Adams v. Broughton

13 Ala. 731

• Court: Supreme Court of Alabama
• Decided: January 15, 1848
• Status: Published

Opinions

GOLDTHWAITB, J.

1. The deed under which the plaintiff in these suits makes title having been made in the State of Georgia, at a time when the slaves were there, is the matter which causes the chief difficulty; for it seems to be conceded, the deed, under our statutes of frauds, is inoperative against creditors and purchasers, because it was not registered, and because there was no transfer of the possession of the slaves. It may admit of question, whether property brought within this State is not governed by our statute, but we do not now purpose to discuss this point, and shall confine our examination to ascertaining, whether, by the course of the common law, the delivery of a voluntary deed, conveying an estate in personal chattels, to be enjoyed after the death of the grant, is operative, either against his personal representatives, when he dies in possession, or against his creditors, or a subsequent purchaser from him.

Independent of decisions upon this subject, it would seem strange if one, by a secret act, which need be known to but three persons — i. e., the grantor, the grantee, and the witness — should, be permitted to clog his visible property, so as to defeat those who should afterwards credit him upon the faith of his being the owner, or to whom he should after-wards sell it for a valuable consideration. If this was permitted, it is evident there would be no security for either creditor or purchaser, as nothing would be more easy than for one thus to dispose of his entire estate, and the consequence would be, the enjoyment by his donee of the estate freed from the claims of creditors. Our statute of frauds possibly permits a gift so made, although the possession is not transferred at the time to the donee, but then the deed must be acknowledged and registered as the act directs. I apprehend that a gift could not be so made by the course of the common law, and that without a change in possession, actual and notorious, at the time, no estate, as against a creditor, or subsequent purchaser without notice, would pass by the delivery of a deed. I say without notice, because I deem this clear, but do not intend to be understood as declaring that a subsequent purchase would be avoided, even by the fact of notice, for it admits of much doubt whether the possession and ownership can be disunited without the express sanction of legislative enactments.

It is somewhat singular that no decision upon this subject as a common law question, is to be found in the English books. This is probably owing to the fact that numerous statutes inhibiting fraud were there passed at an early period. Of this class, though by no means the earliest, are 13 Eliz. ch. 5, and 27 Eliz. ch. 4, which cover every possible ground of fraud — the first being in favor of creditors, and the last in favor of purchasers. They are both said by Lord Mansfield to be declaratory of the common law. Cadogan v. Kennet, Cowp. 434. And this seems also to have been the opinion of Sir Edward Coke. Coke on Litt. 76, a, 290, b. Neither of those statutes, in terms, avoid transactions merely because they are voluntary — i. e., without valuable consideration— but only such as are fraudulent. It is evident therefore, when the courts avoided conveyances merely on the ground that there was no valuable consideration to sustain them, this must by the common law have been considered as actual fraud, wherever a creditor, or subsequent purchaser came in contact with the volunteer. Yet we must not be led away, to suppose the common law prevented an owner, whether of real or personal estate, from renouncing his dominion over it, and transferring it to another — provided this renunciation was coupled with an actual change in the possession, bona fide and not colorable. Under these statutes, however, the courts seem to. have considered it imperative on them to decide against a voluntary conveyance, independent of the question of possession. In Munn v. Wetmore, 8 Term, 529, where the possession seems to have followed the deed, Lord Kenyon admitted, that if the deed was voluntary, the law says it was fraudulent. In Otley v. Manning, 9 East, 58, all the decisions prior in point of time are collated, and the conclusion was, a voluntary conveyance, without fraud, was per se void, under the statute, against a subsequent purchaser.

It is inconceivable that so harsh a construction could ever have been put on the statute, unless the previous law had denounced the same consequences against similar conveyances, where the possession did not follow the deed. Without reference to any statute, as giving the rule, it seems well settled, that even when a sale is made, it will be void against a creditor, unless there is a change of possession, actual or notorious. Wendell v. Smith, 1 Camp, 332; Armstrong v. Baldeck, Gow. 33. It is said arguendo by counsel, in Bicknell v, Rolston, Pr. Ch. 285, that he had known the law so ruled forty times at Guildhall; and Gibbs, C. J., in Joseph v. Ingram, 8 Taunt. 838, in a case where an exception to the general rule was allowed, admitted the principle was established, that if a man sells goods, and continues in possession, the sale is void. Nor do the decisions of Kidd v. Rawlinson, 2 B. & P. 59, and Watkins v. Birch, 4 Taunt, 823, affect this rule, as in them, although the possession continued as it was before the purchase, the sale was made by the sheriff. It is true, with us this rule, as to attaching creditors, has been somewhat modified, so that the possession is per se evidence of fraud; yet every one must perceive that a' subsequent purchaser has just as strong an equity as the previous one, and when he acquires the possession with the purchase, ought not to be defeated by the previous secret transfer. In Gardner v. Howland, 2 Pick. 599, it is said by the court, that to complete a sale of a chattel, so that the vendee may hold it against a subsequent purchaser, ignorant of the former sale, a delivery is necessary.

