Larkin v. Mead

77 Ala. 485

• Court: Supreme Court of Alabama
• Decided: December 15, 1884
• Status: Published

Opinion

STONE, C. J.

Much that is found in the present bill appears to be unnecessary to a settlement of the questions sought to be raised. The history of the life-insurance, alleged to have been taken out by Mead on the life of his first wife, the purchase and various conveyances of the Outerbridge lands, Larkin’s claim od Mead for moneys paid by him as surety to the Townsend estate, and the attempt by equitable proceeding, instituted by the former, to realize the sum for which the latter had become liable to him in consequence of said payment to the Townsend estate, out of the insurance money which fell due on the death of Mrs. Mead — these, it would seem, comprise all the bill need have shown, anterior to the making of the notes, which the present bill seeks to collect.

According to the averments of the bill, about the year 1870, Larkin paid, as surety for Mead, a sum of money between three and four thousand dollars. Before that time, Mead had taken out an insurance policy on the life of his wife, payable to himself, in the sum of ten thousand dollars, and had paid the annual premiums as they matured. For the purpose of defrauding his creditors, he, Mead, had procured the life-policy on his wife to be so changed, as that the loss, or insurance money, to fall due at her death, was made payable to Lewis, who was his nephew, a young man without means; and the money thus to be paid to him was in secret trust for the benefit of Mead. In 1873, Mead purchased the Outerbridgeland, paid the purchase-money, four thousand dollars, and had the title made from Outerbridge and wife to Lewis, in like secret trust for Mead’s benefit, and with like intent to defraud his creditors. Larkin instituted proceedings in the Chancery Court, to intercept the life-insurance money, and to have himself reimbursed out of it for the money he had paid the Townsend estate, as surety for Mead. Mead, with his family, lived on the lands which are the subject of this suit, while Lewis, in whom the title rested, was an unmarried man, and did not live on the lands. Thus matters stood, as the bill alleges, when negotiations and settlement took place, to be presently stated.

The further case made by the bill is substantially as follows: Mead desired and importuned Larkin to dismiss his said chancery suit, promising and agreeing, as inducement therefor; to give him good personal security, and offering said Lewis as such surety. As a reason why Larkin should accept Lewis as surety, Mead represented that he, Lewis, was amply solvent, and that he owned said Outerbridge lands in fee simple. Influenced by this persuasion, and relying on Mead’s said representations, finding the title to be in Lewis, and not knowing that he, Lewis, had not paid Outerbridge for the lands, Larkin agreed to extend the said indebtedness of Mead one and two years, and to dismiss said suit, if Mead would execute to him notes, or bonds, with Lewis as surety, and payable at one and two years. The notes,or bonds were executed by Mead and Lewis, bearing date December 4, 1874, due at one and two years, and being delivered to Larkin, he thereupon dismissed his said chancery suit.

In less than six months after this settlement, viz., May 28, 1875, Lewis, by deed of bargain and sale, reciting a consideration of three thousand dollars paid, conveyed the Outerbridge lands to Mead, thus leaving him, Lewis, without means to pay the said debt to Larkin. This, it is charged, was done without consideration, and with intent to delay, hinder and defraud Larkin a.nd his other creditors. The notes or bonds not being paid, Larkin instituted suits against the makers, and recovered several judgments — the one against Mead, October 26, 1877; the one against Lewis, March 8, 187$. On these judgments executions have been issued, and returned “No property found.” Mead died in 1878 ; there lias been administration on his estate, and the estate has been declared insolvent. No date is given in the bill, when administration was sued out, nor when the estate was declared insolvent. The bill fails to aver that the claim was ever presented to Mead’s administfator, or filed against the insolvent estate. The present suit was instituted September 7, 1883.

Before the judgment was rendered against Mead, he conveyed forty acres of the land to Lewis, in trust for'his (Mead’s) wife. This left only one hundred and sixty acres in Mead, which is claimed as exempt homestead ; and if rightly claimed, the estate having been declared insolvent, the title of the exemption is a fee, leaving nothing either in possession or reversion for Larkin. Hence his interest to have the property declared Lewis’, and not Mead’s. The bill seeks to have the lands condemned and sold as Lewis’ property.

One form of the defense set np is, that, according to the averments of the bill, Mead purchased and paid for the land, and had the title placed in Lewis in secret trust for him, Mead, in fraud of his (Mead’s) creditors; that when Lewis subsequently conveyed the land to Mead, he placed the title where it ought to have been ; and therefore such conveyance can not be a fraud on the creditors of Lewis, no matter what his intention may have been. The following'authorities are referred to as supporting this position : Bump on Fraud. Con. 223: Wait on Fraud. Con. §§ 176, 398; Clark v. Rucker, 7 B. Monroe, 583 ; Davis v. Graves, 29 Barb. 480 ; Cramer v. Dlood, 48 N. Y. 684; Stanton v. Shaw, 3 Baxt. (Tenn.) 12. E contra, Chapin v. Pease, 10 Conn. 69. We will not decide this question. We will hereafter show why we need not express our views on it.

