Webb v. Globe Securities Co.

82 So. 476, 203 Ala. 226, 1919 Ala. LEXIS 204

• Court: Supreme Court of Alabama
• Decided: May 15, 1919
• Docket: 6 Div. 791.
• Status: Published

Opinions

SOMERVILLE, J.

The evidence in this cause reasonably satisfies us that the debts secured by the mortgages in question were in fact , the debts of complainant’s husband. Not only is this not controverted in the evidence submitted, but respondent’s president, who conducted all of the transactions in question, testified that he represented the mortgagee' in the $2,800 mortgage transaction, and “made a loan to Mr. Webb for $2,800 and took a mortgage on his farm, and gave him a cheek for the proceeds.”

If this were all, complainant would be entitled to the relief prayed for as to both of the mortgages.

[1] But the amended answer charges that the mortgaged property was bought by complainant’s husband with his own money, and that the title was placed in complainant only for the purpose of fraudulently withholding it from his creditors, the property remaining for all purposes the husband’s.

The testimony of complainant and her husband clearly establishes this charge, and shows in fact a constructive trust in favor of creditors, whether existing or subsequent. Seals v. Robinson, 75 Ala. 363.

[2] Such a title in complainant can furnish no basis for relief by Way of cancellation of the mortgages on the ground alleged, and that relief must be denied. Of course respondent could not have affirmative relief upon its answer without making it a cross-bill. But for purely defensive purposes, the fraud set up is available on answer alone. Trippe v. Trippe, 29 Ala. 637, 648-650.

[3] It was of no consequence, so far as this case is concerned, whether the latter mortgage was or was not so executed by complainant as to convey the legal title to the property. She being the owner, the statutory requirements for homestead conveyances by married men have no application. Dawson v. Burrus, 73 Ala. 111.

We apprehend that the trial judge denied relief on the theory that a wife may convey her property to her husband’s creditor in payment of his debts, and that the deed of July, 1917, was effectual for that purpose, although complainant received no personal benefit therefrom. Elkins v. Bank, 180 Ala. 18, 6 South. 96.

[4] Such an application of that theory to this case would be sound enough but for the fact that, when complainant executed this deed with her husband for that purpose, the relationship of mortgagor and mortgagee already existed between her and her grantee, this respondent, and the deed was therefore a mere release of her equity _ of redemption.

[5] In such a case, when the mortgagor attacks and seeks to set aside the release in equity, “the burden of proof is on the mortgagee to show that the transaction was fair and honest — -free from the infection of fraud, oppression, or any form of undue influence.” Shaw v. Lacy, 74 South. 933. 1 Here the burden was upon .respondent, and not complainant, to show that no duress of any sort wás practiced apon complainant, and also that the consideration paid for the release was fair and adequate.

Respondent made no attempt to meet this burden of proof, and, indeed, the testimony offered for complainant supports the charge of duress, and shows an inadequate consideration.

Let the decree of the chancery court be reversed, and a decree here rendered setting aside and canceling the deed executed by complainant and her husband to respondent on July 27, 1917, as shown by Exhibit D to E. F. Enslen’s testimony, and authorizing redemption from the mortgage executed by them to Emma J. Enslen on, to wit, December 16, 1913, and by her transferred to respondent.

The cause will be remanded for further proceedings to this end.

Reversed, rendered, and remanded.

McClellan, mayfield, and sayre, JJ., concur.

1 199 Ala. 450.