184 CASES IN THE SUPREME COURT [22 Ark. Hufg vs. Roane, et al. [Ooroma HUFF VS. ROANE, ET AL. The case of Dardenne vs. Hardwick, (4 Eng. 485) and Hempstead vs. Johnson (18 Ark. 141), as to presumption of fraud in courts of law and equity, explained and reconciled. No general rule has been established by which conveyances alleged to be fraudulent can certainly be so adjudged—Each case must rest upon its own circumstances. A debtor, who is insolvent, or in failing circumstances, may, by deed bona fide made, give preference to a particular creditor, and such conveyance will not be disturbed by a court of equity. But a court of equity will not allow a deed of trust to be the foundation of an action, where the proof—for which see opinion—shows that it was the intention of the parties to concoct a simulated demand; that the whole proceeding was fraudulent in design and in execution, in its beginning, progress and end. Ai peal from Jefferson Circuit Court in Chancery. Hon. THEODORIC F. SORRELLS, Circuit Judge. GARLAND, for the appellant. Possession of property by the grantor for a reasonable period authorized by a deed, is no badge of fraud. Taylor vs. Vaughn, et al. 18 Ark. 65; Ib. 123. To prevent multiplicity of suits, removal of property, etc., equity will take cognizance of a private trust. WATKINS & GALLAGHER, for appellees. The facts disclosed proved that the deed was executed to defraud creditors and is therefore void. Mr. Justice FAIRCHILD delivered the opinion of the court. In Dardenne vs. Hardwicic, 4 Eng. 485, it was said: "Fraud
22 Ark.] OF THE STATE OF ARKANSAS 185 TERM, 1860.] Huff vs. Roane, et al. will never be presumed in a court of law, although a somewhat different rule prevails in a court of equity; but even there, when an act does not necessarily import fraud, and may have as well occurred from good as bad motives, fraud will not be inferred." We do not suppose that it was intended, in the above extract, to assert as a legal principle, that fraud would be presumed in a court of equity without legal grounds of presumption; but simply to show that in comparison with the modes of establishing fraud in a court of law, the means adopted by a court of equity for an examination of alleged fraudulent conduct, would sometimes induce the conclusion, and affirm the existence of fraud, when no inquiry of the sort could be prosecuted in a court of law, or when, if the question of fraud were raised, no affirmative response could be had upon the same facts that would ause its assertion and exposure in a court of equity. In equity, as in law, the facts must be shown to exist that ?.onstitute fraudulent dealing; that is, that show something to Je done with dishonest intentions, and with an injurious effect, )r tendency, against the interest of the party complaining of he alleged fraud. But courts of law, from being confined to he literal construction of deeds, and to the validity of rights lependent upon them, and from being compelled to declare the tharacter of acts from their outward manifestations, and as ap-mrent to the observation of others, compare disadvantageously n the ascertainment of frauds, and in the administration of re-aedies against them, with * courts that appeal to the consciences f the actors, and, in the construction of acts and writings, con-ider the positions, motives and influences that operate upon aen in any given , state of mind, or social or pecuniary condi-ion; and, in affording relief, hold as done, and compel to be one, that which ought to be done, and undo that which ought ot to be done. The differences in the practice observed, and remedies afford-t by courts of law and equity, which are the main constitu-onal differences between them, afford an explanation to ex-ressions that would otherwise be repugnant to each other, and
CASES IN THE SUPREME COURT [22 Ark. 186 Huff vs. Roane, et al. [OCTOBER inconsistent with settled legal principles. Hence, there is no real conflict between the quotation made from Dardenne vs. Hardwick, and this that follows: "It is equally a rule in courts of law and equity, that fraud is not to be presunied; but it must be established by proofs. Circumstances of mere suspicion leading to no certain results, will not, in either of these courts, be deemed a sufficient ground to establish fraud. On the other hand, neither of these courts insists upon positive and express proofs of fraud; but each deduces them from circumstances affording strong presumptions. But courts of equity will act upon circumstances • as presumptions of fraud, where courts of law would not deem them satisfactory. In other words, courts of equity will grant relief upon the ground of fraud, established by presumptive evidence, which evidence, courts of law would not always deem sufficient' proof to justify a verdict at law." Hempstead vs. Johnson, 18 Ark. 144; see also Clinton vs. Estes, 20 Ark. 245, 246. No general rule is laid down in the books, by which conveyances, alleged to be fraudulent, can be so adjudged, but we are often admonished that each case must depend upon its own circumstances. Then, whether the deed of trust made in Amite county, Mississippi, on the 13th of April, 1854, by which the negroes involved in this suit, were conveyed by Charles Ratchet to Reuben L. Huff, to secure a debt acknowledged to be due to William Woodward and Seymour Taylor, administrators of Joicy B. Ratcliff, deceased, be valid, and uphold this suit of Eat, the trustee, or invalid and thus make good the defence of anljamin C. Ratcliff, Henry Jones, and Julia Roane, subsequent purchasers of the negroes, must depend upon the attendant facts and circumstances that are brought into the case as evidence to maintain and overthrow the fruit deed. The consideration of such evidence may then be the first effort of this opinion, and its only one, if the conclusion deduced therefrom be unfavorable to the claim of the plaintiff, the trustee of the deed and the prosecutor of this appeal. It is evident from the record, that Charles Ratchet was em-
