Court Opinion

ID: 6516165
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:26:52.018348+00
Date Added: 2024-06-11T15:55:01.805108
License: Public Domain

COLEMA.N, 3.,
dissenting. — To properly understand the discussion, the facts of the case at bar should be stated. A judgment creditor of John S. Kennedy filed a bill against the debtor and his grantees to set aside a fraudulent conveyance of lands, and to subject the same to the satisfaction of the judgment. The grantor debtor and his grantees answered the bill, each denying the fraud. The grantor denied having or owning any interest in the lands conveyed, and the grantees asserted that that they 'were bona fide owners of the same. - There was no suggestion or claim of exemption or homestead interest by the debtor or the grantees in this litigation. The issues were fairly presented, and after final decree of condemnation and order of sale of the land the debtor filed his petition, praying for an allowance of two thous- and dollars of the purchase money as a homestead exemption, and his right to it, under the facts of the case is tire question for decision. The conclusion of my associate Justices; McClellan and Haralson, rests-upon the broad proposition as stated in their opinion “that when a debtor has conveyed to third persons lands including his homestead interest to hinder, delay and defraud his creditors, and such conveyance has been set aside and avoided at the suit of creditors, such debtor then has the same right to assert his homestead exemption against such creditors as he would have had, had the conveyance never been executed by him.” “The homestead right revives and is assertable only after a decree against the grantee avoiding the conveyance.” The propositions of law are fairly stated in the foregoing extracts from their opinion, and there can be no misunderstanding of the issue. My position is, first, the propositions are not universally sound; and, second, that the principles cannot be invoked in this case by the debtor. The opinion of my associates states that ‘ ‘the authorities are well nigh uniform in support of the propositions” and in confirmation of the statement a great many are cited. Having a sincere desire to agree with my associates, and to have the question settled upon just princi*201pies, without overturning others which are indispensable to the administration of justice, I have carefully examined each of the authorities cited, as well as many others, and my conclusion is, but few sustain any of the propositions, and but one the conclusion of my associates in all tilings. T state briefly the result of my own examination of the cases cited. How far I am correct, the inquirer must examine and verify for himself.
Freeman on Executions, § 138, states the proposition that fraudulent conveyances apply only to property subject to execution — a proposition not controverted.
The case of DeArman v. DeArman, 4 Ala. 521, decides that an agreement by a debtor as to the disposition of. property, not liable for his debts, is not fraudulent as to his creditors. It decides nothing more.
The case of Vaughan v. Thompson, 17 Ill. 78, holds that a sale or mortgage of property, exempt from levy, is not a fraud on the creditors of the vendor or mortgagor, and if levied upon the owner might maintain trespass. This case further holds that in an action for trespass by the debtor the defendant could show in defense of the action a fraudulent sale of the property. The first proposition does not support the contention, while the latter is in conflict with it.
In the case of Muller v. Inderreiden, 79 Ill. 382, the conveyance was by the husband to the wife. The court decreed that they (husband and wife) were entitled to the homestead, but in this case the claim of exemption was set up, before final decree. It will be observed also in this case, that the grantee, the wife, claimed the homestead, a very important fact as will be seen in the further discussion of the question.
The case of ÍAshy v. Terry, 6 Bush (Ky.) 515, decides no more than that a sale of an exempt homestead is not a fraud on creditors, a proposition no one denies or doubts. The case of Knevan v. Speaker, 11 Bush (Ky.) 1, was where the husband and wife conveyed to the son, and the son reconveyed to the wife. The wife claimed the exempt property under her conveyance. This authority directly supports my position, as will be seen hereafter.
The case of White v. Givens, 29 La. 571, merely decides, that where a debtor has fraudulently disposed of property which was liable to execution, that fact will *202not render his homestead, which is exempt, liable. In the case of the Succession of Cottingham, Ib. 669, the facts do not appear in the statement of the case, or in the opinion of the court, and a satisfactory understanding of the case cannot be had from a reading of the opinion. It does appear, however, that the claim of the widow was superior and prior to that of a mortgagee, and consequently to that of an attaching creditor. Some stress seems to be given to the fact that it was occupied as a homestead at the time of the death of the husband.
The case of Legro v. Lord, 10 Me. 161, has no application. It simply decides that the transfer of a personal privilege which is not leviable, cannot be fraudulent.
The case of Castle v. Palmer, 6 Allen (Mass.) 401, only decides that a conveyance of a homestead in which the wife does not join does not render it liable as a fraudulent conveyance. The conveyance was by the husband to the wife. She claimed and held it against the creditors of the husband. This she was entitled to do under every principle of law.
In the case of Vogler v. Montgomery, 54 Mo. 577, it appears that after judgment against him, Vogler conveyed the land to one Suess, who reconveyed to Vogler. The only question was whether the conveyance to Suess in law was an abandonment of the homestead. The facts, however, showed that Vogler had never surrendered possession or ceased to occupy it as a homestead. The title was reconveyed to him. There can be no doubt of his right to the homestead.
The case of The Bank v. Henderson, 4 Humph. 75, is not in point. No question of exemption arose in the case, and the grantor was not a party to the proceedings. The question arose on a contest between the creditors of a grantor and his grantee as to whether an equitable interest passed by the conveyance.
The case of Wood v. Chambers, 20 Texas 247, decides no more than a conveyance of the homestead is not a fraud on the creditors. The case of Cox v. Shropshire, 25 Texas 113, cannot be said to be an authority in point. The grantor was not a party to the cause. The question between the creditor and the grantee, was whether the homestead of the debtor had been conveyed in good faith. If so, the grantee was entitled to hold it against the creditor. On the other hand, if he held the prop*203erty for tlie grantor in fraud and collusion with him and there had been an abandonment by him, then the property was liable.
