
    *Terrell v. Imboden and Others.
    July, 1839,
    Lewisburg.
    (Absent Bkooke, J.)
    Fraudulent Assignment — Good between Parties. — The obligee in a bond secured by a deed of trust, makes a deed transferring the bond and deed of trust for the benefit of his creditors. Afterwards, at the request of the obligor, the obligee signs a receipt, stating, that on the day of the date thereof, he received the amount of the bond. The bond was in fact executed without consideration. and the receipt was in fact given without any payment. The creditors for whose benefit the bond was assigned had no notice of its being without consideration until after the assignment: but the obligor knew of the assignment when he took the receipt. Tn a suit between the obligor and those claiming under the assignment, an injunction awarded to restrain the sale of the property conveyed to secure the bond, was dissolved ; and the court of appeals affirmed the order of dissolution.
    On the 8th of November 1836, Robert Terrell made a deed of trust to Jefferson Kinney, to secure the payment of 6S0 dollars stated to be due from Terrell to Henry Imboden by single bill dated the first of January 1835. The deed conveyed real and personal property, and authorized a sale if Terrell should not pay off the single bill on or before the 8th of November 1837.
    Before that time arrived, to wit, on the 20th of October 1837, Terrell filed a bill in the circuit court of Augusta, setting forth, that the debt evidenced by the deed was unjust in its origin, and the complainant never in fact received one cent in consideration therefor ; that he was induced to execute the bond and deed of trust by delusive promises held out to him by Imboden, in whom he had great confidence, and who was a near connexion, the complainant having married his niece ; that these promises had never been performed ; nevertheless the debt had been fully adjusted and discharged, *as would appear by Imboden’s receipt exhibited with the bill. The bill then stated that Thomas J. Michie, as trustee, and Joseph Points junior, Francis T. Stribling, Walter H. 'Tapp. George Imboden and Lewis Harman, as cestuis que trust, claiming' under some assignment or conveyance in trust from Imboden, sought to subject the complainant to the payment of the claim evidenced by the deed, and the complainant was apprehensive that the trustee would sell the property conveyed, so soon as it could be done under the provisions of the deed. The bill farther stated, that at the time of the adjustment and discharge of the debt, the complainant had no notice or information of any claim on the part of Michie and the other persons above named, if any then existed, but believed that it was still within the power and control of Imboden. Imboden, Kinney, Michie, and the cestuis que trust of Michie, before named were made defendants. And the bill prayed that Imboden might be required to state whether the said obligation and trust deed were not executed without any consideration whatever, and whether the debt thereby evidenced had not been fully adjusted and discharged ; that the defendants might be injoined from all proceedings under said trust deed ; and for general relief.
    The receipt filed with the bill was in these words: “Staunton, 17th March 1837. I this day received the amount of bond executed to me for $650, due 27th November 1837, and secured by trust on land, Terrell’s property ; and I further certify that the said Terrell is not due me any other thing at this time. Henry Imboden.”
    The answer of Imboden stated, that on the day of the date of the deed, Terrell came to his house, and represented to him that he was about to be pressed for a debt that he owed (as surety, respondent thought), and proposed, by way of relieving himself from the payment of said debt, to give respondent a bond and deed of *trust to the amount of his (Terrell’s) property. In accordance with this design, and without any delusive promises held out to him by the respondent, but solely with the view of defeating his other creditors, Terrell executed to respondent a bond, dated back to the 11th of January 1836, for 650 dollars payable on demand, and executed to Jefferson Kinney the deed of trust to secure the payment of the bond. Neither the scrivener who drew the deed, nor the trustee, had any notice, either then or afterwards, what was its real consideration. The answer then stated, that in February 1837, the respondent executed to Thomas J. Michie the deed of trust a copy whereof was exhibited with the answer, and in accordance with the provisions of that deed, placed the bond for 650 dollars, with some others, in the hands of Michie, to be by him collected and appropriated to the objects of the trust. During all this time, and for some time after, neither Michie nor any of those for whose benefit the deed of trust to him was executed, had any notice of the character of the claim against Terrell, so far as respondent knows or believes. On the 17th of March 1837, Terrell called on respondent, and stated that George Imboden, one of the cestuis’que trust, had shortly before informed him that his bond was in Michie’s hands for collection; he represented that the debt was not just, and he wished respondent to give him a receipt against it, to prevent its recovery by said trustee. Respondent then gave the receipt exhibited with the bill. He did not, at the date of the receipt or at any other time, receive any money or other thing on account of the bond. The receipt was given to prevent Michie as trustee, and the cestuis que trust, from collecting the money from Terrell, and with a full knowledge on the part of Terrell that respondent, at the time of giving it, had assigned away the debt for the benefit of his sureties, and had no right to collect or adjust it.
    *The deed from Imboden to Michie bore date the-day of February 1837, and was recorded the fourth of that month. It was made to secure Joseph Points junior, Francis T. Stribling, Walter H. Tapp, George Imboden and Lewis Harman, as the sureties of Henry Imboden, and besides conveying real and personal property, transferred all the bonds, notes and book accounts, and debts due to said H. Imboden in any manner whatsoever, together with the benefit of all deeds of trust and other securities by which any of said debts are intended to be secured.
    Pending the cause, Kinney, the trustee in the deed from Terrell, advertised the property thereby conveyed, for sale on the 3d of March 1838; and on Terrell’s petition, the judge of the circuit court awarded an injunction to restrain the sale.
    Soon after the injunction was awarded, the sureties of Imboden filed their answer; wherein, after mentioning the deed from Terrell to Kinney, the deed from Imboden to Michie, and Imboden’s surrendering to Michie the bond of Terrell for 650 dollars, they stated that during all this time they had no notice whatever that the said obligation was without consideration, but on the contrary believed that it was based on a good and sufficient consideration. They claim to be innocent transferrees for a valuable consideration without notice. Long since that transfer, they have heard of Terrell’s alleging that the obligation and deed were executed by him to defraud his creditors. But they insist that if this were so, it would not be available against Imboden himself, much less against his innocent transferrees. They do not admit that the debt has been adjusted o,r discharged by Terrell, either in whole or in part. They charge that Terrell did not apply to Imboden for said receipt till after he was informed of the transfer to Michie, and that the sole object he had in obtaining it was to aid him in a defence against Imboden’s assignees.
