Stokes v. Jones

CHILTON, C. J. 1. The first question presented by the record is, can a court of law avoid a deed in favor of a bona fide purchaser for a valuable consideration, which was made to delay, hinder and defraud creditors. The counsel for the plaintiff insists, that the deed can only be avoided for this description of fraud, in a court of equity, and that the fraud which will vitiate a conveyance in a court of law, must relate to its execution. There are cases where this general language has been held; as in the case of Mordecai & Wanroy v. Tankersley, 1 Ala. 102, where the learned judge in delivering the opinion, says: “ There is no doubt that a deed may be vacated in a court of law for fraud; but the fraud must go to the execution of the deed, otherwise it would not be cognizable in a court of law.” So in this case, when before us at a previous term, (18 Ala. 731,) it was said: “ A fraud which will vacate a deed of lands in a court of law, must relate to the execution of the deed.” In the first case, the attempt was to impeach a deed, valid in its creation, by the subsequent fraudulent conduct of one of the parties to it; and in the second case, the language was used in reference to the argument that the plaintiff, by offering to buy a portion of the same land, had fraudulently induced the defendant to purchase, and had thereby created an estoppel. As applicable to the facts of each, the court very properly said, the fraud to be cognizable at law must relate to the execution of the deed; that is to say, if the title to the land actually vested in the purchaser, it is not, in a court of law, divested by the subsequent fraud; but it was certainly [736] not intended to affirm that a voluntary conveyance, conceived in fraud, and made to delay, hinder and defraud creditors, could not be avoided by a creditor or bona fide purchaser for a valuable consideration, in a court of law. Such a decision would oppose many adjudications of this court, as well as the views of elementary writers on the subject. The case of Carter v. Castleberry, 5 Ala. 277, is directly in point; as also Forrest & Lyon v. Camp, 16 ib. 642, and Johnson v. Thweat, 18 ib. 741. See also, Roberts on Frauds, pp. 72, 596; Gregg v. Lessee of Sayre and wife, 8 Peters, 252. 2. But it is objected to the charge, that inasmuch as the fraud complained of consists in the intention of the grantor, it should have been referred to the jury to ascertain whether that intention existed. When the question is one of fraudulent intent, the court cannot properly pass upon the effect of the testimony, but must leave the question to be solved by the jury, as to whether the act done was coupled with such intent. Thomas v. Degraffenreid, 17 Ala. 611; Castillo & Keho v. Thompson, 9 ib. 944. The case before us, by the peculiar phraseology of the bill of exceptions, is not obnoxious to this objection. It is said: “It was expressly proved, that the conveyance to the plaintiff was made to delay, hinder and defraud the grantor’s then existing creditors.” The proof establishing this conclusion is not set out, and there is no conflicting proof. It has often been said, that the bill of exceptions must be construed most strongly against the party excepting; and applying this rule of construction to the case before us, we are bound to conclude that the plaintiff conceded the sufficiency of the proof to establish the fraudulent intent; since, instead of setting out the proof which tended to establish the intent, (in which case the jury, and not the judge, must determine as to its effect,) he broadly states the effect of the evidence, and concedes that “it was expressly proved the deed was made to defraud the creditors of the grantor.” If, therefore, the fraud was expressly proved, we are unable to perceive any error in the charge to the jury, that, if they believed the proof, the plaintiff could not recover. The charge, construed with reference to the fact stated in the bill of exceptions, was tantamount to an instruction that, if they believed it was expressly proved the deed [737] •under wbieb tbe plaintiff claimed was made to delay, binder and defraud creditors, tbe plaintiff could not recover against tbe defendant, wbo was shown to bave purchased tbe land from tbe fraudulent grantor, after tbe conveyance to tbe plaintiff, and to have paid a valuable consideration therefor. If tbe jury bad found a special verdict, setting forth tbe facts stated in tbe bill of exceptions, tbe court might properly bave pronounced judgment in favor of tbe defendant; for tbe law arising upon the facts stated, without the aid of inferences of other facts from them, is in favor of tbe defendant, and adjudges tbe title of tbe plaintiff against him void. Such being tbe case, and there being no conflict in tbe proof, there was no error in tbe charge, that, if the jury believed all tbe proof, (which, if true, established these facts,) they must find for tbe defendant. 3. But a very ingenious argument is urged by tbe plaintiff’s counsel to establish tbe validity of bis deed, notwithstanding tbe fraud. It is this: When John Stokes, Sr., conveyed tbe land to the plaintiff, be bad neither a legal nor equitable title to it, and as tbe creditors wbo were attempted to be defrauded could not have subjected bis interest in tbe land, either in law or in equity, to their demands, tbe case does not fall within tbe prohibition contained in the statutes of fraud of 13 and 27 Eliz. We are aware that the adjudications upon this point are somewhat conflicting. Mr. Justice Story says, that after various discussions, tbe English courts bave settled down upon tbe doctrine, that in order to make a voluntary conveyance void as to creditors, either existing or subsequent, it is indispensable that it should transfer property which is liable to be taken for tbe payment of debts. 1 Story’s Eq. Jurisp. § 367, n. 1, (4 Ed.) This learned author, however, fails to give any decisive opinion of bis own as to tbe soundness of tbe English rule. On tbe other band, Mr. Chancellor Kent ably combats tbe doctrine, and vindicates tbe justice and policy of tbe rule which requires courts of equity to afford relief, in cases of fraudulent alienations of property, whether such property c®uld be reached by execution at law or not; for, otherwise, a debtor might convert all bis property into stock or cboses in action and settle them upon bis family, set [738] ting his creditors at defiance. Bayard v. Hoffman, 4 Johns. Ch. Rep. 452; ib. 687 ; 1 Story’s Eq. § 368, n. 1. The latter doctrine is sanctioned by this court. See Gannard et al. v. Eslava, 20 Ala. 732. But it is unnecessary to dwell upon this point, or review the cases which bear upon it, inasmuch as the previous decision in 18 Ala. 734, is decisive of it. We there held, that if the deed from John Stokes, Sr., to his son (the plaintiff) was fraudulent, it could not, by virtue of the covenant of warranty contained in it, operate against his creditors or subsequent purchasers, so as to protect his future acquisition of title from them. The voluntary fraudulent estoppel is as impotent to defeat the just claims of creditors or bona fide purchasers for a valuable consideration, as the deed would be had it contained no covenant out of which the estoppel is supposed to arise. A party cannot do by circuity and indirection what the law forbids to be directly done. He cannot avoid the claims of creditors or bona fide purchasers, by conveying with warranty to defraud them, and afterwards acquiring the title. The deed being fraudulent, is void as to the defendant, and wholly inoperative, except as between the parties to it. “According to the greatest authorities,” says Mr. Roberts, “a cpvinous conveyance of land is no conveyance as against the interest intended to be defrauded, and ought by the rules of good pleading so to be treated, where the party is seeking to avail himself of the statutes of fraudulent conveyances.” Roberts on Fraudulent Conveyances, p. 596. 4. The deed in this case contained a condition, the acceptance and performance of which would have created a valuable consideration; but the grantee was an infant of tender years when the deed was made. He had not accepted it, nor in anjr way bound himself to the performance of the condition, before the sale of the land to the defendant. Indeed, he was not apprised of its existence until long afterwards. It was as to him, therefore, at the time of the subsequent sale, purely voluntary, and his subsequent acceptance and part performance could not relate back, so as to defeat the intervening sale to a bona fide purchaser. * Let the judgment be affirmed.