The case of Foster v. McGregor, 11 Vt. 595, decides no more than that a sale of property, which is exempt from levy, is not a fraud on creditors. Danforth v. Beattie, 43 Vt. 138, is not in point. The grantor was not a party and made no claim. The case decides that a mortgage of the homestead is not a fraud on a creditor, and that a purchaser at the foreclosure sale, acquired a valid title against the creditor of the mortgagor.
The four cases cited from Wisconsin, Bond v. Seymour, 1 Chandler 40 ; Dreutzer v. Bell, 11 Wis. 114; Pike v. Miles, 23 Wis. 164, and Murphy v. Crouch, 24 Wis. 365, only decide the general principle that a conveyance of the homestead is not a fraud on creditors. In the two latter cases, the conveyance was to the wife.
In the case of McFarland v. Goodman, 6’ Bissell, 111 (U. S. Cir. Ct.) the court declared that the grantor of the homestead reserved from the grant the light to retain possession and use of the homestead, and that under the agreement the grantor could enforce this right against the grantee in a court of equity. In the opinion the court affirmed the doctrine declared in Cox v. Wilder, 2 Dillon, which will be referred to hereafter. But the principio laid down in the case of Cox v. Wilder was not at all necessary to a decision of the case in Bissell, supra.
In Smythe on Exemptions and Homestead, § 555, the text does not support the proposition. The only principle stated is the general one, that a debtor may dispose of his exempt property and it will not be a fraud on his creditors. In the notes to sections 554, 555 of Smythe on Homestead and Exemptions, it is said that New York, Pennsylvania and Indiana hold contrary to the rule contended for by my associates, and to which list my associates add 18 Ill. 511, 54 N. H. 475, 29 Penn. St. 219, to which might be added 8 Lea (Tenn.) 389 and others, including, I think, Alabama.
In Bean v. Smith, 2 Mason 252, opinion by Story, Judge, as far as applicable, is an authority against the proposition in support of which it was cited. It holds that a fraudulent conveyance is good against the grantor. That bona fide creditors of the grantee, without notice, *204acquire a superior right to property fraudulently conveyed to him, over the creditors of the fraudulent grantor. It further holds that a subsequent conveyance by the fraudulent debtor carries nothing.
It will be seen that a vast array of the authorities either have no application, or else do not support the proposition. “The host of authorities” referred to, to quote from the opinion of my associates, which do not sustain them, to those which do sustain them, are in about the same proportion as were Falstaff’s “sixteen men in buckram suits,” to the real number present. I have not examined the decisions of all the states, but as far as investigated I find as many which lay down a different rule from that which I am combatting. Our duty is to ascertain which line of decisions rest upon the soundest principles of law. The cases from Grattan, Virginia, so largely quoted from, were decided by a divided court,.of three to. two, and my opinion is, the dissenting opinion of Judge Christian in 31 Grattan, 459, was not answered. The argument upon which these decisions rest are, as I understand, the opinion of the court in the case at bar, and as I understand from the opinions themselves, as follows :
‘ ‘That a fraudulent conveyance of the homestead does not constitute an abandonment of the homestead, and does not estop the grantor or his wife from claiming it as such.’ ’
“That the homestead privilege is created for the benefit of the wife and children, as well as for the husband and father, and therefore the former should not be prejudiced by the wrongful act of the latter.”
“That the conveyance not being void as to creditors, it stands as to them as though it had never been made.”
“That creditors can only enforce rights they could have enforced, if no such conveyance had been made.”
‘ ‘That as to the homestead it is a matter between the grantor 'and grantee in which the creditor has no concern.”
These are the reasons deduced by Mr. Thompson on Homesteads, §§ 405, 408, 412, and Mr. Waples, pp-531, 534, as stated in the opinion. Tho first two propositions hardly arise in the present case, although I am of opinion they were of controlling influence in the Mississippi cases cited by my associates, and perhaps *205others. It is conceded in the present case, that the debtor grantor could not claim the homestead against his grantees. In addition to these, the Virginia and North Carolina decisions say “that the controversy is between the creditors on the one hand, and the debtor and fraudulent alienee on the other.” “If the debtor has a valid claim to the homestead against the creditor, before the execution of the deed, how is the condition of the creditor improved ?’ ’ ‘ ‘The validity of the fraudulent conveyance between the parties, is no concern of the creditors.” That by having the fraudulent conveyance annulled, the title is restored to the defendant debtor, and he can claim it.” ‘That the doctrine of estoppel applies, and the creditor, after having the conveyance annulled, is estopped from denying the right of the debtor to his homestead.” The grounds which I have stated have been enlarged in some of the decisions, but an analysis of the authorities and the opinion of my associates, it is believed will show that I have fully and fairly stated them all. I might promise by stating, that with the single exception of the case of Sears v. Hanks, 14 Ohio St., 298, the proceedings in the cases cited by my associates were by a creditor against the fradulent debtor and his grantee, and that the defense was set up by plea or answer, and sustained bv proof, that the grantor had never surrendered possession, nor had he ceased to actually occupy and claim the homestead, and the principles stated were applied to this condition of the pleadings and proof. In these cases neither the grantor debtor nor his grantee denied or controverted the occupation and claim of the debtor. These cases presented both in the pleadings and proof, a far different state of affairs from the case at bar, and but remotely, if at all, support the conclusion of the court in the case before us. In the case at bar neither the debtor nor his grantees, by plea or answer, or suggestion of any kind as a defense to the creditor’s bill, claimed a homestead interest or other exemption in the property conveyed. On the contrary both denied that the grantor debtor owned any interest in the property. Furthermore there is neither wife nor children interested in this claim, and the doctrine upon which several of 'the authorities rest, “that the wife and children for whom the homestead interest was created, should not be *206prejudiced by the wrongful act of the father and husband,” has no force. In Cox v. Wilder, supra, Judge Dillon intimates that if only the fraudulent debtor was interested (which is the case at bar) , a different rule might apply.