If such rules are applicable to cases where a money consid■eration is paid by both parties, how greatly more are they called for when one of them is a mere volunteer ? It has been supposed, that because here the estate was not to vest in the donee until a future day, the possession of the donor is consistent with the deed. Possibly, if the conveyance was sustained by a valuable consideration, this circumstance might create a distinction, as the decisions certainly seem to indicate that there may be a valid mortgage of personal chattels, without a change of possession, but in my judgment, this failing., it only aggravates the mischief to the creditor or purchaser, that the one having the pretended adverse right, has no interest at stake to cause him to proclaim his title.

What I have said, with the citations made, in my judgment is satisfactory to show that a grantee to whom personal chattels are conveyed by a voluntary deed not accompanied with possession, has no right whatever by the course of the common law, against either a creditor of the grantor or a purchaser from him, without notice of the conveyance.

2. It remains to consider the effect of the deed as against the personal representative of the grantor. Assuming, for the present, that this instrument is a deed, as distinguished from a will, it appears to be settled, in this court and elsewhere, that it is operative against the grantor’s personal representatives. Marler v. Marler, 6 Ala. Rep. 367, and cases there cited. When the case referred to was decided, we had examined that of Bethel v. Stanhope, Cro. El. 810, with which it seems at variance. It is to be remarked, that Bethel v. Stanhope, was followed, after a lapse of a few years, by Hawes v. Leader, Cro. Jas. 270, where it was determined the administrator of the fraudulent donor could not resist the suit of the donee. This latter decision seems free from objections to which the other is apparent, for it may be, although there are creditors more than sufficient to exhaust the assets in the hands of the administrator, that they will never pursue those in the hands of the donee. Independent of this, as the fraudulent donee is liable to creditors as executor de son tort, it appears inconsistent he should at the same time be liable to the suit of the rightful administrator. These considerations confirm the opinion held by us in the case cited, and we feel no inclination to depart from the rule then settled.

3. It is urged, however, that this deed is in legal effect nothing more than a will, as the estate cannot be conveyed by the grantee until after the death of the grantor. It may be conceded there is much apparent force in this argument, but it will not stand examination. Formerly it was the rule, that no estate in expectancy could be created either in goods or chattels, unless the entire estate passed out of the grantor at the same time. In accordance with this, we find it laid down in the older books that a man cannot reserve a less estate than he has already to himself, unless he parts with the whole and re-takes that less estate by way of use. Cranmer’s Case, 3 Dyer, 309, b. But in modern times, the law has been modified so as to permit those estates to be created directly, which could formerly be created in an indirect way. A very similar reservation to this, for the life of a grantor, of real estate was held good in Simmons v. Augustin, 3 Porter, 69, and we can perceive no sound reason why a similar principle should not obtain with respect to personal property, as it is conceded by all the modern writers the same effect could be obtained by a conveyance in trust. 2 Black. Com. 398 ; Harg. Notes 3 Coke Litt. 20 a. The American cases are numerous to show that such a settlement by deed is admissible. Horn v. Gartner, 1 Florida Rep. 63, and cases there cited. It being ascertained that such a disposition may be made by deed, it follows, that if the thing be absolutely granted, and there is a grantee to take, that the transfer of the title as between the grantor and grantee is complete by the delivery of the deed. The case of Sheppard v. Nabors, 6 Ala. R. 631, is different from this, because there, although the form of the deed was quite similar, there was no grantee in esse at the time of its execution, and it may be inferred from the report, there was no evidence of its delivery to any one as a deed. Here, as every essential of a deed is proved, we feel constrained to pronounce, that such is the legal effect of the instrument, and as such, it is binding upon the personal representative of the grantor.

The result of what I have said is, that in my judgment, the court below erred in its exposition of the law, so far as it affects the suit against Adams, and that it did not err in the charges in the suit against Banks.

ORMOND, J.'

The deed which is to be construed in this case, is a voluntary deed from a father to his son, conveying, upon the consideration of natural love and affection, certain slaves; the donor reserving to himself the right to use and enjoy the slaves, during his life, and that of his wife.

The effect of this deed was to convey to the donee, immediately upon its delivery, the title to the slaves, the right to the possession being reserved to the donor. The instrument was not testamentary in its character, but became immediately operative upon its execution.

This deed being made in Georgia, it becomes necessary to consider what is its effect at common law. It is conténded by my brother Goldthwaite, that it is fraudulent, and void, by the common law, against creditors, whether prior, or subsequent to the deed, and also against subsequent purchasers without notice of the deed. He arrives at this conclusion, because the deed is voluntary, and there was no change of the possession.

It is admitted, there is no decision in the English books affirming this principle, and to my mind, this is a conclusive argument against its soundness, as it is impossible to suppose, that if the proposition be true, that the common law did not permit a transfer of the title to personal property, in any case, either absolutely or conditionally, without a change of the possession, that the books would not be full of cases illustrating the principle — it would indeed be found among the rudiments of the law.

