5 Ala. 324 | Ala. | 1843
The first question presented on the record» whether the act of 11th January, 1828, Aik. Di. 208, by which deeds and conveyances of real and personal propertyin trust,are declared void against creditors and subsequent purchasers without notice, unless recorded within the time prescribed by the act, has not been changed and in effect repealed by subsequent enactments on the same subject, is one of great interest and of some difficulty.
To a proper understanding of it, it is necessary to take a brief view of the entire legislation on this subject.
In 1803 the statute of frauds was passed, by which certain deeds were declared void, unless proved and recorded within twelve months, in the superior or county court where one of the parties lived. At the same session, and frequently since that time, acts were passed for the registration of absolute deeds of real estate. [Aik. Dig. 88.]
On the 11th January, 1828, an act was passed to prevent fraudulent conveyances, which required all deeds made in trust for the payment of debts, if of personal property, to be recorded Within thirty days, or if of real property within sixty days from the execution thereof, or else to be void against creditors, and subsequent purchasers without notice.
At the same session, on the 15th January, 1828, an act was passed declaring all deeds valid if recorded within six months after their execution, and all deeds recorded after that period to be operative from the date of their registration.
This act being supposed to conflict with and repeal the former, at the succeeding session an act was passed declaring that the act of 11th January, 1828, should stand in full force, and that the
On the 24th January, 1829, an act was passed extending the time of registering deeds, to twelve months after its passage. On the 10th January 1831, the time of registering deeds was extended to éighteen months after its passage; 'and on the 18th January 1832, the time for registerting deeds of “real and personal estate” was extended to one year- from the passage of the act. On the 10th January, 1835, it was enacted, that hereafter it shall at all times be lawful for any person or persons who have failed to have deeds and conveyances of real or personal estate recorded within the time prescribed by law, to have them recorded: Provided, that such registration shall not affect the rights of subsequent purchasers, or creditors, which may have vested previous to such registration, any law to the contrary notwithstanding.
And finally on the 25th December, 1836, an act was passed extending the time of registering deeds of real and personal estate, to six months from the passage of the act. All these acts last enumerated,, passed since 1828, were evidently merely intended to extend the time for the registration of absolute deeds, and even for that purpose were wholly unnecessary, as the act of 15th January 1828, declared, that all absolute deeds should be valid and operative from the date of their registration, if not recorded within six months after their execution. These acts were therefore, evidently passed without any distinct conception of the existing law.
The only difficulty which arises from this unnecessary legislation, proceeds from the terms, “ deeds of personal property” found in the acts of 1832, 1835 and 1836, which it is insisted must have been intended to operate on the act of 11th January, 1828, as that is the only statute which requires such deeds to be recorded.
The difference between the registration acts, properly so called, and the act of the 11th January, 1828, for the prevention of fraudulent conveyances, is quite obvious. By the latter, the deed is declared void as to creditors and subsequent purchasers, if not recorded within the time required by law; by the former acts, if the deed be recorded within six months, it is operative against all persons from the date of its execution, and if recorded after that time, is operative in like manner from the date of its registra
If these enumerated acts, passed since 1828, are held to apply to the act for the prevention of fraudulent conveyances, they effectually destroy its vital principle, by permitting the deed to be kept secret for a great length of time, and, indeed, by the act passed hi 1835, which permits the registration to be made at any after period, virtually repeal it. It is incredible that the Legislature should have intended thus to repeal, by indirection, one of the most important acts on the statute book.' It is much more respectful to that body to suppose that in the hurry of business, the terms of these acts, which, as they were ostensibly mere registry acts, and the rights of creditors and subsequent purchasers were guarded, were not properly scanned, than to hold that they deliberately left the community to grope in the dark, uncertain whether or not, it was its intention virtually to repeal so important an act.
If, however, the act of 1835 could apply to deeds of personal property required to be recorded by the act of 11th Jan. 1828, that act was itself repealed by the act passed at the succeeding session, on 23dDecember, 1836, which requires all persons who have failedto have such deeds recorded within the time required by law, to record them within six months from the passage of that act. [Meek’s Sup. 85.] This time had expired befor this deed was made, and it must therefore be governed by the act of 11th Jan. 1828. This settles the question as to this deed; but we are entirely satisfied that it was not the intention of the legislature to repeal, modify or change the act of 11th January 1828 by any of the subsequent acts which have been enumerated. That these last mentioned acts are registry acts merely, and were designed to apply to absolute deeds only.
It was also argued that this deed was not embraced by- the act of 11th January, 1828, which, it was contended, was only intended to operate on deeds conveying property in trust to secure the payment of debts between the parties to the deed, and did not reach assignments of property in trust to pay creditors.
