Washington v. Norwood

128 Ala. 383 | Ala. | 1900

Lead Opinion

DOWDELL, J.

The bill in ¡this case is filed by the appellant, J. F. Washington as administrator of William Washington, deceased, to set aside an alleged fraudulent conveyance, and to subject certain lands in the hands of the alleged fraudulent grantee to the payment of the debt due from the grantor to the complainant’s intestate. The bill and exhibits show the following state of facts: In April, 1878/ Henry Bunn died intestate in Jackson county, Ala., leaving a large estate, consisting of real and personal property. On the 1st day of June, 1878, letters of administration were duly and regularly issued by the probate court of said county to John P. and Joel S. Timberlake as administrators of said estate, who entered upon the administration, having executed a bond in the sum of $50,000, with William Washington, complainant's intestate, J. F. Martin, T. M, Allison (who are not sued, they being dead and their estates insolvent) and Samuel C. Norwood, respondent’s grantor, as sureties. On the 11th day of August, 1892, said-'afiministrators made a final settlement in the probate court of said county, and decrees were rendered in favor of Beulah Bunn and John T. Bunn, minor heirs of said estate, for the respective amounts due on their distributive shares. On the 6th day of February, 1893, said decrees not having been paid, said Beulah and John T. Bunn filed their bill in chancery against said administrators, and J. F. Washington, as the administrator of the estate of William Washington, deceased, to enforce the collection of their said decrees. On ithe 7th day of May, 1898, said cause proceeded to final decree in the chancery court against said Washington as administrator in favor of said Beulah Bunn and John T. Bunn for the amount of their said decrees in the probate court, and which the complainant was compelled to and did pay. The present bill proceeds \ipon the theory that Samuel O. Nor-wood was liable to the complainant as co-surety with Ms intestate on said administration bond by way of contribution, to the amount of one-half of said decrees, and seeks to condemn the lands owned by him at the time of the execution of said bond., and subsequently conveyed to his son, Samuel W. Norwood, the respondent, which said conveyance is alleged to he voluntary, fraudulent and void. The alleged fraudulent conveyance of Samuel C. Norwood to S. W. Norwood, was executed on the 17th day of May, 1887. The present hill was filed on May 6, 1899. To this bill the respondent pleaded adverse possession of ithe land sought to be condemned since the date of said alleged fraudulent conveyance of May 17, 1887, and the statute of limitations of ten years in bar of the suit. The cause was heard on the sufficiency of said plea, and from the decree of the chancellor sustaining its sufficiency this appeal is prosecuted.

The statute of limitations relied on as a bar to this suit is as follows, Code 1896, § 2798: “Civil suits must be commenced after the cause of action has accrued within the' period prescribed in this chapter, and not afterwards.”

Section 2795: “Within ten years * * 2. Actions for the recovery of lands, tenements, or hereditaments of the possession thereof, except as otherwise herein provided.”

Section 675: “The provisions of this Code prescribing the time within which civil suits must be commenced after tire cause of action has accrued, apply to suits commenced by bill in chancery. The defense invoked by the plea rests, upon the foregoing provisions of the statute, and by them its merit must be tested. If the suit was commenced within ten years after the cause of action accrued, the plea can be no answer to the bill.”

1. An action to set aside a fraudulent conveyance of lands at the suit of an existing creditor of the grantor is a suit in equity for the recovery of lands, and is governed by the statute of limitations of ten years. Code 1896, § 674; Werborn’s Adm’r v. Kahn, 93 Ala. 201, 206; Proskauer v. People’s Savings Bank, 77 Ala. 257; Scruggs v. Decatur M. & L. Co., 86 Ala. 173; Lockard v. Nash, 64 Ala. 385; Snodgrass v. Bank, 25 Ala. 361.

2. A surety is an existing creditor, entitled to protection against a fraudulent conveyance made by his co-suretv at any time subsequent to the execution of the common obligation. — Bibb v. Freeman, 59 Ala. 612; Werborn's Adm’r v. Kahn, supra; Yeend v. Weeks, 104 Ala. 331, 341; Keel v. Larkin, 72 Ala. 493; Fearn v. Ward, 80 Ala. 555; Bragg v. Patterson, 85 Ala. 233; Jenkins v. Lockard's Adm’r, 66 Ala. 377, 381.

3. Such an action can in no case be maintained until the cause of action accrues, — until the demand becomes due and payable. — Jones v. Massey, 79 Ala. 370; McGhee v. Bank, 93 Ala. 192; Frieder v. Lienkauff, 92 Ala. 469; Bragg v. Patterson, supra; Truss v. Miller, 116 Ala. 497. Bee also note to Ladd v. Judson, 66 Am. St. Rep. 289.

