Court Opinion

ID: 6518838
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:29:12.91544+00
Date Added: 2024-06-11T15:55:05.825125
License: Public Domain

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 *398to 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 *399statute 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 *400attained, 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 pos*401session. 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 *402such 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 *403title 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.*404ceding 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 *405bill 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 *406idea 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, *407It 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. .