Stoutz v. Huger , 107 Ala. 248 ( 1894 )

HEAD, J.

A bill was filed by Chas. F. G. Peters, as administrator with the will annexed of Charles Werborn, deceased, against the appellees to set aside a conveyance of land as fraudulent and subject the land to the payment of a judgment which complainant’s testator recovered in life, against D. E. Huger, one of the appellees. On January 22d, 1892, on hearing on the merits, the chancellor rendered a decree dismissing the bill. On December 6, 1892, Richard W. Stoutz filed with the register in the cause, an application as follows : “Comes Richard W. Stoutz and exhibits and files herewith his letters as administrator of the estate of Charles Werborn, deceased, and as such administrator * prays an appeal to the Supreme Court of Alabama, from a final decree rendered in the above entitled cause, on the 22d day of January, 1892, returnable on the first Monday in January, 18Ó3. (Signed) Richard W. Stoutz, Admr.” He filed with this formal letters bf administration, cum test, annexo upon said estate issued to him, qn September 24th, 1892, by the Judge of Probate of Mobile county. He also filed security for costs of appeal. A motion is made in this court to dismiss the appeal on the ground that the appellant had no authority to sue it out. We have stated all the record shows touching Stoutz’s connection with the case.

Appeals are entirely of statutory creation. Being remedial, the statutes creating qud regulating them will be liberally construed, but authority for the appeal in every case, must be found in the statute. — May v. Courtney, 47 Ala., 185. The laws to which we must have recourse are as follows: Section 3611 of the Code provides, that from any final judgment or decree * * * an appeal lies to the Supreme Court * * * on the application of either party, or his personal representatives. Sections 3612 to 3618, inclusive, confer the right of, appeal from certain interlocutory orders, from orders sustaining or dissolving injunctions, appointing receivers, denying remedial writs, and from abolished courts. Chapter 2, beginning with section 3619, regulates the time within which appeals ¡pay lie taken, and the manner of taking and presenting them. Section 3638 provides, “when either party to a judgment or decree dies after judgment or decree rendered, and before appeal taken thereon, an appeal may be presented in the name of, or against the legal representative of the deceased, on producing satisfactory evidence to the clerk, judge of probate or register of the death of the party, and grant of letters testamentary or of administration.” llule 86, Supreme Court practice, provides that any complainant or defendant in a cause in which a decree or order final may have been rendered, may appeal to the Supreme Court in the name of himself and all the other complainants or defendants to the decree. Code, page 826. The Code makes ample provision for the reviyor of causes pending, as well in this court, as in the lower courts. Code, §§ 3462, 3656, and other provisions.

Upon due consideration of the foregoing provisions, in view of their remedial nature and the liberality with which they should be construed to advance the objects the law .intended, a majority of the court are of the opinion that the spirit of the provisions gives the appellant the right of appeal, under the facts of this case, arid the motion to dismiss the appeal is accordingly overruled.

On the questions raised by the ai’peab.

HEAD, J.

The statutes of limitations of three and six years are not applicable to this case. It is a proceeding to enforce" a constructive trust in lands, to which the statute of ten years is a good defense, if the case is ndst excepted from its operation by fraudulent concealment of the facts, or some other saving of the statute. — Lockard v. Nash, 64 Ala. 385 and cases cited. We are not under the necessity of deciding whether the relief sought is barred by the last named statute, for the reason that the defendants have not interposed that defense. The defense of the statute of limitations to the original cause of action of the creditor against the debtor wag personal to the debtor ; and in this case, the debtor who occupies substantially the position of an alleged fraudulent grantor, having suffered judgment against him at the suit of the complainant, his wife, who occupies sub.stantially'the position of an alleged fraudulent vendee of the property sought to be subjected, cannot interpose that defense.