4. The right of action for contribution at law or in equity accrues when one surety pays more than his share of the common liability. — Yeend v. Weeks, supra; Keel v. Larkin, supra; Werborn’s Adm’r v. Kahn, supra; Babcock v. Carter, 117 Ala. 579, 580; Bragg v. Patterson, supra; Bibb v. Freeman, supra; Jenkins v. Lockard’s Adm’r, supra; Preslar v. Stallworth, 37 Ala. 402, 405; Stallworth v. Preslar, 34 Ala. 505.

5. The statute of limitations can in no case begin to run until the cause of action accrues. — Code 1896, §§ 2793, 2795, 674; Pickett v. Pope, 74 Ala. 122, 133; Gafford v. Strauss, 89 Ala. 283; Gindrat v. Railway of Ala., 96 Ala. 162, 166; Truss v. Miller, supra; Pendley v. Madisons Adm’r, 83 Ala. 484; Savannah Railway v. Buford, 106 Ala. 303, 313; Swann v. Lindsey, 70 Ala. 507, 519; 2 Brick. Dig. 220, § 35; Baker v. Barclift, 76 Ala. 414, 417; Lawson’s Admr v. Lay’s Ex’r, 24 Ala. 184; Wyatt’s Adm’r v. Rambo, 29 Ala. 510; Edwards v. Bender, 121 Ala. 77; Owen v. McGhee, 61 Ala. 440, 447; Werborn’s Adm’r v. Kahn, supra; Robinson v. Pierce, 118 Ala. 273; Manning v. Pippen, 86 Ala. 357; Brown v. Campbell, 38 Am. St. Rep. 314, 319; note to Leeds Lumber Co. v. Haworth, 60 Am. St. Rep. 207; Weaver v. Haviland, 40 Am. St. Rep. 631; Gates v. Andrews, 97 Am. Dec. 764; Bump, Fraud. Conv. (3d ed.), § 562; Ang. Lim. 42.

With a statement of the above propositions this case would be free from difficulty but for tlie question of adverse possession contained in respondent’s plea setting up the statute of limitations in bar of the suit. In dealing .with this question, it needs only to be ascertained what is adverse possession, its nature and incidents, and to avoid a confusion of. it with the statute of limitations. Adverse possession may be said to be a collective fact made up of other facts Avhieh are essential, . constituent elements to the creation of the collective. fact. Among these constituent elements are an actual possession of the res, and an open and notorious assertion of claim of OAvnership hostile to the true owner. After its creation, it is the continuation of this collective fact Avithout interruption for the period fixed by the statute of limitations as a bar to the commencement of a suit that renders, it effective as a defense. It is the thing that puts the statute in motion as contradistinguished from the statute itself and its continuity for a definite period that completes the bar of the statute. Even after the statute has been put in motion a break or interruption in the adverse possession stops the running of the statute. Moreover, a possession to be adverse must operate to disseize or oust some other claimant of his possession or right of possession. In speaking of adverse possession, its nature and incidents, in Pickett v. Pope, 74 Ala. 122, 131, which was an action of ejectment by remaindermen against the grantee of the life tenant claiming to hold adveivsely, it Avas said by this court: “An adverse possession, it will thus be seen, is something more than a mere possession, accompanied with hostile claim of OAvnership. It is very true that, ordinarily, an actual occupancy of lands, accompanied with an open, notorious and uninterrupted claim of OAvnership, Avith intention to claim hostile to the title of the real OAvner, constitutes adverse possession. But this is so, only Avhere the possession of the occupying claimant is hostile claim to the right of possession of some one else. If there be no other person entitled to present possession, there can be no repugnancy, actual or constructive, 'between the mere possession of the occupant and the rights of any one else. A possession, to be adverse, must, in other words, operate to disseize, or oust, some other claimant of his possession or right of possession. * * * It is an axiomatic proposition, which requires no reasoning in i|ts support, that there can be no incompatibility between a right which exists and one, so to speak, which does not exist. The tenant for life is entitled to actual possession of the premises of which he is enffeoffed; the remainderman is not so entitled, as long ns the life tenant is living. The actual possession of the former, therefore, is rightful, and not wrongful. It is not adverse to any right of. the remainder-man, hut perfectly compatible with all of his rights. The 'latter, having no right of possession, either actual or constructive, cannot be disseized or ousted, in any proper acceptation of these words. — Tied. Real Prop., § 100; 2 Washb. Real Prop. 555. In accordance with these views, we find that the most.approved definitions of an adverse possession involve not only the idea of an actual, visible and exclusive appropriation of land, accompanied with an intention, openly avowed, to claim against the rightful owner, but to hold against one who is seized.” In Edwards v. Bender, 121 Ala. 77, in a similar action to Pickett v. Pope, supra, it was said: “The statute of limitations and the doctrine of prescription apply only to those who- could have the right to maintain a suit.”

