Campbell v. Davis

• Decision Date: 28 February 1888
• Citation: 85 Ala. 56,4 So. 140
• Parties: CAMPBELL v. DAVIS ET AL.
• Court: Alabama Supreme Court

4 So. 140

85 Ala. 56

CAMPBELL v. DAVIS ET AL.

Supreme Court of Alabama

February 28, 1888

Appeal from chancery court, Lawrence county; THOMAS COBBS, Judge.

Bill in equity, filed by Hiram W. Davis and Margaret K. Hayes against Lucian D. Campbell, to set aside a fraudulent conveyance as a cloud on title.

James Jackson and J. B. Moore, for appellant.

Ward, Chitwood, Walker & Shelby, for appellees.

CLOPTON J.

The land in controversy was sold by the sheriff under executions issued on three several judgments, rendered against Henry C Montgomery in favor of appellees and E. R. Ryan & Co., respectively. The appellees became the purchasers at the sale, to whom the sheriff executed a conveyance. J. F. Montgomery, the father of H. C. Montgomery, owned and possessed the land at the time of his death, which on his death descended to his seven heirs at law. In February and March, 1886, before the rendition of the judgments, but after the debts of the judgment creditors were contracted, all the heirs except one conveyed the land to appellant upon a recited consideration of $6,000 paid, the judgment debtor being one of the grantors. The bill is filed by appellees, as such purchasers, to have the conveyance by the judgment debtor declared fraudulent and void as to them, and to remove it as cloud on their title. It alleges that the $6,000, recited as the consideration price, was in fact a loan, and that the conveyance, though absolute in form, was intended as security for the loan. The exhibits to the bill show that the judgment debtor owned only one-seventh interest in the land. This is the quantum of interest acquired by complainants. None but creditors or purchasers, whose rights are offended, can complain of a fraudulent conveyance. It is valid as between the parties and as against all other persons. However fraudulent may be the conveyance as to the interest of the other tenants in common, the complainants have no right to assail it and have it set aside, as fraudulent. The other heirs at law were unnecessary parties, and were improperly joined; but the right to make this objection is personal to them; a co-defendant cannot take advantage of the misjoinder. Ware v. Curry, 67 Ala. 274.

It has been the established doctrine in this state too long to be considered within the pale of controversy, that an absolute conveyance of land made by an embarrassed or insolvent debtor intended to operate as a security for a debt, antecedent or cotemporaneously contracted, is fraudulent and void against the existing creditors of the grantor. Actual fraud,-an intent to delay, hinder, or defraud creditors,-is not essential. The fraud is deduced by the law from the fact that such conveyance operates a secret reservation of a benefit,-the equity of redemption,-for an embarrassed debtor. The parties will not be heard to deny or rebut the conclusion. Though the bill alleges that the deed was made absolute in form for the purpose of concealing the true character of the transaction and to cover up the property of the debtor so that it could not be reached and subjected to the payment of his debts,-fraud in fact,-no other facts showing fraud need be averred than that the conveyance is...