On May 5, 1874, Henrietta Battle and others conveyed by deed to the defendant, Harriet W. Huger, wife of the defendant, Daniel E. Huger, the real estate described in the bill, consisting of a dwelling house and lot in the city of Mobile, for the consideration recited in the deed of one dollar, and the satisfaction of a mortgage to the executors of John A. Battle, deceased, the amount of which mortgage debt was $10,000. The defendants, Mr. and Mrs. Huger, went into immediate possession of the premises and have since occupied them as a residence and homestead. On November 9, 1882, the defendant, Daniel E. Huger, began purchasing goods of Charles Werborn, complainant's testator, and incurred indebtedness to him aggregating, Feb. 7, 1884, $1,163.30, on which the debtor made sundry payments entitling him to an aggregate credit of $550 leaving due, Feb. 7,.1884, $613.30. On the 17th day of December, 1889, Werborn reduced this demand to judgment, in the circuit court, in the sum of $900.78 and costs, and had execution ' thereon, which was returned, May 2, 1890, “no property 'found.” On December 26, 1890, Chas. F. G. Peters, >as administrator with the will annexed of Werborn, filed this bill, alleging, in substance, that said Daniel E. Huger, in fact, purchased and paid for said house and lot, and had the title conveyed to his' said wife, with the actual intent to hinder, delay or defraud his creditors ; that at the time of the purchase and payment he was insolvent; that the property was, and had always ' been, worth more than $2,000 — the statutory exemption, —and praying to subject the excess of its value to the payment of'said judgment. The answer puts in issue i the alleged equity of the bill. It appears that, after, the : rendition of the final decree'in the cause, the appellant', Richard W. Stoutz, was appointed administrator, with "’the will-annexed, of Werborn’s estate. He exhibited ■ his letters to the register, and sued out the present áp- ' peal. The issue in the cause is purely one of fact; -and the question for decision is whether the payments made by the husband, D. E. Huger, of the purchase money, • were made, and the title caused to be conveyed to his wife, for the purpose of placing the property beyond the roach of his creditors. The complainant being a subsequent creditor, the burden is upon him to prove the investment of the husband’s funds in the purchase, with the fraudulent intent above; mentioned. The defendant, Daniel E. Huger, was a cotton broker in the city of Mobile, living there with his wile-, the saitl Harriet W. It appears from the -judicial proceedings at law introduced ■ in evidence by the complainant, that on May 29, 1871, A. P. Bush, in a proceeding by garnishment, wherein Leach Harrison and Forwood were defendants, recovered a judgment »ixi against said D. E. Huger, which was made final on June 113.1873, for $3,778.38. Execution was issued thereon July 4, 1873, and returned “no property found” January 2, 1874. An alias was issued August 28, 1877, and likewise returned October 16, 1877. On February 16, 1874, Leach Harrison and Forwood obtained judgment against him for $8,257.08 on a demand . alleged in the complaint to have been contracted May 25, 1870. Execution was issued March 6, 1874, and returned July 3, 1.874, “no property found.” Probably, though it does not affirmatively appear by proof, the $3,778.38 recovered by Bush, on default of Huger, as garnishee, in fact, represents, in part, the said $8,257.08 recovered by Leach Harrison and Forwood. These judgments, it is observed, were prior to the purchase of the house and lot, the subject of this suit, and were in force at the time of that purchase. Subsequently, other judgments wore obtained against him, viz : Mechanic’s .and Traders’ Bank, May 25, 1«77, $640, on which execution was issued July 21, 1877, and returned “noproperty found” Jan. 4, 1878; and Queen Insurance Company, June 6, .1888. for $1,175.40; execution June 21, 1888, returned “no property found” December 3, 188.8. This is all the evidence touching Mr. Huger’s financial condition at the time of