Kimbrough v. Hardison
| Decision Date | 30 June 1955 |
| Docket Number | 3 Div. 729 |
| Citation | 263 Ala. 132,81 So.2d 606 |
| Parties | W. P. KIMBROUGH v. Frances Grant HARDISON et al. |
| Court | Alabama Supreme Court |
Knabe & Nachman, Montgomery, for appellant.
Godbold & Hobbs, Montgomery, for appellees.
This is an appeal from a decree sustaining the demurrer to the substituted bill of complaint as a whole and to each aspect of the substituted bill.
The appellant Kimbrough is the complainant. In the substituted bill he alleged the following facts. Appellee Grant owns certain described real estate in Florida. He attempted to convey that property to his daughter, appellee Frances Grant Hardison. Kimbrough had a claim for damages against Grant arising out of an automobile accident on December 22, 1950. Suit had been filed claiming these damages prior to this attempted conveyance and a judgment was found against Grant and recorded in Florida prior to the time that this attempted conveyance was recorded there.
The bill alleged that the attempted conveyance of the Florida realty from Grant to Hardison was a fraud on Kimbrough, a creditor; that Hardison was not a bona fide purchaser for value but that the attempted conveyance was voluntary and without consideration; that the attempted conveyance was made with the intent to hinder, delay and defraud Kimbrough, as a creditor of Grant in his lawful suit, damages, debts and demands and that the purported conveyance was null and void and that the parties to it should be ordered to set it aside. There was also an averment that the appellees knew the purported deed was fraudulent at the time it was given. It was also averred that the appellee Hardison owned certain described real property in Montgomery. Both appellees are residents of Montgomery County, Alabama, and personal service was had on each of them. In the substituted bill appellant asked the following equitable relief against the appellees:
(1) An order to appellees to reconvey the Florida property and undo their alleged fraud; (2) an order to undo the fraudulent conveyance in any other appropriate manner which would vitiate the fraud; (3) a judicial declaration that title to the Florida property had been fraudulently divested out of Grant and into Hardison; (4) an order declaring a lien on the Florida property for the payment of Kimbrough's debts; (5) an order requiring appellee Grant to pay his debt--the judgment for damages claimed--or in the alternative require him to sell the Florida property and make payment of the debts out of the proceeds of the sale; (6) a declaration of lien against the Alabama property of appellee Hardison; and (7) an injunction against the appellees from further conveyances, assignments or deeds of either the Florida or Alabama properties until the payment of appellant's claim.
The lower court sustained the demurrer to the bill as a whole and to each aspect of the bill.
Appellant's theory is that an equity court in Alabama has the power to order the fraudulent vendor and the fraudulent vendee, both of whom are properly before it, to undo their fraudulent conveyances so that Kimbrough, the creditor, may be free to pursue his ordinary creditor's liability against his debtor and that equity in such a case may act in personam against persons within its jurisdiction and order them to perform acts in other states or countries. In support of this theory appellant cites Penn v. Lord Baltimore, 1 Vesey Senior 444; Massie v. Watts, 6 Cranch 148, 3 L.Ed. 181; Guild v. Guild, 16 Ala. 121; Allen v. Buchanan, 97 Ala. 399, 11 So. 777; Lamkin v. Lovell, 176 Ala. 334, 58 So. 258; Horst v. Barret, 213 Ala. 173, 104 So. 530; Peoples' Bank v. Barret, 216 Ala. 344, 113 So. 389, and Hume v. Kirkwood, 216 Ala. 534, 113 So. 613.
Two applicable statutes are:
'All conveyances, or assignments in writing, or otherwise, of any estate or interest in real or personal property, and every charge upon the same, made with intent to hinder, delay, or defraud creditors, purchasers, or other persons of their lawful suits, damages, forfeitures, debts, or demands; and every bond, or other evidence of debt given, suit commenced, decree or judgment suffered, with the like intent, against the persons who are or may be so hindered, delayed, or defrauded, their heirs, personal representatives and assigns, are void.' Title 20, § 7, Code of 1940.
'A creditor without a lien may file a bill in equity to discover, or to subject to the payment of his debt, any property which has been fraudulently transferred or conveyed * * * by his debtor.' Title 7, § 897, Code of 1940.
There is no question but that equity does act in personam and does order a party, in certain situations, to perform or refrain from certain acts relating to land in another jurisdiction, and the authorities cited by appellant and listed supra, sustain that proposition. But we have not found, nor have we been cited, any Alabama authority which extends equity jurisdiction to the point of permitting a creditor to set aside an allegedly fraudulent conveyance of land in another state.
The distinction between the rights of one who had title to land, either legal or equitable, and the rights of a mere creditor is clearly drawn in the case of Lide v. Parker, 60 Ala. 615. In that case a contract creditor prayed that a deed of trust to land in Mississippi be set aside as fraudulent and that respondent account for all money received under the deed of trust and rents and profits. A demurrer raised the question of jurisdiction because the lands were in Mississippi. The chancellor overruled the demurrer, holding that the bill presented a case for equitable relief and that if the transaction be found fraudulent as against the creditors, the court might by personal decree against the defendants, compel them to account for the lands in Mississippi. In reversing the decree and dismissing the bill, this court said:
'The only statute that can be supposed to aid the complainant, is contained in section 3886 (3446) of the Code of 1876 (now Title 7, § 897): 'A creditor without a lien may file a bill in chancery, to subject to the payment of his debt any property which has been fraudulently transferred, or attempted to be fraudulently conveyed, by his debtor.' But, evidently, the property here referred to is property within the State of Alabama. It cannot be presumed that the legislature meant to give in its enactment, if it could do so, an extra-territorial operation, or to authorize courts of equity here, through their power over parties within their jurisdiction, to appropriate real and personal property situated in another State, to the payment of simple-contract creditors in Alabama or elsewhere.
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