
    Potter & Son v. Gracie.
    
      Bill in Equity to set aside Fraudulent Conveyance.
    
    1. Conveyance; what void as to creditors. — A conveyance to a mistress, or to her illegitimate child, though intended merely as a provision for maintenance, and not looking to future cohabitation, is void as against existing creditors.
    2. Conveyance to mistress ; what necessary to support —To support a conveyance to a mistress, on the ground of valuable consideration, there must be clear and convincing proof of such consideration, to overcome the unfavorable inferences which the court would draw from the illegal relation existing between the parties.
    3. Consideration; proof of different, from that staled in conveyance. — If the conveyance itself recites that it is made on divers good considerations, and for kindness felt by the grantor towards the grantees, (the mistress and her child), parol evidence can not be received to show a valuable consideration,
    4. Conveyance in fraud of creditors ; for whai purpose may be alloiaed force.— When a voluntary conveyance, not tainted with actual fraud, is' set aside in equity, at the instance of existing creditors, it will, nevertheless, be allowed to stand as a security to reimburse the grantee, for money paid by him in removing a valid incumbrance on the property.
    5. Same; for whai grantee must account. — If the grantee has been put in possession of the property under the conveyance, the value of the use and occupation will be charged against him, and set off against moneys paid by him for taxes and insurance, and in removing prior incumbrances.
    Appeal from Chancery Court of Dallas.
    Heard before Hon. Charles TueNer.
    This was a creditor’s bill, filed by the appellants, Lewis W. Potter and sons, and John Helton, against B. M. Nelson, administrator of James Johnston, Mary Gracie and William Gracie. Tbe object of tbe bill is to set aside a conveyance made on tbe 29th day of July, 1871, by James Johnston, in bis life time, ito Mary Gracie for life, remainder to William Gracie, ber son, as fraudulent as to bis creditors. The bill alleged that complainants were creditors of Johnston before tbe making of the deed; that at the time of its execution Johnston was insolvent, and owned but little other property than tbat conveyed; that no money, or other thing of value, was paid by Mary Gracie, and tbat at tbe time of the making of the deed Mary Gracie was the kept mistress, or concubine, of Johnston, and continued to be so up to tbe time of his death; that the purpose of Johnston in making the deed, was “to induce Mary Gracie to live with him in a state of prostitution, and to continue to be and remain Ms kept mistress.”
    Mary Gracie answered, denying tbat Johnston was insolvent at tbe time of executing tbe deed, and averring tbe contrary. She also denied that there was no consideration for tbe deed, or that it was made to induce her to remain or live with him, as bis mistress. She averred that, at and before tbe execution of tbe deed, Johnston was indebted to her, in a sum exceeding tbe amount paid for tbe lot, and that be purchased tbe lot at her request, with tbe money be owed her, taking title to himself, because tbe owner of tbe lot would not permit her (she being a colored woman) to become tbe purchaser; that tbe money paid by him was part of what was due her, and that in pursuance of bis agreement to purchase for her, be made tbe deed to her and her son, which the bill assailed. This deed recites that it is made on divers good considerations, and for kindness tbe grantor feels towards Mary Gracie and her child Willie, or William. Tbe answer also set up that she bad made valuable improvements on tbe land, which was unimproved when conveyed to her; that at tbe time Johnston conveyed to her, there was an incumbrance on the lot for part of the purchase-money due by him, and that she had since paid off this mortgage; and that tbe lot would not sell for enough to reimburse her for tbe improvements and payment she had made to remove the incumbrances on it. She positively denied that tbe sale was made by Johnston with intent to binder, delay or defraud bis creditors, or that she received tbe deed with such intent, or knew of, or in any manner participated therein.
    The evidence tended to show that Mary Gracie, who was formerly tbe slave of Johnston, had lived with him as his mistress for some time after emancipation, and that after she ceased to live on tbe same place with him, she frequently visited him, and be visited her, still continuing to cohabit with him until bis death; that William Gracie was their child, born of such illicit intercourse soon after tbe war. Tbe evidence, tending to show indebtedness of Johnston to her, was chiefly of loose declaration made by Johnston to tbe negroes on the plantation, where they lived, and her own testimony that he owed her for services rendered as bis house-keeper, and bad bought tbe lot for her in payment therefor. She introduced no written evidences of this indebtedness to her. She proved that she bad paid tbe taxes and insurance on the property since she bad been in possession, and it was also shown that she bad paid off tbe mortgage given for the purchase-money. The carpenter, who built the bouse on tbe lot, testified that he contracted with and was paid by Johnston. Tbe evidence tending to show that tbe consideration of the deed was the past indebtedness of Johnston to Mary Gracie, was objected to, because it tended to contradict the recitals of the deed.
    
