76 ruptcy, and from the time when the right of the creditors to call him to account accrued." A grantee of land by conveyance from an insolvent, void as constituting an assignment with preference, need account only for the rents and profits received, instead of the actual value of the rents and profits.75 Where the property is conveyed to a wife in fraud of her husband's creditors, a judgment in personam cannot be rendered against her for rents, issues and profits, and the use and occupation of the premises; or the profits of a business, made by her while conducting it, subjected by creditors." But where a wife knowingly takes a grant of property conveyed in fraud of the grantor's creditors, thus becoming a trustee for their benefit, and makes a profit by dealing with the property, the profit enures to the benefit of the creditors.78 And where a wife's realty has been improved by her husband, with intent to defraud his creditors, she acquiescing therein, a part of the rents and profits proportionate to the increase in value from such improvements may be subjected to pay his debts." Where a member of an insolvent partnership conveyed property to his wife which was rented to the firm, and the conveyance was in fraud of creditors, the wife was a mere trustee in equity, the title in respect to his creditors remaining in him, and she was not entitled to payment of rent while firm debts remained unpaid.80 § 39. Interest. The fraudulent grantee is chargeable with interest upon the value of the property or its proceeds from the 74. Sands v. Codwise, 4 Johns. (N. Y.) 536, 4 Am. Dec. 305. 75. McGahan v. Crawford, 47 S. C. 566, 25 S. E. 123. 76. Clark v. Beecher, 154 U. S. 631, 14 S. Ct. 1184, 24 L. Ed. 705; United States Trust Co. v. Sedgwick, 97 U. S. 304, 24 L. Ed. 954; Phipps v. Sedgwick, 95 U. S. 3, 24 L. Ed. 591. 77. Morel v. Haller, 7 Ky. L. Rep. 122; In re Karstorp's Estate, 158 Pa. St. 30, 27 Atl. 739, 34 Wkly. Notes Cas. 9, in the absence of fraud on the part of the wife. 78. Popfinger v. Yutte, 49 N. Y. Super. Ct. 312, citing Davis v. Leopold, 87 N. Y. 620; Ten Eyck v. Craig, 62 N. Y. 420; Penman v. Slocum, 41 N. Y. 59; Van Epps v. Van Epps, 9 Paige, 237; Flagg v. Mann, 1 Summ. (U. S.) 486. 79. Heck v. Fisher, 78 Ky. 643. 80. Lawson v. Dunn, 66 N. J. Eq. 90, 57 Atl. 415. time he took possession or appropriated it to his own use,1 and where the property consists of book accounts he is liable for interest on the amounts collected by him on such accounts from the dates of collection.82 Interest may be allowed upon the rents and profits received by the grantee. The grantee should not, however, be charged with interest on the proceeds of land which he has sold, where a conveyance is set aside as being constructively fraudulent because made without consideration.$4 83 8 40. Reimbursement of consideration and expenditures, indemnity, and subrogation, in case of constructive fraud.Where a conveyance is not actually, but only constructively, fraudulent, or where there is no proof that the grantee participated in or is chargeable with knowledge of the fraud of the grantor, such grantee is entitled to reimbursement to the extent of the actual consideration paid, or the conveyance may be allowed in equity to stand as security for the consideration actually paid or advanced, in money or property, by the grantee.85 Equity will 81. U. S.-Backhouse v. Jett, 2 Fed. Cas. No. 710, 1 Brock. 500, he is liable for interest on the price of property he has sold only from the time of demand by creditors. Ala.-Muskegon Valley Furniture Co. v. Phillips, 113 Ala. 314, 21 So. 822. Iowa.-Risser V. Rathburn, 71 Neb.-Hargreaves V. Tennis, 63 82. Armour Packing Co. v. London, 53 S. C. 539, 31 S. E. 500. 83. Loos v. Wilkinson, 51 Hun (N. Y.), 74, 5 N. Y. Supp. 410; Cowing v. Howard, 46 Barb. (N. Y.) 579. 84. Priest v. Conklin, 38 Ill. App 180. 85. N. Y.-Robinson v. Stewart, 10 N. Y. 189; Pond v. Comstock, 20 Hun, 492; Van Wyke v. Baker, 16 Hun, 168; Bigelow v. Ayrault, 46 Barb. 143; Varmun v. Bolton Shoe Co., 84 N. Y. Supp. 967, where creditors recovered property, or the value thereof, fraudulently transferred by their debtor, the grantee was entitled to a return of the consideration which he had paid for the property; Warren v. Wilder, 12 St. Rep. 757. U. S.