Gordon, Rankin & Co. v. Tweedy , 71 Ala. 202 ( 1881 )

SOMERYILLE, J.

It is now settled by the past decisions of this court, since the act removing, with certain exceptions, all disqualification based on the fact of being a party to a suit, or interested in the issue tried, that, in civil cases, husband and wife are competent witnesses for or against each other, to -prove any fact which did not come to their knowledge through the channel of the conjugal relation; or, in other words, any transaction which is manifestly not confidential. This rule would clearly embrace all matters which must have been intended by them to be made public, the disclosure of which would be no violation of marital confidence, or tend to engender matrimonial discord. And such seems generally now to be the settled weight of authority also in other States.-Chapman v. Holding, 60 Ala. 522; Sumner v. Cook, 51 Ala. 521; Rowland v. Plummer, 50 Ala. 182; Robison v. Robison, 44 Ala. 227; Stuhlmuller v. Ewing, 39 Miss. 447; Crook v. Henry, 25 Wis. 569; 1 Greenl. Ev. § 337; 1 Whart. Ev. §§ 428-431. The •chancellor did not err in admitting the deposition of the ap-pellee, Tweedy, or that of his wife.

When a deed or other conveyance is assailed for fraud, it is competent to sustain its validity by parol proof of any consideration other than that expressed, prpvided the two considerations be consistent, or of the same general character. It did not vary the legal effect of the deed from Tweedy to his wife to show that a portion of the consideration was the proceeds of the sale of certain stock in the Nashville & Decat/ur Railroad Company, though recited to be stock of the Nashville & Chattanooga Railroad Company. So the notes of Foster were as much a valuable consideration as the money consideration recited in the deed which was executed by him to Tweedy. The evidence as to the real consideration of these instruments was properly admitted-1 Whart. Law Ev., §§ 1046-1047; Mead v. Steger, 5 Port. 498; Hinde v. Longworth, 11 Wheat. 199; Hair v. Little, 28 Ala. 236; 1 Parsons Notes & Bills, 194; Ramsey v. Young, 69 Ala. 157.

The release by a married woman of her inchoate or contingent right of dower in lands owned by her husband, of which she is lawfully dowable, may constitute a valuable consideration for the execution of a deed by him to her. And the same is true, whether the release be made contemporaneously with the deed, or pursuant to a preceding agreement.-Hoot v. Sorrel, 11 Ala. 386; Bump on Fraud. Con. 303; Bank of U. S. v. Lee, 13 Pet. 107. Yet such a contract must be reasonable and free from fraud in order to be sustained in equity, and should be especially scrutinized, when made to a wife by a husband who is iusolvent or in failing circumstances.-2 Scribner on Dower, 7-8; Quarles v. Lacy, 4 Munf. 251; Burwell's Ex'r. v. Lumsden, 24 Gratt. 443; S. C. 18 Amer. Rep. 648. We are of the opinion that the deed bearing date November 13, 1813, executed by the appellee, Tweedy, to his wife, is, under all the facts of this case, constructively fraudulent, and can not be sustained. The lands conveyed by this deed had been purchased from one Foster, but a few days before, upon a recited consideration of over sixty-five hundred dollars. Making due allowance for the fact that they were partly paid for in Foster’s.own paper, purchased at fifty cents on the dollar, it is a fair inference, from all the testimony, that they were worth not less than four or five thousand dollars. "We deem the consideration of the conveyance to be grossly inadequate. It is recited to be the proceeds of certain railroad stock alleged to belong to the wife which, the testimony shows, sold for the sum of four hundred and eighty-five dollars; the further sum of six hundred and forty-six dollars received as a part of the distributive share of Mrs. Tweedy in her father’s estate and used by the husband; and the release by the wife of her contingent dower interest in certain lands, the value of which is not stated. What the value of these lands was, or that of the wife’s right of dower in them, does not clearly appear from the testimony taken in the cause. The appellee, Tweedy, estimates the lands as -vyorth about five thousand dollars, and the inchoate right of dower at two thousand dollars, which latter sum, he testifies, was the amount agreed to be paid for the wife’s relinquishment.