      On the hearing, the Chancellor dismissed the bill for want of equity, and this decree is here assigned as error.
    MoegaN, Lapsley & Nelson, for appellants.
    Sumter Lea, and Beid & May, contra.
    
   BBIGKELL, C. J.

A contract, the consideration of which is future illicit cohabitation, like all agreements to do acts forbidden by the law of God, or in furtherance of immorality, is utterly void. If it has been executed, no court of law or equity will, at the instance of either party, interpose to set it aside. The courts apply the maxim, “ In pari delicto, potior est conditio defendentis,” abstaining from interference to enforce or to vacate. — Story on Con. 5543; Black & Manning v. Oliver, 1 Ala. 449; Walker v. Gregory, 36 Ala. 180. A contract or conveyance, in consideration of past cohabitation, intended or regarded as reparation, or indemnity for the wrong done, is treated at common law as founded on a good consideration. If executory, and under seal, the seal conclusively importing a consideration, it may be enforced ; but if not under seal, a mere simple contract, the consideration of which may be impeached by plea and evidence, it stands on the same ground with other contracts or agreements, having only the performance of a natural or moral duty as a consideration to support them. — Story on Con. 541; Chitty on Con. 661-62 ; Singleton v. Bremar (Harper’s Law), 201; Binnington v. Wallis, 4 Barn. & Ald. 650; Marchiones of Annondale v. Harris, 2 Peere Wm. 432; Gray v. Matthias, 5 Ves. 286. A conveyance to a mistress, or to her and her children, by way of gift or advancement, not looking to future cohabitation, intended merely as a provision for maintenance, cannot be sustained against existing creditors. It. stands, as would any other conveyance, springing not from motives of justice, but from motives of affection, or generosity, or prudence. The claims of creditors rest on legal obligations, higher than the demands of affection, or generosity, commendable as may be a response to these, when there are not duties Which the law declares paramount.— Wait v. Day, 4 Denio, 439; Sherman v. Barrett, 1 McMullan, 147.

It is not, perhaps, important to inquire whether the conveyance now impeached rests on a consideration of past or of future cohabitation. If the latter is its consideration, having been executed, it is valid and operative against the grantor, his privies in blood and in estate.— Walker v. Gregory, supra. If the former is its consideration,the conveyance is voluntary. It is the settled law of this State that a con-V6jan.ce, not founded on a valuable consideration, is absolutely void as to tbe existing creditors of tbe grantor. No inquiry is indulged into tbe intent witb wbicb it is made. Tbe intent is material only when tbe rights of subsequent creditors are involved. Then, if it is tainted witb actual fraud, it is void. — 2 Brick. Dig. 21, §§ 100-119. Tbe complainants are creditors of tbe grantor, and their debts existed at tbe execution of tbe conveyance. As to tbem, the conveyance is void, because its consideration is not valuable. Tbe inflexible rule of tbe law is, that the man must be just before he is generous. Tbe claims of wife and children, of all who are bound by tbe ties of natural affection, and relations tbe law recognizes and favors, must yield to the paramount legal duty of tbe debtor to creditors. If these claims are subordinate, surely all claim wbicb is tbe result of an immoral, illegal, meretricious connection, cannot stand on higher ground.

