Costillo v. Thompson , 9 Ala. 937 ( 1846 )

OSMOND, J.

There can be no doubt that the court erred in its charge to the jury, that if they believed the evidence, they must find for the plaintiff. The evidence referred to by the court, was the testimony relating to the conduct of Costillo, at the execution sale, when he became the purchaser of the land in controversy — which was, causing the trust deed from Keho, to him, and his deed from the sheriff for the land when sold for the taxes, to be read, and informing the persons assembled at the sale, that he claimed the land, and if they purchased it, they would buy a law suit. Whether this conduct of Costillo was fraudulent or not, was a question which the jury alone could determine. It certainly was not improper to give notice of the existence of these deeds, and could only become so, by being done with a fraudulent intention. This intent the court could not of its own mere motion, determine as matter of law ; it was peculiarly a quesr tion of fact to be left to the jury.

It is insisted the court did not err, because the deed to Costillo was void as against existing creditors: that the proof shows, that the lessor of the plaintiff, claimed under a judgment founded on a debt of a creditor of Keho, created antecedent to the execution of the deed, whilst the judgment of Emanuel, under which the defendant deduced his title, though older than that under which the lessee of the plaintiffs claimed, was not shown to have been founded on a debt existing, when the deed from Keho to Costillo was made, and that therefore the court was justified in telling the jury the plaintiff was entitled to recover.

The objection to this argument is, that the question as now presented, was not, so far as we can judge from the record, made in the court below. The whole controversy appears to have been upon the fraud supposed to have been committed by Costillo, in causing his deeds to be read at the sale, and it was in answer -to a charge prayed for -by the defendant, that if the fraud, as alledged, really existed, -the plaintiff was not the proper person -to take advantage of it, that the court informed the jury they must find for the plaintiff. If the question now made, had been distinctly stated, it would in all probability have appeared from the record itself, that the judgment of Emanuel was also founded upon a debt, existing when the deed to Costillo was made ; and having a prior lien, would be entitled to priority. It is a sufficient answer to the argument, that this point was not made in the court below, and cannot therefore be considered here. As, however, the cause has been argued here, as to the effect of the deed upon the existing creditors of Keho, and also upon the effect of the fraudulent conduct of a purchaser at sheriff ’s sale, upon the sheriff’s deed; and as these questions must arise upon another trial of this cause, we will now proceed to their consideration.

The deed from Keho, to Costillo, was made the 4th April, 1840, and conveys the premises in dispute, and all the personal property of Keho, in fee, to Costillo, in trust, for the use and benefit of the wife, and child of Keho, and such other children, as may be born of the marriage : and secures to the wife the possession, and enjoyment of the property, for .the maintenance and support of the'family, and that the same shall not be subject to the debts of the grantor ; and upon the death of the wife, the husband to be a tenant in common with the children, with the right of survivorship. The only consideration expressed in the deed, is the existing marriage.

There can be no doubt that this deed is void as to the existing creditors of Keho. Not being made upon a valuable consideration, it is within the 2d section of the statute of frauds. [Moore v. Spence, 6 Ala. Rep. 506, and cases there cited.]

The more difficult question remains to be considered. Conceding the acts imputed to Costillo, to have been done with the intent, that he might thereby be enabled to purchase the land, at a reduced price, is it such a fraud as will vitiate the deed in a court of law ?

Fraud is doubtless cognizable, both at law and in equity, and it is equally true as a general proposition, that fraud vitiates the most solemn acts into which it enters. These general propositions are unquestionable, but they must be considered in connection with others equally well settled. Although the law abhors fraud, it also exacts justice between man and man, and will not permit one wrong, to justify another. When fraud enters into the execution of a deed, as if it be falsely read to the party executing it, or be obtained from the party, when from intoxication he is unconscious of his acts, in these and the like cases, the deed is wholly void, and must be so declared, by every court before whom it is attempted to be enforced. When the instrument itself, through which the party deduces his title is not a nullity, a court of law will not go beyond the deed, and investigate the conduct of the parties to it, anterior to its execution, to see whether the deed is not impeachable. It will not do this, because from its constitution, it can take no middle course, but must give effect to the deed, or declare it entirely void ; whilst a court of equity, acting on the conscience of the parties, can administer exact and equal justice between them.

These principles, have by a series of adjudications received the sanction of this court. [Swift v. Fitzhugh, 9 Porter, 65; Kennedy v. Kennedy, 2 Ala. 571; Mordecai v. Wanroy, 1 Ala. 100; Morris v. Harvey, 4 id. 305; Love v. Williams and Powell, 5 Ala. 58; see also Taylor v. King, 6 Mun. 366; Watt v. Grove, 2 S. & L. 501; Boyd v. Dunlap, 1 Johns. C. 483.]

