Case ID: ala_159/html/0529-01.html
Source: Caselaw Access Project
Author: {"author": "DENSON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

York, et al. v. Leverett.
    
      Bill to Set Aside a Deed as Fraudulent, and to Enforce a Vendor’s Lien.
    
    (Decided Feb. 4, 1909.
    48 South. 684.)
    1. Fraudulent Conveyenecs; Fominal Consideration; What is. — ~ The court will take judicial notice of the fact that $2 was merely a nominal consideration for property worth from $1,500 to $2,000, when asked to set aside such conveyance as a fraud.
    2. Same. — A deed may be technically a voluntary instrument, although founded on some consideration; and where a valuable consideration is necessary to support a deed, the bare recital of a nominal pecuniary consideration, does not show a valuable consideration; and hence, where land had been sold for $960, with the reservation of a vendor’s lien and the purchasers subseqently, when insolvent, and without having paid the vendor’s notes, conveys the land to another on the recited consideration of $2 for the purpose of hindering, delaying or defrauding creditors, and defeating the lien of the note, his vendee will be -held a mere volunteer and the deed ineffectual so far as the rights of the prior creditors of the original purchaser are concerned. .
    Appeal from Clay County Court.
    Heard before Hon. W. J. Pearce.
    Bill by J. M. Leverett against E. York and others to have a deed declared void and to have a purchase-money lien declared upon the property conveyed. From a judgment overruling demurrers to the bill, respondents appeal.
    Affirmed.
    The material allegations of the bill are sufficiently stated in the opinion. The bill was filed in the Clay county court, and addressed to Hon. W. J. Pearce, Judge of said court. Clay county forms a part of the Northeastern chancery division, of which Hon. W. W. White-side is chancellor. The demurrers filed to the bill are as follows: “(1) It appears from said bill that it was improperly filed in this court. (2) For that it appears from said bill that it should have been filed in the county-court of Clay county. (3) For that it appears from said bill that it is. not addressed to Hon. W. W. Whiteside, chancellor of the Northeastern chancery division. (4) For that no facts are alleged in said bill showing that said Sam Wallace executed the deed described in the fourth paragraph of said bill with any intent to hinder, delay, or defraud his creditors. (5) For that it does not appear from said bill that the grantee in said deed had any knowledge of said intent on the part of Wallace, if he had the same, or that said deed was accepted by grantee with any knowledge of the grantor’s purpose, or any intent on the part of the grantee, that said deed should defraud any one.”
    Blackwell & Agee, for appellant.
    The mere suspicion of the existence of fraud is not sufficient. — Smith v. Collins, 94 Ala. 394. The deed recites a valuable consideration and shifts the burden to the appellee to show fraud, and it must, therefore, be specially averred.— Howell v. Carden, 99 Ala. 100. The purchaser from an alleged fraudulent vendor is charged with the burden of negativing notice or knowledge of the financial condition or intent of his vendor. — Kellar v. Taylor, 90 Ala. 289.
    Whatley & Cornelius, for appellee.
    Whatever is sufficient to put a party on inquiry is sufficient to charge him with notice. — Manassas v. Dent, 89 Ala. 565; Foxworth v. Brotan Bros. 114 'Ala. 202; s. c. 120 Ala. 59; Kyle v. Ward, 81 Ala. 120; 21 A. & E. Ency of Law, 584; 23 Id. 494. The consideration must be adequate as well as valuable and his conveyance is voluntary in respect to the remainder above the purchase price. — Fairfield P. Co. v. Kentucky Clothing Co., 110 Ala. 536; 2 Brock 211; ,61 Fed. 588; 6 Wall. 290; 14 A. & E. Ency of Law, 292; -23 lb. 488; 513. Under the deed the purchaser was not an innocent purchaser. — Burch v. Garter, 44 Ala. 117; Smith v. Perry, 56 Ala. 269; Smith v. Burk, 21 Ala. 136.
   DENSON, J.

On the 2d day of October, 1901, H. W. Armstrong, for the agreed price of $960, sold and conveyed to Sam Wallace the lands upon which it is sought by this bill to have a vendor’s lien declared. The price was not paid in cash; but, by agreement between Armstrong and Wallace, Wallace on .that day executed three promissory notes, each in the sum of $320, in which a vendor’s lien is reserved, and payable, respectively, to Jno. S. Armstrong, Mrs. A. J. McClintock, and Mrs. A. I. Miller, children of H. W. Armstrong. The notes were delivered to the payees, and in due course of trade were transferred to J. M. Leverett, the complainant in this bill. On the 22d day of October, 1903, Sam Wallace, without- having paid the notes, conveyed the lands to the respondent E. York on a recited consider ation of $2. The bill avers that at the time the deed to York Avas executed Wallace was insolvent, and' that he made the deed with the intent to hinder, delay, and defraud his creditors, and to defeat the lien of the notes, which were given for the purchase money. It is also shoAvn by the bill that the consideration for the land,as set forth in the deed from Wallace to York, was a grossly ■inadequate price for the property conveyed, and that the property was reasonably worth $1,500 or $2,000.

It seems clear, upon reason and authority that the averments of the bill place the grantee, York, in the attitude of a mere volunteer, so far as the rights of prior creditors of Wallace are concerned. 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 as in the conveyance under consideration. As was said in the case of Kinnebrew’s Distributees v. Kinnebrew’s Adm’rs, 35 Ala. 628, 637: “It is to he observed that a deed may be founded on some consideration, and yet still come within the technical definition of a voluntaiy instrument. * * * It is a necessary inference from the authorities that, when a valuable consideration is necessary to support a deed, the bare recital of a nominal pecuniary consideration will not he regarded as evidencing such valuable consideration. This doctrine is not at war with' the prin ciple that the smallest actual consideration of benefit to the promisor is sufficien to support a promise.” — Goodlett v. Hansel, 66 Ala. 151, 160. It thus appearing upon the face of the bill that complainant’s debt was made prior to the execution of the deed attacked, and was a valid outstanding debt against the grantor at the time the conveyance was made, and that the grantee in that conveyance is a mere volunteer, the bill is sufficient in its averments, so far as the objections made to it by the demurrer are concerned, and the chancellor properly overruled the demurrer. — Klein v. Miller, 97 Ala. 506, 11 South. 830.

The decree overruling the demurrer is affirmed.

Affirmed.

Tyson,. G. J., and Simpson and Mayfield, JJ., concur.