US SUPREME COURT DECISIONS

A post-nuptial voluntary settlement, made by a man who is not indebted at the time upon his wife is valid against subsequent creditors.

The statute 13 Eliz. c. 5, avoids all conveyances not made on a consideration deemed valuable in law as against previous creditors.

But it does not apply to subsequent creditors if the conveyance is not made with a fraudulent intent.

A voluntary settlement in favor of a wife and children is not impeachable on that ground alone by subsequent creditors:

The circumstances that the property thus conveyed constituted a large portion of the estate of the grantor and that he failed within a short period after the date of the conveyance may awaken suspicion and strengthen other circumstances, but, taken alone, are not proof of fraud.

What circumstances will constitute evidence of such a fraudulent intent.

This was a bill brought by the appellant, Sexton, in the court below to subject a house and lot in the City of Washington, the legal title to which was in the defendant, Sally Wheaton, to the payment of a debt for which the plaintiff had obtained a judgment against her husband, Joseph Wheaton, the other defendant.

The lot was conveyed by John P. Van Ness and Maria, his wife, and Clotworthy Stepenson to the defendant, Sally Wheaton, by deed bearing date 21 March, 1807, for a valuable consideration acknowledged to be received from the said Sally. And the plaintiff claimed to subject this property to the payment of his debt upon the ground that the conveyance was fraudulent and therefore void as to creditors.

The circumstances on which the plaintiff relied chanrobles.com-red

Page 21 U. S. 230

in his bill to support the allegation of fraud were that the said house and lot were purchased by the defendant, Joseph, who, contemplating at the time carrying on the business of a merchant in the said City of Washington, procured the same to be conveyed to his wife and obtained goods on the credit of his apparent ownership of valuable real property. That for the purpose of obtaining credit with the commercial house of the plaintiff, in New York, he represented himself in his letters as a man possessing real estate to the value of $20,000, comprehending the house in question besides 100 bank shares and other personal estate. That the defendant, Sally, knew and permitted these representations to be made. That the defendant Joseph in the presence of the defendant Sally applied to General Dayton, the friend of the plaintiff, to be recommended to a commercial house in New York, and in the statement of his property, as an inducement to make such recommendation, he included the premises. That the defendant Sally permitted this misrepresentation, and did not undeceive General Dayton, although she had many opportunities of doing so.

In support of these allegations, the plaintiff annexed to his bill several letters written by the defendant Joseph in the City of Washington to the plaintiff in the City of New York soliciting a commercial connection and advances of goods on credit. The first of these letters was dated 2 September, 1809. The letters stated that the plaintiff's house had been recommended to the defendant by their mutual friend, General Dayton, chanrobles.com-red

Page 21 U. S. 231

represented the defendant's fortune as considerable, spoke of the house in which he was to carry on business as his own, and held out the prospect of regular and ample remittances.

The bill further stated that upon the faith of these letters and on the recommendation of General Dayton, the plaintiff advanced goods to the defendant Joseph to a considerable amount, who failed in making the promised remittances, and on the plaintiff's withholding further supplies of goods and pressing for payment, he avowed his inability to pay, declared himself to be insolvent, and then stated that the house in controversy was the property of his wife.

Some arrangements were made by which the goods in the store and the books of the defendant Joseph were delivered to the plaintiff, but after paying some creditors who were preferred, a very small sum remained to be applied in discharge of a judgment which the plaintiff had obtained in January, 1812, for the sum of $8,249.29 cents. On this judgment an execution was issued, by which the life estate of Joseph Wheaton was taken and sold for $300, the plaintiff being the purchaser.

The bill prayed that the property, subject to the plaintiff's interest therein under the said purchase, might be sold and the proceeds of the sale applied to the payment of his judgment. It further stated that improvements to a great amount had been made since the conveyance to Sally Wheaton, and prayed that, should the court sustain the said chanrobles.com-red

Page 21 U. S. 232

conveyance, the defendant Sally might be decreed to account for the value of those improvements.

The answers denied that the house and lot in contest were purchased in the first instance by Joseph Wheaton or conveyed to his wife with a view to his entering into commerce, and averred that they were purchased for Sally Wheaton, and chiefly paid for out of the profits made by her industry, and saved by her economy in the management of the affairs of the family while her husband was absent executing the duties of his office as Sergeant at Arms to the House of Representatives. The answers also stated that in January, 1807, when the conveyance was made, Joseph Wheaton was sergeant at arms to the House of Representatives, expected to continue in that office, had no intention of going into trade, and had no knowledge of the plaintiff. The design of going into commerce was first formed in the year 1809, when, being removed from his office and having no hope of being reinstated in it, he turned his attention to that object as a means of supporting his family. He then, in a letter dated 24 August, applied to General Dayton as a friend to recommend him to a house in New York, and received from that gentleman a letter dated the 29th of the same month, which is annexed to the answer. In this letter, General Dayton says

"pursuant to your request, I recommend to you the house of Messrs. Sexton & Williamson, with which to form the sort of connection which you propose in New York. They have sufficient capital. . . . The proper course will be for

Page 21 U. S. 233

you to write very particularly to them, stating your present advantageous situation, your prospects and plans of business, and describing the nature and extent of the connection which you propose to form with them, and then refer them to me for my knowledge of your capacity, industry, probity,"

&c.

The defendant Joseph, in his answer, stated that in consequence of this letter, he wrote to the said house of Sexton & Williamson. He admitted that his account of his property was too favorable, but denied having made the statement for the purposes of fraud, but from having been himself deceived respecting its value. He denied having ever told General Dayton that the house was his, and thinks he declared it to be the property of his wife. Sally Wheaton denied that she ever heard her husband tell General Dayton that the house was his property; that she ever in any manner contributed to impose on others the opinion that her husband was more opulent than he really was, or ever admitted that the house she claims was his. She admitted that she saw a letter prepared by him to be sent to Sexton & Williamson in the autumn of 1809, which she thought made too flattering a representation of his property, and which she therefore dissuaded him from sending in its then form. She then hoped that her persuasions had been successful.

The answers of both defendants stated that Joseph Wheaton was free from debt when the conveyance was made, and insisted that it was made bona fide. chanrobles.com-red

Page 21 U. S. 234

The court below dismissed the bill, and from this decree the plaintiff appealed to this Court. chanrobles.com-red

Page 21 U. S. 238