Marriott v. Givens

GOLDTHWAITE, J.

This bill presents several distinct features, which it is proper to advert to, previous to the consideration of the questions raised upon the record. One of them is, that the complainant asserts an absolute title to four of the slaves involved in this controversy, and as to them seeks no ultimate disposition by the décree; but only to restrain the creditors of a third person from pursuing these at law, in satisfaction of their claims against him ; in other terms, the bill claims that the Court of Equity shall interfere to ascertain where the legal title in these slaves is. The only assigned reason for this interposition is, that other personal estate, with some real property, was assigned by the debtor to a trustee as a security to the complainant for certain 'debts due to him; and that this trustee, supposing these slaves to be conveyed to him by the deed conveying the other property, by mistake interposed a claim to them, in common with that.other property, when all of it was levied on by executions at the suits of creditors of that third, person ; and that the complainant was a stranger to this claim. Another feature is, that personal as well as the l’eal estate conveyed by the trust deed, has been levied on by the several creditors of the grantor of the deed, and the common object of the bill is to restrain those creditors from proceeding at law against any of the property thus levied on. The reason for this interposition is assumed to arise out of the right which the complainant has to foreclose his trust deed, and that this right is interfered with or obstructed by their levies.

1. We entertain no doubt that a mortgagee or cestui que trust may, in the first instance, proceed in a Court of Equity to foreclose his mortgage or deed of trust, although by the deed a power is conferred to sell. [McGowan v. Br. B. at Mobile, January term, 1845.]

2. Nor is it a question, when a creditor, previous to the expiration of the law day named in a mortgage or deed of trust, procures a levy to be' made, that the mortgagee or cestui que trust' may file a bill to ascertain and separate his interest from- that which remains in the grantor, in consequence of the usual stipulation in the deed that he shall retain possession of the property, conditionally conveyed, until the forfeiture of the condition. [Williams v. Jones, 2 Ala. Rep. 319.] Indeed, it results from former decisions by the Court, that the interposition of a claim under the statute, by the mortgagee or trustee, will be ineffectual, if made before the expiration of the law day, as until that time the grantor is entitled to retain the property; and this right of possession for a determinate period, is subject to levy and sale, and carries with it the equity of redemption. The consequence of the premature interposition of a claim by the trustee, &c. under such circumstances, is, that the claim suit must be determined against the claimant, as his title is incomplete until a forfeiture of the condition of the deed. In view of this difficulty, we have several times suggested,that another effect of a premature claim, might be to conclude the title of the trustee, (fee., upon the idea that the deed itself might be questioned as involved in such a suit. [Williams v. Jones, 2 Ala. Rep. 319; P. & M. Bank v. Willis, 5 Ib. 770.] How'ever this may be, when the claim is premature, the case last cited establishes that the trustee, &c., when the law day has expired, may interpose his claim under the deed, although the levy was previously made. To the same effect is Magee v. Carpenter, 4 Ala. Rep. 469, and Davidson v. Shipman, 6 Ib. 27.]

3. The consequence of these decisions is, that there is no necessity for the mortgagee or cestui que trust to go into equity'to protect themselves against the creditor of the mortgagor, unless the levy of his execution is made before the expiration of the law day. And the same rule seems to govern any creditor of the property when the mortgagee or trustee is invested by the deed with the power to determine the possession ■ of the grantor in the property conveyed. (See cases last cited.)

4. It seems then to be clear, that the statute authorising a claim suit, invests the person whose propertyis levied on, with the right to have his claim determined at law; but here the converse of this matter is presented; and the question arises, whether a creditor alleging fraud in the conveyance of his debtor, can be prevented from trying that question in a court of law before a jury ? By the course of proceeding, under the common law, this question was generally tried in a suit against the sheriff for a false return of nulla bona, if he omitted to levy; or in an action of trespass or trover, if he improperly levied on the goods of a third person; or it might be in an action directly against the plaintiff for directing the levy; or in trover or detinue against the purchaser at the sheriff’s sale. In relation to real estate, the same question was usually tried in action of ejectment by the purchaser under the sheriff against the tenant in possession, claiming under the disputed title. Independant of these modes of ascertaining the fact of fraud, bf a legal suit, the creditor was permitted, in equity, to set aside the fraudulent conveyance, as an obstruction to his legal right.

From these principles it seems clear that a creditor’s right to attack a conveyance for fraud, is one which may be asserted either at law or in equity, and we have been unable to meet with any adjudicated case which warrants the idea that its determination can be withdrawn from the forum which the creditor selects.

