67 Miss. 715 | Miss. | 1890
delivered the opinion of the court.
The facts of this case, about which there is practically no controversy, are that in the year 1872, John D. Hodges was the owner of the lands in controversy. Suit was instituted against him by a creditor, and, fearing the result of the judgment in the cause, he executed a mortgage to his brother-in-law, one Bandolph, to secure a large sum of money ($4000), which he falsely recited to be due him. There was some small amount due Kandolph, but he never demanded the execution of the mortgage, and it seems he accepted
After Hickey had recovered his judgment, Mrs. Hodges executed a mortgage upon a part of the lands to secure a debt of $400 contracted by her with J. W. Patty. It is conceded by Hickey that Patty is a mortgagee for value without notice, and is entitled to priority of payment. The consideration recited in the conveyance from Randolph to Bush, Patty & Co. is $4000, paid by them to him. The consideration recited in the conveyance from Bush, Patty & Co. to Mrs. Hodges is the payment by her of the Phillips decree and costs, by the transfer of her house and lot in satisfaction thereof. The conveyance from Mr. Hodges to his wife recites that he was in the year 1872 indebted to Randolph in the sum of $4000, which indebtedness Randolph transferred to Bush, Patty & Co., and that Mrs. Hodges had by agreement between the parties paid and satisfied this indebtedness to Bush, Patty & Co., upon their agreement and that of Hodges to convey to her said lands; that Bush, Patty & Co. made conveyance thereof, but that Hodges had inadvertently omitted so to do, and executed the deed then made in pursuance of the former contract.
The court below held the conveyance from Hodges to his wife fraudulent as against Hickey, and she appeals, and assigns such finding for error. Her contention is that she was a purchaser for value of the lands in controversy at a time when her husband was not indebted ; that there is no evidence tending to show that Hodges then intended to defraud subsequent creditors, or, if there is, that nothing is shown from which knowledge of such intent can be imputed to her; that she relied upon Hodges to cause proper conveyance of the land to be made to her, and supposed that the
The argument of appellant’s counsel commands our admiration, but, unfortunately for their client, her case does not disclose the essential fact necessary for its support, viz., that she was a purchaser for value. The conveyance executed to her by her husband recites as its consideration the payment by her of the debt secured to Randolph by the mortgage of 1872. The testimony shows beyond doubt that the debt to Randolph was, except a small sum, fictitious; that on settlement between the parties Randolph received from Hodges $125 in full discharge of all demands; and afterwards, at Hodges’ instance, executed a quit-claim deed to Bush Patty & Co. Going a step back, to the deed executed by Bush Patty & Co. to her, we find the consideration stated to be the payment of her debt to them. There is nothing in either deed suggesting that Hodges owed Bush, Patty & Co. anything except the debt of $4000 originally pretended to be owing to Randolph, and transferred to them, but which it is conclusively shown by extraneous evidence was never paid by them, or intended to be transferred to them. Hodges testified that he never contracted to cause said debt to be assigned by Randolph; that he would not have been willing that such transfer should be made, since he would have feared to put himself in the power of Bush, Patty & Co. There is nothing in the record tending to show that the parties, or any one of them, ever contemplated or relied upon a transfer of this simulated debt. The extent of their purpose and understanding was that Randolph should convey the legal title to the land to Bush, Patty & Co. as a mortgage to secure to them the payment of
The consideration recited in the conveyance from Hodges having been shown to be false, Mrs. Hodges is permitted to show some other valuable consideration for the conveyance made to her. Leach v. Shelby, 58 Miss. 681. The consideration of one of the deeds is shown to be false, and that of the other (the one from Bush, Patty & Co.) is denied to be true by Mrs. Plodges. Conceding to her, for the purpose of this investigation, the right to attack the consideration expressed in the deed from Hodges, the burden of establishing the existence of the real consideration clearly rested upon her, and this burden she has failed to meet. Viewing the testimony most strongly for her, it only suggests the possibility that, at the date of the settlement with Bush, Patty & Co., Plodges owed them some small sum. The evidence of the persons who should have known the facts (Mr. Hodges, the members of the firm, and their bookkeeper) is exceedingly indefinite and inconclusive. But Hodges produced an account rendered to him in January, 1879, by Bush, Patty & Co. (and no transactions are shown to have been had after that date), and it appears in evidence that the rate of interest charged by that firm was 2J per cent, per month on short loans and 1-|- per cent, on loans running through long time. We have gone through this account and charged Hodges with all the items of debits (except the sum advanced to pay off the Phillips decree), and with interest thereon at 2J per cent, per month, and credited him with all payments made. Thus examining the account, it appears that Hodges had overpaid his part of the account, in January, 1879, by something over $40. The balance claimed by Bush, Patty & Co. as then due them evidently consisted alone of the debt against Mrs. Hodges and interest thereon. Whether interest be calculated on her debt at 2-|-per cent, or at the lower rate of 1§- per cent, per month, she owed, according to the course of business, more than the sum claimed. The account thus examined not only fails to show that Mrs. Hodges paid to Bush, Patty & Co. any sum due by her husband to them, but it is made to appear that his debt had been overpaid,
The cross-appeal of Hickey is taken to the action of the chancellor in holding that the homestead exemption in the lands sought to be subjected was first to be set off, the remainder sold, and from the proceeds of such sale that Patty was to be first paid, and the remainder, if any, applied to the payment of complainant’s debt; in other words, because the court failed to marshal the securities, and exclude Patty from participation in the proceeds of the lands other than the homestead, until he should first have exhausted the security of the lands constituting the homestead. It is first to be observed that the complainant does not by his bill specifically ask the court for the relief, the refusal to grant which is the ground of his cross-appeal. The bill seeks a sale of the entire tract of land, and, recognizing the priority of Patty’s right, asks that his debt be first paid out of the proceeds of sale, and then that the remaining fund be applied to complainant’s debt. But it is also to be observed that the answer of the defendants does not set up a claim to the homestead exemption. The possession of Mrs. Hodges is averred in the answer, but the purpose of the averment was to show possession by her under an equitable claim at the time when Hodges borrowed the money from Hickey, and not for the purpose
We have found the conveyance from Hodges to his wife to be fraudulent and void as against Hickey. But it appears in evidence that a part of the land conveyed was at the time the homestead of Hodges, and, because it was, the creditor had no right to subject it to his debt; aud, because he could not subject it, he cannot attack the conveyance thereto as fraudulent. As to this land, Mrs. Hodges is the owner, and her title cannot be assailed by the complainant. It is a mistake to suppose, as has been sometimes suggested, that a court of equity, in proceedings to subject property fraudulently conveyed, cancels the fraudulent conveyance so as to revest title in the fraudulent grantor. This it does not do, but leaves the title where it has been placed by the parties, except in so' far as the
The decree is reversed on the cross-appeal of Hickey, and cause remanded.