[Crawford et al. v. Kirksey et al.]

all his debts. These averments they admit. The bill charges that Creswell, after the alleged sale, continued to possess and occupy the property; the answers state that this was under an annual contract of lease, at a fair, stipulated rent, which was also bona fide.

The answer of Webb sets up that, at the time he took the mortgage, he did not know how Creswell stood in his accounts as executor and administrator-thought he was liable for a considerable balance-and denies all intent to delay, hinder, or defraud Creswell's creditors; admits that he knew Creswell was insolvent when he made the mortgage, and that many suits were pending against him, which would probably soon go into judgment; says that Creswell's settlements have shown that there is no liability on account of said bonds; and he disclaims all interest in, and claim to said mortgaged property; says he has never had any of it in his possession. This cause was first submitted to the chancellor, on bill, answers, and exhibits, and an agreement of counsel, which exerts no influence on the bona fides of the absolute deed to Crawford. The chancellor decreed both the deed and mortgage to be fraudulent. The case was brought by appeal to this court, and is reported as Crawford v. Kirksey, 50 Ala. 590. In this court it was held, that the absolute deed to Crawford was free from fraud, and a valid conveyance. This court said, "The case, then, stands upon these isolated admissions of insolvency, relationship, and the pendency of suits. It has been shown that these circumstances alone would not be sufficient, without more, to vitiate the deed. The retention of the possession, after the sale, is explained in the answers, and shown to be the possession of a bailee and lessee. Such possession, when so explained, is not inconsistent with good faith. The other circumstances relied upon to establish fraud, such as unusual particularity, and the delay to record the deed until after the court was in session, though calculated to excite suspicion, are of very little force."

In reference to the mortgage to Crawford and Webb, this court said, "From Webb's answer it appears, that the liabilities mentioned in this conveyance were merely nominal, and that upon a final settlement of the estates therein named, the said Creswell was discharged from liability for further accounting. This discharged the sureties of his bonds. This seems to have been the condition of these estates when this deed was executed. There was, then, really no sufficient consideration to support it. Such a conveyance must not only be made in good faith, but upon a consideration deemed valuable in law. The decree of the court below, setting aside this deed, was free from error. The decree

* * *

[Crawford et al. v. Kirksey et al.]

of the court below is reversed, and the cause is remanded, for further proceedings in the court below in conformity with the law as indicated in this opinion." This court ruled, also, that the deed and mortgage did not, together, constitute a general assignment.

In stating that "this seems to have been the condition of these estates when this deed was executed," our predecessors were led into a slight error, by a want of fulness in the answers. As we understand the record-shown more fully, however, by the testimony, which was not before the chancellor, or this court, on the first hearing-there was, at the time of the making of the mortgage, a considerable balance against Creswell, which Crawford liquidated in February, 1868, by making good the fund which he said had perished in his hands during the war. This, however, is a matter of small moment, as it only tends to confirm-what our predecessors in fact decided-not that the mortgage was made with intent to delay, hinder, and defraud creditors, but that it was, and is, constructively fraudulent, in this, that it was made on no actual valuable consideration, by one who was indebted at the time. In making this statement, we are simply fortifying the ground on which our predecessors based their opinion, without intending, at this time, to speak of what are alleged to be badges of fraud attending the execution of the mortgage.

Another statement in the opinion of our predecessors seems to have been made on a misconception of the pleadings. The statement is this: "The denials in the answers of Creswell and Crawford that Creswell is liable for his pro rata share of the amounts thus paid, and that the complainants are not creditors of Creswell, are mere evasions. Such testimony was properly disregarded by the chancellor. These denials must have been made upon a misconception, both of the facts of the case, and of the law." Creswell's denial, after admitting the co-suretyship, and the several sums paid by complainants, as alleged, is in the following language: "But denies, as he is advised, informed, and believes, that the said complainants are creditors of this defendant, to the extent alleged in said bill." Crawford's is in the following language: "But denies, as he is advised, informed and believes, that said complainants are creditors of said S. L. Creswell, to the extent alleged in said bill." In connection with these denials, each of said defendants states, on information and belief, that of the sums alleged in the bill to have been paid by complainants severally on account of their said co-suretyship, Kirksey has been re-imbursed by another co-surety $3,400, and Coleman $1,400. If this be

[Crawford et al. v. Kirksey et al.]

true, Creswell was not indebted to the complainants “to the extent alleged in said bill."

When this cause was remanded to the Chancery Court, each party took a considerable volume of testimony, and the cause was again submitted to the chancellor for decree, on pleadings and proofs. In a most elaborate opinion, the chancellor again declared the deed of October 4th, 1866, fraudulent and void. In his opinion, we regret to note that the chancellor allowed himself to be drawn into the utterance of expressions, which scarcely fall within the pale of legal terminology. The vehemence of fervid composition, we suppose, led him astray.

The chancellor ruled, that this court had reversed his former decree only in part, and had affirmed it, in so far as it had pronounced the mortgage to Crawford and Webb. fraudulent. He thereupon ordered that Crawford, who had received the fund originally, should pay it into court, with interest, by a given day; and in default thereof, that execution should issue for its collection, against him and his sureties on his supersedeas bond, given in the former appeal to this court.

We have not before us the supersedeas bond given in that case, and hence can not affirm what its conditions are. It must have been given under one or the other of sections 3927 or 3928 of the Code of Alabama of 1876. Such bonds usually contain the condition, "to prosecute the appeal to effect, and to satisfy such judgment as the Supreme Court may render in the premises. We have, above, shown the language of this court, in the opinion reversing the decree of the chancellor. In the certificate of reversal, sent from this court to the court below, the clerk of this court certified, that it was "considered by our Supreme Court, on the 20th day of June, 1872, that said judgment of said Chancery Court be reversed and annulled," * * and that said appellees, Kirksey and Coleman, pay the costs accruing on said appeal in said Supreme Court, and in the court below." These certificates usually employ the substance, if not the very language in which the judgment of this court is rendered; and we suppose the clerk did so in this instance.