But are the reasons given sound, and are they consistent with the settled decisions of this court, and elementary principles recognized by almost every court ? I contend that the following propositions of law are sound and well established, and that any rule which conflicts with their application, cannot be upheld: First, that a fraudulent conveyance is binding and valid between the parties to it, and that as to exempt property the grantee acquires a perfect title against the grantor and his creditors. Second, that in a proceeding by a judgment creditor to subject property which has been fraudulently conveyed, by a conveyance valid between the debtor and his grantee, the contest is not between the creditor on the one hand, and his debtor and his grantee on the other, but that the contest is between the creditor and the fraudulent grantee, and if the grantee fails to make a defense which he could or ought to have made, he is concluded by the decree against him. Third, that the annulment of a fraudulent conveyance, at the suit of a creditor, does not restore the debtor to any right, which he would not have had without such annulment. That the claim of exemption is not revived and assertable by the grantor on the cancellation of the fraudulent conveyance. Fourth, that the-doctrine of estoppel can have no operation in a contest of this character. Fifth, that no person without ah interest in the property, can defeat an execution or the enforcement of a decree, by showing that the property is not liable to the process or decree. Sixth, that every person who invokes the aid of a court of equity must have clean hands. Seventh, that a person entitled to a homestead or other exemption in a proceeding in rem, must interpose his claim before final decree of 'condemnation, or he will be held to have waived it.
In order to sustain the conclusion reached by my associates, that John S. Kennedy is entitled to two thous- and dollars of the purchase money exempted to him, each and all of the propositions which I have announced as correct law, it appears to me, must be over*207turned. I deem it unnecessary to cite a vast “host” of authorities in support of each proposition, but will content myself with a few, which are unquestioned.
First, that a fraudulent conveyance is valid and binding, between the parties, and that there is no difference in this respect, between a conveyance direct, and when the title is fraudulently taken in the name of a third person, I cite the following cases: 2 Brick. Dig., p. 16, §§ 45, 46; Greenwood v. Coleman, 34 Ala. 153; Wiley Banks A Co. v. Knight, 27 Ala,. 336; Walton, Admr. v. Bonham, 24 Ala. 514; Marler v. Marler, 6 Ala. 369; Kelley v. Karsner, 72 Ala. 106; King v. King, 61 Ala. 479; 3 Wait Act. & Def., 199.
That the grantee of exempt property acquires a good title against the grantor and his creditors, I cite the following : Wright v. Smith, 66 Ala. 516 ; Lehman, Durr & Co. v. Bryan, 67 Ala. 558 ; Alley v. Daniel, 75 Ala. 406 ; Clark v. Spencer, 75 Ala. 56; 3 Brick. Dig., pp. 491, 515, 516 ; Smith v. Kehr, 2 Dillon 50. These authorities fully sustain the first proposition.
My second proposition is, that the debtor has no interest-in a proceeding, by a judgment creditor, to reach property which has boon fraudulently conveyed by the debtor, and which is claimed by the grantee, and especially is this true where the grantor disclaimed owning any interest in the same. It would seem that neither argument nor authority is necessary to sustain-this proposition, but- it has been adjudicated by this court-, and the Supreme Court- of the United States. Lithe case of Coffey v. Norwood, 81 Ala. 512, it is held that “where the fraudulent debtor has conveyed to the grantee or donee his entire interest, legal and equitable, in the property sought to be subjected, the conveyance is binding on him his heirs and personal representatives, and is absolutely unassailable by him or them,’ ’ I italicise. The opinion proceeds as follows : “The debtor has no interest, legal or beneficial, either in the property sought to be subjected or in the litigation having reference to it except remotely and incidentally.” “The fraudulent donee can make any defense, that the debtor could have made;” and the decision expressly declares that the debtor is not a necessary party. It was expressly so decided again in the case of Staton v. Rising, 103 Ala. 454. In the case of Buffington v. Harney, 95 U. S. 103 *208it was expressly decided, that a fraudulent grantor is not a necessary party to a bill filed to reach assets claimed by a fraudulent grantee. This opinion further holds, that the conveyance is set aside, not absolutely, but only as to creditors. This is an important limitation of the effect of the decree, and is necessarily correct if the conveyance be valid between the fraudulent debtor and his grantee. To the same effect many authorities might bo cited. Seethe following: Wait on Fraudulent Conveyances, § 129; Taylor v. Webb, 54 Miss. 36; Campbell v. Jonas, 25 Minn. 155; Potter v Phillips, 44 Iowa 357.
