Boutwell v. Spurlin Mercantile Co. , 203 Ala. 482 ( 1919 )

In a creditor's suit to subject property fraudulently conveyed by his debtor, "when the complainant shows that his debt antedates the conveyance, the grantee must then show that he paid a valuable consideration — substantial, and not merely nominal. Thereupon the complainant must show that the grantee had notice of an intent by the grantor to hinder, delay, or defraud his creditors." London v. Anderson Brass Works,197 Ala. 16, 72 So. 359.

The bill of complaint in this case alleges that the grantor's debt to complainant was in existence when the conveyances in question were made to the several respondents on February 24, 1910. This allegation was, of course, not supported by the mere exhibition of a judgment rendered thereon at a later date. Lawson v. Ala. Warehouse Co., 73 Ala. 289. But the president of the complainant corporation testified that he had personal knowledge of the prior existence of the account; and the bookkeeper who sold the merchandise testified to the fact of the sale and the price charged therefor, after refreshing his recollection by examination of the ledger entries made by himself.

The ledger entries, not being the original entries of the transactions in question, were not admissible as evidence of the account, but were properly used by the witness as memoranda to refresh his recollection.

The prior existence of the account against respondents' grantor was therefore prima facie shown by the testimony referred to, and the burden was cast upon respondents to show its payment or nonexistence, as to which no evidence seems to have been adduced.

The several conveyances by which the grantor disposed of the 80-acre tract were mere deeds of gift, and were constructively fraudulent and void as to complainant's prior claim of indebtedness against the grantor, unless, by reason of its homestead character, it was not subject to the payment thereof.

Respondents' answer set up the claim that this tract was at the time of these conveyances a part of the grantor's homestead, and that this homestead was less than 160 acres in area and $2,000 in value, and that, being exempt as a homestead, its conveyance could not be in fraud of creditors. Pollak v. McNeil, 100 Ala. 203, 13 So. 937.

The trial court held, upon the evidence adduced, that the value of the homestead in question was in excess of $2,000, and that the 80-acre tract was therefore subject to the debt, and ordered that so much of it be sold by the register as might be necessary, "by selling each of said 40's separately, unless the sale of one of them is sufficient."

The burden of proof as to the value of the homestead within the limit of $2,000 was on respondents. The testimony on this issue, pro et con, is apparently about evenly balanced, and, having been taken viva voce before the trial judge, we would not be justified in overruling his finding that the entire homestead of the grantor, including the small tract of his residence and the 80-acre tract here in question, was in 1910 worth substantially in excess of $2,000, and was, as to such excess, subject to the payment of the grantor's debts.

It is insisted on behalf of appellants that the final decree was erroneous at least in its failure to limit the satisfaction of complainant's judgment to the excess value of the value of the homestead, and to protect its exempt value of $2,000 in favor of the respondent grantees.

"Where the area and value of the homestead does not exceed the limit allowed by law as exempt, and it is not a part or parcel of a larger portion of land, a selection is unnecessary." Pollak v. McNeil, 100 Ala. 203, 13 So. 937.

But where, as here, the value does exceed the limit, the homestead exemption can be made judicially cognizable only by a selection within the limit, if separable, or, if not, by an allotment of $2,000 of the proceeds of sale, as provided by sections 4187 and 4188 of the Code. Such proceedings, however, are based upon a formal claim of the exemption by the owner and its contestation by a creditor.

The case here presented is peculiar. Respondents' grantor lived on a half-acre tract, worth, we may say, about $1,000, and in connection therewith used a noncontiguous 80-acre tract, worth, we may say, about $2,000, the two tracts thus constituting his actual homestead. He divided the 80-acre tract into eight parts and conveyed them severally to his children by deeds contemporaneously executed, himself retaining the house and lot. Soon afterwards he died, his widow surviving him. In such a situation we know of no means by which the homestead right of the original owner can now be demarcated and rendered available to these respondents.

Appellants insist that there was error in the action of the trial court in overruling their demurrer to the bill of complaint, especially as to the sufficiency of its allegations of fraud in paragraph 6. The first allegation is that no consideration passed for the conveyances in question, but that the consideration expressed in each of the deeds was simulated; "but [the bill proceeds], if complainant is mistaken in this, then it alleges that all of said conveyances and transfers were simply the means adopted by said W. J. Boutwell to hinder, delay, and defraud this complainant, and to place his property out of the reach of an execution," etc.

As pointed out by the demurrer, the second aspect of the bill was defective in its omission to state any facts constituting the fraud charged, and more particularly in its entire failure to charge any participation by the several grantees in the fraudulent purpose of their grantor. Pippin v. Tapia, 148 Ala. 353,42 So. 545; Martinez v. Meyers, 167 Ala. 456, 52 So. 592; Curran v. Olmstead, 101 Ala. 692, 14 So. 398.

The bill being defective in this alternative aspect, the entire bill was defective, and the demurrer was properly addressed to the bill as a whole. Henry v. Tenn. Live Stock Co., 164 Ala. 376, 51 So. 1029, and cases cited. The demurrer should therefore have been sustained.

However, these appellants, as to the matters here concerned, were not prejudiced by this erroneous ruling, since the proof is clear and without dispute that they were mere donees of their respective interests in the land, and were concerned only with the issues arising under the first aspect of the bill, which was sufficiently pleaded. It would be a useless ceremony to send the cause back for an amendment of the bill and a retrial upon the same evidence, upon which the same result would necessarily be reached.

Finding no prejudicial error in the record, the decree of the circuit court will be affirmed.

Affirmed.

ANDERSON, C. J., and McCLELLAN and THOMAS, JJ., concur.