Pattison v. Bragg

Pattison v. Bragg. Bill in Equity by Judgment Creditor, to subject Property Fraudulently Conveyed by Debtor. 1. Conveyance by insolvent or embarrassed, debtor; when set aside at instance of creditor. — A conveyance of his property by an insolvent or embarrassed debtor, though executed with the fraudulent intent on his part to put his property beyond the reach oí his creditors, will not be set aside in equity at their instance, unless the purchaser participated in the fraudulent purpose, or had knowledge or notice thereof, actual or constructive ; and when answer on oath is required of him, and he answers fully and explicitly, denying all knowledge or notice as charged, his denials must prevail, unless the testimony adduced is sufficient to overcome them. 2. Inconsistent prayers for relief; relief under general prayer. — If a creditor, filing a bill to set aside an alleged fraudulent conveyance by his debtor, and to subject the property conveyed to the payment of his debt, may also ask, in the alternative, to hold the purchaser liable for a balance of purchase-money paid after bill filed and process served (which is not decided), he can not have that relief under the general prayer. Appeal from the Chancery Court of Wilcox. ' Heard before the Hon. Thos. W. Coleman. The bill in this case was filed on the 2d July, 1887, by Thomas H. Pattison, as a judgment creditor of Thomas Bragg, against said Thomas Bragg, Willis Bragg, Robert J. Carson, and others; and sought to set aside a conveyance of his property executed by said Thomas Bragg to Willis Bragg, who was his younger brother, and to said Carson, who was his cousin, and to subject the property to the satisfaction of the complainant’s debt, which was evidenced by two judgments recovered against him as surety for said Thomas Bragg, and which he had paid, taking an assignment of them to himself, and having an execution afterwards returned “No property found.” One of said judgments was rendered on the 26th May, and the other on the 2d June, 1887; but, in each case, the action was commenced in November, 1886, and the judgment was by default. The deed assailed for fraud was dated. May 16th, 1887, and recited the payment of $2,750 as its consideration; the property conveyed consisting of one lot or more in the town of Camden, on which there was a livery-stable, and a tract of land containing about 250 acres, adjoining the corporate limits of said town, on which there was a growing crop of corn and cotton; but this property was incumbered with two mortgages, which were recognized and mentioned in the conveyance to said Willis Bragg and Carson. On the same day this conveyance was executed, Thomas Bragg sold to said Willis Bragg and R. J. Carson the horses and mules on the land, the farming implements, and all of his other personal property not exempt from levy and sale under legal process; and the bill assailed the validity of this sale, as being part of one and the same transaction. The bill alleged that, at the time the conveyance was executed and the sale made, Thomas Bragg was financially embarrassed, if not insolvent; that tbe conveyance included all of Ms property wbicb was subject to levy and sale under execution ; tliat tbe property conveyed was worth at least $5,000; that tbe conveyance was executed by tbe grantor with tbe fraudulent purpose of putting bis property beyond tbe reach of bis creditors, in view of tbe suits then pending against him, in which tbe judgments paid by complainant were rendered; that tbe purchasers bad knowledge or notice of said debtor’s financial condition, and participated in bis fraudulent intent; and that tbe recited consideration was fictitious in whole or in part. Answers on oath were required, and specific interrogatories annexed to tbe bill as to all tbe details of transactions between tbe parties. An answer on oath was filed by Willis Bragg, containing full answers to each of tbe interrogatories; and an answer was also made by said Carson, wbicb was duly sworn to, but be died before it was filed, and it was afterwards filed by bis widow and administratrix, against whom tbe cause was revived, as a part of her answer. Each of these answers denied, fully and explicitly, any knowledge" on tbe part of tbe respondents of said Thomas Bragg’s alleged fraudulent purpose, and any knowledge or notice of bis indebtedness beyond tbe two mortgage debts ; alleged that tbe real value of tbe property was, as estimated in the contract, about $3,400, of which sum $390 was paid in cash, a draft for $1,636 given on one Nunnalee, a banker who lived in Texas, who was an uncle of tbe parties, and who bad promised to lend them $2,000 to complete tbe purchase, and tbe balance was tbe aggregate of tbe two mortgage debts; and made other specific statements and denials in detail. On final bearing, on pleadings and proof, tbe Chancellor refused to set aside tbe conveyance, bolding that tbe evidence was not sufficient to overcome the denials of tbe sworn answers; and be further held that no relief could be granted as to tbe $1,636 paid on tbe draft after tbe filing of the bill, since that relief would be inconsistent with tbe prayer of tbe bill. Tbe complainant appeals, and assigns the decree as error. • J. N. Miller, and B. Howard, for appellant. (1.) Tbe fraudulent intent of Thomas Bragg, tbe debtor and grantor, is not controverted; and tbe only question is, whether tbe grantees participated in that fraudulent intent, or bad knowledge or notice thereof. Tbe appellant relies, in this connection, on tbe relationship between tbe parties, their intimate association, and tbe particular circumstances attending and following tbe transaction, as developed by tbe evidence — tbe hurried visit of tbe debtor to Texas, bis quick return, followed by bis kinsmen, tbe baste witb wbicli tbe trade was consummated, tbe entire change it worked in tbe business of tbe several parties, and tbe uncertainty in tbe proof as to tbe consideration.