Sterry v. Arden — 1 Johns. Ch. 261

Majority

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Sterry and wife against Arden and others.

October 3.

Headnote

A voluntary conveyance, intended as a settlement foi a child of the grantor, is void, as against a subsequent purchaser fora valuable consideration, with only implied notice of the previous deed, by the statute of frauds.

But such deed may become valid by matter expost facto, as by some valuable consideration intervening.

Marriage is such a valuable consideration; and, therefore, if the grantee in a voluntary deed, gains credit by the conveyance, and a person is induced to marry her, on account of the provisions made for her in the deed, such conveyance, on the marriage, ceases to be voluntary, and becomes good against a subsequent bona fide purchaser for a valuable consideration.

And it makes no difference whether any particular marriage was in contemplation at the time of the voluntary settlement, or not/

LOUISA ANN, one of the plaintiffs in this case, and one of the daughters of James Arden, and Robert Sterry, her husband, filed their bill to obtain the benefit of a convéyance made to the defendants, Richard D. Arden and Be Wilt Clinton, in trust for her, by her father, James■ Arden, and for an account. The circumstances attending the execution and delivery of this deed are the same as those stated in the preceding case, in regard to the deed to the plaintiff’s sister, Eliza B. Arden ; and which it is, therefore, unnecessary to repeat.

The circumstances peculiar to this case, stated in the hill, were, that on the 11th of December, 1809, the plaintiffs married, and had a child born, which is still living. That the plaintiff, Robert Sterry, when the marriage took place, understood, and believed that Louisa Ann had a beneficial interest in the trust premises, according to the conveyance. That James ' Arden fraudulently executed a deed of conveyance of the trust premises to the defendant,- Philip Verplank, a relation, who, knowing the interest of the plaintiffs in the premises, fraudulently accepted such deed, and claimed to hold the premises by virtue thereof: they, James Arden and

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Philip Verplank, thereby intending to defraud the plaintiffs, and defeat the deed in trust for Louisa Ann, and the estate thereby created. That the pretended deed to Verplank , was dated the 11th of December, 1809, and expressed to be in consideration of a large sum of money paid, by him, to James Arden ; but that, in fact, the deed was not executed on that, but on some subsequent day, and fraudulently dated anterior to its actual delivery ; and that, if, in fact, it was executed on the 11th of December, 1809, it was so executed and accepted, at an hour subsequent to, and with full knowledge of the marriage of the plaintiffs; and that the consideration, mentioned in the deed to Verplank, was never truly paid, or secured by him, to James Arden, from the proper funds of Verplank.

James Arden, in his separate answer, stated, in relation to the sale to Verplank, that considering himself, in consequence of Louisa Ann's marriage without his consent, as the absolute owner of the premises, he did, on or about the 11th of December, 1809, sell and convey the premises to the defendant, Verplank, for the consideration of 16,000 dollars, paid to him by Verplank, on the delivery of the deed; and that the deed was executed on some day between the 11th and 14th of December, 1809, but on which day he did not recollect; but it was after the intermarriage of the plaintiffs.

Verplank, in his answer, stated, that before the execution of the deed from Arden to him, he had heard that Arden had made some provision for his daughters, out of property situated in Greenwich-street, but who informed him he could not recollect, and was wholly ignorant of the circumstances attending such provision, or the manner in which such settlement was made. .That at the time the deed from Arden to him was executed, he had no knowkdgj, or notice, that the premises conveyed to him had been previously conveyed to the trustees, on the trust, as stated in the hill of the plaintiffs ; that he purchased the premises for

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16,000 dollars, and that, on or about the T 1th of Decem ber, 1809, he received the deed ; that for several months prior to the execution and delivery of the deed to him, he was in treaty with Arden for (he purchase of the premises,. and the terms of purchase were partly agreed on, at least one month prior to the 11th of December, 1809; and that, at the time of the execution of the deed to him, he had no knowledge, to the best of his recollection, of the intermarriage of the plaintiffs; that he could not recollect the precise day on which the deed to him was executed, but is positive'that it was executed between the 11th and 14th of December; that he actually paid the whole consideration mentioned in the deed, and has, since the execution thereof, received the rents and profits of the premises in question, to his own exclusive use ; that he married the niece of James Arden; and he insisted, that the prior deed, in trust for Louisa Ann, was voluntary, and void, by virtue of the act, entitled, “An act for the prevention of frauds.”

It was proved that the plaintiff, Robert Sterry, knew, previous to the marriage, of the settlement which had been made upon the plaintiff, Louisa Ann, and that the premises were worth about 20 or 21,000 dollars.

