Corprew v. Arthur , 15 Ala. 525 ( 1849 )

COLLIER, C. J.

It may be conceded, that a conveyanee, without valuable consideration, by one indebted at the time, is fraudulent at law against existing creditors, and the intention of the donor determines the validity of such conveyance as against subsequent creditors. Cato v. Easley, 2 Stew. Rep. 214; Miller v. Thompson, 3 Port. Rep. 198; Hanson v. Buckner, 4 Dana’s Rep. 251.

Our statute of frauds, in declaring the effect of fraudulent conveyances, substantially embodies the provisions of the 13th and 27th Eliz. Although, in respect to the first, it is settled that the intention of the parties is the ruling point in determining the validity of a voluntary conveyance as against the subsequent creditors of the grantor, yet the modern English decisions maintain that such conveyance is void under the 27th Elizabeth, against a purchaser for a valuable consideration, though he have notice of its existence. Upon a former occasion, I said it was doubtless the design of the latter statute to avoid transfers of property intended to defraud purchasers, and the quo animo a gratuitous transfer of property was made, was always a material inquiry; and if there was no fraud in fact, it should be upheld against a purchaser with notice. See my opinion in Frisbie v. McCarty, 1 Stew. & P. Rep. 68. In Cathcart et al. v. Robinson, 5 Pet. Rep. 264, it was said, “ that the supreme court of the United States, in expounding a statute, adopted the construction of the courts of the country where the statute was enacted ; but this rule may be susceptible of modification, when applied to British statutes adopted in any of the American states. By adopting them, they become our own, as entirely as if they had been enacted by the state. The construction which British statutes had received in this country —indeed to the time of the separation of this country from the British empire, may very properly be considered as accompanying the statutes themselves, and forming an integral part of them. But however subsequent decisions may be respected, their absolute authority is not admitted. If the English courts vary their construction of a statute which is common to both countries, we do not hold ourselves bound to fluctuate with them. At this day in England, a voluntary conveyance is held to be absolutely void, under the statute of the 27th Elizabeth, against a subsequent purchaser, even although he purchased with notice. These decisions do not maintain that a transaction valid at the time, is rendered invalid by the subsequent act of the party: they do not determine that the character of the transaction is changed; but that testimony afterwards furnished, may prove its real character. The subsequent sale of the property is carried back to the deed of settlement, and considered as proving that deed to have been executed with a fraudulent intent to deceive a subsequent creditor.”

“At the commencement of the American- revolution, the construction of the 27th Eliz. seems not to have been settled in England. The leaning of the courts towards the opinion, that every voluntary settlement would be deemed void as, to a subsequent purchaser, was very strong ; and few cases are to be found in which such conveyance has been sustained. But these decisions seem not to have been made on the principle that such subsequent sale furnished a strong f resumption of a fraudulent intent; which threw upon the person claiming under a voluntary conveyance, the burden of proving it, from the conveyance itself, or from extrinsic circumstances, to he made in good faith ;■ rather than, as furnishing conclusive■ evidence, to be repelled by no circumstances whatever. The modern English decisions, (add the court,) which establish the conclusiveness of a subsequent sale to fix fraud upon a transfer or settlement of property, made, without valuable' consideration, seem to the court to go beyond the construction which prevailed at the revolution, and not proper to be followed in this country.” See Sugden on Tend:. 474 to 479. The English construction, it must be admitted, has been adopted in some- of the states. Ricker v. Ham, 14 Mass. Rep. 137; Clapp v. Tirrell, 20 Pick. Rep, 247; Barrineau v. McMurray, 3 Brev. Rep. 204; Tate v. Liggatt et al. 2 Leigh’s Rep. 84; Bell et al. v. Blaney, 2 Murp. R. 171.

