72 So. 359 | Ala. | 1916
Lead Opinion
The controlling issue in this case is whether plaintiff’s title to land by purchase under an execution
The debt upon which the execution sale was founded was due from Anderson to London & Fitts in April, 1910, and the general contentions of plaintiff are: (1) That the conveyance from
Anderson to his wife was a voluntary convenance, and therefore void as to this debt, regardless of good faith; (2) that, though there was a valuable consideration therefor, the conveyance was nevertheless void unless defendant showed that the consideration was also reasonably adequate, which it failed to do as matter of law; (3) and that, in any case, the consideration recited as paid was so grossly inadequate that, as matter of law, the conveyance must be branded as fraudulent and void.
“In the application of the principle that voluntary conveyances are, as matter of law, conclusively presumed fraudulent and void as to existing creditors, the definition of a ‘voluntary conveyance’ must be steadily kept in view. It is a conveyance founded merely and exclusively on a good, as distinguished from a valuable, consideration, on motives of generosity and affection, rather than on a benefit received by the donor, or detriment, trouble, or prejudice to the donee. If the donor receives a benefit, or the donee suffers detriment, as the consideration of the conveyance, the consideration is valuable, not good merely. However inadequate such consideration may be — however trivial the benefit to the one, or the damage to the other — the conveyance is not voluntary. The inadequacy is a circumstance which, with other facts, may import an actual intent to hinder, delay, and defraud the creditors of the grantor, but it does not change the character of the conveyance — does not convert it into a voluntary
See, also, Pickett v. Pipkin, 64 Ala. 520, 524; Bradley v. Ragsdale, 64 Ala. 558; Early & Lane v. Owens, 68 Ala. 171, 174.
It must be conceded that this court has sometimes treated executory trusts (Kinnebrew v. Kinnebrew, 35 Ala. 628, 637), and even conveyances of chattels (Felder v. Harper, 12 Ala. 612) and land (Goodlett v. Hansell, 66 Ala. 151, 160), as voluntary with respect to other adversely interested parties, even upon recited considerations of $5 or $10; and these cases have been later cited with approval in York v. Leverett, 159 Ala. 529, 531, 48 South. 684, 685, where it was said: “When a court of chancery is called upon to set aside a conveyance upon the ground of fraud, it takes judicial notice that such a pecuniary consideration as $2 is merely nominal when there is a transfer of so much value ($1,500) as in the conveyance under consideration.”
So, also, in Folmar v. Lehman-Durr Co., 147 Ala. 472, 477, 41 South. 750, it was said, without other comment, that a deed made for love and affection and $2 was voluntary on its face, and void as to existing creditors.
It appears from these cases that the technical definition of a “voluntary conveyance” in Bibb v. Freeman, 59 Ala. 612, has not been strictly applied in all cases, and that this court has taken judicial notice that the recital of any trifling sum (from $1 to $10) as a pecuniary consideration for the grant of property of large value does not necessarily show as to third persons that the conveyance is other than voluntary; especially where it is coupled with a recital 'of the consideration of love and affection, and the grantee is a near relative of the grantor.
Nevertheless, there must be a limit somewhere; and, without undertaking now' to define such a limit, we are unwilling to say that the instant deed, reciting a consideration of $100 and love and affection,” is upon its face a purely voluntary conveyance. It was therefore properly admitted in evidence.
In Borland v. Mayo, 8 Ala. 104, 117, the rule was stated as follows: “Inadequacy of- consideration, where the vendor is greatly indebted, is recognized as a mark of fraud. * * * True, it might not be sufficient per se to authorize the sale to be • annulled, unless the disparity between the true value of the property, and the price paid, or agreed to be paid, was so great as to strike the understanding at once with the conviction that such a sale never could have been made bona fide. But it may be a mark of fraud where the difference is not so great, and, when other circumstances are associated with it, they may be conclusive.”
In Bibb v. Freeman, 59 Ala. 612, 616, it was said: “However inadequate such consideration may be — however trivial the benefit to the one, or the damage to the other — the conveyance is not voluntary. The inadequacy is a circumstance which, with other facts, may impart an actual intent to hinder, delay, and defraud the other creditors of the grantor; but it does not change the character of the conveyance, does not convert it into a voluntary conveyance. * * * The intent of the party making it determines its validity or the invalidity, whatever may be its. form, or the consideration it recites.”
In Early & Lane v. Owens, 68 Ala. 171, 174, it was said: “The adequacy of the consideration is not a matter of inquiry;, that is material only as evidence of a fraudulent intent.”
In Little v. Sterne, 125 Ala. 609, 615, 27 South. 972, 974, it was said: “If complainants were existing creditors, Mrs. Little, as a purchaser from the debtor of a valuable, though inadequate consideration, would be protected unless she had knowledge, •actual or constructive, that he was insolvent or in failing circumstances, or unless she had knowledge of and participated in a •scheme on his part to hinder, delay, and defraud his creditors.”
It has been several times said that, “Where a valuable consideration has been paid for property,” creditors cannot impeach the conveyance without showing knowledge or participation by the grantee in the grantor’s fraudulent intent. — Pippin v. Tapia, 148 Ala. 353, 354, 359, 42 South. 545; Simmons v. Shelton, 112 Ala. 284, 21 South. 309, 57 Am. St. Rep. 39; M.-M. Mfg. Co. v. Leith, 162 Ala. 246, 258, 50 South. 210.