In Gindrat v. Western Railway of Ala. 96 Ala. 162, 166, a suit in equity involving the rights of remainder-men, it was said: “The possession of the defendant during his life, however long, notorious, open, adverse, and under claim of right against all the world, could not ripen into title, or afford a predicate for the presumption of a grant.under the doctrine of prescription, as against these plaintiffs. At no time during the life estate could they, or any one of them, have questioned this possession, and no laches in submitting to what they were without remedy to resist can be imputed to them.”

.While these cases relate to (the right of remainder-men to sue after the termination of the life tenancy, a right to maintain their suit against one in possession claiming title by reason of -adverse possession of ten years or more is plainly rested upon the doctrine that the possession of the. so-called adverse holder is not antagonistic to nor inconsistent with the rights of the remaindermen during the life of the life tenant, for not until the termination of the life-tenancy does the right of enjoyment of possession come to the remaindermen, and until this time there can be no ouster or disseizin; or, in other -words, no right or cause of action has accrued which by the express terms of the statute, is the time fixed from which the period of limitations necessary to create a bar must begin to run. The statute as clearly and definitely fixes a time when the limitation commences to run as it does the period of time requisite to complete the bar, and that is, after the cause of action has accrued. — Code, § 2793. We can see no reason for withholding the application of the above principles from a suit in equity by a creditor to -set aside a fraudulent conveyance -made by the debtor*, such an action being in its nature a suit for the recovery of land and governed by the statute of limitations the same as actions at law.- — Oode 1896, § 671 and authorities cited above under proposition 1. The possession by the fraudulent grantee of the co-surety, as long as the liability remains -contingent, could no more be said to be antagonistic to 'the claim of a fellow co-surety, than the possession by the grantee of a life-tenant to the claim of the remainderman. In the latter case, the right to sue at law for the recovery of the land is postponed until the termination of the life-tenancy. In the former case, the right to sue in equity for the recovery of the land is postponed until the contingent liability becomes a fixed liability. In both cases the recovery of the possession of the land is necessary to the enjoyment of the right or claim of the plaintiff or complainant in and to the land, in the one instance, to its occupancy and use, and, in the other, to its condemnation and sale for the payment of the debt or charge impressed upon it by the law. It is evident that adverse possession can exist only against him whose-claim to- the land is obstructed by such possession. A claim against land which is contingent, a right to enjoyment in ¡the future or on the happening of a contingency, which may or may not give a right to its possession and enjoyment, cannot possibly be interfered with or obstructed by the possession of lands which is in itself rightful until the contingency happens.

To sustain íthemplea, it must be done upon one or the other of the two following propositions: First, the. complainant’s cause of action must have accrued at the date when the respondent obtained his deed and went into possession; or, second, that (the statute of limitations began to run at the date when the respondent- obtained his deed and went into possession, regardless of when-the complainant’s cause of action accrued.

In Jones v. Massey, 79 Ala. 370, a creditors’ bill to subject property fraudulently conveyed, it was said: “It [the statute] does not exempt such suit from the general rule, which prevails in equity, as well as at law, that no suit can be maintained before the cause of action has accrued, and does not confer on a creditor the right to bring a bill to subject property to the payment of his debt before its maturity, and before he is authorized to maintain an action at law on the demand.” This rule is well settled by the authorities cited under proposition 3 above.

It cannot be doubted that until a final settlement of an administration there is mo ascertained liability against the sureties on the, bond, and until the liability on the bond becomes fixed by -the settlement, there is no cause of action, and the statute of linxitations does not run in favor of the sureties. So, in this case, no right of action accrued to any one, neither the distributees nor co-sureties, until a decree of the probate or chancery court was rendered ascertaining the devastavit, and fixing the amount of the sureties’ liability. If this complainant stood in the shoes of the distributees, and was bound to begin suit -within the same period allowed them, the bar would not be complete, as the final settlement was made in 1892. It is just as well settled that a surety’s right of action for contribution, at-law or in.equity, does not arise until lie lias paid the debt, and he becomes, so to speak, subrogated to the right of the obligee. His right i'S founded in natural justice, is contingent until payment, it then becomes a fixed liability against the co-surety. In Yeend v. Weeks, 104 Ala. 331, 341, a bill by the administrator of a surety on an administrator’s bond to set aside conveyances by his co-surety for fraud, and for contribution, it was said: “Another principle equally well settled is, that the liability of the surety on an administrator’s bond or other contingent obligation, makes him a creditor within the provisions of the statute of frauds, from the -date of. the contract, and though, generally, he has no cause of action until he has paid the debt, he is entitled to protection against fraudulent conveyances executed by the principal debtor in the meantime. As was stated in Keel v. Larkin, 72 Ala. 500, supra, the claim of the surety is considered as having existed — so far as to constitute him a creditor — at the time he incurred the contingent liability, being deb it am in presentí, solvendum, in futuro; his subsequent payment of the debt extending back by relation to the date, although no demand, or right of action technically accrues until a subsequent date. The surety is thus, in a sense, sub: rogated to the rights of the creditor, whose claim he has been compelled to pay.”

