Rogers v. Conaway

• Decision Date: 16 March 1933
• Docket Number: 7 Div. 170.
• Citation: 147 So. 152,226 Ala. 334
• Parties: ROGERS v. CONAWAY.
• Court: Alabama Supreme Court

147 So. 152

226 Ala. 334

ROGERS v. CONAWAY.

7 Div. 170.

Supreme Court of Alabama

March 16, 1933

Appeal from Circuit Court, Cherokee County; A. E. Hawkins, Judge.

Creditors' bill by L. J. Conaway, as trustee in bankruptcy of J. B Rogers, bankrupt, against Della Rogers and J. B. Rogers. From a decree for complainant, respondent Della Rogers appeals.

Affirmed.

F. M Savage and Irby A. Keener, both of Center, for appellant.

Hugh Reed, of Center, for appellee.

KNIGHT Justice.

The appellee, Conaway, as trustee of the bankrupt estate of J. B Rogers, exhibited his bill of complaint in the circuit court of Cherokee county against Della Rogers and her husband, J. B. Rogers, in and by which he seeks to have declared fraudulent and void, as against existing creditors of said J. B. Rogers, a certain conveyance executed by the husband to the wife. The complainant avers that, at the time of the execution of said deed, the grantor therein was greatly indebted to various and sundry persons, and that among the number were H. C. Snead & Co.; and that on the day of the date of the conveyance H. C. Snead & Co. had filed their suit in the circuit court of Cherokee county against said J. B. Rogers, in which a judgment was thereafter rendered in favor of the plaintiffs in an amount in excess of $1,700. The judgment was rendered on February 4, 1931, and on or about the 23d day of May, 1931, the said J. B. Rogers filed his petition in the District Court of the United States for the Northern District of Alabama, praying to be adjudicated a bankrupt. The date of the conveyance attacked is December 31, 1930.

The complainant charges that the conveyance by said Rogers to his said wife "was voluntary and without consideration, and was in fraud of the rights of said H. C. Snead and company, and other existing creditors" of said Rogers, and was made with the intent on the part of both parties to said deed, and with knowledge of the financial condition of said J. B. Rogers, for the purpose of hindering and defrauding the creditors of the said J. B. Rogers in general, and the firm of H. C. Snead & Co. in particular.

The defendants filed separate answers to the bill, each denying the charges of fraud, and each asserting that the conveyance to the wife was made in exchange for other lands owned by the wife, which she at the time conveyed to the husband; and for "other valuable considerations," but which were not set forth.

Upon the hearing of the cause, the court decreed that the complainant was entitled to the relief prayed for, and decreed that the said deed from J. B. Rogers to his said wife was fraudulent, void, and that the lands conveyed by the deed were subject to the payment of the debts of said J. B. Rogers, existing at the time the deed was executed, and ordered the register to sell the same.

From that decree this appeal is prosecuted by the said Della Rogers.

The evidence leaves no room for doubt that at the time of the execution of the deed by Rogers to his wife the said Rogers was financially embarrassed, and, in fact, in failing circumstances, and that he owed the said firm of H. C. Snead & Co. a large sum of money, which shortly thereafter was reduced to judgment in the circuit court of Cherokee county. The exact amount of this judgment was $1,703, and cost of court. It further appears, without dispute, that on the day said deed was executed a suit, brought by said H. C. Snead & Co., was pending in the circuit court against said J. B. Rogers, and a summons to answer in said cause was served by the sheriff on said Rogers on that day. This indebtedness had been owing by said Rogers to said H. C. Snead & Co. for a long while, and they had been pressing for its payment.

It also appears from the evidence that in 1903-long before there were any dealings between the said Rogers and Snead & Co.-Rogers, the husband, purchased of W. A. Snead and wife 70 acres of land. This land will hereafter be designated the Snead land. Snead and wife conveyed this land to "J. B. Rogers and his wife, their heirs and assigns." The purchase price paid Snead was $700, but the evidence shows that, at the time of the conveyance here in question, this tract of land was of the value of about $1,700.