What is meant by the term “creditor” in the act of 11th January, 1828, it is not necessary now to consider, as we think the entire transaction fraudulent and void.
The facts are, that the defendants Cummings and Cooper stand to each other in the relation of father-in-law and son-in-law, and were partners in trade; that on the 19th of January, 1839, Cummings conveyed to Cooper, one half of a lot of ground in Tuskaloosa, on which was a brick store house, for the consideration, as stated in the deed, of twenty-nine hundred and twenty-five dollars, having a year or two previously sold him the other half at the same price. On the 21st of the same month, Cummings made a deed of assignment to Cooper, of all his effects, real and personal, and all his title thereto, whether legal or equitable, including three slaves, house-hold and kitchen furniture, choses in action, &c., upon trust, that Cooper should take possession thereof, and manage, sell and dispose of it, collect debts, &c. as he should deem most for the interest of the creditors; and from the proceeds first to pay a debt due the State Bank; second, to pay all the individual debts of Cummings; the debts of Cummings & Cooper, and of Cummings & Mason; and lastly all other creditors in equal proportion. The deed is executed by Cummings & Cooper alone, and it does not appear that any of the creditors were privy to, or assenting to it.
These deeds the bill charges to have been made with the intent to delay, hinder and defraud creditors. The answer of both Cummings & Cooper, insist that they were both fair and bona fide. That the consideration of the deed for one half the lot to Cooper, was a note made by W. A. Leland and J. C. Cabaniss to Cooper, on the 13th June, 1838, for five thousand dollars, due one day after date, on which was a credit of two thousand dollars, which was transferred to Cummings by delivery, and was then considered good, and is nowr part of the assets of Cummings. That the design of the deed of assignment was to secure to the creditors of Cummings, a just distribution of his property, and, was made bona fide.
It is, however, insisted that the answer of Cooper is evidence for him, and by that it appears that the note of Leland and Caba-niss, was considered good at the time it was received by Cummings. It is certainly the well establish rule hr chancery that when an answer is directly responsive to an allegation of the bill, it is evidence for the defendant; but when the defendant in his answer, sets up new matter in avoidance of an allegation of the bill, as he puts such fact in issue, he assumes the burden of proving it, unless under the rule adopted by this court, the complainant waives the necessity of such proof by going to trial by consent, on bill and answer, which was not done in this case.
The allegation of the bill is, that the deed of the 19th January, was not made upon the considertiom expressed in it, or bona fide paid to the said Cummings by the said Cooper, or in good faith secured to be paid, but was a voluntary conveyance, or made to the intent to delay, hinder and defraud creditors. The interroga-
The .answer to this interrogatory is, that the consideration of the deed was the note of JLeland & Cabaniss, six months past due,, which was transferred to Cummings by delivery, and which “respondents considered good.”
It is no where alleged in the bill that Cummings received from Cooper, as the consideration of the deed, paper which he knew to be of no value; but the allegation is, that the consideration as expressed in the deed, was neither paid by Cooper or secured to be paid. The answer in effect admits this, by showing that Cooper did not pay the consideration in money, or become bound to pay it; to avoid the effect of this admission, it is further stated that the real consideration was the note of third persons, which at the time respondents considered good. The estimation in which the defendants held this paper, at the time of this transaction, is clearly matter set up in avoidance. It is true, that the interrogatory requires the defendants to state “ when the payment was made, and in wliai;” and so far as the answer shows that the payment was made in the note of a third person, it may be considered responsive to the interrogatory. But when, in addition, it is added that at the time they considered the note good, a new fact is introduced into the case, which is not so much as hinted at 'in the bill. The complainant did not profess to have any knowledge of the consideration beyond what was disclosed by the deed. From that it appeared that the consideration was paid by Cooper in money, or at least no intimation to the contrary was given, and such was the natural as well as legal inference. This, the complainant asserts to be untrue, and denies that money or its equivalent in value was paid.
It would be extremely hazardous to seek the aid of a court of chancery, if such a response to such an allegation, was evidence for the defendant, only to be countervailed by the testimony of two witnesses, or of one, with-strong corroborating circumstances. Not being proved, it can avail nothing in this case. [Huntsville Branch Bank v. Marshall, et al, 4 Ala. 60.]
We proceed to the consideration of the deed of assignment,
The deed of assignment conveys to the trustee all the real and personal property, and choses in action, of Cummings, in general terms, and without any description whatever, either in the body of the deed, or in any schedule annexed to it, except three slaves, who are described by their names, and confers on him authority to manage, sell, and dispose of it, collect debts, &c. as he shall deem most for the interest of the creditors. No creditor is specified by name, except the State Bank; nor is there in the body of the deed, or in a schedule attached to it, any list of the names of the creditors, or of the sums due them. There is no provision in the deed for the creditors to become parties to it, or for notice to be given them; nor does it appear that any notice in fact was given.