the purchase and since, except ■ that he testifiies that his income after making the first payment on the house and lot, (which was at the time of the purchase) was not as much ns it was before; and that he had not, since then, made $7,000 over and above •expenses. The purchase of the house aud lot was negotiated entirely by said D. E. Huger, his wife, as she testifies, taking no part in if. The terms of payment were $3,000 in cash, at the time of the purchase; $2,000 to be paid at ton months ; $3,000 two years from date, and the balance, $2,000, four years from daté. Mr. Ilugor paid the cash payment of $3,000 with his own funds, and he and his wife executed their joint promissory notes for the said several payments, all bearing interest from date, the said D. E. Huger signing first. Except as to the last of these notes, it does not appear when they were paid, though they were all paid. Presumably, they were paid as they respectively fell due. The evidence shows that Mrs Huger procured Win. Bhtler Duncan, of New York, to pay the last note, being the noté for $2,000 payable four years after date — May 8, 1878, — which he did on Eeb. 9, 1880, taking from the mortgagees in the Battle mortgage, an assignment of that instrument to himself, for his security. This money was repaid to Mr. Duncan by Mrs. Huger, Aug. 13, 1880. How she obtained the means to repay this loan, and by whom the first and seepnd notes aggregating $5,000, besides interest, were paid, are contested questions. The complainant took no testimony. The defendants took and introduced the depositions of themselves and Mr. Duncan. The testimony of D. E. Huger touching these questions is, substantially, as follows: Responding to interrogatories in chief, be says : “I do not recollect when I bought the house I now live in. I bought it from the estate of S. G. Battle for $10,000. I agreed to pay $2,000 or $3,000 cash and the balance on time. I made the cash payment. My money was used in-making the cash payment. After the first payment the other payments were made with monies of my own and William Butler Duncan of New York.” Answering another direct interrogatory, he says : “ I did not state that Mrs. Hug^r made the deferred payments herself, but she made them through William Butler Duncan. She made the money through Mr. Duncan. Mr. Duncan made the investments for Mrs. Huger. Mr. Duncan offered to lend me money to make the deferred payments, but I was under obligations to him already and refused to take any more money from him.” Answering another interrogatory, be says : “I am not accurate as to dates. I think all the purchase money was paid for the house before Werborn’s account was made. All I paid was before the account was made. I do not know how long before. I cannot give the date o.f each payment.” Answering another interrogatory, he says: “I believe the last payment on the house was made to E. H. Gran-din, executor, by Mr. William Butler Duncan. I do not know the date Mr. Duncan paid this money, but I never paid him back.’’ On cross-examination he was asked: “If you have answered that Hattie W. Huger borrowed money to make some of the payments upon said house, did she not repay such loans? Did not D. E. Huger furnish her with the means of repaying such loans ? Did not the money to repay such loans come from D. E. Huger, either directly or indirectly ? “Did not D. E. Huger in some way repay the party who made such loan or loans to Mrs. Hnger ■? To which he answered: “I cannot answer the first question to the second cross-interrogr atorv definitely. I think the money was lent to my wife first, and I think Mr. Duncan made the money for her in Mobile & Ohio Railroad debenture bonds'. I did not furnish my wife with the means of repaying such loans directly or indirectly. I did not repay the party who loaned the money to Mrs. Huger.” Answering another cross interrogatory, he says : “I do not know that any money was furnished my wife for speculation or investment. I have good reasons to believe that Mr. Duncan assisted her in his speculations. The investments were in bonds principally.”

