Bishop v. McPherson

• Decision Date: 21 May 1936
• Docket Number: 6 Div. 865
• Citation: 232 Ala. 594,168 So. 675
• Parties: BISHOP et al. v. McPHERSON.
• Court: Alabama Supreme Court

168 So. 675

232 Ala. 594

BISHOP et al. v. McPHERSON.

6 Div. 865

Supreme Court of Alabama

May 21, 1936

Rehearing Denied June 18, 1936

Appeal from Circuit Court, Jefferson County; E.M. Creel, Judge.

Suit in equity by P.L. McPherson against C.M. Bishop and others. From a decree overruling a demurrer to the bill as amended respondents appeal.

Affirmed.

Smith Windham, Jackson & Rives, of Birmingham, for appellants.

John W Altman and Thos. H. Fox, both of Birmingham, for appellee.

KNIGHT Justice.

The bill in this cause was filed by appellee, P.L. McPherson, to have a certain instrument executed by the respondents Ruby G. Bishop and her husband, C.M. Bishop, to the complainant, declared and enforced as an equitable mortgage on the lands described in the bill; or, in the alternative, to have a decree of the court subrogating the complainant to the lien of the "original vendor" of said property for the amount advanced by the complainant for the purchase of said property; and to have a certain purported mortgage executed by the said respondents Ruby G. Bishop and her said husband to the respondent H.M. Cowart declared to be fraudulent and void as against the rights of the complainant; for sale of said property for the satisfaction of said mortgage or lien; and for general relief.

It appears from the averments of the bill as last amended that a short time prior to July 23, 1932, the respondent C.M. Bishop "requested the complainant to lend him the sum of $2,000.00, stating that he and his wife were about to, or desired, to purchase" certain real estate in Jefferson county (and which is particularly described in the bill), "with the money, if such loan were made, and that if the complainant would make said loan to said respondent, they, the said C.M. Bishop and wife, Ruby G. Bishop, would execute a mortgage on said land which they desired to buy, to the complainant, to secure said sum of money, and that relying on these representations, the complainant did in fact make a loan of money to the respondent C.M. Bishop, in the amount of $2,000.00."

It is further averred: That with the money thus borrowed of complainant the respondents did actually purchase said property, which was then unimproved, for the sum of $600. That the title to said property was taken in the name of the respondent Ruby G. Bishop.

That, after the purchase of the property, the respondents "went ahead and had a house built on said land," and in paying for the construction of said house, and in paying for the material used in the construction, the respondents expended the balance of said loan, that is to say, $1,400.

That on or about July 23, 1932, the respondents Bishop executed to the complainant a paper writing purporting to be a mortgage on said property to secure the loan made by the complainant to the said C.M. Bishop. This instrument appears in the report of the case.

In paragraph E of the bill as amended it is averred that it was the intention of the parties at the time the loan was made that the same should be secured by a mortgage; that it was the intention of the parties, including the respondents C.M. Bishop and Ruby G. Bishop, that said purported mortgage "was to be and operate as a good and valid mortgage on said property."

It fully appears that the only money used in the purchase of said property and in the construction of the residence thereon was money actually advanced by the complainant.

It also appears from the averments of the bill that the respondents C.M. Bishop and wife resided upon the property as their home at the time the mortgage was executed.

The court overruled the demurrers of the respondents to the bill as amended. From this decree the respondents appeal.

It unquestionably appears from the bill that it was not the wife's money that was used in the purchase of the real estate, nor was it her money which was used in the construction of the residence thereon. It was the husband's money, obtained by him from the complainant for the express purpose of purchasing the property, and upon the assurance that a mortgage would be executed on the property to be bought and delivered to the complainant as security for the loan.

It appears, as above pointed out, that the conveyance was made to the wife, Ruby G. Bishop.

Confessedly, had the purchase money not been paid to the vendor, the fact that the conveyance, at the request of the husband, was made to the wife, would create no obstacle to the enforcement of the vendor's lien upon the property.

Under such circumstances, the wife would be a mere volunteer--the volunteer donee of the husband--standing in his shoes, "entitled only to his rights, and bound by every equity affecting him." Pylant v. Reeves, 53 Ala. 132, 25 Am.Rep. 605; Crampton v. Prince, 83 Ala. 246, 3 So. 519, 3 Am.St.Rep. 718; Moore v. Worthy, 56 Ala. 163; Daniel v. Daniel, 214 Ala. 406, 108 So. 42.

When the complainant made the loan to the respondent C.M. Bishop, he (the complainant) became by that act a creditor of the said C.M. Bishop, a simple contract creditor it is true, but none the less a creditor. As such simple contract creditor he acquired certain rights as against the debtor and his property which the debtor could not defeat by the voluntary conveyance of his property to his wife or to any one else. Among such rights was the right to pursue the debtor's property and have it applied, or subjected, to the payment of the debt. Such a voluntary conveyance is constructively fraudulent against the creditors of the debtor, and will be set aside by a court of equity. And this would result without regard to the good or bad faith of the voluntary donee, and whether or not such donee knew, or did not know, of the purpose or intent of the grantor. A court of equity requires that one must be just, before being generous, in the disposition of his property. Wood v. Potts & Potts, 140 Ala. 425, 37 So. 253; Beall v. Lehman Durr Co., 110 Ala. 446, 450, 18 So. 230; Wallen v. Montague, 121 Ala. 287, 25 So. 773; Carr v. Goldstein, 210 Ala. 366, 98 So. 199; Gant v. Dunn, 215 Ala. 411, 110 So. 903.

The filing of the bill by a simple contract creditor in such a case will have the effect of fastening an equitable lien upon the property so conveyed to a voluntary donee. Barnes v. Bell, 231 Ala. 84, 163 So. 616; Cortner v. Galyon, 223 Ala. 405, 137 So. 30; North Birmingham American Bank et al. v. Realty Mortgage Co., 223 Ala. 30, 134 So. 796; Corothers v. Weaver et al., 220 Ala. 584, 127 So. 151; Hines v. Duncan, 79 Ala. 112, 58 Am.Rep. 580; Evans v. Welch, 63 Ala. 250; Mathews v. Mobile Mutual Ins. Co., 75 Ala. 85.

Confessedly having advanced the respondent C.M. Bishop $2,000 with which to purchase the property and to make the improvements thereon, to say the least of it, the complainant became a creditor of the said C.M. Bishop, and, being such creditor, the said Bishop could not make a gift of the property, so bought with the money borrowed of complainant, to his wife, without committing a constructive fraud against the complainant. In these circumstances, the...