Court Opinion

ID: 6511623
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:22:53.169089+00
Date Added: 2024-06-11T15:54:53.862927
License: Public Domain

BRICKELL, C. J.
— It is an incident of the “ absolute power which a man possesses over his own property, that he may make any disposition of it in which he does not interfere with the existing rights of others, and such disposition, if it be fair and real, will be valid. The limitations on this power are those only which are prescribed by law.” — Sexton v. Wheaton, 8 Wheat. 229. The statute of frauds avoids gifts or convej'ances only as to creditors or purchasers — the only persons whose rights are interfered with, and who can from them sustain legal injury. Between the parties and their privies, they are valid, and have the same operation and effect, as if they were untainted with a covinous intent, and founded on an adequate valuable consideration. Strangers have no right or interest in questioning, and are not permitted to impeach them. The primary fact, of consequence, when a party claiming to be a creditor avers a gift or conveyance to be in fraud of his rights, is the existence of a debt, to the payment of which the property conveyed could be subjected, if the gift or conveyance did not stand in the way, obstructing legal remedies. The parties claiming under the gift or conveyance may dispute the existence of the debt, may require it to be proved, and may prefer against it any defense, not merely personal, which the debtor could have preferred in an independent suit upon it. — Halfman v. Ellison, 51 Ala. 543; Pickett v. Pipkin, 64 Ala. 520.
While, as owner, it is an incident of his power to make such dispositions of his property as he may choose, if the limitations the law imposes on the power are not offended, so in the creation of debts, in'establishing between himself and others the relation of debtor and creditor, the debtor is accountable to no one unless he acts mala fide. — Candee v. Lord, 2 Comst. 269. Therefore, a judgment against the donor, or grantor, whether rendered prior, or subsequent to the gift or conveyance, is competent evidence of the debt, of the fact that the party in whose *293favor it was rendered, stands- in a relation to be injured and affected by the gift or conveyance. When rendered by a court of competent jurisdiction, in the regular course of judicial proceedings, in the absence of fraud or collusion, it is conclusive, evidence of a debt existing at the time of its rendition. — Dubose v. Young, 14 Ala. 139; Snodgrass v. Br. Bank Decatur, 25 Ala. 161; Troy v. Smith, 33 Ala. 469. It is not evidence of an indebtedness existing at any time anterior to its rendition ; and if the conveyance is impeached as merely voluntary, as wanting only in a valuable consideration, if the time of rendition is subsequent to the conveyance, there must be other evidence than the judgment affords to show the existence of the debt when the conveyance was made. But if, as in the present case, the gift or conveyance is assailed'as tainted with actual fraud, as having been made with the intent to hinder, delay, or defraud existing creditors, it is void, not only as to such creditors, but as to subsequent creditors; and the judgment, of itself, establishes the right 'of the creditor to impeach t'he gift or conveyance. — Elliott v. Horn, 10 Ala. 348; Thomas v. DeGraffenreid, 17 Ala. 611; Foote v. Gobb, 18 Ala. 585; Huggins v. Perrine, 30 Ala. 396.
The donee or grantee may contest the validity of the judgment — he is not a party or a privy to it. The want of jurisdiction in the court to render it; the want of a debt of legal obligation, or of any real cause of action to support it;’ that it is the result of fraud and collusion between the parties to it, may be shown. But irregularities in the course of the proceedings can not be drawn in question collaterally, and can not be inquired into ; nor can any errors which the debtor has waived, or which could be corrected only by an appeal or writ of error to á superior tribunal, be taken advantage of, or made available. Pickett v. Pipkin, supra.
The action at law against the mortgagor, it may be, could have been successfully defended upon the ground that the plaintiffs therein had not, as they alleged, the beneficial ownership.in the demands upon which it was founded. The defense could have been made only by verified plea, and if in that form it was not interposed, it was waived. The justness of the debts or demands is now fully proved, and all that can be said is, that parties, not having in them a sufficient legal or equitable interest to maintain an action at law, were suffered to proceed to judgment. It is now insisted that the mortgagee ought not to be concluded by the laches of the mortgagor in making defense against the suit at law. We think otherwise, in view of the particular facts of the ease. It is apparent that the commencement of the suit at law, and its prosecution to judgment in the name of the stockholders of the company, as the benefi*294cial owners of the demands upon which it was founded, instead of the name of the company to whom they really belonged, was an error or inadvertence. The suit] was commenced and prosecuted with the consent and by the acquiescence of the company now claiming the judgments as its property. There was no fraud or collusion, or want of good faith. The. plaintiffs in the judgments, in this state of facts, hold them as mere trustees of the company, and there is no opportunity for vexing the debtor, or those claiming under him with double litigation, or subjecting them to double liability for the same cause. The case would be different, if the mortgagor had, subsequently to the mortgage, submitted to a judgment, not founded on a real debt, or a just cause of action; or if he had suffered a judgment rendered against him on a real debt, at the suit of parties having no interest in it, and not acting with the consent o'f. the creditor having the right and interest.
The judgments have merged the simple contracts on which they are founded, and the right and interest in them which the appellee asserts, are strictly and purely equitable. The legal title to the judgments resides in the plaintiffs in whose favor they were rendered, who may exercise it not only to the prejudice of the appellee, but to the injury of the mortgagor and mortgagee, driving one or the other party to the circuitous process of other suits for the purposes of protection. A court of equity requires the person having the legal title to the subject-matter of suit to be made a party, either as plaintiff or defendant, though he may not have a beneficial interest, so that the legal title may be bound by the decree. — Story’s Eq. Pl. § 153 ; Plowman v. Riddle, 14 Ala. 169. When a bill is brought by the assignee, or other equitable holder of a judgment, to-obtain satisfaction through a decree of the court, the assignor, or the party having the legal title is a necessary party, in whose absence a decree will not be rendered. — Cathcart v. Lewis, 1 Vesey, jr., 463.
It is the settled rule, that when a suit in equity can not be disposed of properly on the merits, without the presence of absent parties, objection may be made at the hearing, or on error; and in the absence of an objection, it may be taken by the court eva onero motu. — Goodman v. Benham, 16 Ala. 625; McMaken v. McMaken, 18 Ala. 576; Woodward v. Wood, 19 Ala. 213; Proul v. Hoge, 57 Ala. 28; Dooley v. Villalonga, 61 Ala. 129.
Originally, the plaintiffs in the judgment were made parties complainant. A demurrer was interposed, founded on the hypothesis, that the fair intendment from the bill was, that they were joined merely because they were the stockholders of the company. That may have been, and .was, perhaps, the idea of *295the pleader in framing the bill, and if they had borne no other relation to the subject-matter of the suit than that of stockholders, the bill was obnoxious to demurrer. The appellee submitted to the demurrer, and amended the bill by striking out the plaintiffs as parties. If there had been a clear and orderly statement of the facts, showing there was a necessity for their presence as parties, because in them resided the legal title to the judgments at law, and that between them and the appellees there was no‘ conflict of interest, the demurrer would have been frivolous. However that may be, it would violate the policy of the court, if a decree were sustained which can not be safely obeyed, because of the absence of parties whose presence is necessary to quiet the litigation. We are constrained upon this ground to reverse the decree of the chancellor and to remand the cause. We forbear the expression of an opinion upon the merits of the controversy, as the case may hereafter be presented upon a different state of facts.