Kennedy v. First National Bank , 107 Ala. 170 ( 1894 )

McCLELLAN and HARALSON, JJ.

The authorities áre well nigh uniform in support of the proposition, that where there is a fraudulent conveyance of property constituting or including the homestead, which is subsequently annulled at the suit of a creditor, the grantor is not estopped as against the creditor to assert his right of homestead in rhe premises. And the reason for this doctrine is found in the creditor’s want of interest in that which is not liable for debt. Thus, it is said by Judge Thompson : “It has been frequently held that a conveyance by husband and wife of real estate in which the wife has an inchoate right of dower, subsequently set aside as being fraudulent as to creditors, will not operate to bar an assignment of dower. The theory of the case appears to be that a conveyance thus sot aside at the suit of creditors, for fraud, is to be treated as a mere nullity — as though it had never been made — and that the wife’s inchoate right of dower is, therefore, wholly unaffected by it; that whilst, the conveyance subsisting, she would be estopped to assert her right of dower as against the fraudulent grantee, yet, the conveyance being annulled, the creditors of her husband can, as against her, derive no advantage from it. *

* * * * * Do the same principles apply also to to the right of homestead? Most of the cases answer this question in the affirmative, and hold that'a conveyance set aside for fraud, at the suit of the husband’s creditors, does not estop the grantor,-or his wife, from claiming homestead in the premises thus conveyed. Such a conveyance does not constitute an abandonment of the homestead such as opens it to creditors. Two general reasons for this rule may be deduced from the cases : First, that the homestead privilege is created for the benefit of the wife and children, as well as for that of the husband and father ; and, therefore, it is not right that the former should be prejudiced by the wrongful act of the latter. Second, that, the conveyance being void as to creditors, it stands as to them as though it had never been made. If it had not been made, the debtor, or his wife, could have asserted' the right of homestead in the premises against them ; and they can not assume the inconsistent positions, the nullity of the conveyance and claiming a right under it. In other words, a fraudulent conveyance does not enlarge the rights of creditors, but leaves them to enforce the rights they would have had if no such conveyance had been made. Expressed in still another way, the interest which a creditor has in the property by virtue of his lien is a derivative interest, proceeding from the debtor and depending upon his title. Hence a creditor cannot acquire a right under the debtor’s title and at the same time impeach that title. He cannot sell, under his execution, the debtor’s title, and at the same time deny the debtor’s right of homestead on the ground that the latter has no title. If the premises are actually occupied by the debtor as a homestead, it can make no difference, so far as the creditor is concerned, by what sort of title the debtor occupies. By attempting the sale the creditor affirms that the debtor has' a salable interest; and th§ law means that that interest should not be taken away, and the debtor disturbed in his possession by sale under judicial process. If a conveyance of land is procured by an insolvent debtor to his wife and children, it will be treated in equity, as having been made to himself, and, if with his family he occupies it as a homestead, it will be protected as such ; since the title which, if the property were not homestead, could be subjected by creditors is sufficient to support the homestead right. Besides, the fraud does not consist in conveying the homestead ; for the creditor could not have reached that with his execution had the debtor retained it. The fraud consists in conveying the other part of the land that the creditor can reach by his execution. But as to the homestead he has no concern. That matter rests between the fraudulent grantor and his grantee. This appears to be the most satisfactory ground upon which the rule has been placed. It resolves itself into this : that as to exempt property there are within the meaning of the statute of frauds, no creditor«. Statutes creating exemptions were not designed to imprison the debtor in his homestead, nor to fetter the transfer of his chattels. There being, then, no legal restraint upon the debtor against conveying or selling such property, * * * * the motives with which such transfers are made are of no concern whatever to the creditor. If he procures a conveyance to be set aside as fraudulent, he takes what is vendible under his execution ; the title to the rest is a question to be disputed between the debtor and his grantee.” Thompson on Homesteads & Exemptions, §§ 405, 408-412. The same views are expressed by Waples in his work on Homesteads & Exemptions, pp. 531-534. And in succeeding sections Judge Thompson discusses the few adjudged casos which are supposed to announce a contrary doctrine, and demonstrates, we think, that they either turn upon statutory considerations, and are, therefore, not in reality opposed, except perhaps in matters of dicta to the views expressed in the text, or proceed upon some misconceived idea of the abstract rights of the creditor and grantor-debtor in such cases, and are, therefore, wholly unsound. The great majority, indeed nearly all, of the adjudged cases fully support the text we have so fully quoted, as will appear from the following collation of some and citation of most of them. In the case of Smith v. Rumsey, 33 Mich. 183, it is said (p. 191) by the Supreme Court of Michigan: “The homestead was not subject to execution. * * * It was, however, grantable. It'was capable of transfer by deed executed by husband and'wife, and since creditors could enforce no process against it, could no more pursue it for their debts against him (the fraudulent grantor) , than they could pursue for the same purpose the absolute property of the government, the law will not allow it to be said that the transfer of it, if any were made, operated to defraud creditors. When the law declares that a debtor’s disposal of his property with intent to defraud his creditors shall be voidable at the instance of his creditors, and at the same time declares that specific property of the