The right of dower is, of course, merely contingent, being dependent upon the wife’s good behavior, and the further fact of her surviving her husband. And while it is a valuable interest, which was the subject of conveyance by fine at common law and by deed with us, it is more or less valuable according to the ages, state of health, and even the habits of the husband and wife.-Bullard v. Briggs, 7 Pick. 533; Code, 1876, § 2470. And, under the provisions of our statutes, the right may be barred entirely, should the statutory separate estate owned by the wife at the time of the husband’s death be equal to, or greater in value than her dower interest.-Code, 1876, §§ 2715-2716. The statute further provides, in cases where lands of a decedent are sold by order of the probate court, and the widow consents to have her dower interest sold with them, that the value of the dower right shall be “ascertained by proof, having regard to the age and health of the dowress,” but it shall in no case be estimated at more than “ one-sixth of the purchase-money.” — Code, 1876, §§ 2470-71. When the right is inchoate, as of necessity it is before the death of the husband, it can not be so valuable as after his death, because it is contingent and may be defeated by the death of the wife, or the- forfeiture of it by her misbehavior. Standard annuity tables, founded in human experience and observation, furnish the proper rule by wrhich chancery courts are ordinarily governed in computing the probable present value of such a contingent interest.-1 Scribner on Dower, 333; 2 Ibid. 6; Jackson v. Edwards, 7 Paige, 386, 408-410; Bartlett v. Vanzandt, 4 Sandf. Ch. 396. The case of Beavers v. Smith, 11 Ala. 20, announces no principle in conflict with this rule. The question there was the proper valuation of a vested dower interest, not a contingent or inchoate one. And though held by this court in Martin v. Wharton, 38 Ala. 638, that such an inchoate right of dower was not available as a set-off under the statute, on the ground that it could not be measured with sufficient accuracy by any pecuniary standard, we apprehend that the powers and machinery of a court of equity are for the purpose here sought fully adequate to this end, at least by approximation. It is known that in modern times, characterized among other things by the rapid growth of the business of life insurance, it has become a common thing for actuaries to calculate values of this contingent nature upon the basis of standard annuity tables, and tables of mortality giving the probable duration of human life at every age. And this duty being here imposed by the requirements of this case, we know of no other possible way of determining such valuation than by the rule we have amiounced.-Jackson v. Edwards, 7 Paige, 386, 408.

The appellees in this case have failed to furnish any sufficient data in the testimony, by which we are enabled to ascertain the value of the wife’s interest in the lands in which she relinquished her dower. The conveyance being assailed as fraudulent, the burden of proof was cast upon the grantee to prove the existence, amount and validity of the recited consideration. Hamilton v. Blackwell, 60 Ala. 545. In the absence of such proof we can not regard this portion of the consideration.

So the wife’s right to the railroad stock is not established by proper evidence of its transfer, and the proof of this portion of the consideration also fails. Such transfer appears to have been made in writing upon the books of the company, and upon this muniment of title the defendant relied. Secondary, or parol evidence, therefore, of this fact was not permissible, unless a predicate had first been laid for its introduction. 1 Whart. Ev., § 61-63.

Neither can interest be estimated as a lawful or valuable consideration. The husband is not accountable, under the statute, for the rents and incomes of the wife’s statutory separate estate, which includes interest on her moneys used or converted by him. It was held by this court in Earl & Lane v. Owens, 68 Ala. 171, that a conveyance made by a husband to secure to the wife such rents or incomes, which he had converted to his own use, was voluntary and void as to existing creditors, thus overruling the contrary principle decided in Brevard v. Jones, 50 Ala. 241. Nor can interest be allowed the wife for the use or conversion by the husband of her equitable separate estate, in the absence of an agreement to pay such interest, or of an express dissent on the ■wife’s part objecting to the husband’s reception of the same.-Roper v. Roper, 29 Ala. 247; Newlin et al. v. McAfee, 64 Ala. 357.

