Berry, Demoville & Co. v. Sowell

SOMERVILLE, J. It is a settled principle of equity jurisprudence, that where, by mistake, or fraud, a deed or 'other-written contract fails to express any material term of the real agreement which the parties mutually intended to make, a court of equity will, on clear and satisfactory proof of such mistake or fraud, reform the instrument, so as to make it conform to the intention of the parties, and embody the actual or true agreement.—Alexander v. Caldwell, 55 Ala. 517; Campbell v. Hatchett, Ib. 548. The aim of the court, in such cases, is to place the parties, as nearly as possible, in the situation they would have occupied but for the mistake.—Waterman on Specific Performance, §§ 368, 369. And this jurisdiction to reform or rectify written instruments may be exercised as well against creditors, and purchasers having actual or constructive notice of the mistake, as between the-immediate parties themselves.—Dozier v. Mitchell, 65 Ala. 511; Baskins v. Calhoun, 45 Ala. 582; Williams v. Hatch, 38 Ala. 338; 1 Story’s Eq. Jur, §§ 165, 166. If, however, the parties can not be placed in stdtto quo, or if the mistake can not be rectified without impairing the vested rights of innocent third parties, having no notice of the mistake, the aid of equity will be withheld.—Waterman on Spec. Perf. § 384. The present bill is filed to reform a deed to certain real estate, executed bv the defendant, Capshaw, to the complainant, Mrs. [18] 'Sowell, and dated December 19, 1873. Ancillary to tliis, an injunction is prayed against a writ of attachment levied upon the land by the appellants, Berry, Demoville & Co. No difficulty is presented as between the immediate parties to the deed. The bill alleges an agreement between Benjamin Sowell, complainant’s husband, who is made one of the defendants to the bill, and his wife, the complainant, on the one part, and the defendant, Capshaw, on the other, that the husband should convey the property in controversy to Capshaw, in order that lie might re-convey to the wife, in such manner, and with such apt words, as to constitute the property her. separate estate by contract. Capshaw, who thus constituted himself a mere trustee, made this re-convey anee; but, by omission, ignorance, or mistake of the draughtsman, the consideration of the deed was recited to be mere love and affection, instead of a valuable one moving from the grantee and her husband, and the apt words necessary to describe or create the separate equitcible estate were omitted. The parties are thus alleged to have executed an instrument, by common mistake, different from the one agreed on, and prejudicial to the rights of the complainant. These facts are admitted in the answers of both Capshaw, the grantor in the deed, and of Benjamin Sowell, the husband, who acted for his wife; and are, in our opinion, sustained by the evidence. The case is clearly one in which the equity of rectification, which is strictly in the nature of specific performance, can be invoked, unless there be some other ground of valid objection. The remedy of Mrs. Sowell, in a court of law, was totally inadequate. The deed on its face purported to be a mere voluntary conveyance, which would be void as to the attaching •creditors, whose debts existed at the time of its execution. It was incapable of being established by parol proof of a valuable consideration in a court of law, such evidence being inadmissible as tending to vary the legal effect of the instrument. The only remedy, in such cases, is a bill in equity filed with the view of its reformation.—Kerr on Fraud & Mis. 191-2; Hubbard v. Allen, 59 Ala. 283. The levy of the attachment was no obstacle to the reformation of the deed conveying the attached property to the complainant. The equity of Mrs. Sowell, arising from the purchase of the house and lot in question with her money, was .superior to the lien acquired by the levy of the attachment, whether the attaching creditors had notice of such equity or not. The attachment could only reach the aetucal interest oj the defendant in attachment, whatever that might be, aud is no impediment to the assertion of all equities previously existing as incumbrances on the property. — Drake on Attachments, § 223; Freeman on Judg. §§ 356-7. Nor can an attaching [19] creditor claim protection as a bona fide purchaser, as he seeks to recover an old debt, and parts with no present consideration. Depeyster v. Gould, 29 Amer. Dec. 723; Rogers v. Adams, 66 Ala. 600. The same rule was applicable, in this State, to the liens of judgment creditors, until it was expressly abrogated by statute.—Coster v. Bank of Georgia, 24 Ala. 37; Preston & Stetson v. McMillan, 58 Ala. 84; Code of 1876, §§ 2199, 2200; Freeman on Judg. §§ 356-7. The evidence shows that the complainant was in possession of the premises, and that the d.eed from Oapshaw to her, here sought to be reformed, was executed and recorded before the levy of the attachment sued out by appellants. The original vendors, Townsend and wife, conveyed to Benjamin Sowell, in March, 1870, for a consideration of two thousand dollars. Of this sum, one thousand dollars was paid in cash; and the note of Sowell was given for the balance, upon which Oapshaw became one of the sureties. Oapshaw afterwards became indebted to Sowell, in the sum of about six hundred dollars, for a lot of land in the town of Athens, which he paid upon the debt to Townsend ; and he also paid out of his own funds the balance of the purchase-money, amounting to about four hundred dollars. It is'insisted that this was a donation to the complainant, his daughter, to whom he conveyed the house and lot, as above stated, in December, 1873, and that the conveyance was, therefore, fraudulent. If the premise be true, the conclusion would follow, at least so far as to render the deed constructively fraudulent, and the grantee would be constituted a trustee in i/mitmn to the extent of the gift; such beiug the ’ principle governing voluntary conveyances. — Bump on Fr. Oonv. 303. But we are not at liberty to regard the transaction in this light. The four hundred dollars in question was paid by Oapshaw, pursuant to a previous obligation entered into as surety for Benjamin Sow-ell. It was not, therefore, a gift to the complainant, but money paid by request for the use of the principal, Sowell, against whom an action of assumpsit would lie' at the instance of Cap-shaw. So, a garnishment might lie against him, as the debtor of Oapshaw, in favor of the appellants. These conclusions are utterly in conflict with the theory of a gift to complainant. The fact that the money, paid by the surety for the principal, was invested by the latter in the lands purchased for complainant, confei’s no right upon the appellants, as creditors, to pursue the fund into the investment. Such investment, standing alone, raises no equity in favor of the creditors of the surety, either by subrogation or otherwise. Such, at least, is the doctrine of this, court as established by its past decisions. Foster v. Trustees of Athenæum, 3 Ala. 302; Knighton v. Curry, 62 Ala. 404. [20] The decree of the chancellor must, under these principles, be affirmed.