Joseph Story

“ Creditors have, as between them and the debtor, an undoubted right to so much of his estate as will pay their debts; but the debtor has a right, equally undoubted, of preferring one creditor to another, or giving all his property to one; this is neither fraud in law or fact, in the absence of covin or collusion. A debtor may sell his whole estate, turn it into money, and distribute it among his creditors, at his pleasure ”

“ The real question is, whether the property he owned in December 1825, passed to Richard Stockton, father and trustee of Mrs. Thomson, for her use, or whether it remained in the defendant, on account of the legal inefficacy of the marriage-agreement to divest him of it, and vest it according to that agreement? If it was operative in law, the house furniture and fund in hands of Robert Stockton belong to him, in trust for the uses of the agreement. If not, then the law deems J. R. Thomson to be the legal owner, in trust for his creditors, of whom the plaintiffs seem to be the only ones. ”

“ She is not to be considered in any court as a volunteer, but comes into court, at least, on an equality, both in law and equity, with any other parties whose claims are founded in money. You will not forget the difference between a provision for a wife and children, before and after marriage; when there is no portion or money paid, it is the difference between a purchaser and a volunteer; for the former, the consideration is as valuable as the debt due a creditor, or the money received from a purchaser in the latter ”

“ It is a hardship on a widow or an orphan, who has been defrauded by her trustee, in selling what is not his own, but theirs; but it is as great, if not a greater, hardship on the widow or orphan, to be deprived of property which they have purchased and paid for by money earned by their industry, and deprived of that, on the faith of which they have devoted their lives to a husband, and placed at his disposal their future happiness, and last cent. A loss must fall on one of two innocent sufferers, whose claims may be supposed equal in justice and equity ”

“ But before we can say that it is a fraud in law, to expend $5000 in furnishing a house costing $13,000, and the establishment to be supported by the income of an investment of $40,000 in productive funds, we must be satisfied, that it is, at the first blush, an extravagant and unwarranted expenditure under all the circumstances in evidence, and to an extent indicating some fraudulent or other motive unconnected with the fair execution of the contract, of which we are not satisfied ”

“ The rules laid down are not new ones, either here or in that country which is the source of our jurisprudence, and to whose judicial tribunals the wisest and best judges will look, without any fear of foreign influence; to some, with veneration, and to all, with respect, as the expositors of the same common law which originated there, and, adopted in this country, is the source of national pride to both, as a system equally distinguished for its wisdom and public benefits. ”

“ The present is the case of a man in trade, with immense outstanding debts and liabilities, without a particle of real estate, or even of personal, but in mere speculation, who, immediately after the marriage, declared his inability to settle the property promised by the marriage-settlement, who has not, and never had, any goods, stocks, credits, property or estate of any kind, nothing to pledge, even if he wanted to borrow, who pleads utter insolvency, who settled, on his marriage, the very money he borrowed of the plaintiffs, and who now lives upon it, in their despite. ”

“ If the settler alone intend a fraud, and the other party have no notice of it, but is innocent of it, she is not, and cannot be affected by it. Marriage, in contemplation of the law, is not only a valuable consideration to support such a settlement, but is a consideration of the highest value, and from motives of the soundest policy, is upheld with a steady resolution. The husband and wife, parties to such a contract, are, therefore, deemed, in the highest sense, purchasers for a valuable consideration ”

“ That it hinders the plaintiffs, who are prior creditors, is beyond all question. In the court below, it was insisted for the defendant, that by ante-nuptial settlement, the wife is a purchaser, holding by a consideration equivalent, if not superior, to the most valuable. For the plaintiff, conceding this position, it was contended, nevertheless, that there must be a fair transaction, as well as a valuable consideration, that fraud will vitiate any contract whatever, that even acquittances, bonds, laws, treaties, may be annulled by fraud, and why not the contract of marriage-settlement? ”

“ A mere doubt or suspicion of the fairness of the transaction, ought not to be sufficient to lead to the finding of any act to be fraudulent, unless the conduct and situation of the parties, and the effects intended to be produced by the act, appear inconsistent with their integrity, and admit of no reasonable interpretation but meditated fraud, to be effected by the agreement, sale or deed ”

“ There is no such proposition in law, as that a covenant 'to furnish a house in a suitable manner, as the husband shall judge fit and proper,' which is the language of the covenant, or an actual expenditure to the extent of $5000, is per se fraudulent. There must be other circumstances. These were marriage articles, rather than a consummate settlement, and chancery will so mould and control them as to effectuate the intention, annulling the excess of the execution beyond what was lawfully intended. ”

“ It is a strong proposition, to assert that an unsuitable expenditure by the husband, contrary to the express language of his covenant, shall defeat the wife's settlement for anything more than the excess, when that is made out by evidence. The court expressed an opinion, that the expenditure might be bad for the excess, when shown, and were right in refusing to say, that a given expenditure, was per se a fraud.
2. The delivery of notes to the trustee, upon the eve of the plaintiffs' judgment, was good, if the settlement was so. ”

“ They are entitled to the protection of all courts, in the enjoyment of what is granted, and to their aid in enforcing the performance of what has been stipulated to be done, and where either party can rightfully call on a court of law or equity to compel the other to perform an act necessary to the execution of the contract, and the judgment or decree of the court would be given in his favor, a voluntary performance of the legal or equitable obligation would be equally valid. ”

