Brown v. Lyon , 17 Ala. 659 ( 1850 )

PARSONS, J.

The question is whether the Circuit Court erred in excluding the deed of assignment from the jury, on the ground that it was fraudulent on its face. The deed does not show specifically what was conveyed, either by schedule or otherwise, although it included money and choses in action. It does not state the quantity or amount of any thing. The dissenting creditors of the grantor might be very much embarrassed in an attempt to recover their debts, because they could have no aid from the deed in ascertaining the particulars of what was conveyed, although part of it was money and another part choses in action. Neither could they ascertain, by any aid from the deed, the proportion which the debts bore to the entire value of all that was assigned. If there was a great disproportion, as if the value of what was assigned very far exceed the amount of the preferred debts, it might tend to show a fraudulent design in the parties to the deed. This disproportion may have been so great as to furnish a motive for its concealment. It is said that “fraud lurks in loose generalities,” and we are satisfied that the omission to show specifically by the deed the effects that were assigned, is a circumstance to be considered by the jury, in connection with all the evidence in the cause, upon the question of a fraudulent intent. — See the opinion of Tilghman, Chief Justice, in Wilt v. Franklin, 1 Bin. Rep. 502. But our predecessors held, twenty years ago, that this circumstance is not sufficient to render a deed fraudulent on its face. — Robinson v. Rapelye & Smith, 2 Stew. R. 86. After such a length of time and after so many rights have grown out of that decision, it is by no means our intention to overrule it. But it was not necessary for the court to go beyond the question whether the deed was fraudulent on its face. The opinion of the court in that case, as limited and explained by the question that was before it, is authority upon the point and must stand.

2. We can presume, according to repeated decisions of this court, that the prefered class of creditors all duly assented to this assignment, because it was for their benefit, and no release, delay of suit or other prejudice was required of them by the deed. The persons composing the prefered class are the parties of the third part in the deed. They were not required to execute the deed; they were the only creditors who were parties to the deed ; the assent of all of them is to be presumed. Hence the opinion in -Elmes v. Sutherland, 7 Ala. 262, and other similar cases, does not affect the present question-." In the case of Elmes v. Sutherland, and other similar cases, the principle is-established that, in-those and the like, cases, the deed of assignment was invalid to pass the property to the trustee, until assented to by all the creditors whose debts were intended to be secured — that-until such assent, ■ the deed operates ,only as a power which is revocable by the grantor and which is revoked or annulled by the levy of an execution against the grantor upon" the property. But this principle-does not apply to -cases like the present, in which the assent of all the- creditors, who are parties to the-deed, is to be presumed. — Smith-v. Leavitts,- 10 Ala. 92. In- this case the question does not arise, whether the actual dissent of a single-creditor who is a party to the deed and in the class first provided for, can thereby prevent the deed from becoming effectual in favor of-the other creditors, the deed not providing against such a consequence.

3. But we think this deed does provide against such a consequence, in reference to the grantor’s creditors who are not parties to-the deed. For. them-a provision is made out of the - residue of the trust funds, after the first class is satisfied.' This, the postponed class, according to the deed, is to consisl-of such of the grantor’s creditors as should, within six months, execute the deed, and none of them did so. In such case, it has been held that they can only claim the benefit by actually executing the deed. — Garrard v. Lord Lauderdale, 3 Simons, 1. All that was assigned was devoted in the first place, to the.'satisfaction of the class of creditors who were parties to the deed and as to whom it took effect immediately. There could be no ■ resulting interest to the grantor,-in default of other creditors becoming parties, until the first class of debts was all paid. As to the residue, a provision was made for such of the other creditors-as should execute the deed within the time limited. The provision for them was conditional in its nature. If they have lost their provision, by not complying with the deed, that cannot affect the previous debts, because it would be manifestly contrary to the intention of the parties to the deed, as is plainly to be infered .from the deed itself. Hence this deed has provided against such a consequence. The power of the grantor to do this cannot be doubted. It was his intention, as we infer from the deed, to create rights between the two classes as distinct as those of a first and second mortgagee. This he can do by one deed as well as by two, for the thing done must depend rather upon the intention of the party than, the number of deeds.. The question now under consideration is not one of fraud.— Hence those decisions in which it has been settled that a deed fraudulent in part-, as against the statute of frauds, is entirely void, do not affect this question. But the question here is, whether the assignment was complete, or the deed fully executed for any purpose, and we think it was so in relation to the prefered creditors, who were not dependent upon the acts or omissions of the next class.

. 4. The counsel for the defendants contend that the interest resulting to the grantor is a ground for holding that this deed is void per se. The deed bestowed that interest upon the trustee for the benefit of those creditors of the grantor who should execute the deed within the time limited. It was by the deed confined to the residue after discharging the prefered debts: And if there was a residue, it is true, it resulted to the grantor, as those creditors did not execute the deed, but it resulted by operation of law. There was no stipulation or reservation of this kind in the deed. It is conceived that the authorities cited, by the defendants’ counsel do not apply. It was held in Grimshaw & Brown v. Walker, 12 Ala. Rep. 101, that an express stipulation of this sort made the deed void, because the deed in that case required certain of the creditors to release their claims. The deed in the present case only requires a portion of the creditors to execute it within a limited time, by which they could have been prejudiced in no respect. No release was required from any of them. The New York decisions in reference to express stipulations for the benefit of the grantor, as to return to him the surplus, are very strong, but their statutes are not identical with ours. — See Goodrich v. Downs, 6 Hill’s Rep. 438. We think there was error in excluding the deed from the jury.

Let the judgment be reversed and the cause remanded.