debtor shall be' exempt as against his creditor’s adverse claims, the provisions are in pari materia, and must be construed together, and the latter provision must be held to exempt this exempt property from the operation of the former provision. Certainly it would be very inconsistent to say that a debtor’s disposal of property, and which property, in so far as the creditor and his claims are concerned, may be said to have no existence at all, is a fraud upon the creditor.” To the same effect it is said by the Supreme Court of Maine : “No creditor can be, in legal contemplation, defrauded by a mere conveyance, made by his debtor, of any of his property which such creditor has no right by law to appropriate, or even to touch, by any civil process.” — Legro v. Lord, 10 Me. 165. And by the Supreme Court of Wisconsin : “A conveyance of homestead, by the husband to the wife, cannot be held fraudulent as to creditors, for the reason that, being exempt, it was no more beyond their reach than before.” — Pike v. Miles, 23 Wis. 168. And this general principle is fully recognized in our own decisions. — Fuller v. Whitlock, 99 Ala. 411, 415, and cases there cited. Judge Freeman, in a note to Blue v. Blue, 87 Amer. Dec. 268, 274, states the doctrine and cites the authorities as follows: “In New Hampshire it is held that a levy on premises in possession of the execution debtor claiming a homestead therein, without any application on his part for an assignment of homestead to him, is valid against the grantee of the debtor whose deed is fraudulent and void as to creditors, although the value of the premises does not exceed the amount exempted by law from attachment and levy. — Currier v. Sutherland, 54 N. H. 475. But while there are a few eases to the contrary, the great weight of authority holds that a conveyance of property set aside for fraud at the suit of the grantor’s creditors-does not prevent Mm or Ms wife from afterwards claiming a right of homestead in the premises so conveyed. The fraudulent conveyance does not place the creditors in any better position than they occupied before it was made. The homestead still remains exempt. — Freeman on Executions, § 138 ; Dearman v. Dearman, 4 Ala. 521; Vaughan v. Thompson, 17 Ill. 78 ; Muller v. Inderreiden, 79 Ill. 382; Lishy v. Perry, 6 Bush. 515; Kuevan v. Speeker, 11 Bush. 1; White v. Givens, 29 La. Ann. 571; Succession of Cottenham, Ib. 669; Legro v. Lord, 10 Mo. 161; Castle v. Palmer, 6 Allen, 401; Smith v. Rumsey, 33 Mich. 183; Smith v. Allen, 39 Miss. 469; Remington v. Seal, 39 Miss 518; Edmonson v. Meacham, 50 Miss. 34; Vogler v. Montgomery, 54 Mo. 577; Rankin v. Shaw, 94 N. C. 405; Sears v. Hanks, 14 Ohio St. 298; Bank v. Henderson, 4 Humph. 75; Wood v. Chambers, 20 Tex. 247 ; Cox v. Shropshire, 25 Tex. 113; Foster v. McGregor, 11 Vt. 595 ; Danforth v. Beattie, 43 Vt. 138; Shipe v. Repass, 28 Gratt. 716; Boynton v. McNeal, 31 Gratt. 456 ; Marshall v. Sears, 79 Va. 49; Bond v. Seymour, 1 Chand. 40; Dreutzer v. Bell, 11 Wis. 114 ; Pike v. Miles, 23 Wis. 164; Murphy v. Crouch, 24 Wis. 365; Bean v. Smith, 2 Mason, 252; Cox v. Wilder, 2 Dill. 45; Smith r. Kehr, 2 Dill. 50; McFarland v. Goodman, 6 Bissell, 111; Smythe on Homesteads and Exemptions, § 555.” And it is said in Freeman on Executions: “But it is evident that creditors cannot be defrauded, hindered or delayed by the transfer of property which, neither at law nor in equity, can be made to contribute to the satisfaction of their debts. Hence, it is almost universally conceded that property which is, by statute, exempt from execution, cannot be reached by creditors on the ground that it has been fraudulently conveyed.” § 138. In Sears v. Hanks, supra, the plaintiffs were creditors of the grantor in a fraudulent conveyance whicli had been set aside at their instance. The grantor-debtor then claimed homestead in a part of the land covered by the conveyance, and his claim was allowed, the court saying : ‘ ‘The rights of the plaintiffs in this action are only those which belong to creditors seeking to set aside a voluntary conveyance of their debtor, made in fraud of their rights, and to enforce their judgment liens against the property so conveyed. Their claim is not under or through the fraudulent conveyance, but adverse to it; and when at their suit it has been set aside, and declared wholly void as against them, they cannot be allowed as creditors to set up this void conveyance, against which they are claiming, for the purpose of enlarging their rights and remedies against their debtor, or for the purpose of estopping him from the assertion of the rights which he would otherwise have against them. As between debtor and creditor, the deed is simply void, and cannot,' therefore, affect the rights of either. A judgment creditor’s lien is only upon the property of his debtor; and the purchaser at a sale or execution takes in general only the debtor’s title. If the debtor has no title or interest in the property levied on, there is nothing for the creditor to sell; and it is not competent for the creditor, while selling the alleged title of the debtor, to deny his right to homestead on the ground that he has no interest in the property about to be sold. If he has an interest in the homestead property which the creditor carnsell, he has interest enough to secure his homestead from sale. The validity of the fraudulent conveyance, as between the parties to it, is no concern of the creditor when it has been set aside as to him. All he can ask is that, as against him, it shall confer no right on any one.” And so it is said by Judge Dillon, in Cox v. Wilder, 2 Dill. 45, 49, as to the right of such grantor to claim homestead, the fraudulent conveyance having been annulled: “Except for the deed to Wilder the bankrupt would be entitled to the exemption. But, as we have seen, the assignee does not and cannot claim under that deed, but in hostility to it; and when it is avoided and the title placed in the assignee, I do not think (in view of the purposes of the exemption) that the husband is estopped, as against the assignee, to claim the right to the homestead, or the value, to the extent given by the statute. This view does not make the estate any less than if the fraudulent conveyance had not been made, while-the opposite view gives the creditors a profit out of the attempted fraud, at the expense of the family for whose benefit; the exemption is mainly if not wholly provided.”