In Tyson v. South C. C. Co., 181 Ala. 256, 262, 61 South. 278, 280, we said: “Notwithstanding complainant is an existing creditor, if Mrs. Tyson was a purchaser for value, though the consideration was inadequate, she would be protected, unless the consideration was so grossly inadequate as to constitute fraud in and of itself, or unless she had knowledge, actual or constructive, that the grantor was insolvent or in failing circumstances, or unless she had knowledge of and participated in a scheme on his part to hinder, delay, or defraud his creditors.”
This view of the subject is supported by the ablest commentators : Freeman on Executions, § 40 (cited in note to State v. Mason, 34 Am. St. Rep. 395); 2 Pom. Eq. Jur. (3d Ed.) § 970. See, also, 32 L. R. A. p. 52, note, where many cases are collected.
It is certainly true that several of our decisions, in dealing with conveyances made upon new considerations, have stated as a general rule, without noting any limitation, that as against preexisting creditors the grantee must show a consideration both valuable and adequate. — Harrell v. Mitchell, 61 Ala. 270, 281;
But in practically all of the cases where the rule is stated in general terms, it' clearly appears that the conveyance was in consideration of a past debt. — Hubbard v. Allen, 59 Ala. 283, 296; Pollak v. Searcy, 84 Ala. 259, 4 South. 137; Wedgworth v. Wedgworth, 84 Ala. 274, 4 South. 149; Yeend v. Weeks, 104 Ala. 331, 344, 16 South. 165, 53 Am. St. Rep. 50; McTeers v. Perkins, 106 Ala. 411, 17 South. 547. Or else it clearly appears that the fraudulent grantor was insolvent, failing, or financially embarrassed when he made the conveyance. — Lehman v. Kelly, 67 Ala. 192, 202; Smith v. Collins, 94 Ala. 394, 10 South. 334; Martin v. Berry, 116 Ala. 233, 22 South. 493; Freeman v. Stewart, 119 Ala. 158, 167, 24 South. 31; Ober v. Phillips, 145 Ala. 625, 40 South. 278; Brunson v. Rosenheim, 149 Ala. 112, 43 South. 31; Leinkauf v. Morris, 66 Ala. 406, 417; Caldwell v. King, 76 Ala. 149, 156; Waddle v. Gt. So. Phosphate Co., 184 Ala. 346, 63 South. 462.
This last line of cases, especially Martin v. Berry, 116 Ala. 233, 22 South. 493, seems to establish the doctrine that proof of the complainant’s debt, plus proof of the grantor’s insolvency, etc., whether known to the grantee or not, imposes upon the grantee the burden of showing a consideration both valuable and adequate. But see, also, on this subject, Smith v. Collins, 94 Ala. 394, 403, 10 South. 334.
Plaintiff’s contention is that, there being a twofold consideration for this conveyance, of which the major element — the agreement to marry — is nonlegal, the conveyance must be regarded as wholly voluntary, and therefore wholly void. The argument is plausible. Certainly, if property worth $5,000 is sold for $500 and marriage with the purchaser, it might be a fair assumption that the marriage was by the parties, valued, for this purpose, at $4,500; and hence the conclusion that, to the extent of $4,500, the conveyance was voluntary, and pro tanto intended as a gift; and" hence, also, the further conclusion that, the gift element predominating over the money element, the transaction must be regarded as a “deed of gift” within the meaning of the statute (Code, § 4287) which pronounces such deeds void as to creditors.
It is necessary now to notice several of the minor questions presented by the record.
We are aware, of course, that the views of this court on this ■question have not always been consistent, as a reading of the 'digests will readily show. But the rule above stated must now be regarded as firmly established. — Malsey v. Connell & Co., 111 Ala. 221, 20 South. 445; Wallen v. Montague, 121 Ala. 287, 25 South. 773; Teague v. Lindsey, 106 Ala. 266, 17 South. 538; Montgomery v. Kirksey, 26 Ala. 172.
We have a line of cases which may confuse the casual reader if this limitation is not carefully observed. — Kelly v. Connell, 110 Ala. 543, 18 South. 9; Wimberly v. M. F. Co., 132 Ala. 107, 31 South. 524; Silvey v. Vernon, 153 Ala. 570, 45 South. 68, 127 Am. St. Rep. 69. These cases hold that, when an insolvent or ■embarrassed husband procures a conveyance to be made to his wife, a presumption will be indulged against her which requires her to affirmatively show that the consideration was paid by her, ■and not with funds of the husband. This limitation was possibly ■overlooked in discussing the rule in Waddle v. Phosphate Co., 184 Ala. 346, 349, 63 South. 462.
We are constrained to the conclusion that the case was tried by the lower court without any error prejudicial to appellant, and in harmony with -the law as above stated.
It is unnecessary to pass upon the trial court’s ruling to' the effect that a portion of the land in suit was so insufficiently described in the sheriff’s levy and deed as to render plaintiff’s-deed invalid to that extent, since the jury found that the conveyance to Mrs. Anderson was not void for fraud, and the entire issue was thereby concluded. If there was error in that behalf, it was not prejudicial. The judgment will be affirmed.
Dissenting Opinion
I dissent from the opinion of the majority, upon the sole question óf admitting in evidence the ahtenuptial'contract for any purpose. Thé majority hold that it is a. nullity and can form no part of the consideration of the conveyance, but that it was properly admitted, with the qualification that, it could, be considered in determining the intention of-the parties thereto. To my mind, this was prejudicial error. If this agreement could form no part of the consideration for the conveyance, then it
Rehearing
ON REHEARING.
Anderson, C. J., dissents on one point, and thinks that the judgment should be reversed, as shown by his separate dissenting opinion.
It results that the application for a rehearing must be overruled.