Allen v. Overton

• Decision Date: 26 October 1922
• Docket Number: 8 Div. 459.
• Citation: 94 So. 477,208 Ala. 504
• Parties: ALLEN ET AL. v. OVERTON ET UX.
• Court: Alabama Supreme Court

94 So. 477

208 Ala. 504

ALLEN ET AL. v. OVERTON ET UX.

8 Div. 459.

Supreme Court of Alabama

October 26, 1922

Rehearing Denied Dec. 7, 1922.

Appeal from Circuit Court, Madison County; Osceola Kyle, Judge.

Suit by B. M. Allen and others against A. E. Overton and wife to cancel deeds. From a decree dismissing the bill, complainants appeal. Affirmed.

Douglass Taylor and Cooper & Cooper, all of Huntsville, and Allen &amp McEwen, of Birmingham, for appellants.

R. E Smith, of Huntsville, for appellees.

MILLER J.

This is a bill in equity as amended by B. M. Allen and others under the firm name of Allen, Bell & Sadler, against A. E. Overton and his wife, Lucy Overton. It seeks to have canceled and declared void seven deeds executed by A. E. Overton to Lucy Overton as a fraud against complainants, whose debts, due by A. E. Overton, were contracted after the execution of the conveyances. It alleges the defendant A. E. Overton was insolvent; that the instruments conveyed substantially all of his property; that they were made without valuable consideration for the purpose of hindering, delaying, and defrauding his creditors, both those to whom he was indebted at the time and those to whom he afterwards became indebted. The answer of each defendant admitted the execution and delivery of the deeds, that they conveyed substantially all of his property, but they put in issue by direct denial the other material averments of the complaint.

The decree of the court on final hearing, on pleading and proof denied complainant relief, dismissed the bill, and taxed complainants with the court costs. This appeal is prosecuted by complainants from that decree, and it is assigned as error.

On June 14, 1916, Judge W. T. Lawler was killed. D. D. Overton, brother of the defendant A. E. Overton, was charged with the crime. He was a fugitive from justice; had left for a foreign country with no intention of returning within five years. The passion of a majority of the people was inflamed against both brothers and other members of their family. The defendant's life had been threatened; so, to preserve his estate for his wife and to pay the debt he owed her and other lien and mortgage debts on the property, A. E. Overton made and executed on the 1st of September, 1916, the seven deeds conveying the property to his wife. Four deeds recite the consideration as $1 cash, love and affection, and the assumption by her of the mortgage debt on the property conveyed; one deed recites the same consideration as above, except, instead of assumption of a mortgage debt, it recites assumption of a $300 annual lien debt to be paid to Mrs. King during her life; and the other two deeds recited "$1 cash and love and affection" as the consideration. All of the deeds were executed and acknowledged on the same day, September 1, 1916, and all were delivered at the same time to the grantee, Mrs. Overton, on that date by her husband. Some of them were filed for record in January, some in February, and some in April, 1917. D. D. Overton was captured and placed in the Birmingham jail before October 9, 1916, charged with murdering Judge Lawler. He employed complainants to defend him. On October 9, 1916, he executed two notes to them each for the sum of $2,000, one payable in 6 and the other 12 months from date. These notes were sent to the defendant A. E. Overton and the other brothers and relatives to sign as sureties. They were signed by D. D. Overton, A. E. Overton, H. C. Overton, T. B. Overton, and J. L. Overton. Both notes were reduced to judgment May 27, 1918; both belong to the complainants; execution was issued on each and return made by the sheriff, "No property found."

The complainants introduced evidence showing that on May 15, 1916, a note was given by A. E. Overton to W. R. Rison Banking Company, and the balance due and unpaid on the note is $3,077.25. The evidence of the defense was that this note was a debt of D. D. Overton, and that H. C. Overton, T. B. Overton, and A. E. Overton were sureties. The bank held collateral given it by D. D. Overton to secure the note which exceeded in amount the amount of the debt; and at the time of the execution of the deeds, on September 1, 1916, D. D. Overton, H. C. Overton, and T. B. Overton had property sufficient to pay the note. The only debt shown to have been contracted by A. E. Overton after the execution of the deeds to his wife was the surety debt to complainants.

In Allen v. Caldwell, Ward & Co., 149 Ala. 293 (42 So. 855), this principle is declared in the opinion, which is expressed in headnote 6, as follows:

"A voluntary conveyance from a husband to his wife is valid, where all of his existing creditors were secured, and it does not appear that he foresaw future liability, as to subsequent creditors, under the rule that a voluntary conveyance is valid against subsequent creditors in the absence of actual fraud."

It appears from the evidence that this debt of the bank at the time of the execution of the deeds was secured; and from the evidence the defendants did not know complainants at that time. D. D. Overton was a fugitive from justice, had not been arrested, and he had no intention of surrendering. There is no evidence indicating when the deeds were executed either of the defendants contemplated that A. E. Overton would create an obligation to the complainants or that either foresaw future liability from any subsequent creditors.

The deeds were executed and delivered on September 1, 1916; and they were not recorded until January, February, and April, 1917. There is no evidence that they were designedly kept off of the record to obtain credit; there is no evidence that any one was injured thereby, and this court has said:

"The mere failure to record is not evidence, of itself, of a vicious intent, and where a failure to record is consistent with good intentions the law will attribute no bad motive to the grantee." Allen v. Caldwell, Ward & Co., 149 Ala. 299, 42 So. 858; Mathews v. Carroll, 195 Ala. 505, headnote 5, 70 So. 143.

Mrs. Overton, without objection, testified:

"At the time the deeds were made my husband owed me $500 which I had inherited from my Grandmother Adams' estate. He has used this money. The payment of this debt was part of the consideration for which the deeds were made. And as the further consideration for making the deeds I agreed with my husband to assume and pay off the mortgage debts on the land and to pay Miss King the $300 a year as is recited in the said several deeds. I have paid the mortgages on the Moore's mill property and on the school street property. At the time I did not know the complainants, neither did my husband to my knowledge know them. He did not tell me and I did not know that he contemplated employing them at the time. At the time there was no conversation between my husband and myself relative to making any new debts. The deeds were not made with any understanding between my husband and I to hinder, delay, or to defraud any one who held any claim against my husband, nor who might thereafter be a creditor of him. I did not know my husband owed any debts except the mortgages on the land and the claim of Miss King which was being taken care of by the transaction. I knew about what the reasonable value of the property was and knew that the debts, mortgages, and claim of Miss King, were just about as much as what the property was worth."

A. E. Overton on this subject said:

"Each deed recites a consideration of $1 and love and affection and other consideration of the assumption and payment of the mortgage indebtedness as recited in each deed. I owed my wife $500 cash money at the time the deeds were executed and the cancellation of this debt by her was part of the consideration paid."

He also testified:

"I did not contemplate at that time the making of any new or additional debt."

If the grantor in a conveyance receives a benefit or the grantee suffers detriment as the consideration of the conveyance then the consideration is valuable, and the instrument is not a voluntary conveyance. ...