1877 that the decree of the circuit court, declaring that the July Term. vendor's lien, reserved by Repass, is superior and paramount to the lien of the judgment creditors, is not Cloud & Co erroneous, and that in this respect the same be affirmed.

Shipe,

V.

Repass & als.

Another important and interesting question arises in this case, which is not so free from doubt as the question we have been considering, and upon which there is some conflict of authority in other states. is a question of first impression in this state.

On the 13th May 1872, James B. Hurt, four months after he had conveyed the land in controversy to his son, John B. Hurt, filed and put on record his homestead deed, in which he claimed as part of his homestead $1,000 of the purchase money alleged to be due from his son for said land. This deed having been declared fraudulent and void as to creditors, the question we have to determine is, "Whether James B. Hurt can now claim against his creditors a homestead in this land, or rather (which is the same thing) in the purchase money which represents the land." It has been seen that the deed from James B. Hurt to his son was set aside by the circuit court as fraudulent and void as to the creditors of said James B. Hurt. From this decree there was no appeal. The effect of that decree was to set aside and vacate the deed as to the creditors of James B. Hurt, but as between the grantor and grantee it was a good and valid deed. Both the grantor and grantee in this case say, in their sworn answers, that the deed was bona fide, and made upon full consideration. Whether that was true or not, the title to the land passed out of James B. Hurt. It was gone from him forever. The title was then in John B. Hurt, subject to the satisfaction of the claims of the creditors of James B. Hurt. The land itself, and of

1877.

July Term.

Shipe,

V.

Repass

& als.

course the proceeds of its sale, belonged to the creditors. If anything was left after satisfying the claims of James B. Hurt's creditors, that surplus was the property of John B. Hurt, the alleged vendee. In Cloud &Co this James B. Hurt could not claim his homestead, for that would be to claim a homestead in the property of another. A fortiori if the land was not sufficient, as in this case, to satisfy the claims of creditors, the debtor could not claim his homestead in the proceeds, for that was not his property, but the property of the creditors, so adjudicated to be by the decree which declared the conveyance to be void as to creditors, and which subjected the land to the payment of their claims. This would seem to be clear on principle. Surely the debtor can only claim his exemption by homestead or otherwise in property which is his own, and not in that which is another's. The cases are somewhat conflicting as to whether the fraudulent sale of property deprives the debtor of his exemption. Alabama, Mississippi, Minnesota, and perhaps some other states, it has been held that a fraudulent conveyance is no bar to claim of homestead. In Pennsylvania, New York and Indiana, the contrary doctrine has been held; and I think these latter decisions are based on principle, founded on a sound morality, and more in accordance with the spirit and intention of the exemption laws.

In

In Indiana it is held, that where a person conveys property, whether the sale is fraudulent or not, the grantor must be regarded as having no title-none against his grantee; and as against his creditors he can have no right if the sale is fraudulent. See Smyth on Homstead, section 557. Mandlove v. Burton, 1 Ind. R. 3. In this case the court says: "If he (the debtor and grantor) conveyed the property, though fraudu

1877. July

Term.

Shipe,

lently, this conveyance divested him of all interest in it. If the grantee was privy to the fraud, his title is void as against the creditors of the grantor. If he Cloud &Co was not privy to the fraud, and obtained the property for an adequate consideration, he will hold it against the grantor and his creditors. In either event, however, the question must arise between the grantor and those creditors. In no case can a man avail himself

V.

Repass &als.

of his own fraud."

In New York the rule adopted is to the same effect. Whenever there is a fraudulent conveyance or concealment of property in order to defraud his creditors, the debtor will be placed beyond the reach of the statute. Brackett v. Watkins, 21 Wend. R. 68.

In Pennsylvania the rule has been uniform from its earliest decisions, under the law of 1849, to the present time, that if a debtor has fraudulently conveyed or concealed his property from his creditors, it will bar him of all claim to exemption. Mc Carthy's appeal, 68 Penn. St. R. 217; 38 Ib. 190; 51 Ib. 90, and other cases cited in Smyth on Homestead, § 552, page 399.

Whatever cases there may be (and certainly some may be found in other states) in conflict with these decisions, I prefer to follow them, because they are not only founded upon sound principles of law, but are based upon those sound principles of morality and equity which declare that in no case can a man avail himself of his own fraud.

It would seem strange, indeed, and to my mind, not to be tolerated for a moment, that a party who commits a fraud is to be placed, by a court of equity, in a better position than if his transactions with his creditors had been fair and bona fide.

Suppose that James B. Hurt had conveyed this land

1877. July Term.

Shipe,

V.

Repass

to a trustee for the benefit of these very judgment creditors, could there be a question in the mind of any one, that he could ever claim a homestead on land thus dedicated to his creditors, and the title to which Cloud & Co had passed out of him forever? Suppose he had made a deed of gift of the land to his son, not being indebted. In both of these cases it will be conceded that his right of homestead was gone forever. But it is said, while this is conceded, that if he conveyed the same land for the purpose of perpetrating a fraud, he may have his homestead in it, or its proceeds.

Now, the deed which was vacated and annulled by the circuit court was still good between the parties. The title was in John B. Hurt, and had passed from James B. Hurt forever. John B. Hurt would be regarded in a court of equity as a trustee holding the legal title for the benefit of the creditors of James B. Hurt. The court would say to him, "The land is yours when you pay off the liens of the judgment creditors, and not till then." But all title to the land and its proceeds is as completely gone out of James B. Hurt as if he had conveyed the same in trust for the benefit of his creditors. He cannot claim a homestead in it, or its proceeds, because neither are any longer his property.

. It is further urged that the homestead is for the benefit of the family of the party claiming it, and for this reason, and by express enactment, the court is required to give all our homestead laws a liberal construction. Admit it; but surely the claimant must confine his claim of homestead to that which belongs to him; and the utmost stretch of liberality and latitudinous construction can never vest him with rights in property which belongs to another.

But there is another view of the question which, as

& als.

Term.

Shipe,

V.

Repass

& als.

1877 far as the judgment creditors are concerned, would July seem to be conclusive.. James B. Hurt claims his homestead in part in two bonds of five hundred dollars each, executed and delivered to him by his son, John B. Hurt. These bonds are nominally secured by a vendor's lien on the land conveyed by James B. Hurt. This deed is set aside as fraudulent and void. Of course, then, the vendor's lien contained in said void deed, is no lien at all. That is swept away, and is as if it never existed. Then it follows that James B. Hurt is entitled, as he claimed, to a homestead on the lands of John B. Hurt without the security of a lien upon the land, that security being contained in a deed declared fraudulent and void. Now there is no objection to this claim of homestead in the notes of his son, John B. Hurt; with that the creditors have nothing to do. They are only affected by the lien retained in the deed, and that deed is declared void. Being void, there is no lien. So that the claim of homestead, in the bonds of John B. Hurt, can stand without affecting the rights of creditors.

I am therefore of opinion, that so much of the decree of the circuit court of Wythe as declares that John B. Hurt is entitled to his claim of homestead exemption in the proceeds of the land which he fraudulently conveyed to his son, John B. Hurt, be reversed and annulled, and that the said decree, in all other respects, be affirmed.

But on this question of the right to claim a homestead, the majority of the court differ with me, and are of opinion that James B. Hurt has a right to claim his homestead in the proceeds of the land decreed to be sold by the circuit court, as against the creditors of James B. Hurt. The result, therefore, is that the decree must, in all respects, be affirmed.