    *Kinney answered, saying, that he knows nothing of the consideration of the bond to Imboden and the deed of trust to himself, nor of the subsequent discharge or release thereof. He had always considered the deed fair and bona fide, and would not have executed it with any other impression. Several months before the trust could, by its terms, be executed, Imboden came to respondent, and urged him to advertise and sell for the debt. Respondent, intending to comply with the request, turned to the deed, and found he could not then act.
    The defendants took the deposition of Erasmus Stribling, the scrivener who drew the deed. The deponent happened, on the day of its date, to be in Imboden’s store, and was invited by him into his countingroom and asked to draw such a deed. Deponent assented, and Terrell, coming in shortly after-wards, furnished the list of property included in the deed. Deponent then, by direction of the parties, filled up the deed as it now stands. He was himself requested to act as trustee, but declined so to do, informing the parties that he was often from home and they had better substitute some other name. The name of Jefferson Kinney was then inserted. Something was said about the time which was to run before the trust was to be acted on. Terrell wished a longer time than twelve months, but it was agreed that that should be the time ; Imboden observing that Terrell need not be afraid to trust to him for indulgence, if it should be necessary, — or words to that amount. Deponent did not see or hear any thing from the parties, or either of them, calculated to raise a suspicion in his mind that the transaction was not fair and bona fide between them. He never heard there was any debt due from Terrell to Imboden until the time he drew the deed, nor did he ever hear its integrity impeached until some time during the past fall or this winter. The date of this deposition was the 17th of February 1838.
    *Two days after this deposition was taken, the plaintiff took that of Catha-rine Imboden, the mother of Henry Imboden, and grandmother of Terrell’s wife. She deposed, that her son Henry came into her presence, in the fall or winter of 1836, and told her that Robert Terrell had given him a deed of trust upon every thing he had, for 600 dollars. She asked him if Terrell owed him? and he replied, “Oh no — I took the deed of trust for the benefit of Terrell’s wife and children. He is going to run off, in consequence of having had a fight with Nat. Grove, and being bound for security money for Peck.” The witness, being asked if she knew whether Terrell was indebted to her son, answered, that he never told her that Robert Terrell was in debt to him, but he said that his brother Dick was.
    The defendants then ' took the deposition of Joseph R. Beatty. He deposed, that about the year 1835, he heard Henry Imboden say that he was astonished at Robert Terrell’s not having complied with a promise he had made to pay him money about that time. Deponent asked Imboden if Terrell owed him much ? Imboden answered “Yes,” and named the amount; which being large, deponent asked Imboden if Terrell was able to pay a debt of that amount ? Imboden said “Yes, I think he is.” Deponent thought he had heard Imboden say that the debt was in part for cash loaned. I-Ie heard him complain more than once of Terrell’s failure to pay him money.
    On the 21st of June 1839, the court, on the motion of the defendants, ordered that the injunction be dissolved.
    From this order, an appeal was allowed.
    Baldwin, for the appellant.
    The plaintiff has come into court upon equitable grounds, to wit, the want of consideration for the debt, and its having been discharged. He does not seek relief on the ground that *the contract was in fraud of his creditors. That is a defence made by Im-boden aud those claiming under him. They seek to shew that the consideration of the bond was unlawful. Such a ground is inadmissible. One is not to be heard to allege his own turpitude, when he is more deeply dyed in guilt than his adversary — when that adversary is not in pari delicto. Besides, the answers are not evidence of the truth of the allegation, and the proof does not sustain it. There is no proof that Terrell, at the time of the transaction, was indebted to third persons. But whether the transaction was fraudulent or not in regard to third persons, the debt was discharged by Imboden’s acquittance, not only as against him but as against his assignees. The assignees can stand upon no better footing than the obligee, unless they prove that at the time of the discharge, the obligor had notice of the assignment. But of this there is no evidence. Imboden and his assignees seek to set aside the acquittance, and to enforce what they allege was a fraudulent plan concocted by Imboden. The court should not aid these efforts. It should stay the trust deed, on the concession of want of consideration, and the evidence of satisfaction, and not hear the defence set up, or at least require full proof. Imboden is doubly stained with guilt. His declarations, whether in or out of court, are no evidence. Jones’s adm’r v. Comer’s ex’or, S Heigh 3S0 ; Austin’s adm’x v. Winston’s ex’x, 1 Hen. & Munf. 33.
    Michie, for the appellees.
    The allegations of the bill are vague and unsatisfactory. What were the promises made by Imboden and not performed, is not stated. What injustice there was in the bond and trust, we are not told. And while the plaintiff alleges that he received no consideration, he does not say whether any, or, if any, what consideration was stipulated. Nor is it alleged that the debt was paid. The statement is merely that the debt was adjusted and discharged. *The adjustment and discharge may have been just such as is stated in the answers. And such an adjustment and discharge could not avail against innocent assignees. For, though bound by all payments and setoffs after the assignment and before notice, they would hardly be bound by a contract between the obligor and obligee that the debt should be cancelled or surrendered. The' complainant not having alleged such fraud in the consideration, or such failure of consideration, as would vitiate the debt, and not having alleged payment, the injunction was improvidently awarded. But whether it was rightly awarded or not, most clearly the order dissolving it is correct. The deposition of Catharine Imboden, taken by the plaintiff, explains the nature of the delusive promises mentioned in the bill, and shews that the bond and deed of trust were voluntarily given by Terrell (without fraud on the part of Im-boden) to delay and defraud his creditors. Suppose this so, will the court set aside the contract even as between Terrell and Im-boden ? A man has a right to make a voluntary conveyance of his property, where there is no fraud on either side, arid deprive himself of the power to recover it back from the voluntary donee. Shall a fraudulent intent on the part of the donor place him in a better situation than he would have occupied had his intent been good ? If the courts of the country sanction this principle, then all a fraudulent debtor has to do, is to cover up his property while the storm rages ; and when his creditors are dead, or their debts out of date, he may come out with his pockets full. But this is a case of assignees for valuable consideration without notice, who stand upon a higher footing than the original grantee or obligee. It has been so adjudged in relation to the assignee of a fraudulent grantee, under the proviso in the statute of frauds.
    
