London v. G. L. Anderson Brass Works

72 So. 359, 197 Ala. 16, 1916 Ala. LEXIS 26
CourtSupreme Court of Alabama
DecidedApril 20, 1916
StatusPublished
Cited by55 cases

This text of 72 So. 359 (London v. G. L. Anderson Brass Works) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
London v. G. L. Anderson Brass Works, 72 So. 359, 197 Ala. 16, 1916 Ala. LEXIS 26 (Ala. 1916).

Opinions

SOMERVILLE, J.

The controlling issue in this case is whether plaintiff’s title to land by purchase under an execution [19]*19sale against one G. L. Anderson, on April 3, 1911, shall prevail against defendant’s title derived from said Anderson by conveyance from him to his wife, Lula Anderson, on October 22, 1910.

The debt upon which the execution sale was founded was due from Anderson to London & Fitts in April, 1910, and the general contentions of plaintiff are: (1) That the conveyance from

Anderson to his wife was a voluntary convenance, and therefore void as to this debt, regardless of good faith; (2) that, though there was a valuable consideration therefor, the conveyance was nevertheless void unless defendant showed that the consideration was also reasonably adequate, which it failed to do as matter of law; (3) and that, in any case, the consideration recited as paid was so grossly inadequate that, as matter of law, the conveyance must be branded as fraudulent and void.

(1, 2) 1. The deed from Anderson to his wife recites a consideration of “one hundred dollars and love and affection to him in hand paid.” The land conveyed was of the value of $10,000, or a little more, and then carried an incumbrance of $5,000. If the valuable consideration recited were merely nominal — as $1— and for the self-evident purpose of coloring a gift as a sale, the deed would be construed as a voluntary deed, as to creditors, and parol evidence of a substantial valuable consideration would not be admissible to support it. — Houston v. Blackman, 66 Ala. 559, 565, 41 Am. Rep. 756. But $100 cannot be regarded as nomnial, however inadequate it may be.

“In the application of the principle that voluntary conveyances are, as matter of law, conclusively presumed fraudulent and void as to existing creditors, the definition of a ‘voluntary conveyance’ must be steadily kept in view. It is a conveyance founded merely and exclusively on a good, as distinguished from a valuable, consideration, on motives of generosity and affection, rather than on a benefit received by the donor, or detriment, trouble, or prejudice to the donee. If the donor receives a benefit, or the donee suffers detriment, as the consideration of the conveyance, the consideration is valuable, not good merely. However inadequate such consideration may be — however trivial the benefit to the one, or the damage to the other — the conveyance is not voluntary. The inadequacy is a circumstance which, with other facts, may import an actual intent to hinder, delay, and defraud the creditors of the grantor, but it does not change the character of the conveyance — does not convert it into a voluntary [20]*20conveyance. — Bump on Fraud. Con. 262.” — Bibb v. Freeman, 59 Ala. 612; Pippin v. Tapia, 148 Ala. 353, 42 South. 545.

See, also, Pickett v. Pipkin, 64 Ala. 520, 524; Bradley v. Ragsdale, 64 Ala. 558; Early & Lane v. Owens, 68 Ala. 171, 174.

It must be conceded that this court has sometimes treated executory trusts (Kinnebrew v. Kinnebrew, 35 Ala. 628, 637), and even conveyances of chattels (Felder v. Harper, 12 Ala. 612) and land (Goodlett v. Hansell, 66 Ala. 151, 160), as voluntary with respect to other adversely interested parties, even upon recited considerations of $5 or $10; and these cases have been later cited with approval in York v. Leverett, 159 Ala. 529, 531, 48 South. 684, 685, where it was said: “When a court of chancery is called upon to set aside a conveyance upon the ground of fraud, it takes judicial notice that such a pecuniary consideration as $2 is merely nominal when there is a transfer of so much value ($1,500) as in the conveyance under consideration.”

So, also, in Folmar v. Lehman-Durr Co., 147 Ala. 472, 477, 41 South. 750, it was said, without other comment, that a deed made for love and affection and $2 was voluntary on its face, and void as to existing creditors.

It appears from these cases that the technical definition of a “voluntary conveyance” in Bibb v. Freeman, 59 Ala. 612, has not been strictly applied in all cases, and that this court has taken judicial notice that the recital of any trifling sum (from $1 to $10) as a pecuniary consideration for the grant of property of large value does not necessarily show as to third persons that the conveyance is other than voluntary; especially where it is coupled with a recital 'of the consideration of love and affection, and the grantee is a near relative of the grantor.

Nevertheless, there must be a limit somewhere; and, without undertaking now' to define such a limit, we are unwilling to say that the instant deed, reciting a consideration of $100 and love and affection,” is upon its face a purely voluntary conveyance. It was therefore properly admitted in evidence.

(3, 4) 2. A laborious survey of the numerous decisions and opinions by this court on the burden, nature, and effect of proof with respect to the consideration paid by an alleged fraudulent grantee, where his conveyance is attacked by a pre-existing creditor, exhibits inconsistencies which cannot be reconciled. We think, however, that the following principles must be regarded as settled by the weight of the adjudications: (1) If the considera[21]*21tion paid by the grantee was an existing debt due to him from the grantor, he must not only show its bona fide existence, but must also show that it was adequate; that is that the value of the property was no more than a fair equivalent for the amount of the debt. If this is shown, the intention of the parties to thereby hinder, delay, or defraud is wholly immaterial, and cannot defeat, the conveyance. — Crawford v. Kirksey, 55 Ala. 282, 293, 28 Am. Rep. 704; Moore v. Penn., 95 Ala. 200, 203, 10 South. 343; Chipman v. Glennon, 98 Ala. 263, 265, 13 South. 822; Wood v. Riley, 121 Ala. 100, 25 South. 723; and innumerable other cases. (2) But if the consideration paid is a new one, not resting on past indebtedness, a different rule prevails. When the complainant shows that his debt antedates the conveyance, the grantee must then show that he paid a valuable consideration — substantial and not merely nominal. Thereupon the complainant must show that the grantee had notice of an.intent by the grantor to hinder, delay, or defraud his creditors.

In Borland v. Mayo, 8 Ala. 104, 117, the rule was stated as follows: “Inadequacy of- consideration, where the vendor is greatly indebted, is recognized as a mark of fraud. * * * True, it might not be sufficient per se to authorize the sale to be • annulled, unless the disparity between the true value of the property, and the price paid, or agreed to be paid, was so great as to strike the understanding at once with the conviction that such a sale never could have been made bona fide. But it may be a mark of fraud where the difference is not so great, and, when other circumstances are associated with it, they may be conclusive.”

In Bibb v. Freeman, 59 Ala. 612, 616, it was said: “However inadequate such consideration may be — however trivial the benefit to the one, or the damage to the other — the conveyance is not voluntary. The inadequacy is a circumstance which, with other facts, may impart an actual intent to hinder, delay, and defraud the other creditors of the grantor; but it does not change the character of the conveyance, does not convert it into a voluntary conveyance.

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Bluebook (online)
72 So. 359, 197 Ala. 16, 1916 Ala. LEXIS 26, Counsel Stack Legal Research, https://law.counselstack.com/opinion/london-v-g-l-anderson-brass-works-ala-1916.