Ivey v. May

• Decision Date: 19 December 1935
• Docket Number: 1 Div. 864
• Citation: 164 So. 732,231 Ala. 339
• Court: Alabama Supreme Court
• Parties: IVEY v. MAY et al.

164 So. 732

231 Ala. 339

IVEY v. MAY et al.

1 Div. 864

Supreme Court of Alabama

December 19, 1935

Appeal from Circuit Court, Baldwin County; F.W. Hare, Judge.

Bill in equity by Robert Ivey, a non compos mentis, suing by his next friend, Chesley A. Robinson, against W.W. May and others. From a decree granting relief upon condition, complainant appeals.

Corrected and affirmed.

B.F McMillan, Jr., and H.M. Aldridge, both of Mobile, for appellant.

Hybart & Chason, of Bay Minette, for appellees.

KNIGHT Justice.

The appellant, suing by his next friend, filed his bill in the circuit court of Baldwin county against the appellees, W.W. May, George Marinous, and Peter Frankos, the latter a resident of Illinois, seeking the cancellation of certain conveyances, the first of which was executed by the appellant, and at a time when it is averred he was of unsound mind, "and incapable of attending to business affairs." The deed of appellant was executed to appellee Frankos, and Frankos, in turn, conveyed the property to W.W. May, and May, after litigation arose, which involved the validity of appellant's deed to Frankos, conveyed, by quitclaim deed, the same property to Marinous, another of the appellees.

The bill shows that complainant owned a piece of property in Baldwin county, at or near Loxley in said county; that the property was worth approximately $6,000; that the complainant on November 23, 1931, was of unsound mind, and so much so that he was not capable of transacting business; that he was also in feeble physical condition. That with knowledge of the mental and physical condition of appellant, and with the fraudulent purpose of acquiring appellant's property at about one-fifth its real value, the appellee George Marinous on November 23, 1931, prevailed on the appellant to sign a deed purporting to convey the property to appellee Peter Frankos; that Frankos, to aid in carrying out the fraudulent scheme of Marinous to acquire appellant's property at an amount greatly less than its real value, accepted the deed but shortly thereafter conveyed the property to appellee May who was an "agent, servant or employee of Marinous," and who paid nothing for the conveyance; that the deed made to May was but a further step in the consummation of the fraud upon appellant. (And we may here say that the evidence shows that shortly after the title had passed to May, he, May, conveyed the property to Marinous.)

It appears from the bill, and the evidence fully supports the averment, that the consideration paid, and to be paid, to appellant by Marinous for the property was $1,000, of which amount $500 was paid by check drawn on the Baldwin County Bank by Marinous, and a note for $500 was executed to appellant, and which purported to have been made by Frankos.

It appears that appellant deposited the check in the Baldwin County Bank, and said bank was shortly thereafter placed in liquidation by the superintendent of banks of the state of Alabama, and some time thereafter, under the authority of the state banking department, and by a decree of the circuit court of Baldwin county, the said bank was reorganized, and the reorganized bank issued to appellant, to cover his deposit in the bank at the time the bank failed, 6 and 495/1250 shares of stock in the reorganized bank, and a certificate of deposit for $239.86. The said Ivey never withdrew the certificates, and, in fact, never knew of the issuance of the same, but said "documents remained in the bank until withdrawn for use as evidence in this case."

On submission of the cause for final decree, the chancellor decreed that the complainant, Robert Ivey, was of unsound mind at the time of the execution of the deed to Peter Frankos, and that George Marinous was not "entitled to protection as an innocent purchaser for value under section 6822 of the Code of Alabama"; the deeds from Ivey to Frankos, and Frankos to May, and May to George Marinous were each held to be null and void, but required, as a condition precedent to the cancellation of said conveyances, that Ivey pay to the register of the court, for Marinous, within ninety days from the filing of the decree, $623, representing the original cash payment for the land, with 8 per cent. interest thereon from November 23, 1931, and also that the note given by Frankos to said Ivey for $500, and which evidenced the unpaid purchase price of said land, should be returned to Frankos. The court further decreed that unless the said $623 was paid to the register "within ninety days from the filing of this decree, or if appealed, within ninety days from judgment on appeal, the said three deeds above mentioned and set out are not to be affected by this decree."

From this decree the complainant, Ivey, appealed, and has here assigned for error that part of the decree which required that the complainant, as a condition precedent to the cancellation of the conveyances, should pay the said $623 to the register for the defendant Marinous.

The respondents have neither appealed from said decree, nor have they made any cross-assignments of error upon the record. It would, therefore, seem that the decree is entirely satisfactory to them.

That Marinous was in truth and fact the real purchaser of appellant's property, in the sense that he alone was to be benefited thereby, the evidence convinces us to a moral certainty; that Marinous knew, at the time he prevailed upon appellant, Ivey, to execute the deed, that Ivey was of unsound mind, and wholly incapacitated to transact any kind of business, we are equally well convinced; that Frankos and May were mere dummies, brought into the transaction to aid Marinous in consummating the fraud upon the said Ivey, there is no room to doubt; and, lastly, that the property was worth several times the amount that Ivey was to be paid for it by Marinous, or by Frankos, we are also reasonably satisfied.

The sole question presented by this appeal is: Will the complainant, under the averments of the bill and the proof as above stated, be required to make restitution to Marinous of the consideration paid for the property, together with interest thereon, as a condition precedent to the cancellation of the conveyances?

This precise question has never been determined by this court.

Except in the cases provided for in sections 6822 and 6823, which have no application here, the contracts and conveyances of insane persons are absolutely void, and confer no rights upon the other party to the contract. Metropolitan Life Ins. Co. v. Bramlett, 224 Ala. 473, 140 So. 752; Walker v. Winn, Adm'r, 142 Ala. 560, 39 So. 12, 110 Am.St.Rep. 50, 4 Ann.Cas. 537; Dougherty v. Powe, 127 Ala. 577, 30 So. 524; Hughes v. Bullen, 209 Ala. 134, 95 So. 379; Livingston v. Livingston, 210 Ala. 420, 98 So. 281; Code§ 6824.

This court, in the case of Hood v. Holligan, 229 Ala. 539, 158 So. 759, which was a suit to quiet title to land, held that a deed executed by a person of unsound mind to a grandson, who paid nothing for the property, and who procured the execution of the deed with notice or knowledge of the grantor's insanity, was void, and that the grantee of the grandson, though paying value, without notice or knowledge of the first grantor's insanity, received no better or higher title than the grandson, and that an offer to do equity or to make restitution was not necessary to secure a cancellation of the conveyance.

This case, we concede, is not altogether in point for the reason that the insane grantor did not come into court in the first instance seeking a cancellation of his void deed, but was brought in as one of the defendants to the bill to quiet title, and when brought in, sought cancellation by cross-bill.

The author of the text in 32 Corpus Juris § 540, p. 748, states the rule bearing on the question now before us as follows: "It is generally held that the conveyance may be set aside without requiring the consideration to be refunded where the grantee had knowledge of the grantor's insanity, or where the consideration paid is so inadequate as to evidence an intention of the grantee to take advantage of the grantor's infirmity to defraud him. In such cases, at most, it is necessary to return only what is left." (Italics supplied.)

The Supreme Court of Massachusetts, many years ago, had occasion to pass upon a case involving the exact question now before us. That court in the case of Gibson v. Soper, 6 Gray (Mass.) 279, 66 Am.Dec. 414, held that a conveyance by an insane person could be avoided by him without being required, as a condition precedent to relief, to make restitution to the grantee. That to hold that restitution must be made as...