In Werborn’s Adm’r v. Kahn, supra, a bill in equity by a surety to subject personal property fraudulently conveyed by a deceased co-surety, it was said: “Complainant’s right to contribution did not arise until payment of the sum received in full satisfaction of the decree.”

It will thus be seen from the foregoing • authorities, that while a surety is a creditor within the statute of frauds, entitled to protection against fraudulent conveyances by his co-surety, yet his right of action against such co-surety does not accrue until he has paid the common obligation.

Counsel for appellee rest their contention in support of the plea upon two cases, and only two, decided by this court — Barclay v. Smith, 66 Ala. 230, and Snedecor v. Watkins, 71 Ala. 48 — and, as we gather from the opinion of the chancellor in the record, upon these two authorities he bases his decree sustaining the sufficiency of the plea. In itlie first-named case, it was decided, that the purchaser of lands which were, at the time subject to an execution lien, might hold adversely from the date of the conveyance as against a purchaser at a subsequent sale under the execution. We do not think this case as an authority is in conflict with the views we have expressed above, and it-can he differentiated from the case at bar. Adverse possession runs not only against one, holding title with a right of possession, but also against any person having a claim against 'the land with a right of action. In Barclay v. Smith, the execution creditor at the time of the conveyance by the debtor had a present right of action to proceed against the land; or, in other words, his cause of action liad accrued to him. Hence the statute of limitations was put in operation at the. very moment adverse possession by the grantee of the debtor arose. The title of the purchaser at a subsequent sale under the execution was derived through the. lien of the execution and the sale ¡thereunder. The title of the purchaser at. the execution sale having its origin or inception in the execution and the lien it created, against which lien as a claim or right the adverse possession of the debtor’s grantee operated, such title as creating a cause of action was infected with the infirmities attending the origin from which it sprung; or, in other words, as an accrual of a cause of action to the purchaser under the tittle derived through the execution sale, it could not operate to change the .time when the statute of limitations was put in motion as against the lien of the execution by the adverse possession of the grantee of the debtor.

In the case of Snedecor v. Watkins, supra, which was a bill to set aside a fraudulent conveyance made by the surety on a guardian’s bond, the facts show that the complainant’s cause of action against the surety accrued more than ten years before the filing of the bill. And the right to file the bill against the fraudulent grantee to sett aside the conveyance and condemn the land to the complainant’s demand arose immediately upon the accrual of the 'complainant’s cause of action against the surety. As against this right of the complainant to proceed against the land the adverse possession of the voluntary or fraudulent grantee put in motion the statute of-limitations as soon as the right to sue arose, and not until such right accrued. To hold otherwise would result in the anomalous state of the running of the statute of limitations when there was no debt or demand against which to run, and no person with a right to sue. We cannot assent to what was said in Snedecor v. Watkins, that “it does not change the case that the night of the complainant- to proceed against the guardian’s surety arose within ten years before the commencement of this suit, as the purpose of the proceeding is not to obtain a personal judgment on the debt, nor is it a suit for the land.” In the first place the facts in that case did not present for decision the question in the foregoing quotation, for more than ten years had elapsed at the filing of. the bill since the complainant’s cause of action had accrued. In the next place the facts in Barclay v. Smith made an entirely different case, and when properly understood cannot be considered as an authority for the doctrine asserted in the above extract from the opinion in Snedecor v. Watkins. To adhere to such a doctrine would be not only to oppose the plainest principles of right and equity, but it would also be to ingraft upon the statute by judicial decision a provision which the lawmaking power in its enactment did not contemplate and the very language of ¡the statute f orbids.

