Campbell v. Davis , 85 Ala. 56 ( 1887 )

CLOPTON. J.

-The land in controversy was sold by the sheriff, under executions issued on three several judgments, rendered against Henry C. Montgomery, in favor of appellees and C. B. Byan & Co., respectively. The appellees became the purchasers at the sale, to whom the sheriff executed a conveyance. J. F. Montgomery, the brother of H. C. Montgomery, owned and possessed the land at the time of his death, which on his death descended to his seven heirs at law. In February and March, 1886, before the rendition of the judgments, but after the debts of the judgment creditors were contracted, all the heirs except one conveyed the land to appellant, upon a recited ' consideration of six thousand dollars paid, the judgment debtor being one of the grantors. The bill is filed by appellees, as such purchasers, to have the conveyance by the judgment debtor declared fraudulent and void as to them, and to remove it as a cloud on their title. It alleges that the six thousand dollars, recited as the consideration price, was in fact a loan, and that the conveyance, though absolute in form, was intended as security for the loan. The exhibits to the bill show that the judgment debtor owned only one seventh interest in the land. This is the guaidum of interest acquired by complainants. None but creditors or purchasers, whose rights are offended, can complain of a fraudulent conveyance. It is valid as between the parties, and as against all other persons. However fraudulent may be tbe conveyance as to tbe interest of tbe other tenants in common, the complainants have no fight to assail it, and to have it set aside, as fraudulent. The other heirs at law were unnecessary parties, and were improperly joined; but the right to make this objection is personal to .them; a co-defendant can not take advantage of the misjoinder. — Ware v. Curry, 67 Ala. 274.

2. It has been the established doctrine in this State, too long to be considered within the pale of controversy, that an absolute conveyance of land, made by an embarrassed or insolvent debtor, intended to operate as a security for a debt, antecedent or contemporaneously contracted, is fraudulent and void against the existing creditors of the grantor. Actual fraud, an intent to delay, hinder or defraud creditors, is not essential. The fraud is deduced by the law from the fact that such conveyance operates a secret reservation of a benefit — the equity of redemption — for an embarrassed debtor. The parties will not be heard to deny or rebut the conclusion. Though the bill alleges that the deed was made absolute in form for the purpose of concealing the true character of the transaction, and to cover up the property of the debtor so that it could not be reached and subjected to the payment of his debts — fraud in fact — no other facts showing fraud need be averred, than that the conveyance is absolute in form, was intended as security for a debt, and was made by an embarrassed debtor. — Bryant v. Young & Hall, 21 Ala. 264; Hartshorn v. Williams, 31 Ala. 149; Sims v. Gaines, 64 Ala. 392; Hill v. Rutledge, at present term.

The allegations, that the debts of the creditors were contracted in 1885, that one of the judgments was rendered in April, 1886, and that an execution issued thereon was returned “no property” to the succeeding term of the court, at which term the other judgments were rendered, are averments of fact sufficient to show prima facie the embarrassed, or insolvent condition of the judgment debtor. The complainants are not required to offer to pay the money loaned. When a conveyance is constructively fraudulent, because of inadequacy of .consideration, it may be permitted, the grantee not participating in any fraudulent intent of the grantor, to stand as security for the consideration actually paid; but, when it is wholly fraudulent, either in fact or in law, it will not be allowed to stand for the purpose of reimbursement. Caldwell v. King, 76 Ala. 149.

As a general rule, a tenant is estopped to deny the title of his landlord, either during the continuance, or after the expiration of the term. Before the tenant will he heard to assert an outstanding title in himself, or in a stranger, he must surrender the possession to his landlord, unless his title has expired, or been extinguished, or the reversion has passed by a valid alienation to the tenant or a third person, since the commencement of the tenancy. The attornment of the tenant to a stranger does not, of itself, destroy the possession of the landlord. — Rogers v. Boynton, 57 Ala. 501. Also, when possession of the rented land is tortiouslv gained from the tenant, or otherwise, so as to entitle the landlord to maintain an action of forcible entry and detainer, a court of equity will not, on such possession, entertain a bill at the instance of the tortfeasor, to remove a cloud from his title to the land. — Turnley v. Hanna, 67 Ala. 101. Equity will not extend aid to protect a possession acquired by unfair or unlawful means. The possession, which gives jurisdiction in such cases, must be rightful. But the allegations of the bill are, that though Montgomery is in possession nominally as tenant, under a contract of lease, the renting was simulated and fictitious, a device contrived to deceive and divert, and to hinder, delay and defraud his creditors — part and parcel of the fraudulent transaction; and that he was never really tenant, but remained in possession of the land as his own. If these be the facts, and we must assume their 'truth on demurrer, the tenancy is fraudulent, and there is no tenancy as against the complainants; and if Montgomery, being the execution debtor, attorned to them, under such circumstances, they acquired rightful possession, to protect which a court of equity will entertain a bill to remove a cloud from their title. If not proved, the equity of the bill must fall.

Affirmed.