The Virginia Court of Appeals, in Marshall v. Sears, 79 Va. 49, following and reaffirming two earlier decisions of that court, has this to say : “The only question, therefore, involved upon this appeal is the right of a fraudulent grantor, when his conveyance has been set aside, to assert his claim of homestead in the property embraced in the deed. And as this point has been twice passed upon by this court, we are saved the necessity of making any elaborate review of the cases, or of the reasons upon which they are founded. In the case of Shipe, Cloud & Co. v. Repass et als., 28 Gratt. 729, Judge Staples, speaking for a majority of the members of the court then sitting, says : “In Smyth on Homestead and Exemption, § 469, it is said : ‘The general rule seems to bo, the fraudulent conveyance.of the homestead by a bankrupt does not estop him from claiming such homestead in the premises after the conveyance has been annulled and decreed as fraudulent and void as to creditors.” ’ And after quoting decisions from other states to the same effect, that learned Judge proceeds as follows : “It must be borne in mind, however, this is a controversy between the creditors on the one hand, and the debtor and fraudulent alienee on the other. What are the rights of the former in such a controversy? Simply to have, the deed annulled; to be placed precisely in the same position they occupied before. Can they claim more? If the debtor has a valid claim to the homestead as against them, before the execution of the deed, how is their condition improved bv the deed? Their judgments are only a lien upon the property of the debtor. It is not competent for them, while selling that property, to insist that it is not the debtor’s property. The validity of the fraudulent conveyance as between the parties is no concern of the creditors. All they can claim is, that as against them it can confer no rights upon any one. If any one can set up the estoppel it would seem to be the fraudulent grantee. But in this case he asserts no such claim. But the creditors, through him, seek to appropriate that the law does not allow them, nor the deed confer upon them. If the debtor makes a fraudulent conveyance of property in which he has a right of homestead under the constitution, -what is it to the creditors so far as the homestead is concerned? When the conveyance is annulled, and they are restored to their own, they have obtained all they can justly claim. They cannot be heard in one breath to say that the conveyance is a nullity as to them, and in the next to assert it confers upon them new rights because it is valid between the parties.” And he comes to the conclusion that where there is a fraudulent conveyance of property, which is subsequently annulled at the suit of the creditor, the grantor is not estopped as against the creditor to assert his right of homestead in the premises.

“In Boynton et als. v. McNeal et als., 31 Gratt. 459, the same learned Judge, speaking for a majority of the whole court, after a careful re-examination of the whole subject, announces the same doctrine, and quotes from Thompson in his book on Homestead Exemptions, who gives as the reasons for the rule, to be deduced from the cases : First. That the homestead privilege is created for the benefit of the wife and children as well as that of the husband and father, and therefore it is not right that the former should be prejudiced by the wrongful act of the latter; and, second, that the conveyance being void as to creditors,'it stands as to them as though it had never been made. Without undertaking to multiply authorities, or to prolong the discussion, we may say that the rule, and the reasons for it, heartily commend themselves to our approval, and are in accord with the humane policy of the homestead act, which seeks to protect the family of the debtor from the inhumanity which would deprive its weak and dependent members of a shelter. And it cannot be said with propriety that the application of this rule will work a fraud upon creditors, for no creditor can be in any wise injured, in legal contemplation, by any dealing of the debtor with property which the law has removed, or, what amounts to the same thing, has authorized the debtor to remove beyond his reach. — Sears et als. v. Hanks et als., 14 Ohio St. R. 298; Cox v. Wilder, 2 Dill. 45; Crummen v. Bennett et als., 68 N. C . 494.”

