Tyson v. South. C. O. Co.

61 So. 278, 181 Ala. 256, 1913 Ala. LEXIS 111

• Court: Supreme Court of Alabama
• Decided: February 14, 1913
• Status: Published

Opinion

ANDERSON, J.

The bill charges that the entire consideration of the deed from Tyson to his wife was simulated — that is, that the recited consideration of $4,000 was simulated — and that there was no valid assumption of the bank mortgage. If this averment is true, then the conveyance was voluntary and inoperative as against existing creditors, whether fraudulent mala fide or not. If the averment that there was no valid assumption of the mortgage debt was the conclusion of the pleader, the point was not taken by any of the grounds of demurrer. It is also true that the deed recites the assumption of the mortgage debt by the grantee, and as to whether this can be disproved we are not concerned, in passing on the demurrers to the bill, as said bill does aver that there was no valid assumption of the mortgage debt.

While the bill may charge that the conveyance was without consideration, it seems to guard against a failure to prove this averment by attempting to charge that the consideration was inadequate, and charges fraud mala fide by way of a general conclusion, as it avers that the land was worth a great deal more than the amount of the bank mortgage and the consideration expressed in the deed combined, and that the deed was accepted by Mrs. Tyson for the purpose of hindering, delaying, or defrauding the creditors of the grantors. Inadequacy of price alone may constitute fraud, when so gross as to shock the conscience; but no such inadequacy is charged in the present case. “In charging fraud the rule is that mere conclusions, as that a conveyance is fraudulent, or that it was made with fraudulent intent, will not suffice against a proper demurrer.” —Little v. Sterne, 125 Ala. 609, 27 South. 972. Notwithstanding complainant is an existing creditor, if Mrs. Tyson was a purchaser for value, though the consideration was inadequate, she would be protected, unless the consideration was so grossly inadequate as to constitute fraud in and of itself, or unless she had knowledge, actual or constructive, that the grantor was insolvent or in failing circumstances, or unless she had knowledge of and participated in a scheme on his part to hinder, delay or defraud his creditors. — Little’s Case, supra, and cases there cited. The bill, in so far as it attempts to charge fraud mala fide, does not contain these necessary averments, and was subject to the respondents’ demurrers directed at this feature of said bill, and which were not directed at the whole bill.

The demurrers as filed to the entire bill as amended were properly overruled, but those filed to so much of the bill as charged fraud mala fide should have been sustained.

Affirmed in part, and reversed and remanded.

'Dowdell, C. J., and Mayfield and de Graffenried, JJ., concur.