Court Opinion

ID: 6510342
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:47.937993+00
Date Added: 2024-06-11T15:54:51.524420
License: Public Domain

STONE, J.
The present record does not inform us positively that Solomon Robbins, Sr., was insolvent, or unable to pay all his debts, when he executed the conveyance to Mrs. Grayson, his daughter, which this suit seeks to override as fraudulent. His financial condition, at that time, was an important factor in the solution of the issue before the jury. Robbins himself testified that the debt to Temple, which was reduced to judgment, and under which the lands were sold and bought by plaintiffs — the title under which they claim in this case — was contracted before the war. The war commenced in 1861. The conveyance to Mrs. Grayson was in November, 1872, eleven years afterwards. Temple’s judgment was recovered in April, 1873 — five months after the conveyance, and probably after Temple’s suit had been instituted. The deed sets forth the consideration to be paid, as follows: “First, that the said Kate Grayson and her said husband are to pay, discharge and satisfy, on or before the same becomes due and payable, a certain debt due from me to my son, Solomon Robbins, Jr., * * particularly described in a mortgage deed executed by me to my son, to secure the payment thereof, which mortgage deed was executed by me about the fifth day of November, 1867, and is recorded in the office of the judge of probate of said county of Coosa, book m, page 110. Second, that said Kate Gray-son and her said husband are to pay to me, or my order, or for my use and benefit during my life, or to my legal representatives after my death, the balance remaining due of said sum of two thousand dollars, purchase money, after deducting [the sum] by them paid and expended for the satisfaction of said mortgage debt due to my said son Solomon Robbins, Jr., as above specified.” The third clause provided that Mrs. Grayson and her husband should go into immediate possession of the premises. “Fourth, that the said Kate Grayson and husband are to suffer me and my said wife, mother of said Kate, to reside with them as they are now doing, upon said premises, or elsewhere, as may be agreed upon by the parties, for and during the natural life of myself and my said wife, or either of us ; and the said Kate and her said husband are to reside with me and my said wife, giving to us their society, sympathy, and contributing from the proceeds of said lands whatever our necessities, comforts and conveniences may reasonably require, during the life of myself and of my said wife. Lastly, that the title to the above and hereby granted lands and premises, shall be subject to the terms and conditions hereinabove described and set forth.” It will be observed that this deed does not describe the debt to Solomon Robbins, Jr., its amount, or *483when and how payable. It refers to it simply as a debt particularly described in a certain mortgage. Still, by the terms of her title, Mrs. Grayson and her husband were bound to pay, discharge and satisfy that debt, on or before the same becomes due and payable ; and it was made a charge on the lands in her hands. The present suit attacked Mrs. Gray-son’s deed for fraud. That deed certainly contained some unusual stipulations, and an understanding of the entire contract was necessary to a proper decision of the question of fraud vél non. The debt and mortgage to Solomon Bobbins, Jr., were important elements in this inquiry, and the latter should have been allowed to go to the jury, as a material fact for their consideration. The Circuit Court erred in not allowing the mortgage to go to the jury.
The mortgage to Solomon Bobbins, Jr., as we have said, was executed in November, 1867, more than six years after the creation of the debt to Temple, according to the testimony of Solomon Bobbins, Sr. It is made to secure a note, described in the mortgage as bearing even date with the mortgage, due one day after date, for the sum of nine hundred and three dollars. The mortgage conveys the four hundred acres of land in controversy in this suit, and contains a power of sale in the following language: “ If I fail to pay or cause to be paid said note, with interest from date, then after my death and the death of my wife Mary Bobbins, and not until then, the said Solomon Bobbins, Jr., is hereby authorized to seize and take possession of the above described lands, either by himself or his agent, or his legal representative,” and after giving three weeks notice of time, place and terms of sale, to sell the lands for cash, and pay the mortgage debt with interest. As we have shown above, the payment of this debt according to the terms of the mortgage, was one of the stipulations of the contract, by which Mrs. Grayson purchased the lands. Beading the contract as shown by the two conveyances, no part of the purchase money was to be paid until after the death of both the elder Bobbins and his wife; while, under the mortgage, the mortgagee was not allowed to take possession of the property under the mortgage, or to collect his claim by sale, until those two events should happen. And under the conveyance to Mrs. Grayson, the grantor and his wife reserved the privilege of residing on said land, and were to receive from the proceeds of said lands whatever their necessities, comforts and conveniences might require, during the life of the grantor and of his wife. It is manifest that under these conveyances, Bobbins secured from the products of said land a support for himself and wife during the term of each of their *484lives, no matter how long they might severally live; and, under the deed to her, Mrs. Grayson secured to herself, during that uncertain and probably long time, the possession, use and enjoyment of the lands, subject to the charge above, without being compellable to pay any thing therefor. Is a conveyance of this kind valid against the claims of creditors ?
