Kinder v. Macy

Murray, C. J., delivered the opinion of the Court—Terry, J., concurring.

To maintain a creditor’s bill in chancery, in order to reach equitable assets which are alleged to be fraudulently conveyed, it is not sufficient simply to aver that the conveyance was fraudulent, but facts and circumstances must be set out and shown, which will reasonably sustain the theory of the bill.

In the present case, unless the defendants, Macy, Low & Co., received the conveyance under which they hold "the projmrty, with a view to hinder, delay, or defraud creditors, the complainants’ bill can have no standing in a Court of Equity. For if Macy, Low & Co. have purchased in good faith, it is immaterial how many valid prior liens may have attached on the property, they are entitled to what remains after the satisfaction of those liens, or they would have the right to pay the liens and keep the property, and in such a case, a Court of Equity would not interfere, because the whole subject could be well disposed of by a Court of Law.

What, then, are the allegations upon which the complainants rest to convict the defendants of a fraudulent transaction ? They call the deeds of conveyance fraudulent, and charge them to have been made with the intent to hinder, delay, and defraud the creditors of Adams & Co.; but all this is mere averment. Then comes the charge of Adams & Co.’s insolvency, but that is insufficient to taint the purchase, for it may be the highest duty of an insolvent to sell his property in order to pay his debts.

The only other facts which seem to be relied on, is, that Macy was formerly the agent of Adams & Co., and knew all about their condition, and that the price paid for the property was inadequate, being only three thousand dollars, when, as it is said, the property is worth twenty thousand dollars.

The first of these averments amounts to nothing. A man having been agent or clerk of an insolvent, cannot, necessarily, raise the inference, that his purchase of the insolvent’s property was fraudulent. If it could be shown, that he had taken an unfair advantage of the knowledge which that position gave him, so as to possess himself of property at a smaller sum than its value, or, if it appeared that he had no apparent means of making such a purchase, these would be circumstances which would demand [208]of a Court the strictest investigation. But there are no such charges made.