Farrow v. Cotney , 153 Ala. 550 ( 1907 )

McCLELLAN, J.

— The purpose of the bill, presented by the wife, is to have a formal deed declared a mortgage, and to cancel it because given to secure the debt of the husband. The. appellant asserts that the transaction was a valid sale and an agreement to repurchase within a given time. The chancellor granted, in the main, the relief prayed.

The wife may sell her lands in payment of the debt of the husband, but she cannot, directly or indirectly, so subject them, as a security therefor, that she may not have the securing instrument canceled and held for naught. This has been so often declared as to require no more than the statement of the rule. The issue here is one of fact, whether the transaction was an unconditional sale and agreement to repurchase by a given time, or a method to secure the payment of the husband’s debt. The issue can, we think, be correctly determined by the answer to the question: Was the existing debt paid, satisfied by the conveyance of the lands to the appellant? It is axiomatic that there can be no mortgage unless there is a mortgage debt. We are of the opinion that the indebtedness existing prior to the conveyance was paid, settled, thereby; and hence the conveyance was not intended by the parties as a security for that indebtedness; and, of course, if not, the consequent agreement for a repurchase and the note given to that end did not rest upon any consideration other than that present in the agreement to repurchase. We will state, briefly, the reasons for this decision of the question of payment of the debt vel non:

The fact that a creditor of the husband is paid the debt by means of the conveyance, by the wife, of her lands, is condemned by no known rule of law. That it may be lawfully, and therefore bindingly, done, is firmly settled in this state. Nor does the fact that, prior to or at the time of the transaction resulting in the conveyance of her lands, he is a creditor of the husband militate against the validity of the conveyance as such. In a proper case his relation to the husband may be of evidential force in explanation of the nature of the transaction and the intention of the parties; but, in spite of it, the burden of proof, to avoidance by the wife of the effect of the instrument as a conveyance, rests upon her. The record here proves indisputably that the debt to Farrow Avas paid. K. W. Cotney, the husband of the appellee, testified that the Taking of that deed paid the whole debt. There hasn’t been any transaction between us since. He gave up those papers — sent them to me by mail. Up to that time he held those papers against me. He Avas to send me my papers; was to send me all the papers back behind that transaction that he held against me, and this transaction Avas a.settlement of all the indebtedness.- And after the deed was made the whole thing Avas Avound up until then, and he was to send me my papers. That Avas a final settlement. My recollection is that he sent those by mail. After that I did not owe him a cent, except that $600, and the $600' was what he was to sell the land back to us at, and give us 10 years to pay for it. * * * If Mr. Farrow holds a mortgage against me, it is unlegal after that final settlement.” The appellee testified: “After that deed was made, we OAved Mr. Farrow no debt except this note for $600. Mr. FarroAV said he would give us all the time we wanted to pay for it, if it took us 10 years to pay for it. Mr. Farrow sent the papers and notes of my husband back to him. He Avas to send all papers and notes back of this deed to us, and that deed was to be a final settlement. * * * I sent this cotton down there by Mr. Railey, and Mr. Farrow sent back this cotton bill with this credit of $54.80. That was a credit on this $600 land transaction — a payment on it.” Gussie Whaley, a daughter of appellee, testified: “It was my understanding of the transaction that the land was to pay what my father owed Mr. Farrow and for the money that he paid them that day; that was my understanding of it. That the deed was to pay the debt and for the money he let them have that day. He agreed to let my father and mother have the land back that day — sell it back to them for $600 — is my recollection of the amount.” It appears, further, that the appellant paid the $150 in excess of the $450 indebtedness, to the appellee, and surrendered his evidences of debt or securities therefor. There is no other evidence or inferable circumstance in the record of sufficient force to refute the positive statements quoted from complainant’s witnesses. The debt being paid by the conveyance, there was left no subject upon which to rest a mortgage,securing it.

The decree appealed from is reversed, and .one is here rendered dismissing the bill.

Reversed and rendered.

Tyson, O. J., and Dowdell and Anderson, JJ., concur.