In the case of Robinson v. Rapelye and Smith, [2 Stewart 86,] this court held that the conveyance, by the assignor, of all his property in general terms, did not invalidate the deed; and it may be conceded that neither of the facts above enumerated, or all taken together; would be conclusive evidence of fraud; yet certainly, considered altogether, they raise the presumption of fraud, which, it is true, might be removed by other facts attending the transaction, but which, unexplained, stamp it as fraudulent. [Halcey v. Whitney, 4 Mason, 206; Wilt v. Franklin, 1 Binney 516; Hower v. Gessamine, 17 S. & R.; Hatch v. Smith, 5 Mass. 42; Keyes v. Brush, 2 Paige, 311.] It is indeed, difficult to conceive
These suspicious circumstances derive additional force from thé manner in which the trust has been executed. The principal part of the debt of complainant was the individual debt of Cummings, which, by the deed, is placed in the list of preferred debts, after the payment of the debt to the Bank. Yet, although the trustee professes to have paid a large amount of debts, in addition to the debt due the Bank, no part of this debt has been paid, although he insists that the assets are nearly or quite exhausted. It was his duty, as trustee, to have paid all debts of the same degree, pro rata, if there was not sufficient to pay all.
No portion of the trust estate, except the dioses in action, appear ever to have been in the possession of the trustee, but were left in the possession of Cummings, upon an alleged contract of hiring, the terms or conditions of which are not given, nor does any thing appear to have been received from that source. The possession remaining with the grantor, is a badge of fraud — admitting, it is true, of explanation; but the attempt to reconcile this apparent inconsistency, by the trustee, is most extraordinary. The slaves were from near forty to seventy years old, and were reserved from sale that they might appreciate in value. The same reason, in effect, is assigned .for not selling the dwelling-house and other personal property; yet, we know, that from the operation of well known causes, which we take judicial notice of, all property has been depreciating in price since the date of the deed. Nor was any sale made until the dwelling-house was nearly destroyed, and the slaves injured by a tornado, in March, 1842; and when sold, it appears that all the property, except a few inconsiderable articles, was purchased at a low rate, by a son of Cummings.
We have not considered it necessary to narrate the glaring inconsistencies of the answer, and of the schedules annexed to it, because the unquestioned facts admitted by the answer, and the entire omission on the part of the defendants to explain or account for the various suspicious circumstances above described, irresistibly impel our minds to the conclusion, that the object of the
It is also objected to the decree, that the court erred in directing a sale of the land, in which Cummings had only an equitable interest. These.lands were purchased by Cummings at a sale, directed by the county court, of the real estate of the intestate of complainant, who gave bond with surety for the purchase money, but no title was ordered to be made to him by the court, for some reason, which does not appear. The objection supposes, either that the legal title vested in Cummings, on the approval, by the Orphans’ court, of the bond executed by him for the purchase money, or that the equitable lien on the land was discharged by the execution of the bond with surety. As to the first supposition, it is very clear, that the approval by the court of the bond for the purchase money, does not vest the legal title in the purchaser, as the statute expressly requires the court to decree that a title be made, and until the conveyance is in fact made, the legal title remains in the heirs at law. [Lightfoot v. Lewis’s heirs, 1 Ala.R. 475.] And as to the second, the doctrine has no application to a case where the title is not in fact made. The reservation of the title is a plain and palpable assertion of a lien for the purchase money. [Foster v. The Athenaeum, 3 Ala. 302.] But whether the title of Cummings was legal or equitable, it passed by the conveyance to the trustee, and was therefore properly included in this bill, and could only be sold by the decree of a court of chancery.
The propriety of the decree of the chancellor, requiring the trustee to account, and making all the monies received by him under the trust, liable to the payment of the complainant’s debt, without allowing him credit for debts paid by him, is also questioned. The correctness of the decree, supposing this to be its meaning, must depend on the right the complainant acquired under her judgments, and by the exhibition of her bill, as she had no specific lien on the property of Cummings. By the judgments and execution, a lien was obtained on the real estate, from the date of the judgments, and on the personalty, excépt dioses in action, from the time the executions came to the sheriff’s hands. These liens are rendered effectual by the decree, declaring the deed to Cooper, and the deed of assignment, void against all per
The exhibition of the bill is in effect an appropriation, from that time, of the equitable assets of Cummings, upon which the complainant acquired no lien by his executions; but all payments made to the creditors of Cummings, by the trustee, before that time, are in effect, payments made by Cummings himself The deed of assignment, though fraudulent and void as to creditors, is at least a power of attorney from Cummings to the trustee, to pay and discharge his debts, out of the effects placed in his hands for .that purpose. Of these payments by the trustee, before the exhibition of the bill, the defendant in error cannot complain, as they were made from funds upon which she had no lien, legal or equitable. She is not therefore, prejudiced by the action of the trustee; the effect is the same to her as if the deed of assignment had never been made, or the payment had been made by Cummings himself. The trustee must, therefore, hi the account, be allowed credit for all payments made to the creditors of Cummings previous to the filing of the bill.