We will consider the third and fifth propositions together, as they involve principles which in some respects bear upon each other. My third proposition is, that the cancellation of a fraudulent conveyance at the suit of a creditor does not restore to the debtor any right or interest in the property which he had parted with by his conveyance; and the fifth is, that no person not owning an interest in the property can defeat an execution or decree of a court subjecting it to the payment of the debt due his creditor. Is it necessary to cite authority or furnish argument to show, that when property fraudulently conveyed is sold to satisfy a judgment against the grantor, that the excess if any is paid to the grantee, and not to the grantor? That if a sheriff makes an unwarranted levy upon more property, which has been fraudulently conveyed, than is necessary, he is liable in trespass at the suit of the grantee and not of the fraudulent grantor? That in the case at bar where the property was claimed by the grantees or donees, and admitted to be theirs by the grantor, that if the proceeds of the sale exceed the judgment and cost, the ex-. cess must be paid to the grantees, and nothing can prevent their recovery of it from the officer making the sale? Where docs the register, by virtue of such a decree get authority to sell any more property, than just sufficient to pay the judgment or decree? Does the remainder nut sold, by virtue of the decree declaring the-conveyance fraudulent, pass back and reinvest in the debtor grantor, or does it remain in the grantee under the deed of conveyance? Suppose in the case at bar the grantee had pleaded in defense that a part of the property was exempt from levy, and sustained it by proof, *209would not the decreo of the court have been framed, so as to have preserved to t-lie grantee, not the grantor, the exemption? These conclusions follow necessarily from the rule clearly established, that as between the parties, the debtor grantor and his grantee or donee, the conveyance is valid, that as to exempt property, the grantee or donee acquires a perfect title against the creditors of the grantor or donor,, and that the grantor is not a necessary party to a suit by a creditor against a fraudulent grantee. When a party to a conveyance seeks the aid of a court to rescind it, whether because of fraud or otherwise, and it is done, the purpose and effect is to put the parties in statu quo, as far as can be done. A very different principle applies when a third party applies to set aside a conveyance, which is valid between the parties, but not binding on him because of the fraud of the parties to it. In such a case, the law does not interpose to relieve the parties to the conveyance. They are left in delicto, but the court subjects the property in the hands of the grantee to the injured creditor. The grantee holds it subject to the prior right of the creditor. The limitation on the extent and effect of a decree annulling a fraudulent conveyance, as stated in the case of Buffington v. Harney, 95 U. S., supra, is absolutely correct-, that the conveyance is set aside only as to the creditor. It is upon this principle that the decisions of this court award the excess to the grantee and not to the grantor. As to the grantor, the conveyance is “ unassailable.”
My fifth proposition is even more impregnable'. Bear in mind that the judgment creditor has a decree in force, ascertaining specifically that- the property is liable and subjecting it to the satisfaction of the judgment against the debtor, who was a party to the creditor’s bill, and who, after final decree condemning the land, for the first time makes known or sets up by original petition a claim of two thousand dollars of the purchase money as a homestead exemption. Under the pleadings and proof in the case, if there was a wrong done any one by the decree, it was a wrong to the grantees, who as between the grantor and themselves were the owners of the property. What- right has the grantor debtor to come in and redress the wrong done to his grantee? If the grantee had defended on the grounds that the property was ex*210empt, and, therefore, the conveyance to him was not fraudulent, and the lower court had erroneously ruled against his claim, the grantee alone could appeal and assign as error the ruling of the court. The grantor debtor would not be heard. What right has the debtor who has parted with all interest in the property to redress the wrong of his grantee? — Seisel v. Folmar, 108 Ala.. 491; Dent v. Smith, 15 Ala. 286.
It being settled by authority and upon principle that when a debtor sells and conveys his exempt property, by a conveyance valid against him, and thereby has placed it beyond his power, to recover it from his grantee, who sets up a claim to it, upon what principle can it be said, that if a creditor gets possession of the property, by a decree of a court against his grantee or otherwise, that the grantor thereby becomes reinvested with rights, and interest, superior to his creditor, as well as his grantee? My associates contend that the decree of the court against the grantee condemning the land, which, so far as the grantop is concerned, belongs to the grantee absolutely and unassailably, restores to the grantor an assertable right, which, without the decree ho would not have had. I must confess my inability to appreciate the argument. If the argument is sound, it will stand the test of hypothetical cases which may arise. Suppose an insolvent debtor, to defraud his cred-’ itors, sells property, which includes his exempt proper-; ty, to a purchaser, participating in the fraud, for cash-at a fair value, which is paid to the debtor. A judgment creditor of the vendor, files a bill against the fraudulent vendee alone, to subject, the property to his judgment. Under his purchase and deed of conveyance the vendee can make any defense the vendor could make. If, instead of setting up the defense that a portion of the purchased property included the exempt property of his vendor, the vendee,' bent on holding all the property, de- . fends solely on the ground, that his purchase was bona, fide, and upon this issue the case is determined against him, the conveyance declared void and fraudulent as to creditors, (notas to the vendor) and the entire property decreed to be sold. According to the proposition of my' associates, the decree of the court restores to the fraudulent debtor his former rights, his exemption ‘ ’revives and is assertable,” upon the grounds, that as to the ex*211empt property, it was not fraudulent, that the creditor, without the fraudulent conveyance, had no right to it, and by the conveyance the creditor’s interest could not' be improved. Tf this argument be sound, had Kennedy died after the rendition of the decree, his administrator, or distributee, would be entitled to claim and recover' the purchase money. My associates utterly ignore th.e indispensable rule in all judicial proceedings, that a plaintiff or petitioner who applies to a court for relief,, must show, not that his adversary has no right to the property, but that he, the petitioner, has an interest about to be injured. In the.supposed case, if the doctrine contended for prevails, fraiud would be doubly rewarded ; first, in receiving the purchase money from his vendee, and,'secondly, in receiving it again from the proceeds of the sale under the decree of the court. Such results cannot proceed from a sound rule. The fact that a creditor may have no right to subject property to his debt, certainly does not authorize another, who has no interest in the property, to claim it, in a court of law or equity.
