Citations
- 5 Ohio St. 124
Full opinion text
Bartley, J.
This is a proceeding in chancery, instituted by the complainants as judgment creditors of Benjamin Mackall, to set aside a deed of conveyance, made by him to trustees, in contemplation of insolvency. The terms of the conveyance, the object of which is expressly declared to be the benefit of all the grantor’s creditors, are expressed in the following language, to wit: “ And to that full and complete extent, the said trustees are hereby authorized and empowered to sell, either at public or frivate sale, and with such notice of sale, and in such manner as they shall think most expedient and beneficial to my creditors, the above described tracts of land. And out of the proceeds of said sales to pay as soon and as fast as they may be realized: 1st. The costs of this assignment, and the reasonable costs, expenses and compensation, to the said trustees, of the execution and carrying into effect the trust aforesaid. 2d. That they pay out the balance of said fund equally and pro rata, to all my creditors, in proportion to the amount of their respective demands, hoping and expecting that the trust fund hereby created, will satisfy all my debts, leaving a balance, which said balance, should it arise, the said trustees are to pay over to the undersigned, B. Mackall, or his personal representatives.” It appears that at the time of the execution of the deed, judgments were about to be taken against the grantor, one of which was for a security debt; and that he declared that he intended the conveyance to be a security for his own debts, and not for his surety debts ; and also that he desired by the conveyance to prevent a sacrifice, thinking that in the hands of trustees the property could be made to go further, etc.
The grounds upon which the complainants seek to set aside the conveyance, are the following:
1st. That there was no actual delivery of the deed, either to the trustees, or the beneficiaries of the trust, prior to the judgments of complainants.
2d. That the deed is a deed of trust, in the nature of a mortgage, which could not take effect until entered for record; that it was not entered for record until after the recovery of the judgments ; and, therefore, that the jndgments have the first lien.
3d. And that the deed is fraudulent and void as against creditors.
Of these in their order:
1st. The delivery of the deed to the recorder for the grantees, and as their deed, was sufficient evidence of delivery. It has been held, that the delivery of a deed to a third person for the use of the grantees, was a sufficient delivery. And if proof of acceptance by the trustees were necessary in this case, the evidence was sufficient. It is shown, that the trustees agreed to accept before the execution of the deed. In Mitchell v. Ryan, 3 O. St. Rep. 377, it was expressly ruled, that “ simple assent to the conveyance given, even before its execution, is a sufficient acceptance.” And if the doctrine of this case of Mitchell v. Ryan is to be followed, there is an end to the question on this point. And this is strengthened by Church v. Gilman, 15 Wend. 656 ; Gamons v. Knight, 12 Eng. Com. L. Rep. 351.
2d. There is a manifest and well settled distinction between an unconditional deed of trust, and a mortgage or deed of trust in the nature of a mortgage. The former is an absolute and in defeasible conveyance of the subject matter thereof, for the purpose expressed; whereas the latter is conditional and defeasible. A mortgage is the conveyance of an estate, or pledge of property, as security for the' payment of money, or the performance of some other act, and conditioned to become void upon such payment or performance. A deed of trust in the nature of a mortgage, is a conveyance in trust by way of security, subject to a condition of defeasance, or redeemable at any time before the sale of the property. A deed conveying land to a trustee as mere collateral security for the payment of a debt, with the condition that it shall become void on the payment of the debt when due, and with power to the trustee to sell the land and pay the debt in case of default on the part of the debtor, is a deed of trust in the nature of a mortgage. By an absolute deed of trust, the grantor parts absolutely with the title, which rests in the grantee unconditionally, for the purpose of the trust. The latter is a conveyance to a trustee for the purpose of raising a fund to