      
      Fraudulent Conveyance — Good between Parties. — A fraudulent conveyance, though void as to creditors, is goody between the parties, and, therefore, the fraudulent grantor cannot be permitted to allege his fraud to avoid his deed. Starke v. Littlepage, 4 Rand. 368; James v. Bird, 8 Leigh 510, 31 Am. Dec. 668; Terrell v. Imboden, 10 Leigh 331; Owen v. Sharp, 12 Leigh 427. For this proposition the principal case is cited approvingly in Owen v. Sharp, 12 Leigh 430; Harris v. Harris, 23 Gratt. 756, 759, 763, 770; Thornburg v. Bowen, 37 W. Va. 544, 16 S. 32. Rep. 827; Horn v. Star Foundry Co., 23 W. Va. 539 ; and distinguished in Kyger v. Depue, 6 W. Va. 299.
      The principal case is also cited in Montgomery v. Rose, 1 Pat. & H. 9.
      Case Contra Disapproved. — The case of Austin v. winston, 1 H. & M. 33, seems to lay down a contrary doctrine. , It holds that where a transaction between a debtor and his creditor, is intended by them both to defraud the other creditors of the debtor, but the latter, under all the circumstances of the case, is not so culpable as the former, it would seem, that the court of equity ought not altogether to refuse relief to the debtor, but to apportion the relief granted to the degree of criminality in both parties, so as on the one hand to avoid the encouragement of fraud, and on the other, to prevent extortion and oppression. But this decision was rendered by a divided court, and the conclusion reached by the majority of the court was one, which evidently did not meet with the cordial approbation of even the maiority, for Juixus Car-rington, one of the majority, concludes his opinion thus : “So far as respects myself, it is not to be considered that any principle is here fixed so as to operate as a precedent in other cases. This decree is adopted to fit the present case only: and it is hoped that so gross a fraud may not again be brought before this court.” And .Judge Green, in Horn v. Star Foundry Co., 23 W. Va. 534, in reference to this case, says : “In subsequent Virginia cases this case was accordingly not regarded as settling the law, and when spoken of afterwards it was either impliedly disapproved or apologized for, because of the particular circumstances surrounding this particular case. I do not regard it as authority to be followed.”
    
