Watters-Tonge Lumber Co. v. Knox

• Decision Date: 16 June 1921
• Docket Number: 5 Div. 778
• Citation: 89 So. 497,206 Ala. 183
• Parties: WATTERS-TONGE LUMBER CO. v. KNOX et al.
• Court: Alabama Supreme Court

89 So. 497

206 Ala. 183

WATTERS-TONGE LUMBER CO. v. KNOX et al.

5 Div. 778

Supreme Court of Alabama

June 16, 1921

Appeal from Circuit Court, Tallapoosa County; Lum Duke, Judge.

Bill by the Watters-Tonge Lumber Company against D.R. Knox and others to declare a deed void as against creditors and to subject said property to the debt. From a decree denying relief and dismissing the bill, complainant appeals. Reversed, rendered and remanded.

S.J Darby, of Alexander City, for appellant.

J Percy Oliver, of Dadeville, for appellees.

GARDNER J.

Appellant, a judgment creditor of D.R. Knox, filed this bill to have declared fraudulent and void as to the creditor of said Knox a conveyance to his son, W.H. Knox, of one-half undivided interest in and to a certain lot and residence thereon situated in Alexander City, Ala. From a decree denying relief, and dismissing the bill, complainant prosecutes this appeal.

In April, 1914, D.R. Knox was indebted to the complainant in the sum of $464.87, and executed his note for that amount, due June 1, 1914. In March, 1916, he wrote the complainant, "If I live, I am going to settle this debt during this year;" and on July 12, 1916, he wrote another letter, giving sickness as an excuse for his failure to pay, and stated that he would pay as soon as he could. Two days prior to the date of this letter--that is, on July 10, 1916--said Knox had purchased from one Ingram a residence lot in Alexander City, for a recited consideration of $1,470. While the deed discloses the payment of the sum in full, yet the evidence shows without dispute that the cash payment amounted to about half this sum--said Knox assuming the payment of a mortgage for something over $700, held by one Harrison, which was upon the property at the time of the purchase. Soon after this purchase (the exact date not appearing in the proof) a house was built upon the lot, costing, according to the evidence of D.R. Knox, from $800 to $1,000. W.H. Knox is the son of D.R. Knox, and resided in this residence with his father as a member of the household. He became 21 years of age on March 7, 1916.

On October 9, 1918, the complainant brought suit against D.R. Knox in the circuit court of Tallapoosa county upon the note above mentioned, and recovered a judgment in August, 1919, which was duly recorded. On April 1, 1919, D.R. Knox sold to one Foshee the house and lot above referred to for a cash consideration of $3,250, and on the following day bought from one J.R. Black and wife the house and lot involved in this litigation, paying therefor a cash consideration of $3,100. The Harrison mortgage for $700 continued unpaid upon the first house and lot, and was transferred to the property here in question--D.R. and W.H. Knox having executed the mortgage on this property to secure the $700.

The deed from J.R. Black and wife to the property here in question was made to D.R. and W.H. Knox jointly. The bill charges that this was a voluntary conveyance as to the half interest of W.H. Knox, and was made for the fraudulent purpose of hindering, delaying, and defrauding the complainant from the collection of its indebtedness. The check for $3,250, purchase money for the original house and lot, was paid to D.R. Knox, and he paid to J.R. Black the cash consideration for the property here involved. It therefore appears that, at the time of the conveyance here in question, complainant was an existing creditor, with a suit pending and judgment obtained a few months thereafter, and that the debtor paid the purchase money, and had the conveyance so executed as to convey to his son, who resided with him as a member of his household, a half interest in the property. Under these circumstances, the burden of proving that the deed was not a fraudulent conveyance is cast by law upon the respondents. As said by this court in the recent case of Murphy v. Pipkin et al., 191 Ala. 111, 67 So. 675:

"The sufficiency of the proof of consideration must depend on the relations between the parties, the circumstances surrounding them at the time, and their conduct subsequent to the transaction. The vendees were the daughter and son-in-law of the vendor. Transactions between parent and child are jealously watched in a court of equity, even when the controversy arises between them, and, when the rights of creditors are involved, fuller proof must be given of an adequate and valuable consideration, and of the good faith of grantee or vendee, than would be required of a stranger."

See, also, Hubbard v. Allen, 59 Ala. 283; Harrell v. Mitchell, 61 Ala. 270; Wood & Son v. Riley, 121 Ala. 100, 25 So. 723; Calhoun v. Hannan, 87 Ala. 277, 6 So. 291; McCrory v. Donald, 68 So. 306, 192 Ala. 312; Goetter & Co. v. Norman Bros., 107 Ala. 585, 19 So. 56.

In Harrell v. Mitchell, supra, the opinion draws attention to the fact with what ease the consideration for the transfer of property may be feigned, and how essential it is that it should appear also that the grantee had the ability to make the purchase; the court saying:

"Clear evidence of ability to make the purchase is vital to sustain the transaction against creditors, whose right to appropriate the property of the grantor to the satisfaction of their demands is clear, and founded on law and good conscience."

Speaking of cases of this character, continuing, the court said:

"It is true, fraud is never presumed--that it must be proved by clear and satisfactory evidence, and when a transaction is susceptible fairly of two constructions, the one which will support and free it from the imputation of impurity of

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