S. Jones, jun. and Riggs, for the plaintiffs,

contended, that the purchase of Verplank, though for a valuable consideration, if made with notice of the prior voluntary settlement, was void. Though there may be some colour of equity, that a bona fide purchaser, without notice, and for a valuable consideration, the vendor being in possession, should be preferred to a prior voluntary settlement, vet there is no such equity in his favour, where he purchases with notice of the prior settlement. Policy does not require, in that case, that there should be such a preference, and it would be unjust. The stat. of 27tb Ehz. speaks only of fraudulent, not voluntary conveyances. And such a construction ought not to be given to the statute, as would defeat a prior voluntary

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settlement, in favour of a purchaser with notice of it. Where the voluntary deed is fair, legal, and honest, at the time, it will not be defeated by any subsequent matter, unless by the _ act of the grantee, or where the rights of a purchaser, in equity, require it. A purchaser, with notice, is not a bona fide purchaser. He attempts, knowingly, to defeat the vested rights of other and innocent persons.

The only three cases in England, decided since the year 1776, which go to sanction a different doctrine, ought not to be received as authority here, especially, when it is not denied that they are against principle, and not founded on a true construction of the statute. The cases in favour of voluntary settlements are numerous, and a summary of the law on this subject'may be found in the opinion of Lord Ellenborough, in the case of Doe, ex dem. Otley, v. Manning, (9 East, 59—63.) These cases all go to show, that voluntary conveyances may afford presumption of fraud, yet they are not absolutely void at common law, or under the statute, as against a subsequent purchaser. (See Sir Ralph Bory’s case, 1 Vent. 193. Jenkins v. Kemis, Hard. 398. 1 Lev. 150. Lavender v. Blackstone, 2 Lev. 146. Garth v. Mois, 1 Keb. 486. Style, 441—446. Gilb. Law of Evid. 201. (245.) 2 Wils. 357. Cowp. 434. 705. 2 Bl. Com. 300, 301. 1 Vern. 364. 3 Atk. 238.) Love and affection are a good consideration for a conveyance, and the deed, in this case, is most clearly honest and meritorious. (2 Bulst. 225.)

The English judges, in late decisions, have regretted that a different doctrine has prevailed; but they thought too much property was held under it to allow them to decide differently ; though, if the case were res integra, they would have given a different construction to the statute, and supported these honest family settlements. (1 Fonbl. Eq. 269, 270. n. g. Sugden’s Law of Vend. 433. 1 Bay’s S. C. Rep. 173.)

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This court is not embarrassed with any such difficulty; and ought to disregard a rule so repugnant to principle, and to the good sense and sound construction of the statute.

That Verplank is chargeable with notice of this prior deed, there can be no doubt. Notice may be actual, or constructive, and what is enough to put the party on inquiry, is sufficient notice. (1 Atk. 489. 2 Atk. 54. 174. 2 Bro. 291. 1 Ch. Cas. 28. 259. 2 Vesey, jun. 440. 2 Ch. Cas. 246. 1 Fonbl. Eq. 271. Newland on Contracts, 54. Sugden’s Lam of Vend. 498.)

Again, the marriage of the plaintiff intervening prior to the purchase, it is to be presumed to have been an inducement to the settlement, and forms a consideration, ex post facto, which makes the conveyance valid and effectual, as if given, originally, for a valuable consideration. (Sugden's Lam of Vend. 436, 437. 1 Sid. 133. Skinner, 423. 1 East, 95. 10 Johns. Rep. 185 . 9 Vesey, 190. 9 East, 69. 5 Vesey, 862. Bac. Abr. Frauds, (C.) Newland on Contracts, 404. Roberts on Fraud. Con. 195. Prec. in Ch. 275.)

Harison and Harris, contra,

contended, that there was no delivery of the deed, and that it having been retained by the father in his possession, it was inoperative. (1 P. Wms. 577.)

The deed, in this case, was purely voluntary ; it is proved that the one dollar, mentioned as the consideration, was never paid. Then, Verplank, being a bona fide purchaser for a valuable consideration, without notice, the prior voluntary deed is void as against him. Verplank, in his answer, denies that he had notice, and no notice, in fact, has been proved. A mere rumour, or report, of the kind stated, is not sufficient to charge a party with notice. The grantor had been in continued possession since the date of the deed, for four years, and Verplank bad a right to consider him as the owner. The case of Ottley v. Manning.