Mrs. Huger, answering an interrogatory in chief, says : “I think I bought the house I live in about eighteen years ago. Col. Huger made the contract of the purchase of my home. Col. Huger made all the negotiations for the purchase of the property.” Again she answers: “My husband made the first payment. Through friends I made money by investment and speculation, and in that way made money to make the deferred payments. Friends made the investment or speculation by which I made this money.” Again she answers : ‘ ‘My house was paid for as near 'as I remember, before this account was made. I can not state how long before. I cannot state accurately when the payments were paid on my house.” Again she answers: ‘ ‘I cannot state when the last payment was made on my house. It must have been paid to E. H. Grandin. I repaid Mr. Duncan gradually.” * * I have stated all T know about this matter. Answering a cross-interrogatory, she says : “I paid gradually on the money that I borrowed to pay on my house. That is my best impression. Col. Huger did not furnish me with the money to repay such loans, either directly or indirectly. He did not repay these loans.” Answering another cross-interrogatory, she says : “Mr. Duncan managed all my speculations or investments. I don’t know how it was derived. I am perfectly ignorant how the speculation was managed. These speculations were managed by Mr. Duncan.” The foregoing comorises the entire testimony of these two witnesses respecting the payments and how and by whom they were made.

Mr. Duncan testified for defendants as follows: “I know the house now owned and occupied by Mrs. Hattie W. Huger and family in Mobile. I had to do with the payment of the balance due by Mrs. H. W. Huger upon this property. I paid the last note due by Mrs. Huger upon that property. The amount so paid by me was two thousand dollars, and one hundred and eighty dollars of interest. I paid it on February 9th, 1880. I have examined Exhibit A, and find it is the note which I paid. I paid it to E. H. Grandin and R. T. Stannard, executors of J. A. M. Battle.” Again he says: “I paid it (the note for two thousand dollars) February 9th, 1880. I was repaid the amount by Mrs. Huger August 18th, 1880.” Again he says : Mrs. Huger said to me that the balance due by her on account of the purchase of this property, amounted to the remaining note unpaid, namely, $2,000, with interest; that she had not the means to pay said note; that she desired me to advance her the amount necessary. She did this with the knowledge of her husband, Daniel E. Huger, who said to me personally that he had not the means of doing so, and that if she could not manage to get the money to do it, the property would have to be sacrificed. He at that time owed me personally money, and stated to me he would not under any consideration ask me to advance any more to him, and that whatever I did in connection therewith, I must do at the request of Mrs. Huger, and upon her responsibility, as he had no money to give her, or to accomplish what she desired.” Again he says: “It (the money he paid) was not derived from her husband, D. E. Huger, either directly or indirectly, and I know of no other source (from which Mrs. Huger derived the money), except the extent that I personally assisted her therein. * * * I do not know what investments of money she may have made. I personally'made an investment for her, advancing the whole amount thereof, on which I subsequently realized, giving her the benefit of the profit exceeding the amount which I had advanced for her.” This constitutes substantially all the testimony upon the question under consideration, an analysis of which shows very plainly to our minds that Mr. Huger paid all rhe purchase money for the house and lot, except the last note for two thousand dollars paid by Mr. Duncan; that Mr. Duncan, after making the payment, gave Mrs. Huger the benefit of some investment he made in Mobile & Ohio Railroad bonds, and in that ■way realized the money to repay himself the amount he had paid out.

The next question then, is, does the evidence satisfy the mind that Mr. Huger had the title to this property put in the name of his wife in order to place the property beyond the reach of his creditors? We are pursuaded that such was the purpose. We have seen that on Feb. 16, 1.874, about three months before the purchase, a judgment was rendered against him for $8,257.08 on a debt which he had been owing since May 25th, 1870, upon which an execution was, at the time of the purchase, in the hands of the sheriff; that previously, to-wit, juue 13th, .1873, a judgment had been obtained against him for $3,778.38 upon which- execution had been returned Jan. 2d, 1874. His business was evidently declining, for he testified that his incomp was not so much after the purchase as it was before. It is not conceivable that at the time of the purchase he did not realize the existence, and feel the pressure, of the heavy indebtedness then but recently reduced to judgment, and in the hands of the sheriff for collection. He engaged in the purchase of a very valuable home, worth $8,000 more than the law allows a debtor to hold, as a home for himself and family, against the claims of creditors, and paid down, in the face of the judgment against him, the sum of $3,000 of his own funds. It cannot be denied that it was contemplated by both himself and wife that he would make the deferred payments, for it is not pretended that she had any estate, was engaged in any business or that she could, in any wise, anticipate the future acquisition of means with which to make the payments as they might severally mature. This is borne out by the fact that he himself made the future payments, until he reached the last, due four years after the purchase. Finding himself unable to pay the last note, and two years after its maturity having passed, it is evident the time came that the property was about to be sacrificed, on account of his inability to raise the necessary amount. In this emergency, through the intercession of his wife, Mr. Duncan was induced to advance the money to pay the note, the history of which has already been stated. In view of all this he has the title to this valuable home placed in his wife, where, if the conveyance stands, the property would be secure to the use of himself and family, free from the judgments which were pending against him. Can this be deemed the exercise by a debtor of a due regard for the rights of his creditors? We are constrained to think that the course pursued was in that disregard of the rights of creditors which imparts to the transaction the element of main fides which the law condemns as actually Iraudulent.

The decree of the chancellor will be reversed, and a decree here rendered granting the complainant relief and ordering that, if his debt and the cost of this court and the court below be not paid by a day to be therein named, the said property be sold and the excess of the proceeds of sale over $2,000, representing the homestead right, and $2,180 with interest, the preferred lien of Mrs. Huger, be applied so far as necessary to the payment thereof; the said $2,000, and the amount of said preferred lien, and the surplus of the remainder after the payment of complainant’s debt and cost, aforesaid, to be paid over to the defendant, Iiattie W. Huger,

Reversed and rendered.