83 Ala. 142 | Ala. | 1887
— When this case was before us at a former term (Larkin v. Mead, 77 Ala. 485), we passed only on the equity of the bill, and held it made a case for equitable relief. In that case, -the question was raised on demurrer, and only the averments of the bill could be considered. Taking the averments to be true, we held that Mead, and those claiming in his right, were estopped from setting up any title, legal or equitable, in him, Mead, at the time he induced Larkin to accept Lewis as surety. Our ruling was rested on the averments, that “Mead induced Larkin to dismiss his suit to subject the proceeds of the life-policy, and to extend time of payment on his notes or bonds, with Lewis as surety, ... on the representation that Lewis held a fee-simple title to the lands'.”
The case comes before us now on pleadings and testimony, and on the chancellor’s final ruling thereon. The answers deny the averments of the bill on which its equity was rested at the former hearing, and there is not a semblance of testimony offered in support of those averments. We must, therefore, determine this case on the other questions raised.
We hold that the testimony authorizes us to draw the following conclusions of fact: That Mead purchased the Outer-bridge tract of land — the land in controversy — and paid for it with his own means, and took the title in the name of Lewis, with the intent of fraudulently placing it beyond the reach of his creditors generally, and particularly to hinder and defeat any attempt the present complainant might make to subject it to the demand setup in the bill; that Lewis accepted and held the title in secret trust for the benefit of Mead, to aid him in consummating his fraudulent design; and that when, in the changed conditions, it became unsafe for the title to remain in Lewis, it was voluntarily re-transferred to Mead, who had greater facilities for further covering it beyond the pursuit of creditors, and with the intent that he should do so. We speak of Mead’s intent; for we are convinced that Lewis had neither interest nor intent, further than to aid Mead in carrying his fraudulent purposes into execution.
It is contended for appellants, that when Lewis transferred
There are authorities which seem to maintain this proposition. — Clark v. Rucker, 7 B. Monroe, 583; Davis v. Graves, 29 Barb. 480; Cramer v. Blood, 57 Barb. 155; s. c., 48 N. Y. 684. And the following authorities, it is contended, go far to support the same principle: Caffal v. Hale, 49 Iowa, 53; Clemens v. Clemens, 28 Wis. 637; s. c., 9 Amer. Rep. 520; Parker v. Tiffany, 52 Ill. 286; Matthews v. Buck, 43 Me. 263; M. Sav. Bank v. Lyle, 7 Lea, 431; Petty v. Petty, 31 N. J. Eq. 8; Moore v. Livingston, 14 How. Pr. 1; Wait Fraud. Con. § 398. In none of these cases, however, was the question of actual, intentional fraud in the reconveyance either proved, or relied on. In the present case, as we have stated, we are satisfied that, in the original placing of the title in Lewis, and in the re-transfer to Mead, the purpose and intent were to defraud Larkin, and to hinder him in the collection of the debt this bill seeks to enforce. In reaching this conclusion, we are influenced by the clearly proven motive and intent of Mead, and the further manifest fact that Lewis was simply his instrument, without interest, and without independent motive.
* When the title to the land was placed in Lewis, under the circumstances, and with the intent shown above, the fact that Mead had negotiated the purchase, and made the payment, gave him no right, either in law or equity, to recover the lands from Lewis. Concurring, as they did, in the fraudulent intent, the law denies to each all redress as to any mere executory agreement. It leaves the title where they placed it, and lets them severely alone. In pari delicto, melior est conditio possidentis. The law withholds its hand, not in furtherance of any claim the grantee may assert, but as a punishment of the bad motive of him who invokes its aid. Ex turpi causa, non oritur actio. Nor does such fraudulent grantee rest under a moral obligation to restore the property. If there be no obligation which is recognized and acted on,
•There is another aspect of this question. When Mead purchased the land, and had the title placed in Lewis, Mead’s creditors had a clear right, in equity, to have it declared his property, and to* have it sold in payment of his debts. So, the title remaining in Lewis, his creditors had a clear right, as against him and Mead, to have the property sold in payment of his, Lewis’ debts. Suppose the creditors of Mead instituted proceedings to condemn the land as his property, and the creditors of Lewis made a similar attempt to condemn it as his property; which class should prevail over the other ? This question seems to have arisen in M. Savings Bank v. Lyle, 7 Lea (Tenn.), 431, and the ruling was, that the creditors of the fraudulent grantor should be first paid. That question does not arise in this case, for there are here no conflicting claims of opposing creditors. The debt sought to be enforced in this suit, is equally the debt of Mead and Lewis, and the question as to which of two creditors shall have the preference does not arise.
When the renewal notes were executed, and as long as the title remained in Lewis, there can be no question that the land was subject to the debt, either as the property of Mead or of Lewis, at the option and pleasure of Larkin, the creditor. Of Mead, because he purchased and paid for it, .and had the title put . in Lewis, as a means of defrauding his creditors. Of Lewis, because he owed the debt, the title was in him, and its liability to his debts could not, as a punishment for Mead’s fraud, be gainsaid by the latter.
