Yeargin v. Donnelly

296 So. 2d 144, 292 Ala. 430, 1974 Ala. LEXIS 1090
CourtSupreme Court of Alabama
DecidedMay 30, 1974
DocketSC 633
StatusPublished

This text of 296 So. 2d 144 (Yeargin v. Donnelly) 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
Yeargin v. Donnelly, 296 So. 2d 144, 292 Ala. 430, 1974 Ala. LEXIS 1090 (Ala. 1974).

Opinion

BLOODWORTH, Justice.

Respondent Al Yeargin appeals from a decree of the circuit court of Baldwin County setting aside a warranty deed from the complainants, Joseph and Thelma Donnelly, to. the respondents, James and Carol Driver, on account of failure of consideration and fraudulent misrepresentation, and removing as clouds on complainants’ title a quitclaim deed to the same parcel of land from the Drivers to Pioneer Investment, [433]*433Inc. and a subsequent warranty deed to said land from Pioneer Investment to respondent Yeargin.

On November 15, 1971, the Donnellys executed and delivered to the Drivers a warranty deed conveying to the Drivers certain real property situated in Baldwin County. The consideration for the execution of this deed was the transfer to the Donnellys by James Driver of 180,000 shares of stock in South Central Industries, Inc., which Driver represented to the Donnellys to be a financially sound corporation, the stock of which he represented to be worth $1.50 to $2.00 per share and further represented that it could be freely traded six months after September 10, 1971.

The warranty deed from the Donnellys to the Drivers was duly recorded on December 15, 1971. The next day, the Drivers executed and delivered a quitclaim deed to Pioneer Investment, Inc.,, a corporation. By the terms of the quitclaim deed, the Drivers reserved all of the oil, gas and other mineral rights in the subject property. On February 21, 1972, Pioneer Investment, Inc. executed and delivered a warranty deed conveying the property to respondent Yeargin. James Driver signed the deed as President; William Lyons signed the deed as Secretary.

After holding the stock for six months (as required by a contract of sale), the Donnellys attempted to sell the stock and were informed that it was worthless and, even if it were to have some value, it was investment stock and could not be sold for two years. Whereupon, the Donnellys instituted this suit in the circuit court of Baldwin County seeking to set aside the warranty deed from the Donnellys to the Drivers on grounds of failure of consideration and fraudulent misrepresentation. The Donnellys also asked the court to decree that the respondent Yeargin has no right, title or interest in the subject property and that the quitclaim deed to Pioneer Investment and the warranty deed to Year-gin be removed as clouds upon the title of complainants Joseph and Thelma Donnelly.

Respondents James and Carol Driver, nonresidents whose address was unknown to complainants, were served by publication, and, having failed to answer, plead or demur to the bill of complaint, decrees pro confesso were entered against them. Respondent Yeargin appeared and defended.

The cause came on for trial and the evidence was heard ore tenus by the trial judge, Hon. Telfair Mashburn. The evidence taken included testimony by Joseph Donnelly (as part of complainants’ case in chief) that he has remained in possession of the property at all times subsequent to the execution of the warranty deed to the Drivers, that he lived on the property, and continued to operate all the facilities on the property (with the exception of a restaurant which was operated for several months by a Mr. Fortenberry, an employee of Mr. Driver, under an A. B. C. license issued to Mr. Donnelly), and that it was generally known in the community that Mr. Donnelly was in possession of the property. There was testimony that Mr. Donnelly had told Mr. Driver that he (Donnelly) was going to stay in possession until he got his money. On rebuttal for complainants Mr. Day, a neighbor, testified that Mr. Donnelly had been in possession of the property at all times during the three years preceding the trial and that Mr. Donnelly had been away from the property for only one week, during which time Mr. Day stayed on the property for him.

A final decree was rendered on May 15, 1973, in which the trial judge found that the allegations in the bill of complaint had been proved and that complainants were entitled to the relief prayed for. Accordingly, the warranty deed from the Donnellys to the Drivers was declared to be void and of no legal effect, and the quitclaim deed from the Drivers to Pioneer Investment and the warranty deed from Pioneer to Yeargin were removed as clouds on [434]*434complainants’ title. It is from this decree that respondent Yeargin appeals.

Upon a consideration of those issues argued on this appeal, we hold that the trial court did not err in granting complainants the relief prayed for. Accordingly, we affirm.

In appellant Yeargin’s assignments of error 1. and 2., he complains that the trial court erred in granting relief because the bill of complaint fails to state any cause of action against him or to allege any wrongful action which would support the decree against him.

The precise contentions on this issue are less than clear. Appellant Yeargin, in brief, denies that complainants/appellees had to allege possession in order to state a cause of action against him. The remainder of his argument relates only to complainants’ failure to affirmatively allege their possession of the property in their complaint; no other alleged defect in the complaint is brought to our attention. Nevertheless, we will briefly address ourselves to the contention that a cause of action is not stated.

Allegations by complainants that they were in possession of the subject property are not necessary in order to state a valid cause of action and to remove respondent Yeargin’s deed as a cloud on their title. Possession by complainants goes only to the issue of whether or not appellant was a bona fide purchaser. This Court specifically held in Barton v. Barton, 75 Ala. 400 (1883) and in Marsh v. Elba Bank and Trust Co., 207 Ala. 553, 93 So. 604 (1922), that the issue of bona fide purchaser for value is an affirmative defense, in the nature of confession and avoidance, which must be raised by respondent in an action such as the one at bar. When respondent alleges and proves such, burden then shifts to complainants to prove the respondent had actual or constructive notice of the facts constituting the fraud before his purchase or of facts or circumstances sufficient to put him on inquiry, which if followed up, would lead to discovery thereof. There is no duty upon complainants, pleading a fraudulent conveyance, to anticipate the defense and to affirmatively plead and prove that all subsequent purchasers are not bona fide purchasers. Authorities, supra.

As to other possible defects in the complaint, we note that in our case of Nelson v. Boe, 226 Ala. 582, 148 So. 311 (1933), (a bill in equity seeking to have two mortgages decreed fraudulent and void), this Court held that, in absence of a demurrer, if a complaint states a substantial cause of action and the judgment is responsive to it, the Court will treat amendable defects as amended. The Court there stated at 226 Ala. 586, 148 So. at 313:

“In the absence of a demurrer — as is the case here — if the complaint contains a substantial cause of action, and the judgment is responsive to it, the appellant will not be heard to complain of errors or defects in the complaint which would have subjected it to demurrer.

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93 So. 604 (Supreme Court of Alabama, 1922)
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Cite This Page — Counsel Stack

Bluebook (online)
296 So. 2d 144, 292 Ala. 430, 1974 Ala. LEXIS 1090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yeargin-v-donnelly-ala-1974.