“ A married woman can own nothing, can lose nothing, can hardly be guilty of a misdemeanor, if, by construction of law, it may be imputed to her husband; whereas, in the countries of the civil law, marriage is like a commercial partnership, a firm in which the interests of husband and wife are the same, respecting the joint-stock or property. ”

“ A creditor is nowhere more favored than the infant, the ward, the widow or orphan, whose property is in the hands of trustees, without lien or security, and subject to his disposition by deed or bill of sale.
'The creditor of a deceased debtor has the same right to the payment of his debt out of his property as a living one; yet a sale of the personal property of a decedent, by an executor, administrator or trustee, to pay his own debt, is good against creditors, the widow and next of kin, if made without notice or collusion, and no court of chancery will annul it ”

“ Thomson is to be considered as a fair purchaser, without notice, or an honest creditor, her claims can only be affected by fraud, in a court of law, or such a case of equitable jurisdiction as could induce a court to annul a conveyance, made in consideration of money, or as security for a debt, or to enjoin the assertion of any right accruing or claiming under it. ”

“ If the deed is void, by reason of the non-registry, the real estate, upon which alone the statute has any bearing, remains the property of R. Stockton, and is liable to his creditors. The creditors of the grantor, and not the grantee, are the creditors meant by the statute. It is difficult to sustain the exception, that the judgment against Thomson is to prevail over the settlement, and defeat it, when it is only by the validity of the settlement, that Thomson can have anything in the land for the judgment to affect. ”

“ It is good between the parties, and good as to all the world, unless it is liable to impeachment for fraud; which is of two kinds, fraud in fact, and fraud in law. The first is an intention or design to defraud, delay, injure or prevent creditors from receiving their just debts, by a sale, deed, settlement or agreement, by which the property of a debtor is withdrawn, or attempted to be withdrawn, from their reach. ”

“ The first inquiry as to them, is, whether one class has a legal right to the debt claimed, or the other to the thing claimed to be purchased, such as is recognised in a court of law; the second is, whether that right has been so acquired as to be attended with such circumstances of fraud, accident, mistake, trust, inadequacy of price, or unfairness, as will annul or modify it in a court of chancery, according to the established principle of courts of equity. ”

“ The charge, it is, therefore, submitted, annuls the whole law of notice as to fraudulent conveyances, and makes every one a fair purchaser, who is not a participator in the fraud; so that a wife or father have only to remain wilfully ignorant of a husband's fraud, and a family settlement will be valid of property acquired by highway robbery. ”

“ Fisher, you will probably think the plaintiffs' case so far made out as to establish the existence of a valid legal debt due plaintiffs by defendant, at the time of the marriage-settlement, and no evidence being given to impeach the claim, we think, in point of law, it is so, unless you feel at liberty to discredit Mr. Fisher; though Mrs. Thomson is no party to the judgment, it is evidence to affect her claim. ”

“ All this is required to render a conveyance valid at law, in that respect, is, that there be some consideration, the amount is not material, and cannot be inquired into, either as respects the grantor, his creditors, or subsequent purchasers of the same property, in the absence of actual and legal fraud in the grantor, or notice of it to the grantee. The only resort of the parties who complain of any equitable fraud, or other circumstances which would invalidate it in equity, is to those courts ”

“ Thomson cannot be viewed as the purchaser of the property contracted to be invested for her use, she is certainly a fair and honest creditor, from the time of its execution, if not from the time of the proposed settlement in August, after the engagement of marriage was made ”

“ The English statute of 13 Eliz. declares all such acts null and void as to creditors; this statute is in force here, and you will consider it as having the same effect in this cause as a law of New Jersey; the common law makes the same declaration; and if the evidence brings this case within it, your verdict must be for the plaintiff. Proof of fraud may be made out by direct evidence, or may be inferred from such circumstances as will justify that inference; but a jury ought never to presume it, without either ”

“ The consideration being valuable, if the contract, whether executed or executory, is made in good faith, with one having no notice or knowledge of any fraud, covin or collusion to defraud creditors, performance may be enforced, or voluntarily made, and the contract carried into execution, at any time, either in the whole or in part, as is in the power of the party ”

“ You may find, if you are satisfied with the fact, that the payment of the balance of the $40,000 has been waived by consent of the parties, but this can have no effect on the investment actually made. The non-delivery of the securities for the $9500, till near the time when judgment was rendered in New Jersey, and the omission to record the marriage-articles, have been relied on in aid of the presumption of abandonment ”

“ Truth is not to be elicited by forced comparisons and extravagant suppositions, or extracted from extreme cases of rare and barely possible occurrence; the rules of law have been settled to meet the common and ordinary occurrences of life, which come within the cognisance of courts of justice ”

“ Fraud may be imputable to the parties, either by direct co-operation in the original design, at the time of its concoction, or by constructive co-operation, from notice of it, and carrying the design, after such notice, into execution.
The argument at the bar admits these principles to be incontrovertible. But it is supposed by the counsel for the plaintiffs in error, that the charge contains a different and broader doctrine; that it requires active co-operation, preconcert and participation in the original design of fraud ”

“ The security given to the plaintiffs exceeded the amount of the respondentia bond $23,300, which may fairly be presumed to have been invested in the invoices pledged to the plaintiffs, out of his own funds, as there is no evidence that this sum was raised by loan, on the goods purchased on credit. This, added to the other debts, amounting to $7548, makes $30,748, which would seem to have been raised, without contracting a debt. Defendant pledged $23,300 of this to secure the plaintiffs for a loan made for the use of Edward Thomson, and made Thomson personally liable in the bond. ”