where the consideration paid by the subsequent grantee was so inadequate as to show fraud." A mortgage for value, not intended to defraud creditors, and executed by both the grantor and the grantee in a conveyance which was intended to defraud a particular creditor without judgment, is good as against him, though the mortgagee had notice of the fraudulent intent.75 But unless a purchaser from a vendee of property fraudulently conveyed is a bona fide purchaser without notice, he is in no better position than his grantor. 76

50. Rights and liabilities as to original grantor.-A deed made to defraud creditors is void only as against creditors, and a purchaser from the grantee, whether with or without notice of the fraud, takes a good title as against the original and fraudulent grantor, and the latter cannot recover the property from him," except where the grantee had reconveyed the property to the original grantor before conveying it to a purchaser who had acquired no rights as a purchaser for value and without notice.78 The purchaser from the fraudulent grantee is entitled to redeem the property from the claim of judgment creditors against such grantor and to be subrogated to all their rights against the grantor, by an assignment to him of the judgment upon payment of it by him. A purchaser of the premises at a sale on execution against the fraudulent grantee, with notice of the fraud, takes a good

the fraud; Morse v. Aldrich, 130 Mass. 578.

Mo.-White v. Million, 102 Mo. App. 437, 76 S. W. 733.

74. Burtis v. Humboldt County Bank, 77 Iowa, 103.

75. Sipley v. Wass, 49 N. J. Eq. 463, 24 Atl. 233.

76. Watson v. Dickens, 20 Miss. 608.

77. N. Y.-Cole v. Malcolm, 66 N. Y. 363, rev'g 7 Hun, 31.

Kan.-Weatherbee v. Cockrell, 44 Kan. 380, 24 Pac. 417.

La.-Bookout v. Anderson, 2 La. Ann. 246.

Or.-Alliance Trust Co. v. O'Brien, 32 Or. 333, 50 Pac. 801, 51 Pac. 640. Va.-Terrell v. Imboden, 10 Leigh,

321.

78. Curtin v. Curtin, 58 Hun (N. Y.), 607, 11 N. Y. Supp. 937.

79. Cole v. Malcolm, 66 N. Y. 363, rev'g 7 Hun, 31.

title as against the fraudulent grantor." Where a chattel mortgage is given without consideration for the purpose of being sold, the mortgagor is estopped as against a purchaser from claiming that it secured a real debt, but where it is shown that it was not intended to be sold, the mortgagor is not estopped to set up such claim, since such purchaser takes a security for what it is worth, as between the original parties, and if it secures no debt, he can collect nothing on it.81 Where a conveyance was made by a husband to his wife to defraud his creditors, it is good as between the parties, and he cannot show a trust in her as against parties claiming under her. But a purchaser claiming under a deed by a husband to his wife will not be aided in equity against the assignee of the heir of the husband, where the transaction was fraudulent as to the creditors of the husband.83

82

51. Rights and liabilities as to original grantee.-A purchaser from the fraudulent grantee cannot prove, in defense to a suit for the purchase money, that the vendor acquired title by a conveyance fraudulent as to the creditors of the original owner, since only defrauded creditors or purchasers can impeach a fraudulent conveyance.84 And this rule applies to one who buys goods at a shop which had been occupied by a person who owes him, under the supposition that he is dealing with his debtor, but is informed before leaving the shop that another person has become the owner of the stock of goods there, and is selling them on his own account, and makes no objections but retains the goods.85 In an action to set aside a trust deed securing the claim of a bank against the grantor, as in fraud of creditors, a purchaser under the trust deed with knowledge of the fraud could not, at the instance of the bank, however, be charged with rents and profits

80. Douglass v. Dunlap, 10 Ohio, 162.

81. Judge v. Vogel, 38 Mich. 569.

82. Hays v. Marsh, 123 Iowa, 81, 98 N. W. 604.

67.

