Court Opinion

ID: 3515062
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:26:14.919713+00
Date Added: 2024-06-11T14:05:43.839288
License: Public Domain

* Headnotes 1. Equity, 21 C.J., section 435; See under (1) 10 R.C.L., pp. 430-432; 2 R.C.L. Supp., p. 1014; 4 R.C.L. Supp. 666, 5 R.C.L. Supp. 555; 2. Fraudulent Conveyances, 27 C.J., section 119; 3. Fraudulent Conveyances, 27 C.J., section 676.
The Amite County Bank, appellee, filed its original and amended bill of complaint in the chancery court of *Page 883 
Wilkinson county against R.J. Ogden and others, appellants herein. The amended bill of complaint averred, in substance, that, on the 12th day of April, 1920, the appellant, R.J. Ogden, being indebted to the said bank in the sum of three thousand five hundred forty-seven dollars ad eighty cents, evidenced by a promissory note for said sum, payable one year after date, executed a deed of trust in favor of said bank to secure the payment of this indebtedness; that said deed of trust purported to cover three hundred acres of land owned by the appellant, R.J. Ogden, but that the land descriptions in said deed of trust were erroneous in several respects therein particularly set out; that the officers of the bank who made the loan and took the security were not familiar with appellant's land or the numbers thereof; that they relied entirely upon the appellant, Ogden, to furnish them the correct data and descriptions for the preparation of the deed of trust; that the said appellant furnished to the officers of the bank the descriptions of land that were actually written into the deed of trust; that the descriptions so furnished were, in part, erroneous and did not cover the lands which the appellant had offered as security for the loan, but described land that the appellant did not own.
The bill further charged that afterwards, by false and fraudulent representations, the appellant R.J. Ogden induced the bank to release from the operation of this deed of trust the most valuable tract of land covered thereby; that he represented that he had contracted to sell this tract of land, and that, if the same was released from this deed of trust, it would be sold and the proceeds immediately deposited in the bank to be credited on the note secured by the deed of trust; that the appellee bank having great confidence in the business integrity of the appellant, agreed to release and did release the said tract of land, but the appellant did not sell the land and apply the proceeds in reduction of his indebtedness, but, on the contrary, attempted to dispose of the same by a fraudulent *Page 884 
voluntary conveyance to his son, J. Carrol Ogden, one of the appellants herein.
The bill further charged that the appellant R.J. Ogden failed and refused to pay the taxes on the land conveyed under the deed of trust, and that the bank was forced to pay these taxes in order to protect its security; that on the day after the note matured the appellant R.J. Ogden filed for record in the office of the chancery clerk conveyances by which he undertook to convey to his wife his homestead and all the personal property owned by him of every kind and character, and to convey to his adult son, J. Carrol Ogden, and his three minor children, all the balance of the real estate owned by him; that all of these conveyances were without consideration, fictitious, and fraudulent; that they were made for the purpose of placing all his property beyond the reach of his creditors, and particularly for the purpose of hindering, delaying, and preventing the appellee bank from collecting its debt; that the said R.J. Ogden owned no other property whatever which could be subjected to execution or other process in the event the property described in the deed of trust failed to be sufficient to satisfy the indebtedness to the said bank; that, since the alleged fraudulent conveyances to his wife and children, the said R.J. Ogden had been making efforts to sell said land in a further fraudulent attempt to place it beyond the reach of his creditors.
The bill further averred that the lands covered by the deed of trust were wholly insufficient to pay the indebtedness to the bank; that on account of satisfactory business relations with the said R.J. Ogden, extending over a period of years, the officials of said bank accepted without question or investigation the security offered by him, relying more upon the integrity and financial worth of the borrower than upon the security offered, and charges that all the acts of the said R.J. Ogden in borrowing this money, executing a deed of trust on lands which he did not own, securing a release of the most valuable part of *Page 885 
the security, and the execution of these voluntary conveyances to his wife and children, were a part of a scheme to cheat and defraud the bank, and that these alleged voluntary conveyances to his wife and children were fraudulent and void and should be canceled.
The prayer of the bill was for proper process for the appellant R.J. Ogden and his wife and children, to whom these conveyances had been made, and that the deed of trust be reformed and corrected so as to correctly describe the lands intended to be conveyed thereby; that a lien be impressed upon the land for all taxes paid by the bank in protecting its security; that a commissioner be appointed to sell the land covered by the deed of trust as corrected; that the said conveyances to the wife and children of R.J. Ogden be declared fraudulent, except as to the exempt property, and that the same be canceled and set aside, and that the land described therein be subjected to the payment of any balance due upon complainant's debt after crediting thereon the proceeds of the sale of land under the deed of trust, and that personal decree be entered fixing the amount of the indebtedness to the bank, including principal, interest, taxes, and attorney's fees.
The defendants filed an answer, denying the fraud charged, and also filed special and general demurrers to the bill upon the grounds, among others, that there was no equity on the face of the bill, and that the bill of complaint is multifarious, and that at the time of the execution of the alleged fraudulent conveyances the debt of the defendant R.J. Ogden to the complainant bank was a secured debt. These demurrers were overruled, and the defendants answered the bill of complaint. After a full hearing on the bill, answer, and proof, the chancellor entered a decree, adjudging that the allegations of the bill of complaint as to fraud and fraudulent actions of the defendant R.J. Ogden were fully sustained by the evidence, and ordered that the descriptions of the lands embraced in the deed of trust be reformed and corrected; *Page 886 
granted a personal decree against R.J. Ogden for three thousand four hundred eighty-one dollars and twenty-one cents, the amount found to be due the bank by Ogden; ordered the lands covered by the deed of trust to be sold by a commissioner appointed for that purpose; and ordered that the jurisdiction of the court be retained on all parties to the suit and upon all property covered and described by the amended bill of complaint, and not adjudicated in the decree, for further determination and adjudication by that court as the justice and equity of the parties may require; and granting the defendants an appeal to this court without supersedeas.