-United States v. Griswold, 8 Fed. 496, 7 Sawy. 296. Ala.-Campbell v. Davis, 85 Ala. 56, 4 So. 140; Caldwell v. King, 76 Ala. 149; Gordon v. Tweedy, 71 Ala. 202. But see Wiley v. Knight, 27 Ala. 336. Ga.-Park v. Snyder, 78 Ga. 571, 3 S. E. 557, the grantee, under Code, § 1955, defining a mortgage, has a lien treat a sale of personalty without a transfer of possession as other cases of constructive fraud, and hold it good to the amount of the in the nature of a mortgage; Scott v. Winship, 20 Ga. 429. Ill.-Lobstein v. Lehn, 120 Ill. 549, 12 N. E. 68, aff'g 20 Ill. App. 254; Phelps v. Curts, 80 Ill. 109. Ind.-Marmon v. White, 151 Ind. 445, 51 N. E. 930. lowa.-Clarke v. Sherman (1905), 103 N. W. 982; Stamy v. Laning, 58 Iowa, 662, 12 N. W. 628. Ky.-Wood v. Goffs' Curatir, 70 Ky. 59; Short v. Tinsley, 58 Ky. 397, 71 Am. Dec. 482; Botts v. Botts, 25 Ky. L. Rep. 300, 74 S. W. 1093; Chinn V. Curtis, 24 Ky. L. Rep. 1563, 71 S. W. 923; Smiser v. Stevens-Wolford Co., 20 Ky. L. Rep. 501, 45 S. W. 357; Neighbors v. Holt, 14 Ky. L. Rep. 237, while a wife could not be compelled to perform her agreement to pay her husband's indebtedness, which was the consideration of the sale and conveyance to her of all his property, still, after she had performed it in part, the property could not be taken from her without reimbursing her. Compare Bradley v. Buford, 2 Ky. 12, 2 Am. Dec. 703. Me.-Gardiner Bank v. Wheatin, 8 Me. 373. Md.-Cone v. Cross, 72 Md. 102, 19 Atl. 391; Hinkle v. Wilson, 53 Md. 287; Williams v. Savage Mfg. Co., 3 Md. Ch. 418, it may stand as security to the grantee for the sum really due him. Mass.-Thomas v. Beals, 154 Mass. 51, 27 N. E. 1004, the grantee is entitled to receive back the price paid with interest from the time of payment. Mich.-Walker v. Cady, 106 Mich. 21, 63 N. W. 1005; Joslin v. Goebel, 90 Mich. 71, 51 N. W. 354, where a conveyance was made by a husband to his wife in pursuance of a post-nuptial agreement, and for moneys loaned and advanced by the wife to the husband, she should be charged with the difference between her loans and advances, with interest, and the value of the property, and with moneys paid by her husband for her appearing on his books as part of the same account, and the total amount decreed against her should be made a lien on the land conveyed; Cutcheon v. Buchanan, 88 Mich. 594, 50 N. W. 756; Hersthfeldt v. George, 6 Mich. 456. Minn.-Thompson v. Bickford, 19 Minn. 17. Neb.-Farmer's, etc., Nat. Bank v. Mosher (1903), 94 N. W. 1003, 63 Neb. 130, 88 N. W. 552; Connecticut River Sav. Bank v. Barrett, 33 Neb. 709, 50 N. W. 1134. N. J.-O'Connor v. Williams (Ch. 1902), 53 Atl. 550; Kinmouth v. White (Ch. 1900), 47 Atl. 1; Withdrow v. Warner, 56 N. J. Eq. 795, 35 Atl. 1057, 40 Atl. 721, 67 Am. St. Rep. 501. Or.-Wright v. Craig, 40 Or. 191, 66 Pac. 807; Scoggin v. Schloath, 15 Or. 380, 15 Pac. 635, consideration should be repaid with interest. S. C.-Anderson v. Fuller, McMul. Eq. 27, 36 Am. Dec. 290; Parker v. Holmes, 2 Hill Eq. 95; Brown v. McDonald, 1 Hill Eq. 297; McMeekin v. Edmonds, 1 Hill Eq. 288, 26 Am. Dec. 203. Tenn.-Hartfield v. Simmons, 59 Tenn. 253; Turbeville v. Gibson, 52 Tenn. 565; Alley v. Connell, 40 Tenn. 578; Rosenbaum v. Davis (Ch. App. 87 consideration. Where a conveyance of property is merely constructively fraudulent as to creditors, the money paid by the grantee, in payment and satisfaction or in reduction of a valid pre-existing mortgage or other encumbrance on the property, should be allowed to him on setting aside the transfer, and also such sums as he has paid or advanced to pay existing debts due by the grantor. In the latter case the grantee is substituted in the place of the creditors whose debts he has paid and is subrogated to their rights. Where one receives a conveyance from 88 1898), 48 S. W. 706; Carpenter v. Scales (Ch. App. 1897), 48 S. W. 249. Vt.-Foster v. Foster, 56 Vt. 540. Va. Flynn v. Jackson, 93 Va. 341, 25 S. E. 1; Rixey v. Detrick, 85 Va. 42, 6 S. E. 615. W. Va.-Burton v. Gibson, 32 W. Va. 406, 9 S. E. 255; Livesay v. Beard, 22 W. Va. 585. Wis.