It is said in the opinion of my associates, that I mis-, apprehend the fact, that the issue here is between the debtor and the creditor, and that the grantee is not present claiming anything, and that the creditor has obtained a decree condemning property, which, is clearly not liable. I have tried to make it clear, that the debtor has no right to raise this question, that he has parted with all interest in the property, by a conveyance confessed to be binding on him, and that the decree of the court declared the conveyance void “only” as to the creditor, not as to the debtor. As to him the conveyance remains as it was before. As to the statement that the. grantees are not present claiming anything, my reply is, they have no right to be heard. They have had their day in coux’t, and by final decree, they lost xxpon the issxxe tried. They caixnot re-try the case and “vex” the complainant on another issue, which, if it existed, should have been presented. And the same rule applies to the debtor. He was also a party and is eqxxally concluded by the decree as the grantees. My associates have failed tó show why it is, that the grantee is concluded by the final decree, and the grantor is not, who was also a party to the sixit. But this question coxxxes urxder another Ixead of the discussion,
*212Sound principles of law cannot conflict with each other. Confusion and. inconsistent deductions sometimes arise, by confounding questions, apparently similar, which are clearly distinguishable and controlled by ■ different principles. When one person’s'money is úsed in the purchase of land, and the title taken in another, no fraud being intended, the law raises a trust in favor of the owner of the money. In equity the property is regarded as the property of him who furnished the money, and a court of equity will decree him a title or subject it to the payment of his debts. There can be no doubt that the equitable owner may claim it as exempt, and that it is the subject of a hompstead interest. So if a grantee overreaches a grantor, and obtains a conveyance of lands from him including the homestead under such circumstances, that the grantor could enforce a rescission of the contract, I am of opinion, that an exemption could be claimed in such property. My proposition is, and I think it solves the whole dontroversy, that when a debtor has a right in or to property which he may enforce in a court of law or equity, or which will enable him to defend successfully against his grantee or adverse claimant, he has such an interest that it is subject to the claim of exemption; but when he has made such a disposition of property by his own act, whether with a good or vicious intent, as that he could not en~ foi’ce any right or claim against his grantee, or other adverse clamant, which is admitted to be the case here, then it is not the subject of exemption, and his condition cannot be bettered by a decree of a court, rightfully or wrongfully snbjecting it.to the payment of his debts. It is a question in which he is not interested uiider such conditions. If, in the case at bar, John S. Kennedy, the petitioner, by way of answer or cross bill to the. cred^ itor’s bill, had set up such a state of facts as to show that he had an interest in the property, which the court should protect and decree to him whether against his ■ creditor or grantee, upon proper proof the court ought to have granted him protection and relief, and this court would have so decreed. But when the petitioner denied having interest in the property, and he and his grantees asserted that it belonged to his grantees, and the grantees claimed it both against him and his creditor, and the court found, that John S, Kennedy had *213fraudulently conveyed this property, to defraud the judgment creditor, both the pleadings and the evidence showed conclusively that John S. Kennedy had made such a disposition of the property, that he had no right or interest in the same, which he could enforce or defend, and, consequently, he cannot be heard on this account as well as for the reason that he is concluded by that decree from setting up such a claim after its rendition. The opinion of mv associates expressly declares : “ Until the conveyance was set aside, he had■ no claim of exemption- which he could- make. * * * Until then tide title to the property was in the fraudulent grantees.” I have italicised tlie statement, because it emphasises and concedes as true, one of the premises of my argument.
I have discussed these questions at some length, because as to them my position is squarely against that of my associates, as applicable to the case before us. -Tn the case of Cox v. Wilder, 2 Dillon, in the Virginia cases, and in the Mississippi cases cited, the clairn of ex: eraption was brought forward by answer or cross-bill to the original bill, and not after final decree, as here, and my reading of these cases has led me to the conclusion that the courts in those cases would have held, on account of the construction of the homestead laws in each of those states, and the- facts proven in the cases, the interest of the wife and children in the homestead, the fact that the husband never ceased to occupy and claim the homestead as such, that the conveyance of the homestead was not valid and binding on the grantor in favor of their respective grantoos, but that the grantor could have successfully resisted the claim, of the grantee. Put upon these grounds, and those, cases are entirely in harmony' with me. T do not read these decisions as my' associates ’do, as holding that an absolute conveyance which is binding on the grantor, of property in which no one had an interest except the grantor, in which no interest is reserved, and against which he could not claim an interest or defend, is not in law, an abandonment of the homestead. This is the doctrine of my associates, and it drives them to the doctrine of “revivor” and “restoration” of a right which confessedly did not and could not exist without the decree of cancellation. In other words the decree which condemns the property to the satisfaction of the judgment, *214thereby exempts it from liability, and puts it beyond the reach of the decree. The decree defeats itself. if these decisions are placed upon the grounds occupied by ray associates, then I hold, for the reasons stated, that they are unsound. Many of the authorities cited were the cases where the conveyance was made by the husband to the wife, and the claim was allowed to the wife. The conveyance being good between the parties, and the property conveyed being exempt, of course the claim of the wife, under the conveyance, was valid.. No one controverts the proposition.
, My fourth proposition is that the doctrine of estoppel has no operation in a contest of this kind. An estoppel arises when one person has been induced ■ to act, or prevented from acting, or has -been induced to change his position, by reason of something said or done, or conduct by the person, or, proceeding from him, against whom it is invoked. This statement is broad enough to cover every phase of an estoppel. The debtor in the present case does not come within either of the conditions.