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(9 East, 69.,) is conclusive on the point, and there are numerous cases to the same effect, which prove, incontestably, that it is the established rule in England, that a voluntary conveyance, under the statute of the 27 Eliz., is fraudulent against a subsequent purchaser for a valuable consideration. (Tothill's Rep. 257, 258. 1 Ch. Rep. 78. 2 Vesey, 10. Woodie's case, cited Cro. Jac: 158. 2 Bl. Rep. 1019. Cowp. 279. 2 Bro. 148. 4 Bos. & Pull. 332. 2 Taunt. Rep. 82. 4 Cruise, Deed, tit. 32. ch. 22. s. 29—32. Sugden’s Law of Vend. 2d ed. 432.)

The cases cited to the contrary are chiefly loose dicta, and the opinion of Lord Mansfield, in Chapman v. Emery, (Cowp. 279.,) was prior to his dictum in Cadogan v. Kennat, and in Doe v. Routledge.

Lord Ellenborough, in Otley v. Manning, does not deny that this is the construction of the statute, but is inclined to think that the statute itself ought to have been different.

The marriage, in this case, did not render the consideration, of the prior conveyance, valuable. Being against the consent of the grantor, it could be no inducement to him in making the settlement. The marriage could be no benefit, or comfort, to him, when against his will. Such a.marriage Cannot change the original character of the conveyance.

Again, it is not proved that Sterry knew of the conveyance before the marriage ; if he did, he must be presumed, also, to have known of the conditions annexed to the deed ; and, then, he married subject to the effects and consequences of those conditions.

The same questions arise in this case as in that of Souverbye and wife v. J. Arden and others,^[1] on the delivery of the deed. The two deeds were drawn and executed together, and their history is, in all respects, the same. The proof, then, in each cause, is the same, to every essential purpose ; and though Bleecker, one of the subscribing witnesses to each deed, was not examined in this last case, yet his testimony, and that of the other witnesses

* Ante, p. 240.

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iti the other cause, applies equally to the execution and disposal of deeds, and it was averred upon the argument, that the depositions in each cause were, by consent, to be read in the other. Whether this be so, or not, does not appear to be in any way material; for, I considerthe proof taken in this cause to be the same, in effect, as that in the other, and quite sufficient to establish the delivery of the deed, in 1805. We have, in this case, the additional deposition of i?. I. Livingston, who states, that he saw the deed in possession of Louisa, the grantee. The opinion which I have already given in the other case, would then apply to, and govern this, was it not for a new matter of defence set up by Verplank, who claims to be a subsequent bona fide purchaser. This necessarily leads me to the consideration of two very important points arising out of this case:

1. Whether the voluntary conveyance to the daughter was fraudulent and void, under the 3d section of the act of the 26th of February, 1787, [s. 10. c. 44., and which is the same, precisely, as the statute of 27th Eliz. c. 4.,] as against a sub,-: sequent purchaserfor valuable consideration; and, if so, then,

2. Whether the intervening marriage of the plaintiffs, between the settlement and the purchase, did not restore the first deed, and give it valye and validity.

1. I shall consider Verplank as a purchaser for a valúa-, ble consideration. He gave 16,000 dollars in cash, and, though it may have been a very cheap purchase, there was not such inadequacy of price as to justify an inference of fraud. I shall, also, consider him as a purchaser without actual notice of the settlement upon the plaintiff. He declares in his answer, that he had no knowledge or notice of the conveyance of 1805, when he purchased, and there is not proof to contradict this answer. But I hold him chargeable with constructive notice, or notice in law, because he had information sufficient to put him upon inquiry. He admits that, before the execution of the deed, he had heard that the grantor had made some provision for his daughters out of property in Greenwich-street / and there is no evidence in the

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case, that thegrantor owned any other propertyin that street, except the lots included in the settlement. Here, then, is the case of a fair voluntary conveyance, made by a father to his daughter, he not appearing to be indebted at the time, and a subsequent sale made by him, with intent to defeat that settlement, but made for a valuable consideration, and to a purchaser chargeable only with notice in law. The question arising on this first point is definitively settled, in England, by determinations of a recent date in the four great courts at Westminster ; and it is impossible not to feel all the respect which is justly due to decisions of so much weight and authority. (Evelyn v. Templar, 2 Bro. 148. Doe, ex dem. Ottley v. Manning, 9 East, 59. Doe v. Martyn, 4 Bos. & Pull. 332. Hill v. The Bishop of Exeter, 2 Taunt. 82. Doe v. Hopkins, in the Excheq., cited in 9 East, 70.) The voluntary deed is considered fraudulent and void against the subsequent deed, and it is held to be immaterial whether the purchaser had, or had not, notice of the prior deed ; and it was an old settled rule, decided in Gooch’s case, (5 Co. 60.,) that notice to a purchaser, of a fraudulent deed, was of no consequence, as it was still void.