83. Stickney v. Borman, 2 Pa. St.

84. Campbell v. Erie R. Co., 46 Barb. (N. Y.) 540; Root v. Wood, 34 Ill. 283.

85. Mudge v. Oliver, 83 Mass. 74.

accruing during his possession pending the suit, since the bank was an active party to the fraud.86

§ 52. Rights and liabilities as to creditors of original grantor. -A purchaser or other transferee from a fraudulent grantee, with notice of the invalidity of his title, can acquire no better right than that held by such grantee, and a purchaser from the grantee stands on no better footing than such grantee, unless his purchase was for a valuable consideration and without notice of the fraud and wrongful possession of his vendor, but such purchaser or other transferee will hold the property subject to all the remedies that could be enforced against it in the hands of his vendor. Where the fraudulent grantee assigns and transfers

87

86. Stout v. Phillippi Mfg., etc., Co., 41 W. Va. 339, 23 S. E. 571, 56 Am. St. Rep. 843.

87. N. Y.-St. John Woodworking Co. v. Smith, 82 App. Div. 348, 82 N. Y. Supp. 1025.

U. S.-Nickerson v. Meacham, 14 Fed. 881, 5 McCrary, 5; Rateau v. Bernard, 20 Fed. Cas. Co. 11,579, 3 Blatchf. 244; Dexter v. Smith, 7 Fed. Cas. No. 3,866, 2 Mason, 303.

Ala.-Smith v. Heineman, 118 Ala. 195, 24 So. 364, 72 Am. St. Rep. 150; Roden v. Ellis, 113 Ala. 642, 21 So. 71; Spencer v. Godwin, 30 Ala, 355.

Ark.-Miller v. Fraley, 21 Ark. 22. Cal.-Ballou v. Andrews Banking Co., 128 Cal. 562, 61 Pac. 102, although such purchaser pays full value.

Colo.-Wilcoxsen v. Morgan, 2 Colo. 473; Rizer v. McCarthy, 3 Colo. App. 348, 33 Pac. 191.

Conn.-Walp v. Mooar, 76 Conn. 515, 57 Atl. 277; Curtis v. Lewis, 74 Conn. 367, 50 Atl. 878.

Fla.-Mayer v. Wilkins, 37 Fla. 244, 19 So. 632.

Ga. Kelly v. Simmons, 73 Ga. 716; Cottle v. Harrold, 72 Ga. 830.

Ill.-Waggoner v. Cooley, 17 Ill. 339; Brown v. Niles, 16 Ill. 385; Hoff v. Larimore, 106 Ill. App. 589; Ringgold v. Leith, 73 Ill. App. 656; Wallace v. White, 12 Ill. App. 177.

Ind.-Corwin v. Reddington, 4 Ind.

198.

Iowa.-Joyce v. Perry, 111 Iowa, 567, 82 N. W. 941.

Ky.-Jones v. Read, 33 Ky. 540; Stern v. Sedden, 7 Ky. 178; Edgewood Distilling Co. v. Nowland, 19 Ky. L. Rep. 1740, 44 S. W. 364. See Sanders v. Alexander, 25 Ky. 301. Md.-Green v. Early, 39 Md. 223. Mass.-Carroll v. Hayward, 124 Mass. 120.

Minn.-Smith v. Conkwright, 28 Minn. 23, 8 N. W. 876.

Mo.-Sloan v. Torry, 78 Mo. 623; Lesem v. Herriford, 44 Mo. 323.

