Dickson v. McLarney

97 Ala. 383 | Ala. | 1892

HARALSON, J.

— I. The deed which is the subject of this suit, is alleged in the bill, to be a voluntary conveyance, and made to hinder, delay .and defraud the creditors of E. J. Hickson.

The defendants admit it to be a voluntary conveyance, but deny, it was executed with any such fradulent intent, as that charged.

It is necessary to repeat, in this connection, and for the purposes of this decision, some familiar principles, as to such transactions.

A conveyance which is purely voluntary, and not tainted with, an actual intent to hinder, delay and defraud creditors, is void, only as to existing creditors, but when tainted with actual fraud, it is void as to subsequent, as well as to existing creditors : Seals v. Robinson, 75 Ala. 364; Higgins v. Perrine, 30 Ala. 396.

The right of subsequent creditors, therefore, depends rrpon the existence of actual fraud in the transaction, and the burden of proving it, rests upon complainants, — Seale v. Robinson, supra,

If it is true, that the deed from said Dickson to his mother, was both voluntary and fraudulent, it could avail the defendants nothing, if it were shown, that Mrs. Daws did not participate in the fraud with Dickson, for it is unnecessary to aver or prove, that a voluntary grantee participated in the fraud of his grantor, in making a voluntary conveyance. — McGhee v. T. Nat. Bank, 93 Ala. 196; Pickett v. Pipkin, 64 Ala. 524. Nor is it necessary to aver and show,, the insolvency of the fraudulent grantor. — Carter Bros. v. Coleman, 82 Ala. 181-2 ; Lehman v. Meyer, 67 Ala. 397.

The mere fact that one fails to record a conveyance, is not evidence, of itself, of a vicious intent, and where a failure to record is consistent with good intentions, the law will attribute no bad motive to the grantee in the deed, from such failure; but, where a deed is designedly withheld from record, for the purpose of maintaining credit, which the record of the instrument would impair, it is fraudulent and void, as against subsequent purchasers and creditors. Lehman, Durr & Co. v. Van Winkle, 92 Ala. 443; Mobile S. B’k v. McDonnell, 87 Ala. 736.

II. The defendant, Dickson, was the son of Mrs. Daws, and while transactions between' near relations, as we have often said; are legitimate, and not to be held in suspicion, on that account, where there are no circumstances to arouse suspicions of their fairness, yet, where such circumstances do exist, courts, at the instance of creditors, will closely scrutinize their dealings. — Marshall v. Croom, 60 Ala. 121.

Do circumstances of suspicion surround the execution of said deed, between these persons?

It is admitted by the defendants, that 'this deed was voluntary, that Mrs. Daws paid nothing for it, and yet we find the recital, that it was made in consideration of “the sum of five thousand dollars, ($5,000) lawful money of the United States of America, to him (Dickson) in hand paid, by said party of the second part, (Mrs. Daws), at and before the sealing and delivery of these presents, the receipt whereof is hereby acknowledged, and the said party of the second part, her heirs, executors and ..administrators, forever released and discharged from the same.” The very pertinent question forces itself, in this connection, Why should a grantor, who was perfectly solvent, as this one claims to have been, who had no occasion t,o fear he would arouse suspicions as to his solvency, in doing a generosity to his mother, on account of his love for her, deem it necessary to do the rather singular, and unnecessary and improper thing, of reciting so large a pecuniary consideration, for an act so purely voluntary ? This recital is untrue, in point of fact, and the language employed, savors of deliberation and intention, rather than of inadvertence. Not two months before that, she had executed to him, a deed to the same property, for the same consideration — $5,000—which sum seems to correspond with the value of the property conveyed. These circumstances are very persuasive to show, that the recital of this consideration was intended to lead those who read the deed, if it should come to light, to believe it was made for a fair valuable consideration.

As Chief Justice Marshall said, in Shiras v. Craig, 7 Cranch 34, “It is not to be denied, that a deed which misrepresents the transaction it recites, and the consideration on which it was executed, is liable to suspicion. It must sustain a vigorous examination. It is certainly always advisable, fairly and plainly to state the truth.” — Lawson v. Ala. Warehouse Co., 80 Ala. 343.

III. The deed was executed on the 3rd of May, 1887, and yet, as the record shows, it was not filed for record, until June 15, 1889. When it was executed, as is admitted in the answer, Mrs. Daws returned the deed to Dickson, with instmctions to record it, but he carried it to his store and deposited it, and kept it, — intending to have it recorded, as he states, — until the 2nd of August, 1888, at which time he delivered it to Mrs. Beatrix, his sister, by the direction of his mother, who desired it to go on record, and yet, it did not find its way to the record, as we have seen, before the 15th June, 1889, and not then, until some of the creditors of Daws & Bogue were threatening to sue out attachments. It is alleged, that this failure to record, was the result, merely, of inadvertence, and not from any intention to defraud any one. It is certain, however, that the natural consequence of a failure to record the deed, and its concealment, would be, to induce persons trading with or crediting him, to believe that he was still the owner of the property. (Authorities, supra.) “Whenever the effect of a particular transaction with a debtor, is to hinder, delay and defraud creditors, the law infers the intent, though there may be no evidence of a corrupt or dishonorable motive.” — Sims v. Gaines, 64 Ala. 396.

