Goodwin v. Hammond

Baldwin, J. delivered the opinion of the Court Terry, C. J. concurring.

Bill to set aside as fraudulent two transfers of stock of the California Coal Company, from the defendants, Chittle and Wardner, to defendant Hammond. -

The Court below, on express evidence of the existence of the fraud, found for the plaintiff.

Several points are made by the Appellant.

1. That this proof was made by one witness only, and this in contradiction to the defendant’s answer, which was responsive to, and negatived the charge in the bill; and that, by the rule of equity pleading, this is not sufficient.

The point is not well taken. We have held recently, in several cases, that the Practice Act governs all cases of pleading, legal and equitable, by the same rules, at least in this respect; and that the answer is not evidence for the defendant.

2. That the decree is against evidence. We have looked into the proof, and think it sustains the decree; at least, that the Judge below had legal evidence before him of the alleged fraud, [170]and. we do not see any such error as would justify our interference with his conclusion.

3. That the decree is erroneous, in setting aside the transfer in toto, and not allowing the alleged fraudulent vendee to hold the stock as security, to reimburse him for the amounts expended by him in purchase money and assessments.

In some cases of mere constructive frauds, this principle is held by Courts of Equity, and in some instances of actual fraud the like doctrine has been maintained. But these last are rare-exceptions to the general rule. Where the fraud is actual and characterizes the transaction ab initio, we think the better rule is, that the deed is void for any purpose of protection to the fraudulent actor. (See Borland v. Walker, 7 Ala. 280; Sands v. Codwise, 4 Johns. 536; where the authorities are collected.)

The decree is affirmed.