And this doctrine was again reaffirmed in the later case of Hatcher v. Crews Admr., 83 Va. 371. The same doctrine has the support of the supreme court of North Carolina, which, by Merriam, J., said: “It was decided in Crummen v. Bennett, 68 N. C. 494, that a party who conveyed his lands to another in fraud of his creditors, did not thereby forfeit his homestead, and leave it subject to be sold under execution to pay his debts, because as to it the conveyance was not fraudulent — the creditor could not have sold it if the conveyance had not been made — it was not subject to be sold under execution ; in that respect he suffered no detriment. The fraud consisted in conveying the land — that part of it not embraced by the homestead; this was subject to be sold under execution, and the conveyance as to it was, therefore, fraudulent and void as to the creditor. The latter had no interest as to the homestead ; that was a matter between the debtor and the person to whom he made the conveyance.—Duvul v. Rollins, 71 N. C. 218 ; Rankin v. Shaw, 94 N. C. 405, and cases there cited.” — Dortch v. Benton, 98 N. C. 190.

So also it is held in Missouri, where it is said : “It apx>ears to be the received opinion that neither a fraudulent conveyance nor an act of bankruptcy on the part of the head of the family will produce a forfeiture of the benefits of the homestead exemption,” and further that if the conveyance attacked for fraud was made in good faith, and valid, a sale on execution against the grantor would convey nothing ; but that if it was fraudulent, as insisted, by the execution creditor, then the title was in the defendant, and the homestead law obtained, notwithstanding the invalid conveyance, and exempted the land from execution. — Vogler v. Montgomery, et al., 54 Mo. 577, 584; State ex rel. v. Diveling, 66 Mo. 375.

Mississippi is in line with this view, holding that if the facts exist which otherwise entitle one to homestead, the right is not lost, nor is he estopped to assert it, by reason of his having executed a fraudulent conveyance subsequently set aside. — Edmonson v. Meacham, 50 Miss. 34.

And so in Minnesota, this doctrine is upheld, the Supreme Court of that State saying, with reference to the idea of an estoppel upon which the contrary view is rested : “Estoppels by deed bind only parties and privies, and must be mutual. The plaintiff claims in hostility to the alleged fraudulent conveyance, and if it be set aside in his favor as fraudulent and void, it cannot be considered still in force as to any of the parties to it, so as to prevent the defendant and his wife from asserting the same rights for the protection of his homestead as if the alleged fraudulent deed had never been executed ; and the dower interest of the wife would continue in force as if no such conveyance had been made. Malloney v. Horan, 49 N. Y. 111, 119 ; Elmendorf v. Lockwood, 57 N. Y. 322; Roberts ads. Jackson, 1 Wend. 478, 481; Dugan v. Massey, 6 Bush 81; Robinson v. Bates, 3 Met. 40; Sheldon v. Weeks, 7 N. Y. Leg. Obs. 57, 60; Bump. Fraud. Conv., 485; Waite Fraud. Conv., § 46.” Horton v. Kelly et al., 40 Minn. 193, 195.

The doctrine is thus stated in Waite on Fraudulent Conveyances, § 46: “It being a test of a fraudulent transfer that the property alienated must be of some value out of which the creditor could have realized the whole or a portion of his claim, it would seem to follow logically that exempt property is not susceptible of fraudulent alienation. As the creditor possesses no right to have that class of property applied in satisfaction of his claim while the debtor owns it, and would be powerless to seize or appropriate it for that purpose were it restored to the debtor’s possession, the legitimate deduction would seem to be that the creditor’s process could not be fastened upon it in the hands of the debtor’s alleged fraudulent vendee. As to alienations of exempt property there may be a bad motive but no illegal act. When a fraudulent transfer has been avoided, it leaves the creditor to enforce his remedy against the property in the same manner as if the fraudulent transfer had never been executed. The creditor cannot ask to be placed in a better position in respect to the property than he would have occupied if no fraudulent bill of sale had ever been made. And it seems from the current of adjudications that a conveyance of lands, set aside for fraud at the suit of creditors, does not estop the grantor from claiming a homestead in the premises thus conveyed. Such a conveyance does not constitute an abandonment of the Homestead so as to open it to creditors.”

The like view is taken by the Supreme Court of Illinois, where, upon setting aside a conveyance of land embracing the homestead made by Mrs. Jailers as fraudulent and void as against creditors, the court said : “As Mrs. Jaiders still remained in possession of the lands as her homestead and that of her minor children, residing with her, it was just and proper, after cancel-ling the deed that the court should decree that homestead should be first assigned to her in the premises.” Jaffers v. Aneals, 91 Ill. 487, 493.

And the general principle, of which the rule that a fraudulent grantor may claim homestead and his wife dower in the lands attempted to he convoyed after the conveyance is set aside at the suit of creditors is but an exemplification or application, is thus stated by Mr. Bump : “If creditors avoid the conveyance, the law remits and restores the grantee to his previously existing legal rights. A prior interest will not be deemed to be merged in an estate which has been lost, for the law will not consider a deed to be in force which has been avoided. When a grantee loses an interest which he obtained fraudulently, it is to him as if it had never existed. This gives the statute its proper legitimate effect, permits the grantee to hold nothing by his fraudulent contract, and the creditors to take all their debtor fraudulently conveyed, and nothing more. The very avoiding of the fraudulent conveyance, revives and renews the former interest and restores the parties to their original position. If the transfer consists of a release of an equity of redemption, the mortgage is revived when it is set aside. Although an indorsement on a mortgage is fraudulent, yet when that is set aside the mortgage will be valid. The dower of the debtor’s wife will be revived when a deed from the grantee to her is vacated. If the grantee purchases a prior mortgage he will be entitled to retain it after the fraudulent transfer has been set aside. A fraudulent mortgage does not extinguish the debt for which it was given, and if the security fails the debt remains in full force. As it did not arise c.r turpi causa, it can not be merged by anything merely collateral.”