IV. Prior to the date of the conveyance, as Dickson swears, he did not owe a dollar in the world. About the time of its execution, as the proof shows, he was contemplating the extension of his business and the establishment of a branch. He and his partner, as Dickson & Bogue, had conducted a safe and successful business, paving as they went. When the business was enlarged, by the addition of a branch, conducted by-the defendant, and he bought and sold on a larger scale, he fell behind in his payments ; the firm of Dickson & Bogue, as Bogue testifies, became strained, on account of the removal of goods from their store, to the branch busine'ss conducted by said Dickson, and at the dissolution of said firm, on the 21st J anuary, 1889, the indebtedness of E. J. Daws, Agent, according to Bogue’s account, was about $7,300.

V. On the 2nd of August, 1888, as is shown, Oroft & Co., creditors of Mrs. Daws, filed their bill against her, in the Chancery Court of Mobile county, alleging that prior to, and on the 21st March, 1887, she was indebted to them, and had, without any consideration, therefor, and for the purpose of hindering, delaying and defrauding the said Croft Co., and other creditors, made the deed to E. J. Dickson, of that date, conveying to him the property therein described,- — -the same which was on the 3rd day of May, 1887, conveyed to Mrs. Daws by said Dickson, — and prayed to have said deed declared fraudulent, and the property condemned to pay Mrs. Daws’ debts to them.

Answers were filed by both the defendants, which Dickson swears were not read over to him, but which the evidence of defendant’s own witness Addie Beatrix, shows very clearly, is a mistake. In these answers, they both set out the facts to show, that said transaction was bona fide. In the answer of Mrs. Daws to that bill, she denied the allegations of fraud, stated particularly how she contracted the debt to Dickson, for which she executed the deed, states that she had promised him to repay him by conveying the property to him; that what she owed him, exceeded the consideration expressed in the deed; that said Dickson had urged her to make the conveyance to pay him; that there was no understanding or agreement of any kind, between her and said Dickson, further than that the conveyance was taken in full satisfaction of her debt to him; that she remained on the property, afterwards, but it was by his consent and a pure matter of favor by him to her, and it was not the agreement, that she should occupy any part of the property or derive any benefits from it. Dickson by his answer adopted Mrs. Daws’ account of that transaction as true. In the present case, -said Dickson repudiates this account of that transaction, says it is not true, and gives an entirely different version of the matter. The evidence also shows, that he was examined as a witnesss in that case, and swore substantially to the material statements of his mother’s answer, which he now denies. He and Mrs. Daws, each, carefully concealed, during the pendency of that suit, — which was compromised pending Dickson’s examination, as a witness — in the answers filed by them, and in the evidence given in by Dickson, every thing about the existence of said deed to Mrs. Daws, which Dickson had voluntarily made to her, on the 3rd of May, 1887. His excuse as now made, in this suit is, that they were not asked by any body, about that deed. No one knew of its existence, except Mrs. Daws, Mrs. Beatrix, his sister, and himself. Croft & Co. were contending, that the property was Mrs. Daws’ and ought to be condemned to pay her debts, and she and Dickson .alleged, it belonged to Dickson. Complainants are now contending it belongs to Dickson, and he and her heirs, that it is Mrs. Daws’. Such an excuse and defense is not creditable to an ingenious, fair-minded debtor, and we can not accept it, to maintain a conveyance against which there are so many suspicious circumstances, and badges of fraud.

He gained an advantage of a favorable compromise, by setting up and maintaining the averments of his and his mother’s answers in that suit, and he will not be allowed to repudiate what he there pleaded and deposed to, to give still another and farther advantage here. — Lehman, Durr & Co. v. Clarke, 85 Ala. 113; Caldwell v. Smith, 77 Ala. 165.

YI. The relation of attorney and client is shown to have existed between Mr. Smith and the defendants, — said Dickson and Mrs. Daws, — in the Croft & Co. suit against them. He advised with them, touching the defense to that suit, conferred with them fully about the facts of their case, and prepared and filed their answers for them. Unless the privilege is waived by defendants, he can not now, as a witness against them, disclose what then passed between them and him, about that case and its defense. Those facts are protected by the rule, as to confidential communications between attorney and client. — 1 Gr. Ev. §§ 237, 238, 213. The answers, themselves, however, were introduced in evidence, without objection, and the fact of their being filed and their contents, and what Dickson testified in respect to them, is satisfactorily established by witnesses.

YII. There are no errors assigned on the action of the court in overruling the demurrers to the bill, as appellant’s counsel seemed to think.

YIII. Several of the assignments of error proceed on the assumed predicate, that .the bill is filed by complainants as executor and executrix of the will of James McDonnell, deceased, and tbe proof shows, that the cause of action occurred after the death of said McDonnell, and the record fails to show any order, or decree of any probate or other court, to sell said goods for the indebtedness for which the bill is filed. Complainants did not sue as executor and executrix. But, if this were so we have heretofore decided, that an administrator may sue individually on a contract made with him in his representative capacity, or where the claim grew out of the unauthorized disposition by him of the assets of the estate, by which he rendered himself liable, therefor, unless he has been discharged from such liability. — Collins v. Greene, 67 Ala. 215, and authorities there cited.

From what we have said, all the assignments of error disappear, and finding no error in the decree of the Chancery Court, it is affirmed.

Affirmed.