Our conclusion therefore is, that while the complainant as a co-surety was a creditor within the statute of frauds, and entitled to protection as against voluntary and fraudulent conveyances, yet his cause of action did not accrue until he paid off and discharged the common obligation; and in no event could his cause of- action have accrued until the final settlement by the administrators in 1892, which was within the ten years necessary to complete the bar under the statute, and that until such time the possession by the fraudulent grantee could in no sense be said to be. antagonistic to any right or 'Claim of the co-surety in the land, and therefore there could be no adverse possesion by such grantee as against such co-surety of the fraudulent grantor necessary to put the statute of limitations in motion. The decree of the chancellor sustaining the sufficiency of the plea must be reversed and the cause remanded for further proceedings.

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Dissenting Opinion

TYSON, J.,

dissenting. — The theory of the opinion in this case is, that this suit is for the recovery of lands, or in the nature of a suit for their ^recovery. That as the complainant’s -cause of action against tlie alleged fraudulent grantee did not arise until a short time before the filing of the bill, the statute of limitations did not commence to run in his favor, or rather against complainant’» right of action, until the cause of action accrued. I do not make an issue with the majority of the -court -upon the proposition that the complainant’s cause of action accrued only a short time before tin1 filing of the bill as against the fraudulent grantor; but I find nothing in the statute of limitations which excepts from its -operation -the running of the statute in favor of the. respondent, conceding that he acquired possession of the. lands under a fraudulent conveyance. And unless it can be held that the possession of lands of a grantee under- -fraudulent conveyance can never become adverse, but must be referred to the fraudulent conveyance under which he entered and took possession without reference to the length -of time he may have been in possession of -the lands at the time, of the filing of the bill, the position taken by my brothers is wholly untenable. It would be well to observe that we must bear in mind that the -creditor, upon a bill filed to declare fraudulent and v-oid a conveyance by his debtor, must have two -causes of -action, one in his favor against his debtor, and the other against ¡the fraudulent grantee named in the conveyance. The former can never arise until his debt is due and owing, and the latter only after a debt is shown to be due him and the property in the possession of the fraudulent grantee is shown to be the property of the debitor. It is only the property of his debtor which has passed into the possession of the fraudulent grantee that he is entitled to subject to the payment of his debt, upon the theory that the conveyance is void, as against him, so long as the fraudulent grantee’s possession and title must be referred to the conveyance, the property will be regarded as the property of the debtor, and not of the grantee. However, if it be true, as- asserted by my brothers, that a bill filed by a creditor to subject lands in the possession of a fraudulent grantee, is a suit for the recovery of lands, then unquestionably the right of action in this case, not having accrued until a short time before the filing of the bill, the statute of limitations would be no bar to the action. This is the basic principle underlying the conclusion reached. If unsound the entire structure erected upon it must fall. Is it 'a suit for the recovery of lands? I say it is not and that no case can be found in the books which holds, it to be.

Before however discussing this question and citing the authorities, in support of my contention, I will review the authorities cited in the majority opinion for the purpose of showing that they do not sustain the proposition there laid down. In Werborn’s Adm’r v. Kahn, 93 Ala. 201, 206, all that is decided on this point is, that “complainant’s right of contribution did not arise until payment of the sum received in full 'satisfaction of the decree, which was in May, 1889. The causes of demurrer based on the laches of complainant and the statute of limitation of one year, are not well founded. The possession of a fraudulent vendee of personal property must continue, under the statute of limitations, for 'six years, to give him title as against a creditor of the vendor.”

In Proskauer v. Bank, 77 Ala. 257, 261, it is said : “The limitation which a fraudulent grantee of land may invoke for his protection, against a suit by the creditor of his grantor, is ten years — the period requisite (to bar an action for the recovery of the land. The statute which, in actions seeking relief on the ground of fraud, allows one year after the discovery of the facts constituting the fraud, within which to prosecute a suit, enlarges the time for the benefit of the creditor, or party complaining of the fraud, where the statute lias already created a'bar; and was not designed, and does not operate, to abridge the time necessary to perfect a bar in favor of the fraudulent grantee.”

The case of Scruggs v. Land Co., 86 Ala. 173, arose upon a bill filed for the cancellation of a conveyance upon the ground of fraud in procuring its execution, and undue influence exercised by the grantee over the grantor, and is not in point. However, it was held in that case, that the statute of limitations of ten years was applicable, and a defense to the bill.

In Lockard v. Nash, 64 Ala. 385, which was a bill assailing a conveyance as fraudulent, it was said: “A voluntary grantee of property is held a trustee, by operation of law, for the benefit of the existing creditors of the grantor; and when the gift is of personal property, and is attended by no circumstances of concealment, if the creditors allow six years to elapse without suit to enforce their rights, the grantee may invoke the statute of limitations as a defense.”