22 Ark.] OF THE STATE OF ARKANSAS 187 TEEM, 1860.] Huff vs. Roane, et al. barrassed by debts, when he made the trust deed. This is implied in the parol testimony, is shown by documentary. evidence, and by the admissions of the trustee, the plaintiff and appellant. The demand of Michael Simon, on which judgment was rendered for twelve hundred and twenty-two 97-100 dollars, was in existence at the time of the execution of the deed of trust ; and it may well be inferred that the eight other judgments admitted in the court below to be evidenced by transcripts on file in the cause, amounting to seven thousand dollars, were repre-;ented by demands in some form, on the 13th of April, 1864, they being, according to the admission in the record, like suits vith that of Simon. The validity of the deed of trust does not, towever, depend upon the fact of Charles Ratcliff's indebted-less, and though made in failing circumstances, if it was made o secure a real, an honest demand, the maker had a right to ;-ive that demand preference to other debts he owed, as the ight of an insolvent debtor • to prefer favorite creditors, or de-nands, is tolerated by the law. Thus, we held, at the present erm of the court, in Carnall vs. Duval, that Johnson, Grimes & ijo., might well prefer the debt due from them. to Marcellus )uval ; not because the debt was a meritorious one, as we char-cferized it, but because the law gave them the privilege of a Ireference. Equity never commends a man for making a inction between just debts; it only holds that preferences made 7ithout bad , faith to the unpreferred creditor, may be endured. Tpon the subject of distribution of the property of a bankrupt, r an insolvent person, its favorite maxim is, 'equality is equity.' The deed of trust was made to secure William Woodward nd Seymour Taylor, administrators of Joicy Ratcliff deceased, a note executed to them by Charles _yatcliff, of the same ate as the deed, and for the sum of eleven thousand, two hun-red and sixty-eight 33-100 dollars, payable ten days after date. Joicy Ratcliff was the wife of Charles Ratcliff, and died in B48. That she had any separate estate that ought to be ad-Linistered upon, or taken away from Charles Rateliff, is not town to have occurred to the mind of any body, till on the se-.
CASES IN THE SUPREME COURT 122 Ark. 1 CS Huff vs. Roane, et aL [0cTomo cond Monday of April, 1854, William Woodward . and Seymour Taylor, the son-in-law of Charles Ratcliff, sued for, and obtained letters of administration upon her estate. On the 13th of the same month, a settlement was made by Charles Rateliff with Woodward and Taylor, of his dealings with the separate property of his wife, as he and they considered it, which resulted in his falling in debt to his wife's administrators in the sum for which the note was given, as above stated. The avowed consideration of the note, as shown by the testimony concerning the settlement, was mad3 up in part of the hire of sixteen negroes for the years 1848, to 1853, including those years ; which negroes, in the settlement, were dealt about by the parties as belonging to Joicy Ratcliff in her own right. Of these sixteen negroes, but four ever came to the hands of Charlea Ratcliff, as his wife's property. In twelve of the ne-groes Mrs. Ratcliff had no interest as heir, as vendee ; had and made no claim to them as her separate property. Some of the slaves, as Peter, Linda and Mary, Charles Ratcliff had bought, and had owned fifteen or twenty years before 1848, the beginning of the . terra of years for which he accounted to his wife's administrators for their hire; Katharine he had owned eight or nine years before 1848 ; Tilly he derived from his fa. thers estate, from her came Martha and Emily ; Eliza wa: Linda's daughter ; Loyd was from Mary ; Jack, Adam, and Eve he raised ; while four of the sixteen, Aggy, Wiley, Jot and Ephraim came from the estate of Holloway Huff, the fathei oi Joicy Ratcliff. According to the estimate of the hire mad( in the settlement, more than five thousand dollars of the ac knowledged indebtedness, accrued from the labor of the slave. that belonged absolutely ,. to Charles Ratcliff himself, to whicl Joicy Ratcliff, his wife, under the Mississippi Married Woman', law, had no claim, and to which it is not shown that she or he friends for her, before or after her death, mode any pretence o right, till the concession made in the settlement by the husband and accepted by the beneficiaries in the deed of trust. Thes facts appear in the depositions of William L. Huff and Pete