To our minds this doctrine that a fraudulent grantor may claim homestead after the conveyance is annulled has received the sanction of this court. Of it Judge Stone, speaking for the court in Fellows v. Lewis, 65 Ala. 343, 354, said: “This question has been a great many times before the courts of the country, and, in a large majority of cases, the ruling was against the right of the creditor to subject the homestead, merely because its owner and occupant had conveyed his right to another, even- though the conveyance was voluntary, or made under circumstances which would ordinarily stamp it as fraudulent. There can be no fraud, unless there are claims and rights which can be delayed and hindered, and which, but for the conveyance, could be asserted. The law takes no cognizance of fraudulent practices that injure no one. Fraud without injury, or injury without fraud, will not support' an action. Unless they coexist, the courts are powerless to render any relief.— Castle v. Palmer, 6 Allen 401; Legro v. Lord, 10 Me. 161; Foster v. McGregor, 11 Ver. 595 ; Danforth v. Beattie, 43 Ver. 138; Crummen v. Bennett, 68 N. C. 494; Sears v. Hanks, 14 Ohio St. 298 ; Vaughan, v. Thompson, 17 Ill. 78 ; Muller v. Inderreiden, 79 Ill. 382 ; Anthony A . C. Co. v. Wade, 1 Bush, Ky. 110; Morton v. Ragan, 5 Bush, Ky. 334; Lishy v. Perry, 6 Bush, Ky. 515; Kuevan v. Specker, 11 Bush, Ky. 1; Vogler v. Montgomery, 54 Mo. 577 ; Smith v. Rumsey, 33 Mich. 183 ; Hugunin v. Dewey 20 Iowa, 368 ; Dreutzer v. Bell, 11 Wisc. 114; Pike v. Miles, 23 Wisc. 164; Murphy v. Crouch, 24 Wisc. 365; Succession of Cottingham,, 29 La. Ann. 669 ; Edmondson v. Meacham, 50 Miss. 34; Wood v. Chambers, 20 Texas 247; McFarland v. Goodman, 6 Bissell 111; Cox v. Wilder, 2 Dillon 45; Smith v. Kehr, Ib. 50. The following cases hold the contrary doctrine ; but in some of them, it will be seen, the facts were different: Gotzler v. Saroni, 18 Ill. 511; Currier v. Sutherland, 54 N. H. 475; Huey’s Appeal, 29 Penn. St. 219.

‘ Tn the cases cited above, negativing the liability of the homestead which has been fraudulently conveyed, the reasons given are substantially as follows: The property, homestead, is not liable to seizure under execution, and, therefore, a conveyance of it is a question in which the creditor has no interest. It was not liable, before conveyance, to tlie claim he asserts ; and the conveyance, though fraudulent, puts the creditor in no better condition than he was in before. If the conveyance is set aside as fraudulent, this leaves the homestead as if no attempt had been made to convey it, so far as any claim can be asserted by the creditor. It is void as to him, to all intents and purposes. Pie cannot be heard to say, in one and the same breath, that the conveyance is void, in its attempt to divest title out of the debtor, but is valid in destroying the homestead right. Pie cannot claim both under and against the conveyance ; under it, as a valid parting with the homestead right; against it, as an abortive effort to ;pass title out of the debtor. It must stand, as to him, as if no conveyance had been attempted.”