In Snodgrass v. Bank, 25 Ala. 161, it was held that the possession of a slave by a fraudulent grantee gives him no title under the statute of limitations as against a creditor of the. vendor, if the latter could not by reasonable diligence have discovered the fraud within six years before the levy of his execution.

I will take occasion later on to refer to the cases of Lockard v. Nash, and Snodgrass v. Bank, for the purpose of showing that they support my contention. The above cases are all that are cited to support the proposition, that the action to set aside a fraudulent conveyance of land at the suit of an existing creditor of the grantor, is a suit in equity for the recovery of the lands. It is obvious from the examination of the above cases, that they do not support, in the remotest degree, this proposition.

The sole purpose and the only result which can be attained, at all events, in a suit to -set aside a ’Conveyance as fraudulent, is to subject the. land to the payment of the debt of the grantor. The creditor of the fraudulent grantor never had, and can never have, a right to the possession of the lands as creditor. His right of entry or possession of the lands never existed and can never exist. No matter when the accrual of his cause of action may have arisen to file a bill to subject them to the payment of his debt, it never arose, and can never accrue, so as» to maintain a suit for the recovery of lands, tenements, or hereditaments, or the possession thereof. The accrual of his. cause of action, his right'to subject his debtor’s property, and only his debtor’s property, to the payment of Iris debt, I concede, -only arose in this case when he paid the decree, which was but a short time before the filing of this bill. But this is far from conceding that he has the right to- condemn the lands, which have become absolutely the property of another, to the satisfaction of his debt. I do not -doubt that so long as the grantee’s title to and possession of lands are referable to the fraudulent deed under which he acquired their possession,they may be subjected in his hands to the payment of the debts -of his fraudulent grantor. But when he acquires an absolute, indefeasible title to them by adverse possession; in -other words, when he enters into- the actual, exclusive and open possession of them, claiming them as his own continuously and uninterruptedly, for a period of ten years next preceding the filing of the bill, just why his adverse possession does not ripen into a title, independent of the deed, I am unable to comprehend, unless it is the law that a fraudulent grantee is not entitled to the protection of the statute of limitations as a statute of repose, there being nothing in the statute of limitations which expressly prevents as against him its running. If the creditor’s cause of -action can he said to be his right to maintain a suit for the recovery of lands, why not permit him to bring lii-s action at law for their possession? Manifestly, it is because he has no title, no right of entry, no right to possession. Can a fraudulent grantee invoke tlie protection of the statute of limitations as a statute of repose? Before answering this question, however, it will he well to ascertain upon what principle the property in the hands of a fraudulent grantee is subjected by a creditor to the payment of his debt as the property of his debitor. The theory of the law is, that the grantee holds the property as a trustee in invitum for the benefit of the creditors of his grantor. The right of the creditor does not spring out of any contract between him and the grantee. It arises by operation of law upon the broad principle that justice must precede generosity, and that the claims of creditors, who have parted with a valuable consideration, must be satisfied before the claims of others resting merely upon affection or generosity can be recognized. The trust is implied or constructive. It is created by the law. It is imposed upon the.grantee in invitum,. It is noit an express trust, but, as we have said, an implied one. — Lockard v. Nash, supra.

Reverting to the question propounded, can a fraudulent grantee invoke, the. protection of the statute of limitations as a statute of repose? In Bump, Fraud. Conv., § 571, it is said: “Although a fraudulent conveyance is voidable as against creditors, yet the title of the grantee is within the protection of (the statute of limitations. Nor is he precluded from claiming the benefit of the statute by the fact that he is, for some purposes, treated as trustee for the creditors, for he is merely a trustee against his will, by operation of law.”

The leading case in this Stale on this subject, is Snodgrass v. Bank, supra, where the court, speaking to this question, said: “A possession under a fraudulent deed may be void, but it is no more so than one .acquired by a trespass, or any either unlawful act; and against possessions of the latter character, it is clear, the statute runs. We agree, that the statute is one of repose, and wouhl apply it to every case of adverse possession, except wliere the defendant, by fraud, has prevented the plaintiff from obtaining a knowledge of the facts upon which his action depends; and in such a case, the party should, under the influence of the statute, be required to bring hi's suit within the period prescribed after the discovery; but the defendant should not be allowed to claim any benefit by a fraud upon the statute.”

In Lockard v. Nash, supra, after holding that the donee in the voluntary conveyance was a trustee in inritum, and the trust an implied or constructive one, the court said, the statute of limitations operates to bar the enforcement of such trust. The same principle was recognized in Poskauer v. Bank, supra, and also in Smith v. Hall, 103 Ala. 235.

