Hill v. Rutledge , 83 Ala. 162 ( 1887 )

CLOPTON, J.

— There can be no valid objection to the admission in evidence of the bill of sale, which was made by one of the defendants in execution to the claimant, by which he claims to have acquired title to the property. It constitutes the foundation of his claim of ownership, and if the transaction is bona fide, Nee Nom the taint of fraud whether in law or in fact, title to the property in controversy was vested in him, effectual to sustain in his favor the proper issue in a statutory trial of the right of property. The material question relates to the nature and character of the transaction. There is evidence tending to show that it was an absolute sale, and also evidence tending to show that the bill of sale was intended as security for an antecedent debt, and for present and future advances. The evidence thus presents the case in two aspects; and as the validity of the transaction does not appear to be assailed, because of inadequacy of consideration, or on, the ground that it is the product of actual fraudulent intent, the material issue is, was the transaction an absolute sale, or, in legal effect, a mortgage? Instructions to the jury were requested by both parties, referable to this decisive issue. In respect to those given at the request of the claimant, it may be remarked, that they are based on the theory of an absolute .sale; and if such be the fact, they assert familiar propositions, and are free from error. It is unnecessary to consider them seria.tim.

The plaintiffs requested the court to instruct the jury, that if it appears Nom the evidence that the defendants in execution were embarrassed or insolvent, and that the bill of sale was intended to secure a debt due to the claimant, it is fraudulent and void as to the existing creditors of the grantor, although it may be supported by a valuable consideration. Without reference to the actual intention of the parties, the law condemns, as offending the rights of existing creditors, an absolute conveyance of property, made by an embarrassed debtor, when there is a secret reservation for his benefit. The intent in such case is deduced Nom the transaction itself, the inevitable consequence being to hinder, delay, or deNaud creditors. A conveyance, absolute in form, but intended as security for a debt, operates a secret reservation, for the benefit of the debtor, of a valuable right and property — the equity of redemption — which is capable of being subjected to the payment of his debts. On this ground rests the settled doctrine of this court, that such conveyances, when made by an embarrassed or insolvent debtor, are obnoxious to the provisions of the statute, which declares void as against creditors all conveyances “made in trust for the use'of the person making the same.” — Code, § 2120; Bryant v. Young, 21 Ala. 264; Sims v. Gaines, 64 Ala. 392.

The instruction requested by plaintiff simply asserts this legal proposition, in abstract and general terms, which is applicable to one aspect of the evidence. It does not affirm that the plaintiff is entitled to recover on the rule as stated, nor does it profess to set forth all the facts and circumstances, under which the jury should condemn the property to the plaintiff’s execution. If given, it no doubt would have been followed, or should have been, by definite instructions as to the circumstances under which the asserted principle should govern the decision of the case, and as to the facts requisite to entitle the plaintiff to recover. Such instructions would have raised the question, whether it is essential, in order to avoid the conveyance, that the claimant should have had notice of the embarrassed or insolvent condition of the debtor. The charge as framed and asked does not involve this question, and therefore we need not enter upon the inquiry. The charge should have been given.

Reversed and remanded.