-Kickbusch v. Corwith, 108 Wis. 634, 85 N. W. 148. Marriage settlements. - Where a settlement of his real estate by a husband on his wife, made prior to his marriage, was declared fraudulent and void as to the husband's creditors, a portion of his wife's fortune which had been suffered to go into his possession on the faith of the settlement should be paid to her, and the settled realty should stand charged with the payment. Davidson V. Graves, 1 Bailey Eq. (S. C.) 268. A post-nuptial settlement, void as against the husband's creditors, may stand as security for a portion of the wife's estate which had not been settled upon her. Davidson v. Graves, Riley Eq. (S. C.) 232. 86. Short v. Tinsley, 58 Ky. 397, 71 Am. Dec. 481. 87. N. Y.-Lore v. Dierkes, 51 N. Y. Super. Ct. 144, 16 Abb. N. C. 47. Ala.-Potter v. Gracie, 58 Ala. 303, 29 Am. Rep. 748. Cal.-Ackerman v. Merle, 137 Cal. 169, 69 Pac. 983, a mortgage. Iowa.-Garner v. Philips, 35 Iowa, 597, prior mortgage. Minn.-Leque v. Stoppel, 64 Minn. 74, 66 N. W. 208, mortgage. N. J.-Costello v. Prospect Brewing Co., 52 N. J. Eq. 557, 30 Atl. 682. S. C.-Fulmore V. Burrows,, 2 Rich. Eq. 95; Anderson v. Fuller, McMul. Eq. 27, 26 Am. Dec. 290. W. Va.-Kimble v. Wotring, 48 W. Va. 412, 37 S. E. 606; Herold v. Barlow, 47 W. Va. 750, 36 S. E. 8. Wis.-Kickbusch v. Corwith, 108 Wis. 634, 85 N. W. 148. 88. New York Public Library v. Tilden, 29 Misc. Rep. (N. Y.) 169, 79 N. Y. Supp. 161; Pond v. Comstock, 20 Hun (N. Y.), 492; Wood v. Hunt, 38 Barb. (N. Y.) 302; Clements v. Nicholson, 6 Wall. (U. S.) 299, 18 L. Ed. 786; Diamond Coal Co. v. Carter Dry Goods Co., 20 Ky. L. Rep. 1444, 49 S. W. 438; Leqve v. Stoppel, 64 Minn. 74, 66 N. W. 208; Ogle v. Lichteberger, 1 Am. L. Reg. (Pa.) 121. 89. Robinson v. Stewart, 10 N. Y. 189; Lillianthal v. Lesser, 102 App. Div. (N. Y.) 500, 92 N. Y. Supp. 619; Duke v. Pigman, 110 Ky. 756, 62 S. an involvent without actually paying, securing, or becoming bound to pay any consideration therefor, the subsequent voluntary payment by the grantee of valid debts against the grantor, or the purchase of obligations against him, or even the subsequent payment of money to the grantor, will not create a presumption in favor of the grantee, or sustain the validity of the conveyance; neither will this bare fact present a case entitling the grantee to demand, as a condition to the declaring of the conveyance void, and directing a sale for the satisfaction of judgment creditors of the grantor, that provision should be made to idemnify him for such sums as he has voluntarily paid to parties having demands against the grantor." 90 The grantee can prove a purchased claim enly for the amount which he paid for it." The grantee of property under a conveyance constructively, but not actually, fraudulent, as against the creditors of the grantor, may hold the property as security for a debt honestly and jusly due him, to the extent of the indebtedness, as, for example, a judgment recov 92 W. 867, 23 Ky. L. Rep. 209; Arnold v. Haschiedt, 69 Minn. 101, 71 N. W. 829; Kimble v. Wotring, 48 W. Va. 750, 36 S. E. 8. And see cases cited in preceding notes to this section. 90. Wood v. Hunt, 38 Barb. (N. Y.) 302. 91. Armour Packing Co. v. London, 53 S. C. 539, 31 S. E. 500. 92. N. Y.-Brown v. Chubb, 135 N. Y. 174, 31 N. E. 1030, rev'g 8 N. Y. Supp. 61; Loos v. Wilkinson, 113 N. Y. 485, 21 N. E. 392, 10 Am. St. Rep. 495, 4 L. R. A. 353; Nichols v. Nichols, 40 Misc. Rep. 9, 81 N. Y. Supp. 156. Ala.-Gilkey v. Pollock, 82 Ala. 503, 3 So. 99; Price v. Masterson, 35 Ala. 483, where a trust deed as fraudulent, the trustee can retain the property to satisfy a bona fide debt to himself, if he was ignorant of the fraud. Ill.-Lobstein v. Lehn, 120 Ill. 549, 12 N. E. 68, aff'g 20 Ill. App. 254; Walker v. Matthews, 58 Ill. 196; Byrns v. Shaw, 45 Ill. App. 281. Iowa.-Kerr v. Kennedy, 119 Iowa, 239, 93 N. W. 353, but the grantee cannot retain the property for debts due by the grantor's wife paid by the grantee; Fuller v. Griffith, 91 Iowa, 632, 60 N. W. 247. Ky.-Swigert v. Bank of Kentucky, 56 Ky. 268, a court of equity will not divest a creditor of a fund which has been transferred to him by an insolvent debtor for the purpose of benefiting another creditor of the insolvent, when the equities are equal, until all his just claims against the insolvent are satisfied, unless such claims were created subsequent to notice of the equity of the creditor seeking to subject it. |