[2] There is nothing in the judgment, or action of this court, which justified that part of the chancellor's decree, noted above. The decree of the chancellor was in no sense affirmed. If it had been, this court would have proceeded to render such judgment against the sureties as the law authorizes, and would have adjudged costs against the appellant. This court alone has authority to render summary judgments against sureties on appeal or supersedeas bonds,

[Crawford et al. v. Kirksey et al.]

returnable to this court.-Code of Alabama, § 3941. When the supersedeas bond does not fall under the influence of sections 3941-2, the remedy for its breach is a suit at law on the bond. This part of the decree of the chancellor must be reversed. See Hughes v. Hatchett, at the present term.

[3.] We propose, in the next place, to consider that feature of this case, which charges that the absolute deed from Creswell to Crawford was made with intent to delay, hinder and defraud the creditors of Creswell. The pleadings are exceedingly well drawn. After charging the relationship of the parties, the insolvency of Creswell, that many suits were pending against him, and court about to sit at which judgments would be rendered against him, and denying that there was any valuable consideration for the deed, the bill proceeds as follows: "If the consideration recited in said deed was really paid, or if the said Creswell was really indebted to said Crawford, to the amount recited as the consideration, said deed was made upon a secret trust, agreed upon between them, that said Creswell should redeem or re-purchase the property conveyed, on some terms or other, or should remain in possession and use of said property on some terms or other, for his own benefit; or upon some other secret trust, known to them, but unknown to your orators."

Fraud vitiates all transactions, even the most solemn. The fraud which will avoid sales and conveyances, as being made to the prejudice of creditors, is either constructive or actual. Constructive fraud is when one, who is indebted, disposes of his property to another by gift, or on consideration not deemed valuable in law. Under our decisions, such disposition is constructively fraudulent, as against the existing debts of the grantor, no matter how innocent or meritorious the motive with which it is made, or how inconsiderable a part of the grantor's property is thus disposed of. Debtors must be just before they are generous, has been the lifetime language of this court.-2 Brick. Dig. 14, § 10; Ib. 16, § 45; Ib. 17, $$ 57, 58, 59; Ib. 21, §§ 100 et seq.; Spencer v. Godwin, 30 Ala. 355; Miller v. Thompson, 3 Por. 196. But, when property is purchased from the debtor, and a valuable consideration paid for it, a different rule prevails. The question of intent then becomes a material inquiry. If there be no fraudulent design, or secret trust, such sales are upheld. But, if there be a secret trust, or the sale or conveyance be made with intent to delay, hinder, or defraud creditors, either of these will set the conveyance aside, if assailed by a creditor, notwithstanding there may be a full consideration paid for the property. This is what the law calls actual fraud.-Code of Alabama, 1876, §§ 2120, 2124, 2125; Cum

[Crawford et al. v. Kirksey et al.]

mings v. McCullough, 5 Ala. 324; Carter v. Castleberry, Ib. 277; Patterson v. Campbell, 9 Ala. 933; Elliott v. Horn, 10 Ala. 348; McGuire v. Miller, 15 Ala. 394; Wiley, Banks & Co. v. Knight, 27 Ala. 336; Reynolds v. Welch, 47 Ala. 200; 1 Brick. Dig. 132, § 123.

13. Another distinction has grown up; namely, between sales and conveyances made in payment of an antecedent debt, and those made on a new consideration, paid or promised. Each of these classes of conveyance has privileges and rights, not enjoyed by the other. First, as to sales upon a new consideration, and not in payment or security of an antecedent debt: If the seller be insolvent, or in failing circumstances, and the purchaser knows, or is in possession of information reasonably calculated to stimulate inquiry, and which, if followed up, would lead to the discovery that the purpose of the seller is to put his property beyond reach, or otherwise to delay, hinder or defraud his creditors; then, a purchase under these circumstances, though full consideration is paid, is invalid as against creditors. But, if the purchase be made without such knowledge, and without such information as reasonably to put him on inquiry, he acquires a good title, no matter how fraudulent the intent of the seller. There is this qualification, however. If the purchaser, before full payment, is chargeable with knowledge of the fraudulent intent of the seller, he is not permitted to make further payments to the seller, but must withhold the same for the paramount claims of his creditors.-Hall v. Heydon, 41 Ala. 242; 2 Brick. Dig. 18, $$ 70, 71; Tatum v. Hunter, 14 Ala. 557; Cummings v. McCullough, 5 Ala. 324; Green v. Tanner, 8 Metc. Mass. 411.

Second, When the sale is in payment of an antecedent debt. Our statutes have not gone the length of declaring that an insolvent debtor, or one in failing circumstances, shall not give a preference in the payment of his debts. If there be no secret trust, or benefit or reservation, reserved to the grantor, an actual sale made by such debtor, at a fair and reasonable price, will be upheld, although it be known to both contracting parties that such sale will leave the debtor unable to pay his other debts. This is one of the inevitable consequences of allowing a failing debtor to give preferences. The fraud which vitiates a sale by an insolvent debtor to a preferred creditor, is unlike that of a sale for a new consideration paid. It is an attack upon the sale itself, as an actual transfer of the property and its title, or upon the sufficiency or bona fides of the consideration. Simulation, secret trust these are the defects which usually avoid sales made, or pretended to be made, by a debtor in failing circumstances,