Where there is an absolute sale of personal property, and no change of the possession, the law presumes it to be fraudulent, and this has been considered to be law ever since the decision of Twine’s case. This presumption of law, rests upon the established course of dealing amongst men, and therefore when, after an absolute sale, the property is left with the vendor, it is, in the language of Lord Coke, “a sign of trust.” But when the, sale is not absolute, but conditional, and by the contract of the parties, the possession is to be retained by the vendor, for a stipulated time, or until the happening of a certain event, no such presumption arises, because there is nothing incongruous between the contract of the parties, and their conduct; and therefore if the possession is where, by the terms of the contract it should be, it is not a sign, or Badge of fraud. This was determined in Edwards v. Harben, 2 Term, 587, and has been recognized as law from that day to the present, both in England and the United States ; and has been repeatedly recognized by this court. Our registry act, which requires deeds of trust, and other conditional sales to be recorded, does not give them validity, but imposes a condition, to which they were not subject by the common law — registration—the object of which being notice merely, they are valid, though not regisv tered, against all who have notice.

It appears to be conceded, that if this degd was made upon a valuable consideration, it would be valid, though the possession had been retained by the grantor; but if the retention of the possession by the owner, is a badge, or sign of fraud, it can make no difference, whether the deed was upon} sufficient consideration, or was purely voluntary.

The statute of the 13th Elizabeth, declaring fraudulent conveyances void, in favor of creditors, and the 27th of Elizabeth, for the protection of purchasers, have been embodied in our statute of frauds, and it is supposed, that such a conveyance as this, is embraced by the former statute, and being voluntary, is in legal estimation fraudulent. A voluntary conveyance of property by one indebted at the time, is . doubtless by force of this statute fraudulent, and void as to* such creditors. There are also some cases, in which it has-been held, that such conveyances are void as to subsequent creditors of the grantor, but the established doctrine at the present day, both in England and the United States, appears to be, that the statute applies only to creditors existing at the time, and not to such as become so, after the execution of the voluntary conveyance. This question is fully discussed',, in Wheaton v. Sexton, 8 Wheaton, 229, where this conclusion is attained. See also Glaister v. Hewer, 8 Vesey, 200; and Battersee v. Farrington, 1 Swanston, 106. What- is said by Lord Kenyon in Nunn v. Williamson, 8 Term, 529, has reference to the facts of the case then before the court, which was that of a debt existing at the time the conveyance was made, and was not intended to be applied to debts subsequently created. The case of Otley v. Manning, 9 East, 58, also relied on, has not in my judgment any application to this. That decision was made upon the 27th of Elizabeth, in reference to a purchaser for valuable consideration, after a voluntary conveyance, where it was held, in conformity with the established current of the English decisions, that such voluntary deed was fraudulent, and void, against a subsequent purchaser, though he had notice of the previous voluntary conveyance. The statute of the 27th Elizabeth, applies only to voluntary conveyances of land, and has not to my knowledge, ever been supposed to to be applicable to conveyances of personal property.

But our statute of frauds furnishes conclusive proof, that it was not intended, by the enactment of the provisions of the 13th Elizabeth, to embrace such a case as this, as in the very same section, provision is made for the protection of subsequent purchasers, and creditors, when the title is not with the possession, by requiring the instrument by which it is-evidenced, to be proved and recorded.

That such instruments are valid at common law, and not affected by the statute of 13th Elizabeth, unless- the donor is indebted at the time, or unless they are fraudulent in fact, see Bohn v. Headley, 7 H. & J. 257; Hope v. Hutchings, 9 G. & J. 77; Cairns and wife v. Marley, 2 Yerger, 582; Johnson v. Mitchell, 1 Humph. 171; Banks v. Marksbury, 3 Litt. 278.

This deed being executed out of this State, is not embraced by our registry acts, unless it be the act of 1823, requiring all property “ mortgaged, or under any other legal incumbrance,” removed from any other State to this, to be registered within twelve months after such removal. Clay’s Dig. 255, § 4. In Swift v. Fitzhugh, 9 Porter, 39, we held, that a postnuptial contract executed in Virginia, conveying slaves and other property in trust for the wife, was not a legal incumbrance, within this statute. The plain meaning of the statute is, property incumbered for the payment of debts, of which an incumbrance by way of mortgage is put as an example, and cannot reach a case, where the person in possession was entitled to an estate for life, with remainder to another. Besides, the deed was made in 1819, and the slaves brought to this State in 1820, or 1821, whilst the act in question, which was passed in 1823, expressly exempts from its operation, all mortgages, deeds of trust, or other legal incumbrances, existing at the time of the passage thereof.

From this it results, that as the deed was valid at common law, and was not required to be registered by any law of this State, a purchaser from the tenant of the life estate, became entitled only to the interest which he had in the slaves, and upon his death, the tenant in remainder, or his legal representatives were entitled to the slaves. The court therefore did not err in the charges given, or in those refused.

Judgments affirmed.

The cause was re-argued at this term, on the petition of the plaintiff in error.

Manning, for the plaintiff in error, enforced and re-asserted the positions previously taken by him, and especially insisted, that although the deed was made in Georgia, upon the property being brought into this State, it was affected by the statute of frauds, and became inoperative as against the creditors of the donor, for want of registration.

Byrd and Henley, contra.