And to like effect is the case of Smith’s Extr. v. Cockrell , 66 Ala. 64,

The right of a husband to homestead in lands which he has conveyed in fraud of his creditors, after such conveyance has been annulled at their suit, stands obviously upon the same plane so far as the idea of estoppel goes as the right of a wife to claim dower in lands after a conveyance thereof executed by the husband to her in fraud of his creditors has been avoided for that reason. So it is declared by Judge Thompson, (Homestead & Exemptions, §§ 405, 408) and by Judge Dillon (Cox v. Wilder, 2 Dill. 45) ; and so it has been treated and accepted by this court. — Fellows v. Lends, supra. And upon some, but not all, of the considerations which let in a claim of homestead in such cases, it has been expressly determined by this court that the wife’s right to dower is not impaired by such a conveyance after the avoidance thereof by creditors, the court saying: “It is insisted further, however, that petitioner, Mrs. Scruggs, has no right to doAver of this land, because by the conveyance of her husband to her; which though voidable and decreed to be void as to these appellants; Avas valid between the parties to it, her right as dowress became merged in the fee thus transferred to her, and Ayas extinguished. But the contention, in this cause, is between petitioner and appellants ; and in respect of the latter it has been decided, that the conveyance to the petitioner is inoperative and null. In favor of contestants, the title must be regarded as having remained in John W. Scruggs until it Avas devolved on his assignee in banktruptcy. This is the basis on Avhich alone the the claims of appellants are founded : and they cannot be heard to make demands inconsistent with and contradictory of the fundamental propositions on which the case in their favor must rest. As Avas said in the similar case of Mallony v. Horan, (49 N. Y. 119) : ‘When a creditor of the husband pursues him to judgment, and attacks as fraudulent, and sots aside as void, the deed from him, joining in which the wife has released her right of dower, he does not connect himself with the title which that deed has created, and with which the release of dower is connected. He sets up the title of tlio husband as it existed before the fraudulent conveyance, and stands in hostility to the title which it was intended to give. That is the attitude of appellants in the present instance. And in reference to a case exactly like the present (Richardson v. Wyman, 62 Maine, 280), the Supreme Court of Maine said : The deed to the demandant, upon which the tenant relies to defeat her dower, was fraudulent and void as to creditors ; and he, being a creditor, has avoided it. The deed to demandant, releasing to her the fee, being avoided for fraud, the tenant would set it up as an' existing estate to bar the dower to which she would otherwise be entitled. * * * Reduced to its ultimate elements, the proposition is, that a deed fraudulent and void as to the tenant, and which has been avoided by him, may, after such avoidance, be set up as a valid and existing deed, for the purpose of defeating and destroying a right to which the defendant would unquestionably have been entitled had no such deed been executed. When a lessor estate is merged in a greater, the greater estate must be assumed as valid and continuing. There can be no merger when the estates are successive, and not concurrent, nor where the greater estate is void and has been avoided.’ — Richardson v. Wyman, 62 Maine 280; Ridgeway v. Masting, 23 Ohio St. 294; McLeery v. McLeery, 65 Me. 172.”— Humes v. Scruggs, 64 Ala. 40, 49-50.

We need add nothing by way of discussion or argument to the foregoing collation of authorities, in justification of our conclusion in line with them. It has been made to appear that every accepted • text and every adjudged case, received as authority beyond the territorial limits of the coui't handing it down, supports without equivocation or reserve the proposition that a fraudulent grantor is entitled as against his creditors to homestead in lands he has attempted to convey in fraud of their rights, when and after the conveyance has been avoided and set aside in an action prosecuted by them; and the reasons which underlie the doctrine are so fully and clearly set forth in these texts and adjudications, as brought to view in the foregoing pages, that we are under no necessity to recur to them here. We are constrained both by the authorities themselves and — even more — by the considerations upon which they are based, to hold that when a debtor has conveyed to third persons land including his homestead interest, to hinder, delay and defraud his creditors and such conveyance has been set aside and avoided at the suit of creditors, such dehtor then has the same right to assert his homestead exemption against such creditors as he would have had had the conveyance never been executed by him. And this right stands out in bolder relief — its equity, while not more certain is more manifest to even casual consideration — where, as in' the case at bar ; even under the fraudulent transaction the land was held for the debtor and not in hostility to him, where ho supplied the money with which the land was purchased and paid for and had the title vested in his children who held it solely for his use and benefit, which is the theory upon which the complainant Fought and had relief against it.

A few words in respect of the opinion and conclusion of Mr. Justice Coleman, and we are through with this part of the case : It seems to us that a fundamental and all pervading error of his position results necessarily from the fact, of which we do not think he has taken due account, that the issue here is not between Kennedy and the persons in whom he fraudulently had the title to the land invested at all, but wholly between him and the creditor at whose suit the land was decreed to belong to him and not to his children, and to bo subjected as his land to the debt of the complainant. The question is not what rights said grantees have against Kennedy in respect of homestead or anything else. They are asserting no rights. The only right the complainant bank ever had or asserted against them — the avoidance of the title they had — has been fully effectuated against them by the decree of this court; and the bank is not now asserting any right whatever against them. But the question is, what are the debtor’s — Kennedy’s—rights in respect of homestead exemption against the bank ; or, perhaps more.accurately, what are the rights of the bank against Kennedy in respect of homestead in the land. As we understand it, the opinion of Judge Coleman does not proceed at all on the idea that the complainant has any independent right against Kennedv in respect of the homestead, but only upon the ground, that inasmuch as the latter could not assert homestead against the fraudulent, grantees, and for that reason alone, lie cannot claim homestead against the complainant, and this though obviously the only right complainant has against any of the property is derived through the destruction at its suit, of the very claim or right of the grantees which it now relies upon to entitle it to subject the homestead. The conclusion of Judge Coleman puts and sustains the complainant in the attitute of saying to Kennedy in one breath : I claim and have recovered all this land except the homestead interest because the conveyance to your children is utterly void and the land belongs to you ; and I claim and am entitled to the homestead interest because the conveynace to your children is entirely valid and the land belongs to them. It seems to us that to allow such a claim would bo clearly to draw “confusion and inconsistent deductions,” so justly reprobated by Judge Coleman. This quaere is put in the opinion of Judge Coleman: “It being settled by the authorities and upon principle that when a debtor sells and conveys his exempt property, * * *, and thereby has placed it beyond his power to recover it from his grantee, who sets up a claim to it, upon what principle can it be said, that if a creditor gets possession of the property, by a decree -of a court or otherwise, that the grantor thereby becomes reinvested with rights and interest superior to his creditor, as well as his grautee?” This presents the whole theory of the case, and shows that the conclusion reached by Judge Coleman is, as wc have said, based upon the rights of the grantee against the grantor, which are not involved in this proceeding at all,, which the complainant has no concern with whatever, but against which lie has prosecuted his action to success, destroying them, and to which, if they arc still existent between the grantor and the grantee, the complainant is an utter stranger. This is one answer to the quaere. Another, or perhaps the same one in another form, may be found in' the counter quaere : What right has the complainant, who claims solely as a creditor, to appropriate the homestead interest in this land as to which there are and can be no creditors? And the answer in another form is thus given by the Supreme Court of Virginia : “The deed being valid between the parties, no claim or assignment of homestead can affect the rights of the fraudulent grantee. But if he raises no objection, (and he is raising none here) if he does not rely upon the estoppel, and the controversy is narrowed to a contention between the debtor and the creditor, I can see nothing to preclude the former as against the latter from asserting his claim of homestead.” — Boynton v. McNeal, 31 Gratt. 456.