We have never adopted the. provisions of the 13th and 27th Eliz. in extenso. Our statute of frauds-, declares that every gift, grant, or conveyance of lands, tenements or herer ditamentSj goods or chattels, &c., had of malice, fraud, &c., to the intent or purpose to delay, hinder or defraud creditors of their just and lawful actions, &c.; or to defraud or to deceive those who shall purchase the same lands, tenements or hereditaments, &c.j “ shall be from henceforth deemed and taken only as against the person or persons, his, her, or their heirs, successors, executors, administrators or assigns, and every'of them whose debts, suits, demands, estates, or interests', by such guileful and covinous devices and practices as is aforesaid, shall, or might be in any wise disturbed, hinderetl, delayed or defrauded, to be clearly and utterly void; any pretence, color, feigned consideration, expressing of use, or any other matter, or thing, to the contrary notwithstanding.” Clay’s Dig. 254, § 2. This statute was enacted in 1803, before the English decisions to which allusion has been made settled the interpretation of the 27th Eliz. according to the rule, as at present acknowledged. This consideration, and the difference of phraseology in the several enactments, leave us free to' adopt such construction of our own act as may best comport with the language employed, and most certainly advance the legislative intention. These ends, we incline to think, can only be subserved by holding, that one who purchases for a valuable consideration, with notice that his vendor had made a previous voluntary conveyance, will not be preferred. But we pass from this point, for the present.

By the treaty of the 24th March, 1832, the Creek tribe of Indians ceded to the United States, all their lands east-of the Mississippi river. The United States stipulated to survey this land as soon as it could conveniently be done, and when surveyed, to allow ninety principal chiefs of the tribe, to select one section each, and every head of a Creek family to select one half section each, “ which tracts shall be reserved from sale for their use, for the term of five years, unless ■sooner disposed of by them,” &c. It is further provided, that “ these tracts may be conveyed by the persons selecting the same, to any persons, for a fair consideration, in such manner as the president may direct. The contract shall be certified by. some person appointed for that purpose by the president, but shall not be valid till the president approves the same. A title shall be given by the United States, on the completion of the payment.” It is also declared, that “ at the end of five years, all the Creeks entitled to these selections, and desirous of remaining, shall receive patents therefor, in fee simple from the United States.”

Under this treaty, it has been holden that the enrolment of the name of the head of a Creek family, the allotment to him, and his location as such, of a half section of land, conferred prima facie a legal estate, on which the reservee might maintain an action for the recovery of the possession, against an intruder. The title thus acquired was to continue for five years, unless it was sooner conveyed, with the approval of the president; but if there was no such conveyance,- it reverted to the-United States, unless the reservee, or his heirs, were desirous of remaining in the country after the expiration of that period. By the treaty, all the title of the Indian tribe was relinquished to the federal government, and the government were to grant to each head of a family a fee simple in the quantity of land designated, defeasible on the happening, or rather the not happening, of the events specified. If the reservee did not alienate within the five years, or upon the expiration of that time make known his intention to remain in the country, the land re-vested in- the United States, without an entry, or other act, on the part of' its agents. These conclusions were attained upon a construction of the treaty, and was enforced by the subsequent legislation of Congress upon the subject. See Wells v. Thompson, 13 Ala. Rep. 793, and citations by the court. See Clarlitko v. Elliott, 5 Port. Rep. 403; Rosser v. Bradford, 9 ib. 354; Herring v. McElderry, 5 ib. 161.

The sale by Arthur to Williams, if intended not to transfer the absolute right to the vendee, but merely to divest the title of the United States, that the vendor might occupy or dispose of it, unincumbered byany condition, was in direct violation of the treaty. Or the object of the parties was to deceive other reservees by holding-out a false lure, and thus induce them, under the influence of Arthur’s example, to sell their reservations to Williams, that the latter might derive a profit from the purchase. In either case, the contract would be contra bonos mores, and a court of justice would not lend its aid to the vendor to vacate his conveyance ; in such case, the rule in pari delicto, potior est conditio possidentis, applies with all force. Public policy inhibits the enforcement of contracts in violation of positive law, or which are founded in a fraud upon the rights of others, and are opposed to good morals. Roberts v. Gibson, 6 H. & Johns. Rep. 116; Carrington v. Caller, 2 Stew. Rep. 175; Boyd v. Barclay, 1 Ala. Rep. N. S. 34. The contract between Arthur and Williams, according to the testimony of some of the witnesses, is obnoxious to both the objections supposed; and the bill itself expressly alledges the second, as a ground why the conveyance should be set aside. There can, then, be no doubt, that if the principle we have stated be Adhered to, the sale by Arthur cannot be set aside at hi's instance, and that Williams cannot be treated as a trustee, holding for his benefit-.

