Saurderson v. Broadwell

Hayne, C. This was a suit to set aside a deed made hy the defendant William B. Broadwell to the defendant C. E. Broadwell, upon the ground that it was in fraud of the rights of plaintiff as a creditor. The trial court gave judgment for the defendant, and the plaintiff appeals from the judgment, and from an order denying a new trial.

The court found that the deed “ was in good faith for a valuable consideration; that it was an actual sale, without reservation, and not in trust; fhat said deed was not fraudulently made, and was not made or executed or recorded or received, either on the part of said W. B. [133]Broadwell, or on the part of said C. E. Broadweli, or any one else, to hinder or delay or defraud any creditor or creditors of said W. B. Broadwell.”

In addition to the general finding, the court found specifically that the value of the property was “ about $1,-500”; and that the consideration was a pre-existing indebtedness of the grantor to the grantee of $800, and a promise by the latter to assume and pay an indebtedness of $688 of the grantor to a third person, which indebtedness was paid by the grantee within a reasonable time.

The indebtedness of the grantor to the grantee was a valuable consideration for the conveyance. (Jamison v. King, 50 Cal. 132; Schluter v. Harvey, 65 Cal. 159.) The promise to pay the debt due from the grantor to the third person was also a valuable consideration (Gladwin v. Garrison, 13 Cal. 332), and especially so when this payment was in fact made.

It is argued, however, that inasmuch as part of the consideration was a promise to pay another creditor of the grantor, the transfer must be held to have been for the purpose of creating a trust for the benefit of creditors, and that it was invalid as such, because all the creditors were not provided for. But we do not think that there was an attempt to create a trust for the benefit of creditors. The promise was not to pay the debt which was assumed out of the property transferred. The creditor for whose benefit the promise was made could not have fastened a trust upon the property if his debt had not been paid. The most that he could have done in such case would have been to bring a personal action against the grantee upon a promise for his benefit. And any creditor of the grantee could proceed to make their debts out of the property, which would not be the case if it were trust property. In other words, the transfer was absolute, and not in trust. The case of Dana v. Stanford, 10 Cal. 269, goes further than is