Good faith requires that debtors shall honestly apply their property — that which is in excess of what the law exempts to them — to the payment of their debts. Beyond the legal exemptions, human ingenuity can not devise a plan by which a debtor can secure to himself the right to property, or a valuable interest therein, which creditors can not reach and condemn. This is common law, independent of statutory enactments. — Rugely & Harrison v. Robinson, 10 Ala. 702.
In Stokes v. Jones, 18 Ala. 734, a conveyance of land was made by a father to his son, containing a clause of warranty, and the condition that the grantor and his wife, in consideration of the conveyance, were to live with and be supported by the grantees.” This court said, “ The second charge of the Circuit Court was, that if the deed of the father, under which the plaintiff claims, was fraudulent as to the creditors of the former, he could not stipulate in the deed for any benefit to himself. If it was intended to say that such a stipulation or reservation would make the deed void, it was right. A debtor has no right to make such a reservation at the expense of his creditors, and with intent to defraud them.” It will be observed that, in thus stating the principle, knowledge in the grantee of the grantor’s fraudulent intent, is not stated to be essential to the application of. the principle. In Smith’s Leading Cases, 7th ed., vol. 1, part 1, discussing the principles of Twyne’s case, and the numerous adjudications in the mother country and in this on the subject of fraudulent conveyances, it is asserted that one controlling reason why retention of possession by the grantor, contrary to the stipulations of the deed, is prima facie fraudulent, is the presumption it raises of secret trust, and benefit reserved, or secured to the grantor. See particularly pages 46, 48, 53. And speaking on this subject the court, in the great case of Curtis v. Leavitt, 15 N. Y. 9-132, say, it is the duty of a debtor to “ reserve nothing to himself, but give all to his creditors.” Bump on Fraud. Con. 2d ed. 208, speaking of the Stat. 3, Hen. 7, ch. 4, which in substance constitutes § 2120, Code of 1876, says, “It is not directed against trusts made with fraudulent intent, but against trusts themselves. There is not one word about intent, or object, or purpose, or excluding, injuring, or delaying creditors. The effect of the *485trust is not a subject for consideration. Its mere existence avoids the transfer, and destroys the title as against creditors existing or subsequent. A conveyance by the owner of property to another, in trust for himself, is in effect a conveyance to himself, and such a measure can never be necessary for any legal or honest purpose. He who, having the full title, desires to retain the control and use of his property, and yet transfers it to another, can, in the general course of human actions, have but one motive for that measure, and that motive must be to defeat or elude the claims of others. Hence, all conveyances to the use of the grantor, are fraudulent and null against creditors, and others having just claims upon the grantor, or upon the property conveyed. In all the refinements of uses and trusts, in the midst of multiplied distinctions between legal and equitable interests which have abounded in the progress of Anglican jurisprudence, this principle has never been doubted, and the mockery of a transfer by a debtor of his property, to be held for the use of the debtor, has never been allowed to defeat the rights or remedies of creditors.” See, also, same book, 39 and 46; Stokes v. Jones, 21 Ala. 731; Reynolds v. Welch, 47 Ala. 200; Wiley, Banks & Co. v. Knight, 27 Ala. 336; Ticknor v. Wiswall, 8 Ala. 305; Patterson v. Campbell, ib. 933; Montgomery v. Kirksey, 26 Ala. 172; Constantine v. Twelves, 29 Ala. 606; Reynolds v. Crook, 31 Ala. 634; King v. Kenan, 39 Ala. 63; Hall v. Heyden, 41 Ala. 242; Richards v. Hazzard, 1 S. & P. 139; Swift v. Fitzhugh, 9 Por. 39; Gazzam v. Poyntz, 4 Ala. 374; West v. Snodgrass, 17 Ala. 549; Cummings v. McCullough, 5 Ala. 324.
Section 2120 of the Code of 1876, and the statute of 3 Henry, 7, speak alone of goods, chattels and things in action. It is a common law doctrine, however, and is applicable alike to realty. There never was a time when a debtor could convey his property directly, or in secret trust, for his own benefit, or for the use of his family, and thereby defeat his creditors of their lawful demands. — Huggins v. Perrine, 30 Ala. 396.
In the present case, there is no secret trust. Both the mortgage to the son and the conveyance to the daughter, express on their face that they secure a valuable interest to the grantor. They are both fraudulent and void against the claim and title of appellants, if the debt on which the judgment was recovered was contracted before they were severally executed; and this, independent of any intent with which the conveyances were executed. There was, on this question, but a single inquiry for the jury, namely: Whether the debt, on which Temple recovered his judgment, was older than the conveyances? If it was, the law pronounces *486them null and void, so far as that claim is concerned ; and the jury should have been so instructed.
Reversed and remanded.