It is contended for appellants, that inasmuch as Mead and Lewis are alike bound for the debt this bill seeks to enforce, there can be no fraud in transferring the title from the latter to the former, because in either holding the property remains alike liable for one and the same debt. On this ground, it is claimed that the intent to delay, hinder, or defraud can not be predicated of the facts connected with the retransfer.
If the adventitious surroundings of the two parties were similar, this position would seem to be impregnable. But they were not similar. Mead was a married man, and had his residence on the land. Lewis was unmarried, and did not reside on the lands. Mead could claim homestead ex
The case of Allison v. Hagan, 12 Nev. 38, is not distinguishable from the present one in principle. Mrs. Hagan, being embarrassed, conveyed her property — real estate — to Kerrin, upon no consideration, and with the fraudulent intent of delaying and hindering her creditors, until she could raise
“From the offered testimony, Kerrin was not a trustee in any proper sense, but he was a fraudulent grantee as against the creditors of appellant (Mrs. Hagan), and Kerrin took the whole title of appellant in favor of his creditors. Appellant’s creditors could have defeated the conveyance upon the ground of want of consideration, or on the ground of fraud; but neither Kerrin nor appellant could do so, as against Kerrin’s creditors. . . .
“Appellant contends that the offered testimony would have shown, or tended to show, that Kerrin never had any estate . . . which in equity ought to have been subjected to the claims of his creditors, but that he was, on the contrary, bound to preserve the property for her, and that his deed to Young, and Young’s deed to appellant, only resulted in .an honest discharge of his obligation on Kerrin’s part, and an execution of the trust. From the proposed testimony there can be no doubt that Kerrin and appellant conspired together to delay the creditors of appellant. The law declares such conduct an offense against good morals, common honesty, and sound public policy.
“The law does not teach that an agreement entered into for the purpose of delaying or defrauding creditors of the vendor, can be upheld or encouraged by declaring it a trust, nor will courts sustain it as such.”
So, in Bump Fraud. Con. (3d Ed.), 443, it is said: “The principle that a collusive contract binds the parties to it, is a simple principle which commends itself no less to the moralist than to the jurist, for there is no obligation upon any one to extricate a rogue from his own toils. On any other
We hold that the conveyance from Lewis to Mead was inoperative and fraudulent, and vested no title in Mead against the creditors of Lewis; nor in any one else whose claim rested alone on the sufficiency of Mead’s title, with nothing else to aid it.
The renewal notes or bonds, given by Mead & Lewis, bear date in December, 1874. The conveyance of the land from Lewis to Mead was in May, 1875. In March, 1876, Mead conveyed 135 acres of the land back to Lewis as trustee, to be held for the sole and separate use of Mary F. Mead, wife of Mead, the grantor. This deed recites as its consideration and inducement that Mead owned and had contracted to sell two tracts of land; one in Madison county containing 125 acres, the other in Jackson county, containing 200 acres; that his wife, Mary E., refused to join in the conveyance, or relinquish her dower rights in said lands, without compensation therefor, and that to induce her to unite in the conveyance, he; Mead, executed the said deed to Lewis, in trust for her.
The bill charges that Mead induced his wife to interpose this objection to the execution of the deed; that the lands, to the conveyance of which he pretended he had been forced to purchase her assent, were of inconsiderable value, and were incumbered to their full value; and that this, too, was done to place the property, so settled, beyond the reach of Larkin, and fraudulently to secure it for the use of Mead’s family, himself included. Issue was formed on this feature of the bill, and Mrs. Mead, now Keel, denied all knowledge that her husband owed any debt whatever. The answers fully cast on complainant the burden of proving the foregoing charge. No testimony whatever was offered by complainant, bearing on this feature of the bill, while the defendant made proof tending to show that the settlement
As to the remaining land, outside of the . settlement for the benefit of Mrs. Mead, it is subject to Lewis’ debt, and against such liability, neither Mead, if living, nor any one standing in his right, can successfully claim homestead exemption. So far as the rights of the parties to this suit are concerned, it is Lewis’ property, not Mead’s.
i^In the suit at law, the attempt is to subject the land as Mead’s. The present suit proceeds against it as the property of Lewis. Of course both can not succeed, and one of the suits ought to be abandoned. It is not a case, however, where the plaintiff or claimant should be forced to elect in which court he will proceed. — Rule of Practice 113. The suit at law, and the bill in chancery, are not instituted for the same claim, as the law understands that phrase.
The decree of the chancellor is reversed, and a decree here rendered, declaring that the land conveyed to Lewis, for the use and benefit of Mrs. Mead, now Keel, is not subject to complainant’s claim, and as to that part of the land the bill is dismissed. As to the residue of 'the land, the complainant is entitled to relief. The register will report to the next term of the Chancery Court the amount due complainant on the judgment against Lewis, with interest computed to the coming in of the report; and to this end he will consider the testimony on file, and any other lawful testimony that may be offered. All other questions are reserved for decision by the chancellor.
Reversed and rendered'.