It will be remembered that, when Mead induced Larkin to dismiss his suit to subject the proceeds of the life-policy, and to extend time of payment on his notes or bonds with Lewis as surety, he succeeded in his wish and aim, on the representation that Lewis held a fee-simple title to the lands. On the strength of this representation, as the bill avers, Larkin was induced to dismiss his suit, materially altering his previous position, and to postpone his right of pressing his claim to speedy collection. This presents all the elements of an estoppel en pais. In Montefiori v. Montefiori, 1 Wm. Blackst. 363, Joseph Montefiori was engaged in a marriage-treaty, and, to promote his aims, Moses, his brother, gave him a note for a large sum of money, as the balance of accounts between them. No such balance existed. After the marriage, the note was returned to Moses; and the question was, whether the latter should make it good. Lord Mansfield said: “ The .law is, that where, upon proposals of marriage, third persons represent anything material, in a light different-from the truth, even though it be by collusion with the husband, they shall be bound to make good the thing in the manner in which they represent it. It shall be, as represented to be.” This was said more than a century ago. He added: “No man shall set up his own iniquity as a defense.” In the leading case of Heane v. Rogers, 9 Barn. & Cress. 577, the principle is thus stated : “There is no doubt that the express admissions of a party to the suit, or admissions implied from his conduct, are evidence, and strong evidence against him; but we think that he is at liberty to prove that such admissions were mistaken, or were untrue, and is not estopped or concluded by them, unless another person has been induced by them to alter his condition; in such case, the party is estopped from disputing their truth, with respect to that person, and those claiming under him, and that transaction.”' — See, also, Hill v. Huckabee, 70 Ala. 183 ; Smith v. Caldwell, at prevent term', ante, 157; Bigelow on Estoppel, 406, 475 ; Herman on Estoppel, § 409 ; State, ex rel. v. Trustees, 14 Ohio St. 569 ; Burleson v. Burleson, 28 Tex. 383.

Applying this principle to the case in hand, Mead, and those claiming in his right, unaided by anything else, are estopped from denying that Lewis, at the time the notes or bonds were executed, was owner of the lands in fee simple. As to them, he, Lewis, held the fee simple, unaffected by any fraud, or secret trust, attending its acquisition. The rule would be the same, if he had held the title for Mead, untainted by fraud. Lewis, then, being, as to this controversy, the bona fide holder and owner of the title in fee when he became bound for the debt to Larkin, the case is brought within the familiar ‘principle, that a voluntary conveyance by one indebted, of property which can be the subject to seizure for his debts, is fraudulent per se as against existing creditors. Of course', if there be, in such case, an intention to delay, hinder or defraud, of which the grantee had knowledge, the conveyance would be alike inoperative, even though full consideration was paid. — 2 Brick. Dig. 21, § 100; Lehman v. Meyer, 67 Ala. 396; Lehmann v. Kelly, 68 Ala. 192; Buchanan v. Buchanan, 72 Ala. 55; Zelnicker v. Brigham, 74 Ala. 598. It results, that the manner of the acquisition of the land can exert no influence on the question of subjecting it to Lewis’ debt, as being transferred by him to Meadin'fraud of his creditors.

There is nothing in the argument that this bill is multifarious. As we have said, its purpose and prayer are, that the lands be sold in payment of the Lewis judgment. The title of the lands is in the Mead heirs. Hence the necessity of making them parties. We need not consider whether, if the bill had sought relief under both judgments, it would thereby have been rendered multifarious. The two judgments are for one and the same debt, and the one tract of land is the sole subject of the contention. It would be difficult to frame two bills applicable to the subject-matter. We decide nothing on this question. • Nor need we decide whether or not the averments of the bill are such, that the question of non-claim, and the alleged failure to file the Mead judgment against the insolvent estate, can be raised by demurrer. Neither was necessary, in this attempt to subject the land to the payment of the Lewis judgment. We may add, if the averments of the bill are true, 'the'conveyance of the forty acres of land to Lewis, in trust for the second Mrs. Mead, was without consideration and fraudulent, and she can not set up claim of bona fide purchase.

It results from the principles declared above, that none of the grounds of demurrer are well taken, and the chancellor erred in sustaining grounds numbered four and five. The question of homestead is not raised by this record, and we do not consider it.

On the appeal by Larkin, the decree of the chancellor is reversed, and here rendered, overruling said grounds of demurrer numbered four and five.

On the appeal by Mead et al., there is no error in the record.

Reversed and rendered, in case of Larkin v. Mead et al.