   *TUCKER. P.

In whatever light we view this case, I am satisfied that the decree of the court of chancery is right. If we consider it in the way in which the facts present it, there can be no doubt that the original transaction was fraudulent as to the creditors of Terrell, who gave the bond and executed the deed of trust to a near con-nexion for the purpose of protecting his property from their demands. The legal consequence is, that though the transaction was void as to Terrell’s creditors, it was binding between the parties. See the statute of frauds, 1 Rev. Code, ch. 101, § 2, p. 372, and the case of Starke’s ex’ors v. Rittlepage, 4 Rand. 368. And thus it follows that the transfer to Imboden’s creditors gives them complete title as against Terrell himself, though that title would be defeasible by his creditors, if he has any at this time. Had Imboden’s creditors pursued him to insolvency, instead of taking the assignment of this bond and the deed of trust, Imboden would have been bound to surrender the bond as part of his available estate, and Terrell could not have gainsaid the payment.

Such is the case presented, divested of all technicality. Bet us look at it, however, according to strict legal rules. The plaintiff files his bill, setting forth that the debt was unjust in its origin, as he never received a cent of consideration, and was induced to execute the bond and deed by delusive promises never • performed. What they were he does not state, but contents himself with these vague generalities. If, as I think is apparent from the whole case, this form of the bill was adopted as a veil to the real transaction, and because the plaintiff knew that a disclosure of the truth would be fatal to him, then the case is very much like that of James v. Bird’s adm’r, 8 Leigh 510, in which the plaintiff equally evaded a disclosure of the fraudulent transaction, but the court nevertheless, upon the proofs of its character, dismissed his bill. In this case, indeed, *the plaintiff had a difficult game to play. If he attempted to shew by the proofs, or by Imboden’s answer, that there was no consideration, out would come the fraud. If he failed to shew the want of consideration, then the bond and deed of trust were unassailed, and there was no equity for him to rest upon. Driven to this strait, he calls on Imboden to answer, who discloses the original fraudulent object of the transaction, and then proceeds unscrupulously to set forth his own multiplied iniquities in relation to his debts. He transfers it for the payment of his own debts, in violation of the trust reposed in him, and then endeavours to defeat this transfer by signing a receipt acknowledging payment, when no such payment had been made. His fraud is gross and palpable : so gross, that if others were not interested, I should not only deny him the right to make such a de-fence, but should feel anxious to relieve his less guilty confederate, if the rules of the court would permit it.

But others are parties in interest, and parties to the cause. The creditors have answered, declaring their belief, when they took the assignment, that the bond was on good consideration and the debt a just debt; but that in any aspect they were entitled to it. Now if Imboden’s answer and his declarations proved by his mother are put out of the case, it is the naked case of a bond and deed of trust assailed on the ground of want of consideration, where the equity of the bill is denied, and there is no proof whatever in support of it. On the other hand, if Imboden’s answer and declarations are evidence, then they prove the fraud beyond question, and the case is precisely that of James v. Bird’s adm’r, in which, though the bill did not distinctly disclose the fraud, it was dismissed upon proof of it. But in truth the answer of Imboden is evidence against the plaintiff who has called for it, whether it was evidence against the creditors or not. Field v. Holland, 6 Cranch *9. And even though’ he could not avail himself of such a defence, yet his assignees have a right to use his answer and his declarations against the plaintiff, as the plaintiff himself has brought them into the cause.

As to the receipt, it is of no account. It was given after the assignment, and with full notice of it. This is indeed denied by the bill, but proved by the answer, without the evidence of which, there is no proof of the receipt whatever. Reject the proof, and the receipt is out of the case : admit it, and it is fraudulent. It is then no evidence against the creditors. Starkie on Evid. part 4, p. 32; Pocock v. Billing, 2 Bing. 269 ; 9 Eng. C. L. Rep. 409; Frear v. Evertson, 20 Johns. Rep. 142 ; Dade’s adm’r v. Madison, 5 Leigh 401, and the cases there cited.

In every view of the case, I am of opinion that the decree should be affirmed.

CABERR, J., concurred in the opinion of the president, and STANARD and PARKER, J., concurred in the decision that the decree should be affirmed.

Decree affirmed.  