Glover v. Walker

Nov 15, 1894

Versions:107 Ala. 540

HARALSON, J.

In this сase, there was no reply to the pleas, but the parties submitted the case on the bill, pleas and testimony, as noted. They each, in their written arguments, treat the case as at issue on the pleas filed. These issues were, as stated by appellant’s сounsel, 1st, “Whether or not the matters and rights prayed for in this bill were not adjudicated and settled in said *545(former) cause No. 2,100;” and, 2d, "Whether or not the allegations of the bill and the decree in said cause, No. 2,100, did not estop and bar complainant from setting up and mаintaining the bill filed in this cause.” In other words, the insistence of the appellant is, that admitting the truth of the defendant’s 1st and 2d special pleas in bar, the present bill contains equity, since, as contended, after a note given for the purchase money of land has bеen barred by the statute of limitations, the right to file a bill to enforce the vendor’s lien for the purchase price may still, within twenty yeаrs, be maintained, even if the sale had been made with the intent to hinder, delay and defraud the creditors of the grantor; that as betwеen the grantor and grantee, the sale will be treated in equity as binding, and the trust, arising out of the transaction will be enforced for the bеnefit of the vendor. This proposition is denied by the defendant, his contention being, that if the conveyance was executed with thе fraudulent intent set' up, equity will not raise a trust out of the transaction, which it will enforce for the benefit of the fraudulent vendor. That was thе issue presented for decision in the court below, and we accept and treat it as it has been made and presented by the parties themselves. The chancellor decided in favor of the defendant, and dismissed the bill as wanting in equity, and his decree is assigned as error.

It is well settled, that conveyances, or gifts, made to hinder, delay, or defraud creditors, are valid and operative ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍between the parties when fully consummated, and that neither party can rescind or defeat them. In Williams v. Higgins, 69 Ala. 523, which was a real action in the nature of ejectment, the plaintiff exhibited, as the basis of his recovery, the deed from the defendant, which was fair on its fаce. The deed was made, as appeared • by the evidence, to hinder, delay and defraud the creditors of the grantor. The defendant, to avoid his own conveyance, set Up bis fraud, his illegal and immoral purposes in the execution of the cоnveyance. The court held, that he could not become the actor and set up such a defense, to release himself from the toils of his own vicious invention. As was there said, "No court has as yet given such assistance. Truth and fair dealing are rules of universal obligation. If men in consummation pf frauds, employ instruments, binding and conclusive *546in their legal operation and effect, it is sound reason, good policy, sheer justice, to leave them where they have placed themselves, bound as they have bound themselvеs, without assistance from the courts to unloose them, when it becomes their interest to be unloosed, encouraging them and othеrs to commit similar ■ frauds.” And so, it may be admitted, that if the note mentioned in the pleadings were sued on at law, and the statute of limitations wеre not pleaded, the defendant could not, in order to defeat á recovery on it, set up his own immoral conduct in having exеcuted it, to enable the payee the better to hinder, delay and defraud her creditors. — Giddins v. Boling, 93 Ala. 95 ; s. c. 92 Ala. 586. But the case in hand is not analogous to these, as we shall see. Here, an equitable trust is sought to be raised, and is by the contention of the appellant, declared to аrise out of a transaction confessedly actually fraudulent. A vendor’s lien, such as is sought to be here enforced, does not spring from, or depend on the contract or agreement of the vendor ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍and vendee. Unless excluded by their own agreement, the law raises a vender’s lien on the principle, that one man, in good conscience-, ought not to get and keep the estate of another, without paying for it. The vendee stands in the relation of a trustee for the vendor, — holding the legal estate, charged with a trust for the payment of the purchase money. — Shorter v. Frazier, 64 Ala. 74. But, the rule is of universal recognition that a court of equity will never imply or enfоrce a trust, springing out of a transaction, in which the party seeking to enforce it, has been guilty of fraud and immoral conduct. — Brantley v. West, 27 Ala. 551.

In King v. King, 61 Ala. 482, this court said, — “The maxim, in pari delicto melior est conditio possidentis, applies in courts of equity, as well as in courts of law; and either court, leaves a-debtor, guilty of fraud on' his creditors, to the consequences of that fraud.”

In May v. May, 33 Ala. 205, the court held, that while a court of equity will not allow a grantee in an absolute-conveyance, to hold property ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍discharged of a trust which by his consent was attached to a conveyance and which he agreed to fulfill, the transaсtion being fair and'lawful on the part of the grantor, yet it will not aid him in carrying out and effecting an illegal arrangement, by which he made absolute conveyance of his property for the pur*547pose of defrauding liis creditors, upon the private verbal agrеement of the grantee to reconvey the property, or allow it to be redeemed. The court said ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍: “When parties enter into such arrangements, a court of equity does not interfere between them, but leaves them where they have placed themselves.”

In Patton v. Beecher, 62 Ala. 589 in considering a question similar to the one before us, the court said: “The want of consideration would simply render the сonveyance voluntary, inoperative against the existing creditors of the grantor, but as between themselves, it would be valid, operative to pass the legal estate, excluding the implication of a use or trust for the grantor.” And again, if more were neеded, it is held, that where the purpose of a grantor in the execution of a conveyance, absolute in form, is to place his property beyond the reach of creditors, to be held in trust for his own benefit, neither he nor his heirs can enforce the trust; not that such a conveyance gives the grantee an honest right to hold, but, because of the vicious intent of the grantor, he forfеits all right to. enforce the trust. — Kelly v. Karsner, 72 Ala. 111. 3 Wait’s Act. & Def. 199.

From what has gone before, it sufficiently appears, that when one conveys his property to another for the purpose of covering it up, and thereby to hinder delay and defraud his creditors, a vendor’s lien cannot arise out of such a transaction, enforceable in equity.

There was no error in the decree of the ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍chancery court dismissing the bill.

Affirmed.