Let it be conceded, that -the mortgagee is -a creditor by-specialty, (Coote cn Mortg. 457); and that 'he is also a purchaser within the 27-th Elizabeth, so as -to avoid !a prior voluntary settlement under that statute, (Id. 355), and still the complainant is hot entitled to the relief he 'seeks against the heirs of Williams. It is not pretended that the complainant was a creditor of Arthur, until long after he conveyed his reservation, and it i'S perfectly certain, that he had no lien upon it, even if it was competent for a re'servCé to sell, 'or incumber it, otherwise than the treaty provides, oí of his defeasible estate, was subject to levy and -'sale ’under execution. James v. Scott, 9 Ala. Rep. 579. Andas a subsequent purchaser, he -cannot claim the -right 'to subject the land to the payment of his demands, Without showing -that the conveyance Was not only voluntary, but was intended tb defraud creditors. Griffin v. Doe ex dem. Stoddard and Murphy, 12 Ala. Rep. 783. The till makes no Such allegation, a'nd if it did, it would not be supported by'the proof.

The heirs of Williams cannot be treated as trustee's,for the cómplainánt, considering him as á purchaser. If the purchase of -their ancestor is sustained, then they will hold in •their -own right; for it will hot he upheld for the benefit of •those, who deduce a paramount claim through the vendor. The most that the complainant can aSk is, that the deed under Which the defendants claim title, be annulled, and that the interest which Arthur would "have under such circumstances, be subjected to the satisfaction of his claims against the latter.

If we lose sight of the conveyance by the reservee to the plaintiff, it is clear, upon the authority of Wells v. Thompson, supra, thebill itself shows he has no title. He had the right to sell and convey a fee-simple within five years, in the manner prescribed by the treaty; if he failed to do this, and at the end of five years, manifested no desire to remain in the country, his reservation reverted to the United States. No act on the part of the government was necessary to re-invest it, with all the title which was ceded by the treaty. See University v. Winston, 5 Stew. and P. Rep. 17; Gill v. Taylor, 3 Port. Rep. 182; Kennedy & Moreland v. McCartney’s heirs, 4 Ib. 141; Crommelin v. Minter, et al. 9 Ala. Rep. 594; Wells v. Thompson, supra.

The United States has recognised the conveyance of the reservee as passing all the interest which the treaty authorized him to transfer — its effect was to divest his estate, so as to leave nothing to be reached by creditors, or subsequent purchasers. If the patent was obtained by a fraud upon the United states, perhaps the government may assert its right to the reservation, as forfeited, and obtain a decree to vacate the patent. However this may be, neither the bill, or proofs, present a case which entitles the complainant to a decree of foreclosure against the heirs of Williams, or show any interest in the mortgagor.

We have thus seen that the law of the case, is against the complainant; and we are inclined to think if it were otherwise, the bill is not sustained by the proofs. The evidence required to make out a trust, or a fraud, so as to convert the grantee of an absolute deed into a trustee, or to annul the deed, should be clear and satisfactory. So far from establishing that Williams had advanced no money to Arthur, for the reimbursment of which he was to hold the land, we are inclined to think that the most reliable proof, (judging from the manner in which the witness express themselves, and the circumstances under which they acquired a knowledge of the facts they narrate,) tend rather to establish the reverse. The view we have taken, does not require us to examine the facts. Our conclusion is, that the decree must be affirmed.

Oiiilton, J., not sitting.