by Samuel D.' Schmucker, trustee in insolvency of Johns H. R. Nicholson, to avoid and set aside a conveyance of certain real estate made by deed to the appellant, Bishop Nicholson, as trustee for his sisters, Mrs.'White and Mrs. Shriver. Bishop Nicholson owned at the time of the purchase one-seventh of the property in his own right and held five-sevenths as trustee for his sisters, which, with the one-seventh here conveyed by his brother Johns, gave him the entire property. The- bill charges, first, that the deed was made with intent to delay, hinder and defraud creditors, contrary to the insolvent law.

Secondly, that it was given in payment of an antecedent debt and gives a preference against the terms of the insolvent law. It appears from the _ record that the sale was made, and the consideration therefor, seven thousand dollars in bonds, was paid in September, 1891, while the deed was not executed until the 31st of October, 1891. Nicholson was adjudicated an insolvent on the 24th of February, 1892, within four months after the execution of the deed. Bishop Nicholson in his testimony explains the circumstances of the sale and of the making of the deed, substantially as follows : “ I was about to move west permanently ; there were two remaining pieces of property, undivided, belonging to my father’s estate; I had a desire, as soon as possible, to sell them both off and close out the estate.

The two pieces of property were the two spoken of in that deed; I came on ⁴⁶³ to see my brother John about the second week in September ; I saw him at his office; was in town about two hours that day between the trains; stood outside his counter and talked with him over his counter. I told him I had had inquiries about the purchase of the banking house property; the Hopkins Savings Bank people were after me about it, asking its price; also a Mr. Reed, P. J. Reed, I think his name is, and I suggested to him that I would be willing to buy out his share in that undivided estate, and buy it in the interest of my two sisters, Mary and Martha, for whom I was trustee, and I told him I would give him $7,000 for the properties as they were, and he agreed to that-; I told him that he might take $7,000 of the bonds, and I specified the bonds which were then in his possession for safe keeping belonging to my two sisters; the matter was concluded that day before I went back; I told him to take the bonds, and that very soon I would have the deed made; I told him that about the' first of January I would be on again and then we could settle the' matter of premium, but in the meantime, the sale being bona fide, he might take bonds and I would take the property. I asked him about the deeds, who should make them; he advised me to copy the deed literally, changing only the names and dates, the deed which I held from my brother, Charles G. Nicholson, covering precisely the same property. I then copied the deed literally, changing only the names and dates.

The sum was precisely the same as in the original case of my brother, $7,000, so this was $7,000; my brother Johns said he would be glad if the girl's could make a little turn out of the matter; the deeds were drawn afterwards; the exact dates I can’t recall; I felt in no great hurry about the matter.” The proof further shows that the appellant had no knowledge at the time, of the financial condition of the vendor, but believed him to be absolutely solvent; that the sale was entirely bona fides and not made for the purpose of indemnity for any loss or apprehended loss on the part of the vendee. It does not appear from the evidence that ⁴⁶⁴ there was any fraudulent intent on the part of either the vendor or vendee. On