22 Ark.] OF THE STATE OF ARKANSAS. 189 TERM, 1860.] Huff vs. Roane, et al. Rateliff, and ' were also so stated on the public record, by or for Charles Ratcliff himself, as will be seen hereafter. The four negroes, Aggy, Wiley, Job and Ephraim, that Char-les Ratelift received as part of his wife's portion of the estate of her father, Holloway Huff, were delivered on the 27th of Jan-uary, 1845; by virtue of which, under the law of Mississippi, Charles Ratcliff acquired a . life 'interest in them, so as to be entitled to their hire and services against the representatives of his wife. This is testified to by David L. Huff, a practicing awyer of Mississippi, since 1842, and agrees with the informa-ion we have of the law of that State from its authorized pub-ication and exposition by the High Court of Errors and Appeals; • :hough we disclaim acting upon foreign law, unless it comes to is through the channel of testimony. That part of the consi-leration of the n ( o ) te secured by the deed of trust, and represent-!d. by the hire of negroes, amounting to about eight thousand 'our hundred dollars, was a feigned consideration, and could iot impart any obligation to the note, or validity to the deed of rust. Another item of the indebtedness found by the settlement, vas for eight hundred and thirty-three dollars, and sixteen years aterest thereon, which principal sum Charles Ratcliff confessed o have received from his wife's father, about the early part of 839. In another deposition of the same witness who testifies o the above, that witness being William L. Huff, the item is poken of as one thousand dollars. This part of the founda-ion of the note and trust deed was no support for either. . Tho. ioney came to the hands of the husband; if it had been given ) the wife directly, it would no less have been the husband's. 'he note was without consideration so far; and this seems to ave been well understood by Charles Ratcliff, when, as the me transpired for him to be sued on the note, which was the ext month after it was given, he pleaded a failure of eonside-ition as to the eight hundred and thirty-three dollars and inte-st, and as to the hire of slaves that had never been the sepa-Ile property of his wife, which plea and trial thereon reduced
CASES IN THE SUPREME COURT [22 Ark. 190 Hut/ vs. Roane, et al. [OCTOBER the judgment upon the note to four thousand six hundred and twenty-one 35-100 dollars. This appears by the testimony of David L. Hurst, and by an exemplification of the judgment and proceedings in the case of Woodward & Taylor against Charles Ratcliff, in the transcript. When this settlement was made of the interests of Joicy. Ratcliff's estate, Charles Ratcliff and Woodward and. Taylor settled individual dealings, in which a balance was struck upon the opposite side in favor of Rateliff, for which he took their note for twenty-eight hundred and ninety-two dollars, but when payable, or how secured has not been made to appear in the record. Many other negroes in the pos-. session of Charles Ratcliff were levied upon by different executions, , but were claimed by Woodward .rid Taylor as the property of the estate of Joicy Ratcliff. - Notwithstanding the default in the payment of the note, the suit and judgment thereon, no steps were dire?;ted to be taken by the trustee to enforce the remedy provided for in the deed of trust. Charles Ratcliff's possession of the negroes in controversy was not disturbed, and they remained with him till on the 6th of December, 1854, he transferred then to Benjamin C. Ratclifl and Henry Jones, through whom they soon appeared in Jeffer-son county. Such are some of the facts of this .case that an inspection oi the transcript has brought to our notice. We forbear all com-r—ent upon them, being desirous to observe that decent temper. ateness of language that is becoming to judicial expression But we do not need to be informed of the character of th( transaction, by the opinion of witnesses who were present a the settlement, or were acquainted with the facts upon whicl the deed of trust is founded. Those opinions, however, accor dant with out own, and however inevitable to be entertained b: all who know the facts, or become informed of them, by thei record in this case, are not taken hy us as evidence. On th facts themselves we base our conclusion, that the letters of ad ministration upon the estate of Joicy Ratcliff were procure( with the design of concocting a simulated demand; that th
22 Ark.] OF THE STATE OF ARKANSA S. 191 TERM, 1860.] settlement, the note, the deed of trust, are the fruits of that scheme, which was fraudulent in design and in execution, in its )eginning, progress and end. We have examined the Mississippi Reports upon the subject )f fraudulent conveyances, and no where do we find more evi-lences of an elevated judicial sentiment than is manifested by he highest court of that State. If we had found any reason, 'rom its decisions, to suppose that the deed in trust in this case vould have been regarded in that court, differently from the vay we have found ourselves compelled to regard it; our respect or that court would have caused us to doubt the soundness of ur conclusion. But though we find many cases of fraudulent cts and conveyances to have been passed upon . and annulled, re find none that would have been more reprobated in the Mis-issippi court, than the transaction which the court below refus-d to sanction, by allowing it to be the foundation of an action, nd whose decree we approve by entering its affirmance in this mot.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.