As the claim of the defendant in error is against Cummings individually, and as the assets in the hands of the trustee are composed of the interest of Cummings, in the firm of Cummings & Cooper, as well as those belonging to Cummings individually, it may become necessary to marshal-the assets in the hands of the trustee, as the creditors of the partnership are entitled to be paid before an individual creditor of Cummings out of the partnership effects. In this connexion, it may be proper to observe, that in stating the account, Cooper must be charged with one-half the value of the stock in trade at the time of the dissolution, which in his answer .he states that he purchased from Cummings, and that his answer, which impliedly sets up a payment by debts due from Cnmmings, is not evidence of that fact, as it is not responsive to any allegation of the bill.
The objection that the bill is multifarious, cannot prevail. The objection is founded on the attempt made in the bill to subject the property sold to Clare, by Cummings, to the payment of complainant’s debt, with which it is alledged Cooper had no connec-
This question was examined by this court in the case of Lewin v. Stone, [3 Ala. 491,] where it is held that this objection is not favored at this day, when the ends of justice are not promoted by ' it. Such is obviously not the fact here; nor has the defendant Cooper been in the slightest degree prejudiced by it.
The result of this protracted examination, is, that the decree of the chancellor, in the particulars herein stated, in regard to the manner of taking the account, must be modified. In all other respects it is affirmed, and the cause remanded for further proceedings.
Let each party pay his own costs in this court.
My first impression was that the' bill in this case is multifarious; but an examination of its frame and object, have convinced me that it is not obnoxious to that objection. It assumes that all the property it describes, or money due. for such as may have been bona fide sold to third persons, constitute effects and credits of Cummings, in favor of judgment creditors, although it may be claimed by others, under pretended purchases. Cummings, as between himself and the complainant,, is treated as the real owner of the property and credits, and those persons who claim to be adversely interested therein, are made parties, that they may defend against their appropriation to the satisfaction of the complainant’s judgment. The object- of the bill is clearly single; and although all the defendants, are not' jointly interested in the matters which, may be litigated* yet if thei allegations of the bill are true, each one of them, unless it be Cummings, is interested to gainsay such a decree as. the complainant seeks'.. While then, the matter of the bill is such as might properly be the subject of one suit, each defendant is concerned in' some part of the litigation, and according to the rule which re
In respect to the question, how far the validity of the deed of assignment was affected by the neglect to register it within sixty days from the date of its execution, my opinion is different from that of my brother’s. If it were necessary, I would say, that the inclination of my mind was opposed to the construction which they have given to the statutes upon the subject. But I will place my conclusion on the point upon grounds less disputable. It may be laid down generally, that the date of a deed is not an essential part of it. [Com. Dig. Fait B. 3.] Hence it has been said, that a deed is good, although it mention no date ; or hath a false, or impossible date ; provided the real day of its being dated or given,- that is, delivered, can be proved. [2 Bla. Com. 304; Co. Litt. 46.] And it has consequently been held, that a person may declare in covenant that the deed was indented, made and concluded, on a day subsequent to the day on which the deed itself is stated on the face of it to have been indented, made and concluded. [4 East’s Rep. 477. See also, 2 Ld. Raym. Rep. 1076.] Conceding then, that the assignment from Cummings to Cooper had become inoperative, or void, yet the acknowledgment made by the former that he had signed, sealed and delivered it to the latter, on the first day of April, under the act of 1828, unaided by subsequent legislation, imparted renewed vitality to thé deed, and made it effectual from the acknowledgment of delivery. This would seem to be a direct sequence from the common law rule which affirms that a date is unessential to a deed. Whether the law would be the same where the acknowledgment was made before the expiration of the sixty days, I will not, as it is unnecessary, undertake to consider.
If the date of the deed had been stricken out, and another inserted, or á blank left, it cannot be doubted that the deed would have taken effect from its delivery and subsequent acknowledgment ; and why the permitting the date to remain unchanged, can have any prejudicial effect, is what I cannot comprehend, if a date is unimportant and superseded by delivery. Upon the other points of the case, I concur in the conclusions of my brother Os-mond.