Of course, if Della Rogers was, as the evidence all tends to show, the wife of J. B. Rogers at the time of the Snead conveyance, she acquired by the conveyance an undivided one-half interest in the 70-acre tract. No objection could be urged against the deed for uncertainty as to one of the grantees, as the maxim of certum est quod certum reddi potest will be applied. Jones v. Morris, 61 Ala. 518.

We will, for the purpose of this opinion, treat Mrs. Rogers as the owner, in her own right, of an undivided one-half interest in the Snead tract, and that her interest therein was of the value of $850, as the evidence seems to indicate.

The evidence shows that the said J. B. Rogers resided upon the Snead tract, and that it constituted, in greater part, his homestead. He only owned an undivided one-half interest in the tract. Under the law, of course, the area of the homestead could not be enlarged by reason of any incumbrance thereon, or of the character of the estate or interest owned therein by him. This he well knew. It was his evident purpose to acquire the full interest in the home tract for the purpose of homestead exemptions. To accomplish this purpose, he seized upon the idea of conveying to the wife the 170 acres-which could not be claimed as a part of his exemptions-in exchange for her one-half interest in the home tract, thereby withdrawing in legal effect this 170 acres from the reach of creditors, and at the same time securing the full fee, for exemption purposes, in the Snead or home tract. All the while he had in contemplation bankruptcy and, eventually, the defeat of his creditors. Such was his evident scheme, and into this scheme, with full knowledge of her husband's financial embarrassment and failing circumstances, the wife willingly and whole-heartedly entered. The purpose, and the sole purpose of these tergiversations in title to the properties, was to defeat and defraud the creditors of the said J. B. Rogers.

It is not pretended that Mrs. Rogers paid her husband in money the difference in the values of the Snead tract and the 170 acres, which her husband conveyed to her. The fact is, she had no money. To obviate the effect that this disparity in values might have upon the result of this litigation, the respondents undertook to prove, by their unsupported testimony, that Mrs. Rogers really owned an undivided one-half interest in the 170 acres of land, which her husband conveyed to her; that she was, in fact, a copurchaser to this tract with him. The conveyance from the Bass Foundry & Machine Company to J. B. Rogers entirely refutes such a claim. We are fully persuaded by the evidence that Mrs. Rogers at no time owned any interest in the 170-acre tract, prior to the conveyance under attack in this case. The asserted claim is a sham and subterfuge. Under the evidence, apart from any material rights, she had no interest in the 170-acre tract.

After the exchange of these conveyances between Mr. and Mrs. Rogers, which occurred on December 31, 1930, and after H. C. Snead & Co. had reduced their demand against the husband to a judgment, we find Rogers hastening to the District Court of the United States with his petition to be adjudicated a bankrupt. In this petition he solemnly asserts, under oath, that "he owes debts which he is unable to pay in full, and that he is willing to surrender all his property for the benefit of his creditors except such as is exempt by law, and desires to obtain the benefit of the Act of Congress relating to bankruptcy."

Annexed to this petition are the usual schedules; among them, the schedule of unsecured debts. This schedule shows Snead &amp Co.'s debt of $1,703, along with other listed debts. Schedule B-Statement of all property of bankrupt. Real estate we find to be as follows: "S. W. 1/4 of S.W. 1/4, W. 1/2 of S.E. 1/4, of S.W. 1/4, section 7; ten acres west side N.W. 1/4 of N.W. 1/4, S.W. 1/4 of N.W. 1/4 of section 18; all in Township 11, Range 11 East, and N.E. 1/4 of N.E. 1/4, N. 1/2 of N.W. 1/4 of N.E. 1/4, and S.W. 1/4 of S.E. 1/4, all in Section 13, Township 11, Range 10 East, aggregating in all two hundred and ten acres. Estimated value $2,000.00. Eighty acres of the above described lands are mortgaged to Irby A. Keener and F. M. Savage, to secure a debt of $403.25. Personal property:...