Mathews v. J. F. Carroll Merc. Co.

McCLELLAN, J. (l) Where a mortgagor and his wife seek, by their bill, the cancellation of a mortgage on land, belonging to the husband, constituting the homestead, in whole or in part, on the ground that the separate acknowledgment of the wife was not taken as the statute requires, the bill is without equity if in it no effectual offer is made to do equity by restoring that which the mortgagor received on.the faith of the mortgage; and this “upon the consideration that to allow one to retain the benefits of an agreement which he repudiates, when by doing so he derives an advantage, while the uncomplaining party is subjected to loss, would be plainly inequitable.” — Grider v. Amer. Loan Co., 99 Ala. 281, 12 South. 775, 42 Am. St. Rep. 58; Loxley v. Douglas, 121 Ala. 575, 577, 25 South. 998. In Clark v. Bird, 158 Ala. 278, 48 South. 359, 132 Am. St. Rep. 25, the actor was Bird, the vendee in an executory contract of purchase, and not Clark the vendor; and hence the equitable consideration above stated could not have had application or effect. The third, fourth, and fifth grounds of demurrer, to the amended bill seeking to cancel a mortgage on land constituting the homestead because not separately acknowledged by the wife, were well taken, there being no appropriate offer to do equity in respect of funds received on the faith of the mortgage. (2) There was no merit in the point taken by the first ground of the demurrer, that the amended bill was multifarious because it sought the cancellation of a single mortgage on lands alleged to be severally owned. — Code, § 3095; Truss v. Miller 116 Ala. 494, 22 South. 863; Ellis v. Vandegrift, 173 Ala. 142, 55 South. 781. (3) The cross-bill would cancel certain conveyances of real estate, alleged to be unrecorded and voluntary, described in the [504] mortgage and formerly owned by W. F. Mathews, whereby the title to the property was sought to be invested in the wife, Ida Mathews. On a proper interpretation of the cross-bill it is due the respondents in the cross-bill to treat it as defining the cross-complainant as a subsequent creditor; a creditor whose obligation came into being after the voluntary, unrecorded conveyances were executed. In order to warrant the cancellation of even a voluntary conveyance by the debtor at the instance of subsequent creditors there must be shown “mala tides or fraud in fact in the transaction;” and “if actual fraud is shown, it is not of importance whether it was directed against existing or subsequent creditors.” The right of the subsequent creditor to have the conveyance canceled depends upon the existence of actual fraud in the transaction. — Seals v. Robinson, 75 Ala. 363; Allen v. Caldwell, 149 Ala. 293, 297, 298, 42 South. 855, among others. (4-6) The seventh ground of the demurrer to the cross-bill pointed the objection that the allegations of fraud in the executions of the conveyances assailed do not contain sufficient averments of facts, but are predicated of conclusions of the pleader. Fraud is never presumed. It must be alleged and proven to invite or to justify relief by cancellation of conveyances. “Courts will not .strain to force conclusions of fraud; and if the circumstances relied on to sustain that allegation are fairly susceptible of an honest intent, that construction should be placed upon them. * * * Fraud will not be imputed when the facts and circumstances from which it is supposed to arise may reasonably consist with honest intentions.” — Pollak v. Searcy, 84 Ala. 259, 262, 4 South. 137. It is the pleader’s obligation, when he would sufficiently charge fraud as a ground of avoiding a conveyance, to aver the facts and circumstances themselves from which the law, not the pleader’s conclusion, can deduce the conclusion that fraud affected the transaction. — Flewellen v. Crane, 58 Ala. 627-629; Empire Realty Co. v. Harton, 176 Ala. 99, 57 South. 763. As respects the storehouse property, described in the mortgage and in the conveyance to Ida Mathews, the cross-bill charges that the property was claimed by the husband or by the firm, of which he was a member, occupying the property; that the conveyance was not recorded; that there was no change in the possession of the property indicative of any change in the title; and that the [505] husband caused the deed to be withheld from record, under the circumstances we have summarily stated, with the fraudulent intent of creating the appearance of a state of ownership consistent with the right assumed by W.' F. Mathews or the firm to secure credit' — the loan secured by the mortgage — from J. S. Carroll, the cross-complainant’s transferror. It has been ruled here that the simple omission to record a conveyance is not, of itself, evidence of a fraudulent intent; for the mere omission may consist with good intentions. — Lehman v. Van Winkle, 92 Ala. 443, 8 South. 870; Allen v. Caldwell, supra. But the allegations of the cross-bill accompany the averment of failure to record the instrument with the further charge that the withholding from record was caused by W. F. Mathews with an intent that, if entertained, was actually fraudulent. And when these charges are interwoven with the further charges that W. F. Mathews paid the taxes on the property in his own name and had actual unchanged possession of the property, the conclusion of the chancellor that the allegations, with respect to fraud in the conveyance of the storehouse property, were sufficient. (7) Where the conveyance is voluntary, as is here alleged, the grantee therein need not be shown to have participated in the actual fraud characterizing the transaction in order to entitle a subsequent creditor to relief by cancellation of the conveyance assailed. — McGhee v. Bank, 93 Ala. 192, 196, 9 South. 734. Now, the effort to charge vitiating fraud with respect to the voluntary conveyance of the residence property to Mrs. Mathews and their daughter, since deceased, is not presented through allegations of the affirmative strength employed in characterizing as actually fraudulent the voluntary conveyance of the storehouse property. An instance of this difference in averment is the absence of any unequivocal charge that W. F. Mathews kept the conveyance from being filed for record, or recorded. The demurrer to' the cross-bill did not separately assail the features of the pleading treating the distinct conveyances of the two classes of property. The fact that there was no apparent change of possession of the residence property, which was occupied by the husband and the wife, after the voluntary conveyance was made, could not alone suffice to characterize the transaction as the product of bad motives. The withholding of the conveyance from record may have been entirely innocent; and it was the pleader’s obliga [506] tion to aver facts and circumstances which would reflect upon the innocence of the omission to record. The decree is affirmed. Affirmed. Anderson, C. J., and Sayre and Gardner, JJ., concur.