Inadequacy of price is usually denominated a badge of fraud, and it is often asserted that no fixed rule can be declared, by which to determine what disparity between the real value of property and the consideration paid will vitiate a conveyance for fraud. We think it settled, however, that fraud may be inferred from the inadequacy of the price alone, where it is so great as to shock the conscience. This must be the case where the consideration is so far below the market value of the property as to strike the understanding of an intelligent and honest man with the conviction that such a sale could never have been made in good faith.-Bump on Fraud. Convey. 44; Hoot v. Sorrell, 11 Ala. 386; Prosser v. Henderson, 11 Ala. 484. The case is of course strengthened when there are other badges of fraud, such as the financial embarrassment of the grantor,-the pendency of suits against him, a secret trust in his favor or other like circumstances of suspicion, some of which appear in this case. The application of the above principle, as made to the particular state of facts presented in Hoot v. Sorrell, supra, does not meet with our approval.

The deed of Tweedy to his wife, however, may not be fraudulent in fact so as to render it absolutely void. Were such the case, it could not be permitted to stand as security for any purpose of re-imbursement or indemnity to the grantee, but the rule is considered otherwise with “a deed obtained under suspicious or inequitable circumstances, or which is only constructively fraudulent.” In the latter case a conveyance may be made to stand as security for the consideration actually paid. Boyd v. Dunlap, 1 John. Ch. Rep. 478; Bump on Fraud. Convey. 288; Potter v. Gracie, 58 Ala. 303.

There is no force in the objection urged to the parol evidence of the appellee, Tweedy, allowed by the chancellor'for the purpose of proving his agreement to convey to his wife other lands or property, in consideration of her relinquishment of dower in the lands sold to Trabue and others. The contract'was perhaps only voidable and not absolutely void under the statute of frauds, and the protection of this statute could not be invoked by a. third party, if its benefit was repudiated by the party sought to be charged. This defense, under our rulings, is required to be specially pleaded, or else it is considered as having been waived.-Browne’s Stat. Frauds, § 135; Garrett v. Garrett, 27 Ala. 687. Besides, this statute lias no application in cases where a contract has been executed, as in this ease. — Browne’s Stat. Frauds, § 116.

We do not see that the chancellor erred in decreeing that the transfer of the note of Harris, that of Gibson & Co., or of Sherrod, was free from fraud. If there was a fraudulent intent on the part of Tweedy, the grantor, it does not sufficiently appear that Mrs. Tweedy, the grantee, participated in it.-Marshall v. Croom, 60 Ala. 121.

Nor do we feel authorized to reverse his findings as to the sixteen hundred dollars paid by the appellee to his wife. If there was no fraud in the payment of this money, there was no right on the part of creditors to pursue the fund into the property it was invested.

At common law the husband was entitled absolutely to all the property which the. wife acquires by her skill or labor. Fie can not renounce his right to such services or earnings to the prejudice of existing creditors.-Bump on Fraud. Convey. 248. And there is nothing in our statutory system to abrogate this principle.-Glaze v. Blake, 56 Ala. 379. The husband was entitled to the earnings of Mrs. Tweedy referred to in the testimony.

We think the chancellor erred in dismissing the bill in this case. It should have been retained, and the case referred to the register for 'an account to be taken, showing the amount of Tweedy’s indebtedness tona fide to his wife, and allowing by way of credit such sums paid her in good faith and authorized by the views expressed in this opinion. No interest, however, can be allowed the wife on any sums constituting her statutory separate estate, and none on amounts constituting her equitable separate estate without clear proof of an express contract to pay it.

The lands conveyed to his wife by the appellee on Nov’r 13, 1873, should be decreed to stand as security only for the fair value of the contingent dower interest, which will he ascertained, on the reference, by data furnished by standard annuity tables, not to exceed in any event oneMxth of the value of the land, and for such other items of the recited consideration as may be shown to be legal and proper under the proof offered, as tested by the above principles. Mrs. Tweedy must also be charged a reasonable amount for rent of the premises from the time of the filing of the bill, and credit for the value of permanent improvements, made by her, and for taxes paid during the period of her tona fide occupancy or possession of the premises in question.-Potter v. Gracie, 58 Ala. 303; Trial of Titles to Land (Sedgw. & Waite), §§ 694-702; Horton v. Sledge, 29 Ala. 478.

The decree of the chancellor is reversed, and the canse remanded for further proceedings in accordance with this opinion.