Union Mutual Life Insurance v. Spaids

Citations

• 99 Ill. 249
• 1881 Ill. LEXIS 170

Syllabus

<p>1. Fraudulent conveyance — who may avoid. Where a party, at the time of making a voluntary settlement upon his children, or making provision therefor, was not insolvent, and all the debts he then owed have since been paid, in the absence of proof of collusion and fraud to deceive subsequent creditors, the same will not be fraudulent, and can not be avoided by such subsequent creditors.</p> <p>2. Trust — power in trustee to mortgage for money borrowed, construed. A deed conveying real estate to one in trust for bis two daughters, authorized the trustee to borrow money with which to pay the principal due on money secured by trust deed already given on the property, and to secure the payment of the money thus to be borrowed, with interest, by trust deed or mortgage on the premises: Held, that the power to borrow money was given only to remove prior incumbrances, and thus protect the property, and could not be exercised after the discharge of such pre-existing incumbrance.</p> <p>3. Same — trustee applying trust property to his own use — purchaser. It is well settled that where a trustee sells trust property to pay his own debt, under a general power to sell for the benefit of his cestui gue trust, and the purchaser at the time has notice that this is his object, he will take but a voidable title.</p> <p>4. Where the lender of money to a trustee has ample notice, through an agent, that, the borrower holds the estate he mortgages, in trust for the benefit of another, and loans money to such trustee knowing he is going to use it for his own private benefit, and takes a mortgage from him on the trust property, it matters not how ample the power of the trustee may be, the mortgage can not be enforced, but will be set aside as a cloud on the title of the cestui que trust.</p>