It has been suggested, that this is a principle settled in England since our revolution ; but it appears to me that the late cases have declared no new doctrine, and have only followed the rule as they found it, long before settled by a series of judicial decisions of too much authority to be there shaken. In the late case in East’s Rep. Lord Ellenborough, in delivering the opinion of the JL B., gav< a full and at cu aie view of most of the cases on both sides of the question, from the time of the statute of Elizabeth ; and no one who examines that opinion attentively, and, especially, if he also inspects the original cases referred to, can well hesitate as to the correctness of the conclusion drawn by the court, that “ the weight, number, and uniformity of the authorities, in favour of the rule as there decided, do very much preponderate.”

It cannot be expected that I should attempt to go over,

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in detail, the numerous cases which have been so ably arranged and reviewed, and so fairly stated in the opinion referred to. I shall content myself with merely alluding to them, and with the remark, that those cited in favour of the position, that the voluntary deed is only, prima facia, fraudulent as against the subsequent purchaser, are, generally, mere diría, and not solemn adjudications upon the point.

In favour of the voluntary settlement, are Sir Ralph Bovy’s case, 1 Vent. 193. Jenkins v. Kemeshe, Hard. 398. 1 Lev. 150. Lavender v. Blackstone, 2 Lev. 146. Garth v. Mois, 1 Keb. 486. Anon. Sty. 446. Gilberts Law of Ev. 201. Standon v. Charlwood, MSS. cited 9 East, 64. Lord Mansfield, in Cadogan v. Kennett, Cowp. 434., and in Doe v. Routledge, Cowp. 708. 710.

In favour of the subsequent purchaser, are Woodie,s ease, cited in Colville v. Parker, Cro. Jac. 158. Prodgers v. Langham, 1 Sid. 133. White v. Hussey, Prec. in Ch. 14. Tonkins v. Ennis, 1 Eq. Cas. Abr. 334. pl. 6. White v. Sansom, 3 Atk. 412. Townsend v. Windham, 2 Ves. 10. Roe v. Mitton, 2 Wils. 356. Goodright v. Moses, 2 Bl. Rep. 1019. Chapman v. Emery, Cowp. 278. Lord Kenyon, in Nunn v. Wilsmore, 8 Term, 528. There are, however, some cases which are not mentioned in the opinion delivered by Lord Ellenborough, and which, as it seems to me, give additional weight to the opinion which has been adopted. Thus, in Walker v. Burrows, (I Atk. 93.,) Lord Hardwicke observes, “ It has been said, all voluntary settlements are- void against creditors, equally the same as they are against subsequent purchasers, under the statute of 27 Eliz. ch. 4., but this will not hold and he afterwards adds, But, upon the statute of the 27 Eliz., which relates to purchasers, there, indeed, a settlement is clearly void, if voluntary, that is, not for a valuable consideration, and the subsequent purchasers shall prevail to set aside such settlement.” Again, in Upton v. Basset, which was shortly after the statute, (Cro. Eliz. 445.,) there was an evident admission and understanding of allthejudgés,

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that a voluntary conveyance was void, under the 27 Eliz., against a subsequent bona Jide purchaser for valuable consiaeration. The case of Taylor v. Stile, is cited by Sugden, p. 483., as being decided in chancery, in 1763, and in which Lord Northington held it to be clear, that a subsequent purchaser for valuable consideration, though with notice, should set aside a voluntary settlement; and Mr. J. Bathurst said, he knew that Lord Hardwicke had determined so in twenty instances. In Douglass v. Waad, (1 Ch. Cas. 99.,) the court of chancery set aside a voluntary conveyance as fraudulent against a subsequent purchaser, and though the court are reported to have said, “ that all voluntary conveyances are, prima facie, to be looked upon as fraudulent against purchasers, unless the contrary be made to appear,” yet the decree was conformable to the principle contended for by the purchaser, for it set aside the voluntary conveyance as fraudulent, though nothing appeared but the want of valuable consideration to make it so. It is, also, worthy of notice, that, in the original text of the treatise of equity, published in 1737, and of which Fonblanque is the editor, (1 Fonb. 268.,) the same doctrine is explicitly laid down. In short, the principle set up in favour of the purchaser, has been so long and so well established, by a series of authcrita ive decisions, supported by the most eminent judges, that I feel bound by them, whatever doubts I might have had upon this construction of the statute, if I had been at liberty to follow my own reflections. When a principle has taken such deep root, and received such uniform support, it belongs to the legislature, and not to the courts of justice, to suppress or destroy it.

