Fraudulent Conveyances--Effect of Recordation of Fraudulent Conveyance on Subsequent Creditors: In Butler v. Holland, the Tennessee Supreme Court was faced with the question of whether the constructive notice of a recorded deed which is a fraudulent conveyance prevents a creditor, who became such after the recordation, from setting the conveyance aside. The plaintiff-creditor (Butler), in an effort to collect a debt due him from the estate of one Jesse Nolen, deceased, brought a suit in equity to have set aside, as a fraud against plaintiff, a conveyance of real estate by one Nolen to the defendant (Holland). The conveyance admittedly was a gift by Nolen to defendant. Plaintiff's claim arose after the conveyance in question was recorded. Nolen (grantor) continued to live on the land for sometime after the questioned deed. He then moved off the property and went to live with defendant, who was a non-resident. While the opinion is not clear, there is considerable indication that Nolen may have been living on the land when plaintiff gave credit to Nolen. The Supreme Court sustained defendant's demurrer on the sole ground that since the deed was on record before plaintiff's claim arose plaintiff was charged with constructive knowledge of the conveyance and it was not, therefore, fraudulent as to plaintiff.
Paul J. Hartman,
Creditors' Rights and Security Transactions -- 1957 Tennessee Survey,
10 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol10/iss5/13