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Stephens v. Heirs of Harrow.

Charles F. Harrow, about the year 1843, settled in Wapello county. He had before this lived in Indiana, and had been engaged in business with apparently considerable means, but failed, and at his removal left many debts unsatisfied. He was possessed of considerable means when he arrived in Iowa. He purchased several tracts of land a few years after he removed to the State, and the deeds therefor were made to Francis M. Harrow, his son, who at the time was a minor and lived with his father. In 1848, at the request of his father, Francis executed and delivered to him a declaration of trust, setting out that the title of the lands was held for his benefit, to be conveyed to him or under his direction upon request so to do. This instrument is lost. The defendants contend that the contents are as stated, while it is insisted by plaintiffs that it was in fact a conveyance, and operated as such. The father died in September, 1853, the son in October, 1855. The plaintiffs are the legal representatives and heirs and assignees of the heirs of the father, Charles F. Harrow, and the defendants are the heirs of the son, Francis M. Harrow. The District Court, upon a trial on the merits, found the equities of the case with defendants, and rendered a decree dismissing the bill. Plaintiffs appeal.

Hendershott & Burton for the appellants.

Edward H. Stiles, M. J. Williams and Withrow & Wright for the appellees.

I. The testimony shows, conclusively—indeed it is an admitted fact in the case-that the trust relation which the plaintiffs seek to establish resulted from the investment of money belonging to Charles F. Harrow in the land in controversy, taking the title to and in the name of his son, Francis M. Harrow, with the intent and for the

Stephens v. Heirs of Harrow.

express purpose of defrauding the creditors of the said Charles.

This is the same as if Charles F. Harrow had procured the title to be made directly to him, and he then had voluntarily conveyed the same to Francis M., with the intent to defraud his creditors. If Charles F. had in his-lifetime instituted suit against Francis to recover these lands and cause a reconveyance, the authorities are uniform in a long line of unbroken decisions that the courts would have denied him relief and held the conveyance as between the parties valid. His heirs inherit no greater right, but stand in the shoes of their ancestor. What right they have to the land is by inheritance from him. He, leaving none, transmits none to them.

While a deed made to defraud creditors is as to them void, it is nevertheless valid as against the grantor and his children. Reichart v. Castatur, 5 Binn. 109; Osborn v. Moss, 7 Johns. 161; see also Hendricks v. Mount, 2 South. 738.

None but creditors or purchasers, without notice, can take advantage of a fraudulent deed. Swanzey v. Hunt, 1 N. & M. 211. It is good and valid as to all other persons. Burgett v. Burgett, 1 Humph. 469; Woodman v. Bodfish, 25 Maine (12 Shepley) 317; Owen v. Dixon, 17 Conn. 492; Kimmet v. McRight, 2 Barr, 38.

A party to a fraudulent conveyance can not set up his fraud to avoid the conveyance, nor can his grantee or his heirs impeach such conveyance. Barton v. Morris, 15 Ohio, 408; Turner v. Campbell, 3 Gratt. 77; Sharp v. Caldwell, 7 Humph. 415; Murphy v. Herbert, 16 Penn. St. 50-a very strong case; Choteau v. Jones, 11 Ill. 300; McCleny v. McCleny, 3 Texas, 192; Irwin v. Longworth, 20 Ohio, 581; Brown v. Webb, 20 id. 389; Kinneman v. Miller, 2 Md. Ch. Decis. 407; Bret v. Aylet, 6 Eng. 475.

Stephens v. Heirs of Harrow.

A fraudulent conveyance is valid as to the grantee not only against the grantor, but his heirs. 2 Carter (Ind.) 196.

A grantor who executes a conveyance of land to defraud creditors, is bound thereby to the grantee and his heirs, whatever may have been the circumstances attending or subsequent to the conveyance and the declaration of the grantee. Broughton v. Broughton, 4 Rich. (S. C.) 491– exactly in point.

A deed which is made to defraud creditors, though void as to them, is binding upon the grantor and his heirs. McLaughlin v. McLaughlin, 16 Mo. (1 Bennett), 242.

A deed fraudulent as to creditors may be impeached by them, but it is good against all others, and can not be impeached by the grantor or by his representatives or heirs at law. Cushwa v. Cushwa, 5 Md. 44.

Where an intestate previous to his decease conveys any of his property to defraud his creditors, a distributee can not impeach the conveyance. It is valid between the parties and their representatives. Ellis v. McBride, 27 Miss. (5 Cush.) 150. See also 10 Texas, 159; Cobb v. Norwood, 11 id. 556.