N. J.-Newman v. Kirk, 45 N. J. Eq. 677, 18 Atl. 224; Mingus v. Condit, 23 N. J. Eq. 313.

N. C.-Wade v. Saunders, 70 N. C. 270.

the property for the payment of his own creditors, the assignees
of the fraudulent grantee stand on no better footing than the
grantee himself.88
Land for which the land fraudulently con-
veyed has been exchanged is subject to the demands of the original
grantor's creditors.89 A corporation formed substantially out of a
firm which it succeeded, in taking an assignment, apparently
without consideration, of a mortgage held by the firm, to defraud
the mortgagor's creditors, is subject to the same equities as the
firm.90
In the absence of fraud in the entry of a judgment by
confession against the grantor, purchasers who are not bona fide
purchasers for value cannot object that the statement on which
the judgment was entered was insufficient." Where a creditor of
an intestate has no other resource for collecting his debt, he may
call to account in equity one who has, since the debtor's death,
taken the profits of land conveyed by the debtor to defraud credi-
tors, being grantee with notice from the fraudulent grantee." But
in an action to set aside a conveyance as constructively fraudu-
lent, a court of equity will protect a purchaser from the grantee,
as well as the creditor, where both can be protected without in-
jury to either. A grantee in a fraudulent conveyance, who was
a conscious participant in the fraud, on the setting aside of the
conveyance is not entitled to recover expenditures made to pro-
tect his title; but one claiming through him in good faith, who
did not participate in the fraud, although buying under such

93

See Change in character of property,
chap. IV, § 48, supra.

90. In re Sweet, 20 R. I. 557, 40
Atl. 502.

91. St. John Woodworking Co. v. Smith, 82 App. Div. (N. Y.) 348, 82 N. Y. Supp. 1025.

92. Jones v. McCleod, 61 Ga. 602. 93. Tompkins v. Sprout, 55 Cal. 31; Newman v. Kirk, 45 N. J. Eq. 677, 18 Atl. 224, the assignee of the purchaser at sheriff's sale might hold the title acquired from the sheriff as

circumstances as to be constructively chargeable with notice, is in equity entitled to be reimbursed for expenditures in the payment of taxes," or prior liens. On the other hand, although not

a party to the suit, until shortly before the decree, such purchaser is chargeable as against his claim for reimbursement with the taxable costs incurred in the suit after the date when he became a party in interest.9%

§ 53. Mortgage or conveyance to creditors of grantor.-A fraudulent grantee may lawfully dispose of the property in any manner in which the grantor might have disposed of it, had not the fraudulent sale occurred, may transfer it, for instance, to a creditor of the grantor." If a fraudulent grantee transfers or mortgages the property to a bona fide creditor of the grantor, who had no connection with the fraud, and such creditor takes the transfer or mortgage in good faith, either in payment of or as security for his own just debt against the fraudulent grantor, before any other creditor has acquired a lien upon the property, such transfer or mortgage will be valid, to the extent of his claim, as against such other creditors, whether such creditor had notice or not of the prior fraudulent transaction, and such transfer or mortgage may be enforced by the transferee or mortgagee, no rights of creditors, purchasers, or incumbrancers having intervened.98 Such mortgage or other conveyance requires no other

security for the amount actually paid to the sheriff.

94. Lynch v. Burt, 132 Fed. 417, 67 C. C. A. 305; Graves v. Winans (N. J. Ch. 1886), 4 Atl. 645.

95. Lynch v. Burt, supra. See Wolcott v. Tweddle, 133 Mich. 389, 95 N. W. 419, as against purchaser at execution sale.

96. Lynch v. Burt, supra.

97. Dolan v. Van Demark, 35 Kan. 304, 10 Pac. 848.

98. N. Y.-Munoz v. Wilson, 111 N. Y. 295, 18 N. E. 855; Murphy v.

Briggs, 89 N. Y. 446, aff'g 23 Hun,
95; Mahoney v. McWalters, 3 App.
Div. 248, 38 N. Y. Supp. 256.

U. S.-Johnson v. American Trust
Co., 104 Fed. 174, 43 C. C. A. 458.
D. C.-Petingale v. Barker, 21 D.
C. 156.

Ky.-Copenheaver v. Huffaker, 45
Ky. 18.

Mass.-Boyd v. Brown, 35 Mass.

453.

Minn.-Brown v. Scheffer, 72 Mini. 27, 74 N. W. 902; Butler v. White, 25 Minn. 432.