It has been observed, that the present defendant was not a purchaser with actual notice of the deed of settlement. He does not, therefore, come within the exception for which some have contended. Doubts have been frequently expressed, whether the better construction of the statute would not have been to support the voluntary conveyance

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against purchasers for a valuable consideration, with notice ; (and to that opinion I strongly incline ;) yet it is pretty evident, that the allusion here was only to the case of actual notice, where the purchaser was intentionally and premedi- _ tatingly defeating the fair claims and expectations of the prior grantee. (9 East, 71. 4 Bos. & Pull, 335. 1 Fonb. 269. n. g.) Equity does make a distinction between purchasers with and without notice of the prior voluntary settlement made without fraud; but it is only when the former comes for the aid of the court to compel a specific performance, and it then refuses its aid, and leaves him to his remedy at law. (Bennet v. Musgrove, 2 Ves. 52. Oxley v. Lee, 1 Atk. 625.)

2. The next point is, whether the marriage of the plaintiffs, before the purchase, did not give a new character to" the first deed, so as to entitle it to preference.

It is admitted, that the deed to Verplank was made and executed after the marriage, and in consequence of it, and the testimony in the case is decisive, (I refer to the depositions of Mrs. Servant and Colonel Hawkins,) that the plaintiff, Robert Sterry, married with previous knowledge of this deed of settlement on his wife. Under these circumstances, I consider the law to be, that the first deed became good and valuable, and ought to prevail. The marriage was a valuable consideration, which fixed the interest in the grantee against all the world ; she is regarded, from that time, as a purchaser, and as much so as if she had then paid an adequate pecuniary consideration. It has been a principle of long standing, and uniformly recognised, that a deed, voluntary or fraudulent in its creation, and voidable by a purchaser, may become good by matter ex post facto. (1 Sid. 133. 1 East, 95.) It is the constant language of the books, and of the courts, that a voluntary deed is made good by a subsequent marriage, and a marriage has always been held to be the highest consideration in law. (Co. Litt. 9. b.) The cases do not require that the settlement should have been

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made with a view to any particular marriage ; it is sufficient that the settlement was afterwards known to third persons, and was one probable inducement to the subsequent marriage. Indeed, in Brown v. Carter, (5 Ves. 877. 888, 889.,) Lord Ahanley did not think it very material to prove that the marriage was even made with notice of the voluntary settlement, as the knowledge of the circumstances of the party,'and the inducement, were to be presumed. The principle is, as it is there stated, that it would be a fraud on the husband, if the probable inducement was to be after-wards withdrawn, and that it would be gross injustice to take away the benefit of the settlement from the married parties, and their issue. The case of Prodgers v. Langham, (1 Sid. 133.,) is a leading one on this point, and it has always been mentioned as good law. That was a case of a voluntary conveyance, in trust, for an only daughter for twenty-one years, to the intent that the profits, before marriage, should be applied to her maintenance, and, if she married with the father’s consent, then in trust for her during the residue of the term. The court held, that the conveyance to the daughter was a voluntary conveyance, and would have been void as against the defendant, a subsequent purchaser for valuable consideration, if the marriage had not intervened, yet when that took effect, it ceased to be voluntary, and became supported by a valuable consideration, which was unimpeachable, inasmuch as the marriage was an advancement to the daughter, and the husband was induced (though that fact does not appear in the case) by the prospect of this provision. The case of Kirk v. Clark, (Prec. m Ch. 275. 2 Eq. Cas. Abr. 45. pl. 13.,) is equally in point; it was there held, by Lord Ch. Cowper, that a voluntary settlement on a son, before any treaty of marriage, or the contemplation of any, became valuable upon his marriage, wdiich was made with notice of it, the settlement being regarded as a principal inducement. A similar decision was made in the case of the East-India Company v. Clavell, (Prec,

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in Ch. 380, 381.,) and the proof here, brings this case precisely within the reach of those I have cited ; for here was not only actual notice of the settlement, but inducement to . .. ' marry in consequence of it.

The conclusion from these cases, and from the which they lay down, appears to me to be, that the marriage of the daughter, in this case, changed the character of the previous settlement, and placed her in the light of a purchaser for a valuable consideration, and gave her preference to any subsequent purchaser. I shall," therefore, set aside the deed to Verplank, and make the same decree as in the former case.^[2]

(a) (a) Vide Atherly on Marriage and Family Settlements, p. 178—198. who has examined, at large, the question, whether a voluntary settlement is fraudulent and void, under the 27 Eliz., against a subsequent purchaser, merely from its being voluntary. He has taken a view of the subject somewhat new, and he concludes that, according to the true construction of the statute, a voluntary settlement, as such, is void against a subsequent purchaser for a valuable consideration, without notice, but not against a pur-, chaser with notice. In the latter case, he holds the settlement to be valid.