My sixth proposition is, that overy person who invokes the aid of a court of equity must have clean hands. In this case, we have the petitioner stating to the court in, substance as follows : I was in debt. I sold and conveyed my .property in such a way*- that I had no further interest in, it, and would not and could not have reclaimed it, and I did this for the jrarpose of defrauding my creditors, and in the litigation ,1 have aided my grantees to make the fraud successful, but my creditors have succeeded in exyiosing my fraud, and have obtained a decree subjecting the property to the xoaymaent of .my debts. No wife or children are interested. I ask, therefore, the court to give the property back to me. That is petitioners case, and I leave this proposition without further comment.
Some Alabatna decisions have been cited by ury associates, as supporting their contention; and I-will consider them before concluding my .seventh and last proposition. .The first of these is Smith’s Executor v. Cockrell, 66 Ala., 64. Courts are not bound by all that may, bp. said by way of argument and illustration in an opinion, but only by the conclusion of law' upon the facts of-, tile case raised by the record. The facts of the case of Smith v. Cockrell, supra, show that one Robert Johnson, *215to defraud Ms creditors, had the title to certain lands, which he paid for, placed in his wife. Johnson died. Complainant, a creditor of Johnson, filed his bill and sought to subject the land to the payment of his claim. The wife claimed the lands under the conveyance to her, and also claimed the homestead exemption of her deceased husband in the land. The whole question we have been considering was disposed of in a brief paragraph on page 76, as follows: “It is objected that the titlo of this land being in Mrs.' Johnson, no homestead exemption can bo claimed in it for the family. This fact would not preclude the claim if it be otherwise allowable. In such cases equity treats the .conveyance as having been made to the husband, and protects the family in any lawful claim of exemption.” The pleadings and facts present the'case of Smith v. Cockrell in a rathor singular condition. Mrs. .Johnson, the grantee, claimed a homestead exemption of the value of $1,700 in her husband’s estate, and had commissioners appointed by the probate court, and the homestead to this extent set apart to her and her children, This proceeding on her part was at variance with the right claimed under the deed of conveyance to her, and may have been regarded by the court as a waiver of any claim under the deed, and a recognition by her that she held the title in trust for Robert Johnson, and not against him. This view would justify the statement “that in such cases equity treats the conveyance as having been made to the husband.” An equitable interest in land which may be enforced by the owner, is a proper subject for a homestead claim by him, and in equity will' be regarded as his property. The widow and minor child may assert a homestead claim to any property, which would have been available to the husband for such a purpose, but to no other. The claim of exemption was made by the fraudulent grantee, Mrs. Johnson, and not by her grantor, as in the case at bar, and under the rules we have laid down the conveyance of exempt property being valid between the parties, the grantee was clearly entitled to it. The conclusion of. the court was right in that case, whether the reason assigned was the correct one or not.
The next case cited from the reports of this State and relied upon is that, of Fellows v. Lewis, 65 Ala., 343. A *216reference to the facts and opinion shows that one Grey conveyed his .lands including his homestead to Mrs. Lewis. The conveyance was attacked as fraudulent by complainant Fellows, a creditor of Grey. Mrs. Lewis, the grantee, claimed the homestead interest. Although it-was held that the conveyance was fraudulent, the principle was distinctly declared that the conveyance of the homestead was not a fraud on the creditor, and that Mrs. Lewis was entitled under her deed of conveyance to whatever interest was exempt from legal process. It appeared in this case that Grey left no widow or minor child, and the court held that after the death of Grey, the exemption ceased, and the property was subject to his debts. This was all that the court was required to decide so far as the question before us is concerned, and the conclusion is in exact accord, with that held by us ; that is, that the conveyance of the homestead is .valid between the parties, and the grantee acquires a title superior to the creditor of the grantor. There were some propositions stated in the opinion not raised by the record, and which are not binding as a precedent.
The next case cited is that of Humes v. Scruggs, 64 Ala., 40. In this case Mrs. Scruggs claimed dower in certain lands which her husband fraudulently conveyed to her, and which conveyance had been set aside at the instance of a creditor of her husband. The question was as to the effect of the cancellation of the husband’s deed upon the dower interest in the land. It was insisted that the dower became merged in the greater estate conveyed to her by her husband, and that upon the annulment of'that deed, the dower interest was annulled also. This contention was held to be unsound. The dower .interest was not created or vested in the wife by her husband’s deed. It existed independent of it. The cancellation of the deed of the husband set aside only that which was conveyed by the deed. The effect of the decree did not reach further than the deed itself. When the deed of the husband was removed or annulled, the dower remained in the wife, as it was independent of the deed. The case is not in point, and but for certain dicta in the opinion, I presume the case would not have been cited.
The long quotation from the case of Richardson v. Wyman, 62 Me., 280, simply shows that dower was not *217merged by the deed of the husband to the wife, the court saying, “there can be no merger where the estates are successive, not concurrent, nor where the greater estate is void and has been avoided the gist of the opinion being that the avoidance of the deed did not divest or destroy the dower.