As is usual, and is to be expected in cases of this character, it is attempted to support tbe conveyance'by evidence of a valuable consideration. Services rendered by tbe mistress, or a loan of money, for tbe payment of wbicb no written evidence is taken, proved by tbe loose declarations of tbe grantor, made to witnesses having no interest to direct their attention to tbem, and no motive for preserving a distinct remembrance of tbem, have often been asserted as tbe consideration of conveyances, made between parties living in illicit intercourse. Criminal as may be their conduct, there is no legal inhibition against their contracting with each other, and if their contracts are not infected by tbe illegality of tbe relation- — if they are supported by a valuable consideration, they will be upheld and enforced. Tbe existence of tbe relation must excite tbe jealousy of the' court called to inquire into tbe validity of the contract. If tbe character of tbe contract is such as would naturally spring from tbe relation, and is not such as would be expected, if it was founded on a valuable consideration, moving between tbe parties, as if -they were strangers dealing witb each other, clear and convincing proof of the consideration must be given to neutralize tbe unfavorable inferences tbe court would feel constrained to draw. For, many years prior to tbe execution of this conveyance, tbe relation between tbe grantor and tbe grantee for life, was that of concubinage. Beginning while she was bis slave, tbe remainderman was born of tbe illicit intercourse; after emancipation, it continued until bis death severed it in 1873. There may be no evidence of a distinct agreement, when tbe conveyance was executed, that tbe relation should continue, yet it cannot be doubted its continu-anee was contemplated, and there is no reason for supposing that, if its dissolution had been suggested, the grantor would have executed the conveyance. Separation for the wrong he had inflicted, there is not a fact in evidence tending to show he intended. If he was penitent, and intended to atone for the wrong, it is not apparent from any act or declaration found in the mass of evidence in the record. The character of the conveyance is, that to be expected from the condition of the parties — a gift to the mistress for life, with remainder to the child, the offspring of the cohabitation. If a valuable consideration, a debt due to the mistress, had been the consideration of the conveyance, it is not probable she would have consented that her estate in the premises should be limited to her life; and if she died, the remainder should have been limited to the son to the exclusion of her after-born children, if any she had. Such limitations are not usual in deeds of bargain and sale, into which it is sought, by parol evidence, to convert this conveyance, when the consideration moves from one grantee to the grantor. These are the limitations which would be expected in a settlement upon a mistress and her illegitimate child. Fraud, or illegality, is not presumed, it must be proved; and often it is shown by circumstances, rather than by direct evidence. The inferences which must be drawn from the relation of .the parties, and the. character of the conveyance, as to its real consideration, must be repelled by clearer and more convincing evidence of a valuable consideration than that the appellees have introduced.

Without regard to the weight of the evidence., however, we are constrained to declare that it was inadmissible, and could not contradict or vary the consideration expressed in the conveyance. The deed recites that it is made on divers good considerations, and for kindness, the grantor feels towards Mary Grade, and her child Willie or William. A deed may be supported by a good consideration, or a valuable consideration. If it rests merely on a good consideration, it is subordinate to the rights of existing creditors, valid and operative against the rest of the world; while a valuable consideration frees it from impeachment, if it is not tainted with a fraudulent intent. “A good consideration, is such as that of blood, or of natural love and affection, when a man grants an estate to a near relation, being founded on motives of generosity, prudence and natural duty; a valuable consideration, is such as money, marriage, or the like, which the law esteems an equivalent for the grant, and is therefore founded in motives of justice.” — 2 Black. 296-7. It is the settled law of this State, that a deed impeached by creditors for fraud, actual or constructive, cannot be supported by evidence of consideration different from those alleged in it. — Murphy v. Br. Bank of Mobile, 16 Ala. 90. It is at all times dangerous to relax the conservative principle of law, which declares that, when parties enter into a contract and reduce its stipulations to writing, the written memorial is the sole expositor of the contract, and cannot, in the absence of fraud, be waived by parol evidence. Mistake may occur, requiring a court of equity to intervene and correct, so that the contract may conform to the intentions the parties proposed expressing. But without fraud or mistake, as between the parties, the written contract is conclusive. When assailed by creditors, it must be taken as to the parties to it, as it may be written. It can not be supported by falsifying express recitals, which it must be presumed were deliberately made and deliberately accepted.— Watt v. Grove, 2 Sch. & Lef. 600; Bump on Fraud. Con. 557.