In Snedecor v. Watkins, 71 Ala. 48, which the majority of the court undertake to distinguish from the case under consideration, it is said: “It is an effort to- have the defendants, who are voluntary donees of the lands, declared trustees in inritum as to the lands conveyed to them by Bryan Watkins. Their adverse possession, is a complete answer to this, it having matured by lapse of time into -a good title.” Indeed, it is the established doctrine of all the courts, that the statute of limitations runs as- against implied or constructive trusts. — Martin v. Bank, 31 Ala. 115.

The policy of the statute of limitations is to give repose to titles “The benefits and immunities they confer, are for the. repose of adverse holders, who have been in continuous possession, asserting ownership, for the length of time the statute prescribes. In favor of defendants; ‘adverse possession, -open, notorious, accompanied with acts of ownership, bars -an action for the recovery of lands, without any reference to the bona, fides or color -of title, under which the adverse holder claims ownership. — Smith v. Roberts, 62 Ala. 83. ‘When the statute of limitations lias completed a bar, it gives to the party in whose favor it has run a right of entry, upon which he may prosecute ejectment, or, if sued, defend himself.’ — Doe, ex dem., v. Eslava, 11 Ala. 1028.” A right to lands, acquired by ten years’ advesfee holding, with the exceptions the statute provide, arms such holder with all the powers of offense and defense, which an unbroken chain of title confers. The exceptions are expressed in sections 3284=, 3235, ;3236, 3242, 3244, 3245, 3247, 3249 and 3250 of the Code of 1876 [sections 2805, 2806, 2807, 2813, 2815, 2816, 2820, 2822, 2823, of the Code of 1896]. When a case-is brought within.either of the exceptions, the exception prevails, and dominates the rule. But courts have no authority to engraft'exceptions, which are not found in the statutes.. The fact that the present plaintiff was but a lien creditor, without title, when defendant took possession, is not one of the exceptions the statute, provides. The defendant Smith being in posession, and claiming ownership, the statute commenced running in his favor, even against Beard and Cox, original owners, as he received his title from the latter, charged with no trust of his creation.” — Barclay v. Smith, 66 Ala. 230. The principles above quoted from this case, to my mipd, are conclusive of the question here involved. The fraudulent grantee in the case under consideration, having acquired the lands'.from his father under an absolute deed, creating no trust, the very moment he entered upon the possession of the lands, claiming them as his own adversely to all the world, the statute of limitations began to run in his favor. There is no exception, as we have, shown, in the statute of limitations in favor of the complainant in this- case, and therefore the statute must be held to be a statute of repose, to commence to run from the time he took possession of the lands and claimed to own them adversely to his grantor. It. may be conceded that the facts in the case of Snedecor v. Watkins, supra, perhaps did not authorize the count to say that it does not change the case “that -the right, of the complainant to proceed against the guardian’s surety arose within ten years before the commencement of this, suit, as the purpose of the proceeding is not to obtain a personal judgment on the debt, nor i's it a suit for the land.” But the principles announced in that case, whether we regard their enunciation as dictum or not, are correct. The fact was shown, that the fraudulent grantee had been in possession of the lands for more than ten years pre.ceding the filing of the bill. His possession being adverse, open, notorious, uninterrupted and-, accompanied with acts of ownership, completed the bar as against all the world save only such persons as are exempt expressly from the operation of the statute by certain sections of the Code. See also Bobb v. Woodward, 50 Mo. 95; Gregg v. Bigham, 1 Hill (S. C. Law) 193; Dodd v. McCraw, 3 English (Ark.) 83. In Reeves v. Dougherty, 7 Yerg. 222, the court held, (1.) That the statute of limitations protects fraudulent possession the satute of limitations applies where possession was acquired by fraud; (2.) the statute of limitations is a good plea in equity where it would be good at law if the suit had been brought there except where there has been a fraudulent concealment of the cause of action; (3.) grantee of property conveyed in fraud of creditors may idead the statute of limitations to a bill filed by creditors; (4.) statute begins to run in such -case when the; grantee obtains possession. In the opinion, the court, after reviewing all the cases on the subject, said: “But Mrs. Ewing [the grantee in the conveyance] was no party to the judgment; she is pursued, and her legal title (prima facie valid) is challenged on the ground that she paid no consideration, and aided in the fraud, and therefore she holds as trustee by ■implication, for those having a right to stand in Dougherty’s [the grantor] stead. Her title is just as capable of being protected as was that of Cocke, in the case of Porter v. Cocke. His deed was voluntary and void as to creditors, yet adverse possession protected the title. * * * That Mrs. Ewing is entitled to avail herself of the statute, from the nature of the title by which she' claims to hold, is ■clear; but the difficulty is, when does the act of limitations commence its operations in her favor, as against the complainants. If from the time when the judgment was obtained, as insisted, society would have no repose under such circumstances. * * * There is no principle upon which to rest the bar other than the one stated, that the creditors must take the title as it stands between the fraudulent vendor and vendee, at the time he files his bill or levies his execution. If time has confirmed ¡the title to lands or slaves, or harred the remedy to recover other goods, it is in accordance with the established policy of the country, that the general repose- of society-is preferred to the few chance cases of hardship which ¡the general rule inflicts. Here Dougherty kept the complainants in litigation for more than three years, and Mrs. Ewing, the fraudulent vendee, might have profited by it. But had her title been fair, she might have been unable to prove it after -the lapse of time, for it was over eleven years after she took her title and possession before she was sued; and subpurehasers from her would still more need the protection of the statute. * * * But" the remedy of the evil, if evil there be, is with the. legislature, not ithe courts. We are bound to apply the law as we find it. without repealing it, in effect, by making exceptions.”

