Nov. Term, &c., against him, subjecting the lot of school land to sale

1853.

STATE BANK

V.

DAVIS.

for that purpose.

The Court below decreed in accordance, with the prayer of the bill, a foreclosure of the mortgage, and ordered a sale of the mortgaged premises.

It is contended, on behalf of the appellant, that Davis is not entitled to claim the indemnity secured to him by the mortgage from Webb and Shoemaker, for the payment of the debt to Spofford, Tilletson, & Co., because, as counsel insist, his fraudulent conveyance divested him of all title in the school land, and estops him from claiming that the payment of the debt by a sale of the land was a payment by him.

A number of authorities are cited in support of this position; but are not, as we conceive, applicable to the case. They go to establish the familiar principle that a fraudulent deed is valid as against the grantor and his heirs, and is void only as against a creditor, and that a Court of Equity will not lend its aid to relieve the grantor, in such case, from the legal consequences of his fraud. Davis, in this case, is not seeking to set aside his own fraudulent act. That was set aside and annulled, against his will, by a decree of the Court. He claims that the payment of the debt, against which he was indemnified by the mortgage, by a sale of the land so ordered by the Court to be sold, was such a payment by him as to entitle him to enforce his indemnity.

No question arises here between the fraudulent grantor and his grantee. A controversy between them might present the case in a very different aspect. The case of The Bank of the United States v. Burke, 4 Blackf. 141, is cited with confidence. The point decided there was, that where a conveyance was set aside at the suit of a creditor, on the ground of fraud, the surplus remaining after the payment of the debt, belonged not to the fraudulent grantor, but to his grantee. This does not meet the question. It is not whether a fraudulent conveyance is valid as between the parties to it, nor whether, in case of

1853.

its being annulled at the suit of a creditor, the grantor is Nov. Term, entitled to a surplus remaining after the payment of the debt; but whether, when the debt has been paid by a sale STATE BANK of the property, the grantor is entitled to a credit for the payment.

Justice Story, in speaking of the effect of conveyances void for fraud as against creditors, says, "a conveyance of this sort, (it has been said with great force) is void only as against creditors, and then only to the extent in which it may be necessary to deal with the conveyed estate for their satisfaction. To this extent, and this only, it is treated as if it had not been made. To every other purpose it is good. Satisfy the creditors, and the conveyance stands." 1 Eq. Jurisp., sec. 371.

The principle on which Courts of Equity proceed in such cases is, that the title of the debtor, to the extent of the debt, and for the purpose of paying it, is not divested by his conveyance. As against the creditor he does not, and cannot, convey his title.

What was the effect then of the decree of the Court on the bill filed by Rochester against Davis? The land was decreed to be sold to satisfy the debt, because, for that purpose, it was Davis's land. If the debt was satisfied by the sale of Davis's land, it follows that he is entitled to the benefit of the payment. And if he has paid the debt, he is entitled to the benefit of his mortgage security.

It cannot be said Davis is seeking to avail himself of his own fraud. There is no pretence of any fraud, in the transaction between him and Webb and Shoemaker. That was fair and bona fide. The sale of his land, and the application of its proceeds to the payment of the debt, was the act of the Court. They directed his debt to be paid by property, which, by the decree, was ascertained to be his for that purpose.

This view does not conflict either with the authorities or with principle. It gives to the statute of frauds its full operation in regard to the rights of the fraudulent grantor and grantee, leaving the conveyance in full force as between them, subject to be rescinded only at the suit

V.

DAVIS.

Nov. Term, of a creditor, to the extent of his debt and no further; and 1853. only gives to such rescission the legitimate consequences STATE BANK belonging to it, in accordance with equally familiar

V.

As before observed, the rights existing between the fraudulent grantor and grantee are not involved. The appellant here does not stand in a relation to raise that question. She stands in no better position than would Webb and Shoemaker. She claims her title to the land by a purchase under the latter, made subsequent to the recording of the mortgages sought to be foreclosed, and was, therefore, a purchaser with full notice of Davis's rights. She was, besides, a party to the suit in which the fraudulent conveyances were decreed to be void. She is, therefore, chargeable with full notice of all the facts. can assert no right or claim which might not have been asserted by Webb and Shoemaker, in case they had not made the deed to Jenners, as trustee, under which the bank purchased.

She

Per Curiam.-The judgment is affirmed, with 1 per cent. damages and costs.

A. S. White, W. M. Jenners, and H. W. Chase, for the appellant.

Z. M. Baird and J. M. Reynolds, for the appellee.

END OF NOVEMBER TERM, 1853.

AN INDEX

TO THE PRINCIPAL MATTERS

CONTAINED IN THIS VOLUME.

void, ejectment will lie against the pur- 2. The possession of an execution-defendchaser, without any proceeding to reverse ant is not adverse to the purchaser under the order. the execution. Ibid.