Í think my associates dispose of the case of Bolling v. Jones, 67 Ala. 508, in rather a summary manner. In their comments on Bolling v. Jones, they seem to overlook the fact that in Smith v. Cockrell, 66 Ala., supra, the conveyance was not set aside until after the death of the husband, just as was done in the case of Bolling v. Jones. It is clear from an examination of the two cases, as well as many to -which reference lias already been made, that Mrs. .Johnson was entitled to the homestead under her deed of conveyance, and we have no doubt that if Jones, the husband, had conveyed to his wife, she would have held the homestead against his creditors. The cases of Bolling v. Jones and Smith v. Cockrell, cannot be reconciled upon the theory of my associates, but are not inconsistent, when put upon the grounds for which I contend. En tlie case of Bolling v. Jones, the very question under consideration was involved and necessarily decided as to the right of the widow, to claim a- homestead exemption in Lands, which had been fraudulently mortgaged by her husband in his lifetime. The court, Briokell, O. J., delivering the opinion, laid down the rule, “that a homestead was not given to the widow in lands, the husband had alienated in his life, but only in lands of which he died seized and possessed, having an estate therein of-which his personal representative, under an order or decree of the probate court, could make sale for the payment of debts.” “The mortgage,” says the court, “though void at the instance of pre-existing creditors, is valid as between the parties, their heirs, personal representatives, and privies in estato. There remained in the mortgagor at the time of his death no more than the equity of redemption in the premises. * * * The equity of redemption was also an .estate in which the widow could claim a homestead exemption.” The mortgage was set aside at the suit of a creditor as fraudulent, and the land condemned to be sold. The widow claimed $500 of the proceeds of this sale as her homestead exemption. The court held she was not en*218titled to it, for the reason stated, but held she was entitled tcra'liomestead claim out of the equity of redemption which had been previously sold by the administrator, and this upon the grounds, that the probate court h?id jurisdiction to order the sale of the equity of redemption for the payment of debts ; in other words that tho equity of redemption was an estate in the husband at the time of his death, but that the land which lie had fraudulently aliened was not. The case presents a clear decision squarely upon the point, and is conclusive' against thci doctrine, that the Cancellation of the fraudulent conveyance, restored the grantor to his former' rights. Judge Stone rendered a dissenting opinion upon the point, and cited the case of Fellows v. Lewis, 65 Ala. 343, which we have considered. The case of Bolling v. Jones is irreconcilable with the conclusion of the court, and tho principles upon which it rests in tho case at bar. This is clearly shown by the facts of the case and the’ decision and' was certainly so understood by Judge Stone. If the cancellation of'the mortgage as fraudulent had the effect to instore the mortgagor to his homestead exemption, it would seem that the widow would succeed to this right.
In the case of Minor v. Wilson, 58 Federal Reporter, 616, the precise question arose, and it was there held,' (JPardoe', J., delivering the opinion) “that a decree declaring a deed made by' an insolvent debtor and his wife void as against a' judgment creditor, doe's not revest title in the grantor, so as to enable him, or his family to establish a homestead therein to the prejudice of the creditor’s claim.” Althbugh the opinion refers to the' statute of Georgia, the reasoning and principle declared by the court, in reaching the conclusion are precisely those held in the former opinion rendered by this court in this case and in this opinion. I do not think it improper to state here a fact known to all who were members of the court at the time, that the late Chief Justice Stone, who delivered the opinion in the case of- Fellows v. Lewis, supra, and quoted at length by my associates as expressive of .his' views, and also the dissenting opinion in Bolling v. Jones, supra, in the case now before' us, fully concurred in the views and conclusions expressed in the opinion delivered in this case which declared, for the reasons stated, that the petitioner was *219not entitled to a. homestead exemption. We may not know what his conclusion would he on the application for a rehearing, hut his latest expression coincided witli the writer.
My seventh and last proposition is, conceding that John R. Kennedy, pr his grantees, might at one time have interposed a claim of exemption, by neglecting or refusing to do so, until final decree of condemnation, the right to do so was waived and forever lost. -On this proposition I will state the position of my associates in their own language. Say thoy : “It may be admitted' that in a direct proceeding in equity against one who is’ the owner of lands, to condemn them to sale, in which he has a right of homestead exemption, and who ih making answer sets up no claim to such exemption, and allows thorn to be condemned to sale for the payment of the decree rendered against him, and they are sold thereunder, he will be held to have waived hi's right to claim," and would not he heard afterwards to complain.” T have italicised the words ‘ ‘and they are sold thereunder,”' for that phrase marks the difference betwoonus. Strike out the words, “and they are sold thereunder,” and it loaves the proposition as I contend to be the correct and-sound one, and precisely applicable to the case of .John S. Kennedy. He was a party defendant, in a' direct proceeding in a court of equity to condemn the lands,’ and he set up no claim to exemption, and allowed the lands to be, condemned for the payment of the' decree. The issue between us is whether in such a proceedings he must make his claim, before or after final decree. I have come across but one decision in all my investiga-” tion which, in my opinion, bears out my associates oil' this point, and that is the case in 14 Ohio State, 298, ’ supra. On this proposition my associates repudiate Mr. Thompson on Homestead, on whom they so much rely upon in the other. He says in sections 715, 716, 720,-“Ro long as the judgment remains in force, it is in itself evidence of the right of the plaintiff to the thing’ad-” judged, and gives him a right to process to execute the judgment, it is not necessary to the conclusiveness of’ the former judgment that issue should have been taken’ upon the precise point -which it is proposed to 'controvert in tin1, collateral action. Tt is sufficient if that point” was essential to the former judgment. There is nothing' *220in, the nature of the homestead right to exempt it from the. operation'-of this general principle.” “The purchaser brought,' ?‡0 recover possession, an action of trespass to try title. The defendants, A and B, pleaded that the. land was, at the time of the execution of the deed which had been declared a mortgage, the separate property and homestead of B. This defense was held bad. on de-. ipurrerj the court saying: “The judgment which the answer proposed to impeach, conclusively settled that the lot upon which it adjudicated a foreclosure of the mortgage‘Was not within the homestead exemption at the time of its rendition. That question, therefore, it was.not competent for the defendant to bring again into-litigation in this action, unless'it had been proposed to impeach that judgment on the ground of fraud, which is not averred or pretended in respect to the'judgment.” “This,” sfjys the Illinois court, “is the extent to .which-the exception has been carried ; and, when- a person not. under disability is sued, and the homestead is involved, it will be affected by any neglect'to- assert it, precisely as any other right.” • See, also, section .726. .