The heirs of a party who caused land to be conveyed to delay or defraud creditors can not impeach it. Danzey v. Smith, 4 Texas, 411; Fowler v. Stoneman, 11 id. 478.

While a fraudulent conveyance is void as to creditors, it is obligatory on the parties and their heirs. Lenox v. Notrebe, 1 Hemp. 251.

A fraudulent conveyance is obligatory on the grantor and his heirs, but not as to purchasers or creditors. Lenox v. Notrebe, 1 Hemp. 251.

A voluntary conveyance is good against an heir at law, and against all but creditors and purchasers without notice. Jewett v. Porter, 11 Foster (N. H.) 34.

A sale void as against creditors is good as against all the world except creditors and purchasers without notice.

Stephens v. Heirs of Harrow.

Osborn v. Tunis, 1 Dutch (N. J.) 633; Drum v. Painter, 27 Penn. St. 268; L. M. & C. R. R. Co. v. Seeyer, ± Wis. 268; Clute v. Fitch, 25 Barb. 428; Huy's appeal, 29 Penn. St. 219.

An administrator cannot set aside a conveyance which was binding upon the deceased, on the ground of fraud, where the creditors have waived their right to impeach the conveyance. Winro v. Barnett, 31 Miss. (2 George) 653; Snodgrass v. Andrews, 30 id. 472.

Nor can the personal representatives of the grantor. Gulby v. Hall, 31 Miss. 20.

A conveyance of land, though fraudulent against creditors, is valid against the grantor and his heirs. Montgomery v. Hunt, 5 Cal. 356; George v. Williamson, 26 Mo. (5 Jones) 190; Getzler v. Saroni, 18 Ill. 511. See also Davis v. Graves, 29 Barb. 480; 6 Seld. 189; Fargo v. Ladd, 6 Wis. 106; Graser v. Stellwagen, 25 N. Y. 315.

A deed made to delay or defraud creditors is void only as to them, and is valid not only against the grantor, but his heirs. Lakerson v. Stillwell, 2 Beasly (N. J.) 367; 1 Am. Lead. Cas. 75 and 76, and the numerous authorities. there cited; Stewart v. Iglehart, 7 Gill. & John. 132–136; James v. Birds, Adm., 8 Leighton, 510; 2 Halst. 174; Roberts on Frauds, 646; 1 Story's Eq. Jur. § 371.

But we are not without authority upon this point in our own State. The precise question is adjudicated, and the maxim in pari delicto melior est conditio possidentis et defendentis said to apply not only against the grantor in a fraudulent conveyance but his heirs, in Holliday v. Holliday, 10 Iowa, 200. Nor will "equity enforce a reconveyance, nor enforce a secret trust (just what is asked by plaintiffs in the case at bar) in favor of the grantor or his heirs. The rule is well settled." Per WRIGHT, J., in

same case.

It may be urged that there is evidence to show that

Stephens v. Heirs of Harrow.

there was a written declaration, signed by F. M. Harrow, acknowledging the trust, and that this fact changes or takes this case from the operation of the rule. But it makes no difference whether the trust be by parol or in writing, the rule is the same, as is clearly shown by a number of the authorities above cited, and especially in the case of Murphy v. Herbert, 16 Penn. St. 50, where this point is expressly ruled. It is there said that "to enable a party to show a trust in the face of a deed, the object must have been an honest one, and whether the trust be by parol or in writing, the rule is the same." That case 66 goes on all fours" with the one at bar, and is decisive of it. That this trust declaration, if there ever was one, was a part of the arrangement to defraud creditors, is beyond doubt.

II. The Lyon land was purchased by Francis M. Harrow, with his own means, and not with those of his father, before the execution of the declaration of trust, and was not included in that instrument.

BECK, J. The decision of this case turns chiefly upon the facts. We will not attempt a discussion of the evidence, but aim to state briefly our conclusions thereon.

I. We find from the evidence that the lands in controversy, excepting those purchased of Lyon, were purchased by Charles F. IIarrow with his own means, and that he caused the title thereof to be conveyed to Francis M., with the fraudulent intent of hindering the collection of debts which he owed. There exists some doubt whether the Lyon land was purchased by Francis M. with his own money, yet the preponderance of the evidence is to that effect. The decision of the case, so far as this land is concerned, it will be found, turns upon another question.

II. The instrument executed by Francis M., in 1848, was a declaration of trust, and not a conveyance, nor did

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