We attach no importance to the fact that this court has held, in one or two cases in which no question of homestead arose or was involved, that a judgment creditor might proceed by bill in equity against a fraudulent grantee of his debtor to subject the land so conveyed without malting the debtor a party thereto. Assuming that the homestead right can be affected by a decree against the grantee, this might be well said and be true in a case where, whether the conveyance is avoided or not, no question of homestead would arise— where the land did not embrace a homestead — when it would not be true and would not be said in a case involving, and with reference to a homestead .claim. But the homestead right is in no case affected by such decree ; it is not involved in such' case. To the contrary, it revives and is assertable only after a decree against the grantee avoiding the conveyance; and if, as the host of authorities to which we have referred hold, the right to assert it is not cut off by such decree in a case to which the grantor is a party, surely there is no ground for saying it could be cut off by such decree in a case to which the grantor is not a party.

We do not think the case of Bolling v. Jones, 67 Ala., 508, militates against the view we take of this question. That case holds no more than this: that the widow’s, right of homestead under the statute applied in that case pertained to lands which belonged to the husband at the time of his death. At that time the fraudulent mortgage by the husband to the wife and another had not been avoided or even attacked, but was still subsisting, and efficacious between the parties to a divesture of the husband’s title. The land having thus been aliened by the husband, and title not being in him at the crucial moment of time at which the widow’s right of home-was determinable, it was held she was not entitled to homestead in the legal estate. There is nothing decided in the case or said in the opinion, as we understand that case, that could be taken to mean that the widow would not have beeu entitled to homestead, had the fraudulent mortgage been annulled before the husband’s death. If the case means more than this, it is opposed to the doctrine recognized or declared in the three other Alabama cases to which we have referred, as also to the overwhelming weight of authority in other jurisdictions, and to sound principle.

The case of Minor v. Wilson, 58 Fed. Rep., 616, seems to have been decided upon certain statutes of Georgia. If it may be taken as denying the right of homestead because of a fraudulent conveyance having been made, it is only an addition to the very few cases supporting a doctrine which cannot stand upon authority or elemental principles.

We deem it too well settled and elementary a proposition to be open to discussion, that a party cannot claim both through and against a deed. Having acquired rights under it, he is estopped to claim rights against it. That is the principle of estoppel we invoke in this case ; and if Judge Coleman’s “fourth proposition” excludes the application of the doctrine of estoppel to such a case, it is; in our opinion, palpably unsound. .

Judge Coleman further says : “My sixth proposition is, that every person who invokes the aid of equity must have clean hands.” Nobody has ever questioned the soundness of that proposition, and it is equally well established that a debtor’s hands are never soiled by the sale and conveyance of his homestead or homestead interest, and as that is the only interest involved in this case, we are utterly unable to see what application the proposition of the dissenting opinion about “clean hands” can'have here.

So far as the fact that Kennedy had had the title to the land in which he now claims homestead vested in his children in fraud of his creditors is concerned, our conclusion is, that transaction having been avoided, that he is entitled, as against the complainant and his creditors generally, to have homestead, or two thousand dollars in lien of homestead, allotted to him, as prayed in petition.

It is contended, however, that the debtor’s claim for exemption came too late — that he ought to have set it up in his answer to the bill, and not having been brought to the attention of the court by answer or plea and proof, by such neglect he waived and lost his right. It may be admitted, that in a direct proceeding in equity against one who is the owner of lands, to condemn them to sale, in which he has a right of homestead exemption, and who in making answer, sets up no claim to such exemption, and allows them to be condemned to sale for the payment of decree rendered against him, and they are sold thereunder, he will be held to have waived his right to claim, and would not be heard afterwards to complain. — Clarke v. Spencer, 75 Ala., 57.