-— Grawford v. Kiodcsey, 55 Ala. 282; Lehman v. Kelly, 68 Ala. 192; Hodges v. Golevum, 76 Ala. 173; Bump Fraud. Conveyances, 3d ed., 55. (2.) Tbe purchasers, if entitled to protection at all, can only claim reimbursement of tbe $390 paid in cash; tbe draft for $1,636 not being paid until tbe lapse of several months after tbe service of process in this case. — Bush v. Gollins, 35 Kansas, 535; Ware v. Gurry, 67 Ala. 274; Sewing-Machine Go. v. Zeigler, 58 Ala. 221; Wait’s Fraud. Conveyances, § 369. That the draft was revocable, until accepted or paid, see 27 Ala. 399; 77 Ala. 168, 330. Relief to tbe extent of this $1,636 is not inconsistent witb tbe special prayor of tbe bill, and may be granted under tbe general prayer — it varies only tbe degree and measure of relief. — Morrow v. Turney, 35 Ala. 131-39. R. Gaillabd, and S. J. Gumming, contra. (1.) Tbe answers are under oath, as required by tbe bill, and contain very full and particular denials of tbe charges of fraud and notice; and these denials must prevail, unless overcome by tbe positive testimony of two witnesses, or of one witness witb strong corroborating circumstances. — Cases cited in 1 Brick. Digest, 738, § 1466; 53 Ala. 197; 67 Ala. 529; 66 Ala. 517; 52 Ala. 554. (2.) Tbe fraudulent intent of tbe grantor does not affect tbe purchasers, unless it is shown that they participated in it, or bad knowledge of facts charging them witb notice. — Graiuford v. Kirlcsey, 55 Ala. 282; Pickett v. Pipkin, 64 Ala. 520; Bradley v. Bagsdale, 64 Ala. 558; Hodges v. Goleman, 76 Ala. 103; Shealy v. Kdwards, 76 Ala. 176; Marshall v. Groom, 52 Ala. 554; Borland v. Mayo, 8 Ala. 104. Tbe pendency of a suit is not constructive notice of indebtedness to persons who are not parties to it.- — Bump Fraud. Con., 38. Fraud is not to be presumed, when tbe facts may reasonably consist witb honest intention. — Timones v. Reonberi, 63 Ala. 561; Bailey v. Bitten, 52 Ala. 282; HaroHl v. Mitchell, 61 Ala. 271. Tbe adequacy of tbe consideration paid being fully established, the fact of relationship does not establish tbe charge of fraud, and is not even a badge of fraud. — Marshall v. Groom, 52 Ala. 554; Hubbard v. Allen, 59 Ala. 283; Baomard v. Davis, 54 Ala. 565. (3.) Tbe bill sought to set aside the sale and conveyance on the ground of fraud, in Avhieli the purchasers were said to have participated. If the complainant had established his case, the purchasers could not have claimed to be reimbursed to the extent of the $390 paid in cash; nor can the complainant, even by an amended bill, claim relief to the extent of the draft for $1,636.— Gordon v. Tweedy, 71 Ala. 202; Potter v. Grade, 58 Ala. 303; Caldwell v. King, 76 Ala. 129. [MAJORITY — STONE, O. J.] STONE, O. J. We have examined the pleadings and testimony in this case with great care. We agree with the chancellor in finding that Thomas Bragg’s intent in selling and conveying his property to Willis Bragg, his brother, and to Carson, his cousin, was fraudulent; and if he alone were concerned, we would not hesitate to declare the property subject to Pattison’s claim. — Borland v. Mayo, 8 Ala. 104; Marshall v. Croom, 52 Ala. 554; Cranford v. Kirksey, 55 Ala. 282; Hubbard v. Allen, 59 Ala. 283; Donegan v. Davis, 66 Ala. 362; Lehman v Kelly, 68 Ala. 192; Hodges v. Coleman, 76 Ala. 103. But the complainant in his bill called for a sworn discovery from the purchasers, and propounded to them searching interrogatories. Their answers are a very full denial of all knowledge on their part of Thomas Bragg’s fraudulent purpose, and of his indebtedness beyond what he provided for in his sale to them. They equally denied all participation in any and all fraudulent intent on the part of Thomas Bragg, if he entertained such intent. The testimony fails to overcome these denials, and it results that in this phase of the case complainant must fail. It is contended here that, if complainant fails in this leading aspect of his case, then he is entitled to recover the amount of his claim out of the sixteen hundred dollars of purchase-money, which Willis Bragg and Carson owed when this bill was filed and process served on them. A sufficient answer to this contention is, that the bill contains neither averment nor prayer which could raise that issue, even if it be conceded such purpose could be conjoined with the main object of the bill. — Caldwell v. King, 76 Ala. 149; Coffey v. Norwood, 81 Ala. 512; Parsons v. Johnson, 84 Ala. 254; Shealy v. Edwards, 78 Ala. 176. The decree of the chancellor is in all respects affirmed.