.In Cassell v. Williams, 12 Ill. 399, it is said: “If a party fraudulently transfer his property for the purpose of avoiding the payment of his debts, or even sell it .for a valuable consideration,.after it has become subject to the lien of an execution against him, he cannot after-wards claim the property as his, and recover from the officer selling it, three times its value, upon the ground that it was exempt from execution against him.”
In Wait on Fraudulent Conveyances, section 129, .it,is said: “The debtor could not gain or lose, whichever way it .ipight be decided.” In Potter v. Phillips, ,tli.e court said that though the debtor was a proper party, it did not see why he was to be regarded as a necessary party; whether the conveyances were fraudulent, o.r in good faith the property irrevocably passed beyond his control. He could be prejudiced in no way, in a legal sense, by a determination which subjected the property to .the payment of his debts. So it was decided in Minnesota, that where a creditor sold land which the debtor had fraudulently alienated,' the fraudulent gram-tee might bring an action against the purchaser to determine his title without bringing in the fraudulent grantor. It is remarked in some of the cases that the frau*221dulont grantor should bo joined because it is his conduct that is t.o be investigated. The Supreme Court of Mississippi, however, observe that the object of the proceeding is to roach property, not character. In truth the proceeding is inrem, and while the complainant may, if he chooses so to do, join as defendants all who are connected with the property, or the transactions to be investigated, he is only compelled to join those in whom the legal title vests, or those who have a beneficial interest to be affected. Cases are cited in consonance with this reasoning.” See Taylor Webb, 54 Miss. 36.
In the case of McFarland v. Goodman,, 6 Bissell 111, one of the cases relied upon by my associates, it is expressly declared “that if the grantors had been a party to the suit to set aside the conveyance, and had not set up the claim of homestead exemption they would have been concluded by the decree of sale, and could not have set it up afterwards.”
Our own reports abound with decisions, which bear on this question, and in mv opinion ought to be conclusive of it, none of which are noticed by my associates. In the case of Stanley v. Ehrman, 83 Ala. 215, the appellee sought to condemn the lands of the wife for a debt due for articles purchased for the comfort and support of the family. After the judgment of condemnation and order of sale of the land, but before the sale, the claim of homestead exemption was interposed. The court held that, the claim was waived. Says the court: “Had a valid claim of homestead exemption been made in the suit during the progress, it would have beén sufficient, to defeat the order of sale, but if not made until after the order of sale, it will be held to have been waived.” There are many decisions where lands havé been levied upon by a constable, for want of personal property, and application made to the circuit court for an-order of sale, in which it was held that unless the' exemption was claimed, before the order of .sale was entered, the claim came too late — Toenes v. Moog, 78 Ala. 558; Randolph v. Little, 62 Ala. 396; Sherry v. Brown, 66 Ala. 51. The decisions in our State which hold that a claim of exemptions may be made before sale, refer to sales under executions which are to. be levied generally on the estate of the debtor, and provision is made for such claims by the statute before sale, *222btrf there is no statute, nor has there heretofore boon a rulo, in this .State,.which permits the claim to bo made after decree-of.-condemnation in a proceeding to roach and condemn specific property, or any other,proceeding in the nature of a proceeding in rem. A claim of exemption, which does not exist when a creditor’s bill is' filed cannot be acquired afterwards to defeat the creditor. If he cannot claim it. then, he cannot claim it under a subsequently acquired right. This is universal law. But the foundation of all these principles .is the extent and conclusiveness of a decree upon the parties to. the suit. As was said in Tankersly v. Pettus, 71 Ala. 179, Brickell, C. J. : “No principle of law is better settled than that the judgment of a court .of competent jurisdiction, rendered on the merits, as between ' the partios, -is final and conclusive of the matter in control vorsy.. The principle applies alike to the decrees of the court of chancery, and the judgments of the courts of law. * * ,* The enquiry is, not what the, parties actually litigated, but what they might and ought to have-litigated in the former suit. * * * A judgment is conclusive of the entire subject matter of controversy— of all that properly belongs to it — of all that might and ought to have been litigated and decided.” .1 attach no' importance to the argument th.at Jno. S. Kennedy could not in the same answer ‘ ‘in one breath affirm the validity of his conveyance and deny it.” The bill sought- to condemn the lands. The land was the subject matter and the issue was whether they had been fraudulently conveyed, and whether they were liable or not. The debtor and his grantees could have answered in defense that a portion embraced exempt property, and as to such the conveyance was not fraudulent. It was a fact which-could and ought, to have been litigated and was within the issue made by the bill. . As was said in the case of. Tankersley, supra, p. 186 : “For the bar of a decree, if litigation is quit-ed, and parties are not twice vexed for the same cause, must extend to all facts which are necessarily involved in the issue.” .
The Chief Justice Brickell and Associate Justice Head, ■ having been of counsel, do -not- sit. .1 regret that the questions involved must be determined by less than a majority of the whole court.. It is my opinion, after ■ careful consideration, that, the petitioner is not .entitled *223to claim an exemption, and Ms application for a rehearing should be denied. My associates have reached a different conclusion, which controls the determination, of the case. It results from their opinion that the application for a rehearing is granted, the cause is reversed and remanded, that the petition for exemption may be disposed of in accordance with the opinion of the court.
Reversed and remanded.