The policy of our law as evidenced by constitutional and statutory provisions for the purpose, is to secure to every resident and family an absolute right of homestead. It cannot be alienated by the husband, in whom the title remains, except in the manner carefully prescribed by statute. The owner may file his declaration of exemption in the probate court, and this protects him against a levy upon it, unless, on a contest of his claim as provided, it is held to be invalid, or if he has not filed his-declaration, and the homestead is levied on under legal pocess, he may, at any time, after the levy and prior to the sale, file with the officer making the levy, a claim in writing verified by affidavit in the maner directed by statute, which shall protect his property from sale, unless contested as provided, and his claim has been found to be of no validity. — Code, §§ 2515, 2521; Wright v. Grabfelder, 74 Ala., 460. Every supposed necessary precaution, in these and other sections of the Code, has been taken to protect and preserve this family reservation. The courts generally are united in the conclusion, that such statutes, beneficial in their operation, and springing from a wise public policy, should be liberally construed, so as to give effect to legislative intent. — McGuire v. VanPelt, 55 Ala.,353; Thompson on Homestead Exemption, §§ 4, 7. Waivers of this right, which is deemed so necessary in our law to be preserved for the benefit of the family relation, are not to be favored and declared, except when deliberately and fairly made. In keeping with this policy, it has been held, that though the statutes make no provision for such a claim or contest in a court of chancery, yet the right being clear and of constitutional guaranty, that court will grant relief in such cases coming before it, according to its own peculiar methods. The right must not be denied on any technical or unsubstantial ground. — Tonsmere v. Buckland, 88 Ala., 314.

As has been stated, the object of the bill filed in this case, was to set aside Kennedy’s conveyance of his property, including his homestead, made in fraud of his creditors. To this bill Kennedy was made a party, though as contended he was not a necessary party — the correctness of. which proposition it is unnecessary to question. Kennedy and his grantees, in their defense, maintained the fairness of the transaction; the chancery court decided in their favor, but on appeal to this court the conveyance was held to be fraudulent, and that decision was, on the 22d of December, 1890, reversed, and a decree here rendered for the sale of the property sought to be sold, for the payment of the judgment of the appellee against Kennedy, if the same was not paid, together with the costs, by the 1st day of February, 1891. On the 10th day of March, 1891, said Kennedy filed in said chancery court, his claim of exemption to his homestead, which he described, or to' $2,000 of the proceeds of its sale, if ascertained to be of greater value than that sum. On the 13th of April, the register proceeded to sell the property in obedience to the decree of this court. The residence and lots claimed as exempt, brought, as the register reported, the sum of $8,000. On May 5th, at the spring term of said court, said Kennedy filed another petition in said court, to be allowed the sum of $2,000 out of the proceeds of the sale of his homestead, and on May 8th, the chancellor, by his decree, denied his said claims for exemption, and dismissed his petitions. It thus appears, that the claimant was not lacking in diligence in claiming his homestead rights, after the decision of the case in this court. He made his claim about as soon thereafter as due diligence required.

Suppose Kennedy had not been made a party to this suit, — as it is claimed might, properly, not have been done. In such case, it could scarcely be contended that he .could not, after the decision setting aside his conveyance as fraudulent, have filed his claim, as he did, for his exemptions, and that the chancery court could have denied his claim. The reason, if any, why he might not have been made a party is, that as between him and his grantees, he had conveyed his property and was bound by his deed, and being insolvent, the complainant, — as is contended, for the purposes of the other branch of the case, — might not have made him a party. Yet, it did so, and having assigned him such an attitude in the case, can it be said now, that because he did not file an answer or plea, setting up his claim of exemption in the property sought to' be condemned and support it by proof, he has thereby waived his exemptions. It would seem, if he were not a necessary party to complainant’s bill, on the ground of having no interest in the litigation, and he was made one, simply, as a proper party, he should not be held to the consequences, sought to be placed upon him, of being a necessary party, having an interest in the litigation, directly proceeded against, which he failed and refused to set up. The truth is, as has been fully shown, until his conveyance was set aside, he had no claim of exemption which he could make in his answer in this case. If he had a homestead right, it could accrue, as we have seen, only and when his conveyance was set aside as fraudulent. Until then, the title to the property was in his fraudulent grantees. How could he, without reference to the question of his being a necessary or proper party to the bill, be expected or required, by any rule of law, in one breath, to assert in his answer the validity of the conveyance of his homestead, and in the other, to deny its validity? After the title of grantees in said fraudulent conveyance was declared null and void, and the property declared to be Kennedy’s, and not till then, did he have orownahomestead to which he could make a claim. Some of the adjudications to which we have already referred, are decisive of this question, and none of our own cases which have been cited as opposed to our conclusion, when properfy construed, are opposed to it. “Courts of equity, in affording relief against fraud, seek simply to restore the parties, as near as may be, to the positions they would have occupied, had no fraud been perpetrated.” —Sears v. Hanks, 14 Ohio St. 298 ; Cox v. Wilder, 2 Dill. 45, 49; Shipe, Cloud A Co. v. Repass, 28 Gratt, 716; Marshall v. Sears, 79 Va. 49; Leupold v. Krause, 95 Ill. 440.

The former judgmet of affirmance is set aside ; the decree of the court below is reversed, and the cause is remanded to the chancery court that relief may be granted in accordance with the foregoing opinion.

Brickell, C. 3and Head, J., not sitting, having been of counsel.