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1 Ind. L. Rep. 237

Spaulding v. Blythe

Indiana Supreme Court

Decided May 10, 1881

Indiana Supreme Court · decided 1881-05-10

<p>1. Voluntary Conveyance by a Debtor.—A voluntary conveyance made by a debtor who has no other property subject to execution than that so conveyed, is fraudulent as to creditors. There being no consideration paid, notice to the grantee of the fraudulent intent of the grantor does not need to be alleged or proved.</p> <p>2. Where there is Other Property.—But, although a conveyance may be voluntary, yet if the grantor has other property subject to execution, this must be exhausted before resort is had to the property conveyed.</p>

Relies on Newman v. Cordell · Spaulding v. Myers · Palmer v. Henderson

Decided 1881-05-10

¶1Opinion by

Mr. Justice Elliott.

¶2This appeal brings before us the question of the sufficiency of appellee’s complaint.

¶3The complaint seeks to set aside certain conveyances which are *240alleged to have been made to defraud creditors. Two conveyances are attacked as fraudulent. The first of these was executed on the 30th day of July, 1873, by John Spaulding and his wife, Ella Spaulding, to Henry S. Barnaby; the second was executed on the -day of-, 1874, by said Henry S. Barnaby and his wife,. Eliza S. Barnaby, to Ella Spaulding and her children.

¶4It is alleged that the first conveyance was executed without consideration, and that said John Spaulding did not have any other property subject to execution. It w'as not necessary to allege that the grantee had notice of the fraudulent purpose of the grantor, for it sufficiently appears that the conveyance was without consideration, and the grantee a mere volunteer. It has long been firmly settled that a voluntary conveyance, made by a debtor who has no other property subject to execution except that conveyed, is fraudulent as to creditors. O’Brien v. Coulter, 2 Blkf. 423; Palmer v. Henderson, 20 Ind. 297 ; Hougland v. Sherman, this term; Clark

¶5Chamberlain, 13 Allen, 257; Neuman v. Cordell, 43 Barb. 448; Bump Fraud. Conv. 197.

¶6Judge Story thus states the rule borrowed from the civil law by the common law, and the courts of chancery : “ Hence, all voluntary dispositions made by debtors, upon the score of liability, were revocable whether the devisee knew of the prejudice intended to creditors or not.” Story Equ. Juris. §§ 351, 353, 355. It is true that in Spaulding v. Myers, 64 Ind. 264, it was held that a complaint alleging exactly the same facts as those stated in the present was bad, because it did not aver notice to the grantee, but it is evident by the allegation that there was no consideration for the conveyance was not brought to the attention of the court. That case was not very fully argued. There was, as here, no brief at all from the appellee.

¶7In Spaulding v. Myers, supra,the complaint was, except as to parties, precisely like the one under examination, and it was held bad because it did not show that at the time the second conveyance was made the debtor who executed the first of the two conveyances had no property subject to execution, and we think this ruling was correct. If there was property of the debtor which the creditor could have reached by ordinary legal process and out of it have secured payment of his debt, there was no reason for wresting this particular property from the grantees in the second conveyance. *241Before resorting to property conveyed to grantees, even though without consideration, that of the grantor then subject to execution ought first to be exhausted. We hold the complaint bad, not because it failed to aver notice on the part of the grantees of the grantor’s fraudulent design ⅜ but because it is not shown that when the grantees now claiming title received a conveyance, the grantor did not have other property subject to execution sufficient to have satisfied the claims of creditors.

¶8Judgment reversed.

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