The case of Malloy v. Paul, 2 Tenn. Ch. 156, involved the identical question involved in this case. Chancellor Cooper, in a very exhaustive and learned opinion, reviews all the cases on the subject. He said: “In Reeves v. Dougherty, 7 Yerg. 222, it was held that, where the possession of personal property has been acquired by a fraudulent'sale, the statute of limitations begins to ran from the time the fraudulent grantee obtained possession, and, if the title of the fraudulent grantor has been vested In the grantee by the statute, the judgment creditor of the grantor is barred also. The question is fairly discussed upon principle. ‘The object here,’ says Catron, C. J., is to aid an execution at law; to give effect to a legal writ and legal right because of the concurrent jurisdiction in equity; to relieve against the fraudulent conveyance tending to hinder the creditor of the grantor.’ * * * 'The complainants come in asserting their debtor’s right to the property, treating — as they have the right to do — the fraudulent conveyance as merely void.’ * * * ‘But the debtor’s right of property was gone when ¡the bill was filed, and the complainants are equally barred.’ ‘There is,’ adds the learned judge, ‘no fair distinction between a lien by execution and a lien by an implied trust otherwise arising.’ At most, the idea is, the fraudulent vendee holds as a trustee by implication, and the statute of limitations always runs in >favor of such trustees. * * * ‘There is no principle/ continues the court, ‘upon which to rest the bar. other than the one stated, that itlie creditor must take the title as.it stands between the fraudulent vendor and vendee at the time lie files his hill or levies his execution. If time has confirmed the.title to lands or slaves, fit is in accordance with the established policy of. the country that-the general repose of society is preferred to the few chance cases of hardship which the general rule inflicts.’ * * * It will he seen, from this review of the cases, itlrat tin» question as to the point of time when the statute of limitations begins.to rail,, in favor of a fraudulent vendee, of land against, the creditors of the vendor, cannot he considered as positively settled by the decisions. There is, it is true, a direct decision that it begins to run only from the, date of the judgment. But the decisions somewhat shaken by the subsequent reference to it in Knight v. Jordan. Moreover, when we seek to ascertain the principles which underlie the decisions, it is, dear that Reeves v. Dougherty, and Knight v. Jordan, have-the,better basis. Jones v. Read rests upon a literal and forced construction of the second section of the act, of -1819. For that section (which provided that all actions for the recovery.of lands shall he brought, within seven years after the accrual of the right or cause of action) must, upon the plainest rules of statutory "exegesis,.he construed in connection with the,first section, which vests an indefeasible title after seven years’ adverse possession, — a positive provision directly annulled. by the construction put on the second section. The right to sue, the statute contemplates as contemporaneous with the possession, and the provision of the second, section is only the converse of the provision, of the -first section. To allow a right perfected by the statute, .•under the first section, to he set aside in favor o,f a party who acquires his. right twenty years afterwarcls, hut through a party to the original transaction yvbo is.himself barred.^ is.qbsurd. It was the supposed hardship'on the creditor that produced the decision in Jones v. Read, It was a ease.for .legislation, but not judicial legislation.”

Tbe majority opinion entirely leaves out of view the purpose of the statute of limitations as a statute of repose, and engrafts upon section 2595, which provides that the limitation of ten years shall bar all actions for the recovery of lands, tenements, and hereditaments, or the possession thereof, an exception in favor of the complainant. .

Case Details

Case Name: Washington v. Norwood

Court Name: Supreme Court of Alabama

Date Published: Nov 15, 1900

Citation: 128 Ala. 383

Court Abbreviation: Ala.