The levies, which it is the principal object of the bill to-enjoin, seem, all of them, to have been made after the expiration of the term fixed by the trust deeds for the payment of the debts ; but it seems to have been supposed the property must necessarily have been condemned without reference to the question of fraud, from the circumstance that the deeds of trust both provide,-not only that Herndon, the debtor, should remain in possession of the property until the law day, but also until the trustee should be required, in writing, by the complainant, to proceed and sell. Under ordinary circumstances, the trustee is considered as representing his cestui que trust, and rarely, if ever proceeds in opposition to his will; the insertion of this stipulation was probably intended, at least such is the presumption, considering the deeds to be bona fide, to save the debtor, from the captious or vexatious interference óf the trustee; but we think it has no effect to open the law day of the deed from a definite to an indefinite period. It follows then, that the trustee was authorised, under the deeds, to interpose'his claim to the property; and at the time he did so there was no interest remaining in the debtor which could sustain the levy, always supposing the deeds as bona fide. [P. & M. Bank v. Willis, 5 Ala. Rep. 770.]

6. The trustee in a deed of the description before us, is invested with the legal title to the property conveyed, and is, at law, the proper party to contest its legal sufficiency; from this proposition it follows, that a verdict either for or against him, if obtained without collusion or fraud, is binding and conclusive on the cestui que trust.

The application of these principles will enable us to ascertain what and how much equity the bill under consideration contains.

7. As to the four slaves asserted to belong absolutely to the complainant, there is no equity whatever for the mistake of the trustee in claiming them, or even a wrongful claim by him could not affect the true owner. His remedy as to these, was either to pursue the common law modes of relief or he might properly propound a new claim, in his own name, after delivering the slaves in discharge of the condition of the bond binding him to deliver them.

8. So likewise as to the personal property levied on at the instance of Marriott & Hardesty, there is no equity; because their right to have satisfaction out of it was ascertained by the verdict upon the claim interposed by the trustee under the deeds. According to what has already been ascertained, this verdict must have been predicated on the fact of the invalidity of the deeds, because, when the claim was interposed, there was no interest remaining with the debtor which could defeat the claim of his trustee.

9. The same want of equity is apparent as to all the personal property covered by the trust deed, and levied on by the other creditors. As to this, they had asserted a legal right which they are entitled to have determined in a Court of Law. The levies 'being made after the law day, there is no interest in the debtor which can defeat the claim on that account; and the only question involved is the validity of the deeds of trust. The determination of these suits in favor of the one or the other of the several parties, is decisive, so far as that creditor, or the complainant is concerned. >

. 10. With reference to the real estate, we consider the bill as containing upon its face a proper and legitimate equity; and that all the defendants are properly mp.de parties. We have before said, that a mortgagee or cestui que trust might come into equity to foreclose his mortgage, or deed of trust, even though a power to sell was one of the terms. The defendants are all judgment creditors, and according to many authorities, as such, would be entitled to redeem. [2 Story’s Eq. § 1023; Story’s Eq. PI. § 193, and cases there cited.] Consequently they are proper parties to a bill to foreclose. It is to be remarked here, that with respect to the real estate, the bill does not alledge any matter from which it can be inferred that the creditors have enforced the levy upon this description of the property, or consummated it by sale; nor do they pray that they may, as to this, be permitted to contest the deed in a Court of Law, upon the ground of fraud. What would be the effect of such a prayer, and the course to be pursued, are matters which we decline to consider at this time.

11. Having ascertained what is the equity of the bill, we shall proceed to the objection that it is multifarious. That it is so, to some extent, is apparent from what has already been said. There is no connection whatever between the trust property and the slaves to which an absolute title is asserted; and whatever interest Herndon may have in the trust property, none in him is shown for these slaves. Multifariousness is the improperly joining in one bill, distinct and independent matters, thereby confounding them. [Story’s Eq. PI. 271.] But it is said, that although a bill is ordinarily open to objection, for this reason, where it contains two distinct subject matters, wholly disconnected, yet if one of them be clearly without the jurisdiction of equity for redress, the bill will be treated as if it was single, and the Court proceed with the matter over which it has jurisdiction, as if that constituted the sole object of the bill. ■ [Id. § 283.] InVarickv. Smith, 5 Paige, 160, the proper course is said to be, to answer as to the proper matter, and to demur to the other for want of equity; or the defendant may answer as to both and make the exception as to the latter at the hearing. It might be asked how it is if both the misjoined matters are of equity jurisdiction?

Whatever may be the rule elsewhere, and in Courts which permit a demurrer separate from an answer, we think, according to our practice, when a demurrer for this cause is interposed and sustained, the complainant should be put to an amendment of his bill; or, at least, to an. election for which cause he will proceed. , "

It is difficult to say what the proper practice is in an appellate Court, when the cause has been heard after a demurrer for this cause overruled, and'determined upon both the distinct matters. As this matter is immaterial in this case, we shall leave it open, and proceed to the examination of the decree upon the merits.

