Lewis v. Davis

• Decision Date: 30 November 1916
• Docket Number: 6 Div. 258
• Citation: 198 Ala. 81,73 So. 419
• Parties: LEWIS et ux. v. DAVIS.
• Court: Alabama Supreme Court

73 So. 419

198 Ala. 81

LEWIS et ux. v. DAVIS.

6 Div. 258

Supreme Court of Alabama

November 30, 1916

Appeal from Chancery Court, Jefferson County; A.H. Benners Chancellor.

Bill by George W. Lewis and wife against John W. Davis to vacate and annul a deed, and for general relief. From a decree for respondent, complainants appeal. Affirmed.

Estes &amp Jones, of Bessemer, for appellants.

Allen Bell & Sadler, of Birmingham, for appellee.

THOMAS J.

The bill is filed by George W. Lewis and his wife, Elizabeth, for the purpose of having set aside a conveyance made by Lewis, on the day before his marriage, to the said Davis.

The grounds on which relief is sought are, the want of consideration, a fraud on the marital right of the wife, and incapacity of the grantor, by reason of intoxication at the time, to execute the conveyance.

Respondent (appellee here), answering the bill, denied the allegations therein contained, and alleged, not only that a small sum was paid to grantor at the time of the execution of the conveyance, but that the real consideration was loans made by grantee to grantor, for the purposes (among other things) of clearing the property of mortgage incumbrances, and erecting improvements on the lands in question. Respondent prayed that his answer be taken as a cross-bill, for the establishment and enforcement of his equitable lien in the properties conveyed.

The chancellor held that the challenged conveyance was an equitable mortgage, decreed relief, and ordered a reference, to ascertain (1) what amount, if any, John W. Davis furnished said Lewis to relieve his said property from incumbrance; (2) what sum had been expended by Davis in the erection of houses and other improvements on said property; and (3) what sum was advanced by said grantee to the grantor on the 16th day of September, 1914, at the time the conveyance was executed, and what sum was due thereon.

The cross-bill was well pleaded, and no error was committed in overruling the demurrer thereto. It even set up an independent equity relating to the subject-matter of the bill. Betts v. Ward, 72 So. 110; Etowah Mining Co. v. Wills Valley Min. & Mfg. Co., 121 Ala. 672, 25 So. 720; Yarborough's Adm'r v. Avant, 66 Ala. 526; Sims' Ch. Pr. § 649.

Where drunkenness is relied on to avoid a contract or conveyance, it must be shown that at the time of the execution of the instrument, or of entering therein, the obligor's, or grantor's, intoxication was of such degree as incapacitated him from exercising his judgment and prevented him from understanding the consequences of his act or undertaking. The drunkenness of a party at the time of making a contract may render the contract voidable, but does not render it void. Wright v. Waller, 127 Ala. 557, 29 So. 57, 54 L.R.A. 440; Oakley v. Shelley, 129 Ala. 467, 29 So. 385; B.R.L. & P. Co. v. Hinton, 158 Ala. 470, 474, 48 So. 546; Snead v. Scott, 182 Ala. 97, 105, 62 So. 36. On the complainant who seeks to cancel a deed on account of drunkenness of the grantor rests the burden of proof to show this incapacity, from intoxication, at the time of the execution of the instrument. Boggs v. Holloway, 158 Ala. 286, 47 So. 1017. A careful consideration of all the evidence does not convince us that the complainants have discharged this burden of proof.

On the phase of the case that the conveyance was a fraud on the marital rights of Mrs. Elizabeth Lewis, we may observe the gist of such action is, that the prospective husband had the intention, in the execution of the conveyance, to defeat the prospective wife of her right of dower and homestead, or whatever statutory interest she would obtain in the real property of the husband, in virtue of the marriage. Nelson v. Brown, 164 Ala. 397, 401, 51 So. 360, 137 Am.St.Rep. 61; Kelly v. McGrath, 70 Ala. 75, 45 Am.St.Rep. 75; Cannon v. B.T.S. Co., 69 So. 934; 21 Cyc. 1156. It is clear from the evidence that Lewis was indebted to Davis, that he had no intention to defeat the payment of the amounts so due, and that he desired to secure Davis for all sums advanced by him, or paid out for the account of Lewis or to relieve his properties from liens. It is further clear that Lewis knew of the proposed erection of buildings and improvements by Davis on the former's land. Lewis had no other intention than to secure Davis against financial loss from such payments or advances; and that he so secured the same immediately preceding his marriage to said Elizabeth did not vitiate the conveyance so made in good faith. The chancellor properly referred the ascertainment of the facts to the register, on reference. Sims' Ch. Pr. §§ 600-609.

It is further contended that the court committed error in holding the deed to be an equitable mortgage. The essential fact to characterize a deed as a mortgage is that the conveyance was given as security for a debt subsisting between the parties at the time of the execution of the conveyance. If there was no indebtedness the conveyance cannot be a mortgage. Everett v. Estes, 189 Ala. 60, 66 So. 615; Sewell v. Holley, 189 Ala. 121, 66 So. 506; Martin v. Martin, 123 Ala. 191, 26 So. 525; Smith v. Smith, 153 Ala. 504, 45 So. 168; Ellington v. Charleston, 51 Ala. 166; West v. Hendrix, 28 Ala. 226; 3 Pomeroy, Eq. Jur. 1196. A deed of conveyance of land, absolute and unconditional on its face, but intended and understood by the parties to be merely a security for the payment of a debt, or the performance of some other condition, is regarded and treated in equity as a mortgage. It is a settled doctrine of equity that the form of a transaction will never preclude inquiry into its real nature. Stoutz v. Rouse, 84 Ala. 309, 4 So. 170; McMillan & Son v. Jewett, 85 Ala. 476, 5 So. 145.

In Markham v. Wallace, 147 Ala. 243, 41 So. 304, there is quoted with approval from the cases of Jackson v Rutherford, 73 Ala. 156, and Bush v. Garner, 73 Ala. 166, and 19 Am. & Eng.Ency.Law (2d Ed.) 13, and 3 Pom.Eq.Jur. § 1237, the rule of equitable mortgage. ...