Upon appeal the appellants seek a reversal solely upon the ground that the demurrer to the bill of complaint should have been sustained, the contention being first, that the bill of complaint is multifarious; second, that a creditor who has taken security for his debt cannot maintain a bill to set aside a fraudulent conveyance, although the security may be wholly inadequate to satisfy the indebtedness; and, third, that the bill of complaint does not charge that the debtor was insolvent.
We do not think the contention that the bill is multifarious is maintainable. The several issues covered by the bill arose out of the same transactions which it is charged formed a connected series of acts, all intended to defraud the complainant. The general purpose of the bill is the collection of the indebtedness due the complainant, and, while the bill seeks the reformation of the deed of trust and the sale of the land conveyed thereby, this was necessary to determine the extent of the deficiency, if any, in this security, to the payment of which the property conveyed to the other defendants might be subjected in the event the allegations of fraud were sustained. The several defendants claim different parcels of land under the separate conveyances which the bill seeks to cancel, but the gravamen of fraud in each conveyance is the same and equally applies to all of them. *Page 887 
Section 598, Code of 1906 (section 358, Hemingway's Code), provides that the uniting in one bill of several distinct and unconnected matters of equity against the same defendants shall not be an objection to the bill. In 10 R.C.L., p. 430, the doctrine is announced that:
"A bill is not necessarily rendered multifarious by reason of the fact that there may be united in it several causes of action. If all the different causes of action united in the bill grow out of the same transaction, and if all of the defendants are interested in the same rights, and the relief against each is of the same general character, the bill may be maintained. No bill is multifarious that presents a common point of litigation, the decision of which will affect the whole subject-matter, and will settle the rights of all the parties to the suit; and it is not indispensable that all the parties should have an interest in all the matters contained in the suit, but it is sufficient if each party has an interest in some material matters involved in the suit, and they are connected with the others."
Again, in 10 R.C.L., p. 432, it is said: "Fraud is a head under which the courts do and may well permit some laxity of practice in regard to the joining of separate causes of action. Accordingly, a bill may be filed against several persons relative to matters of the same nature forming a connected series of acts, all intended to defraud and injure the plaintiffs and in which all the defendants were more or less concerned, though not jointly in each act nor to the same degree. Where fraud permeates the whole transaction, it imparts to the suit a singleness of object and purpose. Great liberality as to the joining of different claims in one bill is likewise indulged in creditors' suits."
In the case of Delafield v. Anderson, 7 Smedes  M. 630, it was held that: "A bill to set aside a sale of land, under execution, making the several purchasers at the sale, though they bought different and distinct interests, and the plaintiffs in the execution, under which the sale *Page 888 
was made, all defendants, is not multifarious, on account of an improper joinder of parties."
In Waller v. Shannon, 53 Miss. 500, in overruling a demurrer to the bill, the court said: "It is not indispensable that all the parties should have an interest in all the matters contained in the suit; it will be sufficient if each party has an interest in some matters in the suit, and they are connected with the others."
Again, in the case of Butler, Administrator, v. Spann,27 Miss. 235, it was held: "The rule of multifariousness is held not to apply where the parties have a common interest touching the matter of the bill, although they claim under distinct titles and have independent interests; and it is the same where several matters are of the same nature as to the defendants, and of the same general right in the complainant.
"Where several plaintiffs claim under one title, and bring their suit against various defendants, who claim the same estate under distinct and separate sales of different parcels thereof to them separately, where the gravamen of fraud or wrong in the sales is the same and equally applies to all, the objection of multifariousness will not apply."
It has been repeatedly held by this court that it is impossible to lay down any universal rule as to what constitutes multifariousness and that the application of the rule depends upon the particular facts involved, and we think the matters charged in this bill of complaint are so connected as to constitute one series of transactions, all tending to establish the charge of fraud, and that the bill is not multifarious.
The next contention of the appellants is that the bill cannot be maintained because it shows that the creditor had taken security for its payment. A creditor who has taken some specific security for his debt is not by reason thereof cut off from his right to proceed against the property of the debtor for any deficiency, in the event the security is insufficient to discharge the debt. He has the *Page 889 
right to have the deficiency or balance satisfied out of any property of the debtor which is subject to execution, and, where such property is fraudulently conveyed for the specific purpose of hindering, delaying, and defeating the collection of such deficiency, the creditor can maintain a bill to set aside such fraudulent conveyance. Especially would this be true where the bill charges, as here, that by false and fraudulent representations the debtor secured a release from the lien of the most valuable part of the security, thereby practically destroying the security. In Bigelow on Fraudulent Conveyances (2d Ed.) p. 188, in discussing the right of lien creditors to maintain a bill to vacate fraudulent conveyances, it is said that:
"If, however, the property covered by the lien is not sufficient for the debt, then the lien creditor, in respect of the deficiency, clearly falls within the description of creditors and others."
We think this announces the correct rule, and that, upon this point, the action of the court below in overruling the demurrer was correct.
There is no merit in the contention that the bill of complaint does not allege that the defendant R.J. Ogden is insolvent. The bill alleges that he had fraudulently conveyed all the real and personal property, of every kind and character, owned by him, and that he had no property whatever subject to execution, which is a sufficient averment of insolvency to maintain the bill.
The decree of the court below will therefore be affirmed and the cause remanded.
Affirmed and remanded. *Page 890