12. As to the slaves claimed to be the absolute property of the complainant, it would, from the view already taken, be unnecessary to say any thing, but for the influence the assertion of this claim, if unfounded and fraudulent, may have upon the deeds of trust.. There is a total deficiency of proof by the complainant to sustain the assertions of his bill; but beyond this,it is clearly proved, as to one of the slaves, that it was purchased and paid for by Herndon, the debtor, with notes due to him and a partner; and that the seller, at his request, made the bill of sale to the complainant. Another was purchased by Herndon at the sheriff’s sale, through the medium of a third person, and the third by him and another person jointly, in the name of the other person— Herndon paying one half of the money, and the slave being con.veyed by the part owner to the complainant, without any proof of a consideration. Independent 'too of all this, the proof is, that all the slaves were in Herndon’s possession for a long time, and until levied on. We are forced, by this evidence, to the conclusion, not only that the complainant is without just title to these slaves, but also, that he is asserting a simulated one, to withdraw Herndon’s property from the grasp of his creditors.

It is not material to consider what influence evidence like this, in relation to one’branch of the cause, will have upon the other, if that is apparently fair ; because, in our judgment, the deeds of trust were executed by Herndon as a cloak to cover his property, and if the complainant was innocent in the first instance, of a participation in that intention, it is more than questionable if he has not made himself a party to it by attempting to carry out the unlawful purpose.

13. The indebtedness of Herndon is declared by the deeds of trust, to be something over $20,000, by notes of different dates, in additiop-to a debt of $900 by a receipt. The only notes proved as exhibits, amount to little more than $7,000, in both cases excluding interest. No reason is assigned in the bill why the proper vouchers cannot be produced, -and the testimony is equally silent. There is no attempt whatever to sustain the deeds as to the note of $6,800 — the largest of the enumerated sums, and the evidence in relation to the other items, induces the suspicion, when critically examined, that nothing is due to the complainant individually, and nothing more than the amount of the notes exhibited to him as co-executor of Maberry. The co-executor is examined as a witness, and proves beyond a doubt that Herndon never had any transactions with the executors, within his knowledge, except the purchase of some slaves, for which the $4,370 note, which is exhibited, was given, and the loan by the complainant to him of the Carnick note, belonging to the estate, for $8,410. The $2,750 pote, not exhibited, is payable to the complainant pnd Cox jointly, as executors of Maberry. How could this debt have become due to the estate without the knowledge of the co-executor, unless it was a security to the complainant for a portion of the Carnick note ? The witnesses say it was given, as they understood, for borrowed money, and this is consistent only with the circumstance that the note of the estate was lent to Herndon. One of the same witnesses speaks of seeing a receipt in the complainant’s hands, for money collected in Sparta, Tennessee, for $900. Where that receipt was at the hearing, does not appear, but the testimony of the Carnicks shows, that they paid their note at Sparta; and it is not a little peculiar, that $910 should be the precise balance due upon the note, after the principal payment. In the absence of the note which if given at all, was evidently so for the Carnick note, and the receipt, without any attempt to account for them, the inference is irresistible, that both are settled, and it is quite strong that the $2,750 note was given upon the final liquidation of these two items, as otherwise there is no explanation why the note was for money borrowed, and is made payable to the executors of the estate. We think it clear then, that the only judgment which the law authorizes us to pronounce upon the case, left in this condition by the evidence is, that the deeds describe debts which are not shown to be due; and the inference is proper, that they were executed, not for the bona fide purpose of securing debts actually due to the complainant, but that making use of that indebtedness and simulating it to be greatly more than it was, the chief intention was to hinder and delay creditors.

Without entering into the question, whether the complainant might avail himself of deeds executed with such a purpose, if in point of fact he was ignorant of it, we think he is entitled to no benefit, when he has been a party to the attempt to carry the purpose into effect, by pretending to be a larger creditor than he really is, or what produces the same effect — than he is able to prove himself to be. No rule is better established, or is more salutary in its effects, than that which declares it the imperative duty of the grantee in a deed attacked by creditors for fraud, to remove any suspicion of unfairness from the transaction. [Struper v. Eckart, 2 Whar. 302.] This has not been done in the present case, and the effect of such suspicion is to pronounce against the validity of the deeds.

Here our task, necessarily a painful one, ends, as the other questions are unnecessary to be determined; inasmuch as the supposed incumbrance of Bright & Ledyard cannot be tacked to an invalid deed; and the question arising out of Herndon’s bankruptcy and subsequent purchase of his supposed interest in the property conveyed by the deeds of trust is immaterial, if the bill is dismissed.

Such is our conclusion, and the decree here will be, that the Chancellor’s be reversed, and the bill dismissed.