In courts of law, if an instrument is avoided for fraud, or illegality, it becomes a mere nullity. In equity, it may stand as a security for advances which 'have been made, or liabilities which ¿ave been incurred, in consequence of it, if, under all the circumstances, it would be right and just it should stand. — Clements v. Moore, 6 Wall. 299; McMukin v. Edmunds, 1 Hill Ch. 294; Boyle v. Donald, 1 Greenl. Ch. 478. The mortgage to Weaver was an incumbrance on the premises, at the time the conveyance was executed. If this mortgage was satisfied by the grantee for life, after the execution of the conveyance, with moneys not derived from, or furnished her by the grantor, she has an equity to be substituted to the rights of the mortgagee. — Bump on Eraud. Con. 574. The complainants demanding equity, must render it to their adversary. They would not render it, if allowed to subject the property to the payment of their debts, freed from the mortgage which was a prior incumbrance on the premises. If that mortgage was extinguished by the appellee from her own means, her intent was to perfect the title, she and her child acquired by the voluntary conveyance, which is not tainted with an actual intent to defraud creditors, but is void only by operation and construction of law. The equity of the complainants is to subject the premises in the condition in which they were, when their grantor executed the conveyance assailed — they are without equity, to avail themselves of the incumbrances, the grantee may have removed, or to take from her without compensation, the benefit of such incumbrances.

The evidence does not satisfy us, any improvements were made by the grantees, except from moneys furnished by the grantor, after tbe conveyance was executed. It is not necessary, therefore, to determine, whether if any had been made, compensation for them can be claimed.

The premises have been in the occupancy of the grantee, since early in 1871. The value of the use and occupation, from the filing of the bill, to the day of the sale of the premises, as hereinafter directed, must be ascertained, and set off against the money expended in satisfying the mortgage to Weaver, and against the taxes, and insurance on the premises the grantee for life may have paid, since the bill was filed.

The decree of the chancellor must be reversed, and the cause remanded for proceedings in conformity to a decree which will be here rendered.

It is ordered, adjudged and decreed, the deed from James Johnson to Mary Gracie, for life, remainder to her son Willie or William, of date July 29, 1871, conveying the premises therein described, and described in the original bill, is void as against complainants, and all other creditors of the said James Johnson, whose debts were existing at the date of said deed.

It is further ordered, adjudged and decreed, that the register of the fifth district, of the middle chancery division of the State of Alabama, will sell the said premises, at public outcry, to the highest bidder for cash, at tire court-house door, or some other suitable public place, in the city of Selma, having first given thirty days notice of the time, place and terms of sale, by advertisement in some public newspaper printed in the said city of Selma. He will make tbe purchaser, on payment of the purchase money, a conveyance of the premises, and will put the purchaser in possession, and will report said sale to the court for confirmation.

It is further ordered, adjudged and decreed, that the register take and state an account of the debts due and owing the complainants respectively, from said James Johnson, described in the original bill, computing interest thereon, to the day of taking said account.

It is further ordered, adjudged and decreed, that tbe register take and state an account of all monies paid by the respondent, Mary Gracie, from her own means, and not from means or monies furnished her, or by her derived from James Johnson, in satisfaction of the mortgage, executed by said Johnson to Ann P. Weaver, computing interest on each of said payments to the day of taking said account. And the register will also take and state an account of all taxes assessed on the said premises, after the filing of the original bill, and of all insurance thereon, after the filing of said bill, which have been paid by the respondent, Mary Gracie, computing interest from the day of such payments respectively, to the day of taking said account.

It is further ordered, adjudged and decreed, that the register .take and state an account of the value annually, of the use and occupation of said premises, frond the day of the filing of the original bill, to the day of the sale of the said premises, computing interest on the value of each year’s occupation, from the end of the year, to the day of taking said account.

It is further ordered, adjudged and decreed, the value of such use and occupation, so ascertained, shall be set off against the amount ascertained to be due the respondent, Mary Gracie, for payments made by her in satisfaction of the said mortgage, and of taxes and insurance.

It is further ordered, adjudged and decreed, that if there shall be a balance due the respondent, Mary Gracie, on taking the said accounts, such balance shall be first paid from the proceeds of the sale of said premises, after deducting the costs of this suit, and the expenses of said sale, and the balance of such proceeds shall be applied to pay the debts due and owing the complainants, as ascertained by the register. If such balance will not pay the whole of said debts, then it shall be applied to them in proportion to their respective amounts.

All other questions are reserved for the decision of the chancellor. In taking the several accounts, the register will use the depositions already taken, so far as relevant,- and such other evidence, as is on file, and may examine, orally, such witnesses as the parties may produce.

The register will^ report his action, under this decree, to the chancellor, for confirmation.

The respondent, Mary Gracie, must pay the costs of this appeal.  