Buell v. Miller

• Citation: 224 Ala. 566,141 So. 223
• Decision Date: 14 April 1932
• Docket Number: 8 Div. 358.
• Parties: BUELL v. MILLER.
• Court: Supreme Court of Alabama

141 So. 223

224 Ala. 566

BUELL v. MILLER.

8 Div. 358.

Supreme Court of Alabama

April 14, 1932

Appeal from Circuit Court, Madison County; Paul Speake, Judge.

Creditor's bill by Dora Loues Miller against Charles S. Buell and Gertrude S. Buell. From a decree for complainant, respondent Gertrude S. Buell appeals.

Affirmed.

Watts &amp White, of Huntsville, for appellant.

Griffin & Ford, of Huntsville, for appellee.

KNIGHT J.

Appellant and Charles S. Buell, the respondents in the court below, are husband and wife. The appeal is prosecuted by appellant Gertrude S. Buell, from a decree of the circuit court of Madison county, in equity, holding fraudulent and void, as against the judgment and debt of appellee, a conveyance made by the said Charles S. Buell to his said wife.

At the time of the execution of the conveyance, the said Charles S Buell was indebted to the appellee in the sum of $1,822, and the appellee recovered judgment of him for said amount. This judgment was rendered on the 20th day of May, 1929, in the circuit court of Madison county. A certificate of this judgment was duly filed for record in the office of the judge of probate of Madison county on the 25th day of the same month. The deed to the appellant was executed on the 5th day of March, 1927, and duly filed for record on the same day.

It is made to appear from the averments of the bill that the indebtedness of Charles S. Buell to appellee remains unpaid, and is a valid, legal, and subsisting claim.

The bill, for its equity, is rested upon the following averment: "After the execution of said notes and the creation of said indebtedness as above averred, and while the said Charles S. Buell remained indebted as evidenced by said notes, for the purpose of putting his property beyond the reach of this complainant as a creditor, and to prevent, hinder and delay her in the collection of her debt, and for a simulated consideration, or a fictitious consideration, or a pretended consideration, the said Charles S. Buell did, on the 5th day of March, 1927, make and execute to one Gertrude S. Buell, his wife, a deed of conveyance conveying to her the property hereinabove described, *** and the complainant avers and alleges that the consideration expressed in said deed of conveyance was grossly inadequate or so grossly inadequate as to shock the conscience, and that the said Gertrude S. Buell knew at the time of the delivery of the said conveyance to her that the defendant, Charles S. Buell was in failing circumstances, or financially embarrassed, and could not pay his debts."

The thirteenth ground of appellant's demurrer takes the point that the averments of the bill, as to the alleged consideration, are inconsistent and repugnant. It may be, though we do not decide, that had the demurrer pointed out just wherein this inconsistency or repugnancy consisted, so as to inform the court, and thereby to comply with statutory requirements in this regard, this ground of demurrer might be good. As cast, the demurrer is too general. Code, § 6553; McDuffie et al. v. Lynchburg Shoe Co. et al., 178 Ala. 268, 59 So. 567; Deslandes v. Scales et al., 187 Ala. 25, 65 So. 393; Seeburg v. Norville et al., 204 Ala. 20, 85 So. 505.

In the case of Tyson v. South C. Oil Co., 181 Ala. 256, 262, 61 So. 278, 280, this court said: "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."

In Little v. Sterne, 125 Ala. 609, 27 So. 972, 974, this Court held: "If complainants were existing creditors, Mrs. Little, as a purchaser from the debtor for a valuable, though inadequate, consideration, would be protected unless she had knowledge, actual or constructive, that he 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."

In Gordon v. Tweedy, 71 Ala. 202, 213, it is held: "Inadequacy of price is usually denominated a badge of fraud, and it is often asserted that no fixed rule can be declared, by which to determine what disparity between the real value of property and the consideration paid will vitiate a conveyance for fraud. We think it settled, however, that fraud may be inferred from the inadequacy of the price alone, where it is so great as to shock the conscience."

In the case of London v. G. L. Anderson Brass Works, 197 Ala. 16, 72 So. 359, 362, the court held the above views to be "supported by the ablest commentators: Freeman on Executions, § 40 (cited in note to State v. Mason, 34 Am. St. Rep. 395); 2 Pom. Eq. Jur. (3d Ed.) § 970. See, also, 32 L. R. A. p. 52, note."

We are of the opinion that the bill as amended presents a case for equitable relief against the deed brought forward in the case, and that it is not subject to any ground of demurrer assigned thereto.

This brings us down to a consideration of the evidence in the case.

In the case of Brinson v. Edwards, 94 Ala. 447, 10 So. 219, this court held that where a part of the consideration of the conveyance was the payment of antecedent debts, and a part in cash or its equivalent, the validity of the sale, as against other creditors, is to be determined by rules governing sales by debtors for a new consideration, citing in support of the proposition Owens v. Hobbie, 82 Ala. 467, 3 So. 145. In the Brinson Case, supra, this court further held that in cases where the conveyance was made upon a new consideration, though the purchaser pays full price, yet if he is chargeable with notice that the seller is insolvent, or in failing circumstances, and that it is his purpose by the sale to put his property beyond reach, or otherwise to hinder, delay, or defraud his creditors, then such sale is invalid as against other creditors. Lehman v. Kelly, 68 Ala. 192.

In the case of Federal Land Bank of N. O. v. Rowe et al., 222 Ala. 383, 133 So. 50, 51, this court referred approvingly to the case of London v. Anderson Brass Works, 197 Ala. 16, 72 So. 359, and held: "That if the consideration is a new one, the grantee need only show that he in fact paid a substantial valuable consideration whereupon the creditor must show that the grantee had notice of an intent by the grantor to hinder, delay, or defraud his creditors. In the latter event, inadequacy is a mere...