This doctrine is unquestionable, as applied to the private acts of individuals; is the case varied by the fact, that this was a public sale by the sheriff?

We are uot aware of any rule of law, or question of expediency, which should distinguish public from private sales. The same great principles lie at the foundation of both, and in ascertaining their validity, the same rules of law and equity, apply in the one case, as in the other. The sheriff may be considered as acting in a double capacity. He is not only the agent of the parties, he is the ministerial officer of the court, appointed to fulfil its mandates, and if he acts oppressively, or in such a manner as injuriously to affect the interests of the parties to the suit, the court, whose agent he is, will supervise his conduct, and in a summary way, on motion of the party aggrieved by his conduct, set aside the sale. If he collude with the purchaser, it may be that his acts are void, and no title passes to the purchaser by his sale.

We are aware that cases may be found, in which it has been held, that the improper conduct of the purchaser at the sale of property under execution, amounting to fraud, vacates the sale, and that the title does not pass by the sheriffs’s, deed such are the cases of Smith v. Greenlee, 2 Dev. 126, and Swayze v. Burke, 12 Peters, 11. But we feel constrained to adhere to our own adjudications, until, upon established principles of law, they can be shown to be erroneous. Under our complex system of jurisprudence, it is not to be wondered at, that discordant decisions should be made; and whilst we cheerfully admit, the high character of the tribunals which hold a different opinion, we think in this particular the law has been misapprehended.

In Love v. Williams & Powell, 5 Ala. 58, this question came directly before us, and it was there held, that a sheriff’s deed was conclusive, and could not be impeached, upon a collateral issue, except for fraud in its execution. So in Myers v. Henderson’s heirs, 7 Dana, 511, where this question was elaborately considered, it was held, that notwithstanding there was a secret fraudulent combination, between the sheriff and the purchaser at an execution sale, the deed of the sheriff, passed the title to the purchaser, voidable only by the defrauded party. In Taylor v. King, 6 Mumford, 366, which was a sale of land under a trust deed, the purchaser by his fraudulent conduct at the sale, obtained the land at about one-seventh of its value. The court held that the legal title passed to the purchaser, and could not be impeached in a court of law.

The case of Dobson v. Erwin, 1 Dev. & B. 569, was where the purchase was made with the money of the defendant in execution, and the court held that the title was not changed by the sale.

In most of the cases, where sales at auction have been held void, because of puffing, fraudulent combinations at the sale, &c., the question has arisen, either by an attempt on the part of the purchaser to enforce the sale; as in Fuller v, Abrahams, 3 Brod. & B. 116; or by an attempt on the part of the purchasers, to enforce the contract among themselves: such was the case in Phippin v. Stickney, 3 Metc. 384; and it is by not attending to this distinction, that so much confusion exists upon this subject.

The consequence of holding, that no title passed to the fraudulent purchaser at an auction sale, would be, that he could not transfer the title to another, and it would be void-in the hands of an innocent holder, without notice of the fraud. In the analagons case, of a fraudulent purchaser under the statute of frauds, though the property in the hands of the frauduleut vendee, may be reached by a creditor of the fraudulent vendor, yet if it pass into the hands of a purchaser for a valuable consideration, without notice, he can protect himself against the creditors of the original vendor, which could not be, if the title did not pass to the first vendee, notwithstanding the fraud.

Nor is there any consideration of public policy hostile to the view we are taking. When by fraud at- a sale by execution, a purchaser obtains property at an inadequate price, the persons injured, are the parties to the suit, and the creditors of the defendant. The former may have a summary remedy by setting aside the sale ; and the creditors may proceed in equity, to subject the property to the payment of their debts. If the title does not pass, and the property may be again seized, and sold, the inevitable result is, that such a doubt is thrown over the title, that it is purchased for a mere song, and the consequence follows, that no one is benefitted at last, but the final purohaser. The unfortunate defendant in execution, finds himself stripped of his property, and his debts unpaid, by the operation of a rule designed for his benefit.

Nor is it a small consideration, that upon this view of the law, the original purchase money is returned to the vendee. The frauds so called, which vacate sales of this character, are generally constructive, and do not imply the moral guilt, which fraud in its proper sense always necessarily imports,• and in our opinion, it is harsh, if not oppressive, to impose as a penalty upon the purchaser the loss of the money actually paid.

These considerations satisfy us, that we should not disturb the law so long acted on by this court. We feel a strong, conviction, not only that the law has been correctly expounded, but that the best interests of society require, that it should be adhered to.

The judgment must be reversed and the cause remanded.

Note. — See this case commented on and explained in the succeeding case of Ansley v. Carloss.