Opinion
8 Div. 577.
October 4, 1934.
Appeal from Law and Equity Court, Franklin County; B. H. Sargent, Judge.
Wm. L. Chenault, of Russellville, for appellant.
The right of the trustee and his remedies are those of a judgment creditor holding an execution returned unsatisfied. The bankrupt was in possession of the property, holding it as owner, at the time of the bankruptcy. The defense of innocent purchaser cannot be maintained. Complainant was due to have the relief sought. 11 USCA §§ 110 (4) (5) (E), 75 (2); Code 1923, § 7338; Cruise v. Sorrell, 181 Ala. 237, 61 So. 894; Harrison v. Amer. Agr. Chem. Co., 220 Ala. 695, 127 So. 513; Green v. Minor, 224 Ala. 487, 140 So. 747.
William Stell, of Russellville, K. V. Fite, of Hamilton, and Roy Mayhall, of Haleyville, for appellees.
The adjudication of bankruptcy in no way determines that the bankrupt was insolvent at any other time prior to filing the petition. Liberty Nat. Bank v. Bear, 265 U.S. 365, 44 S.Ct. 499, 68 L.Ed. 1057. The trustee has the same right the bankrupt had to property at the time of the petition in bankruptcy, subject to all valid claims and liens. Harper v. Dothan Nat. Bank, 223 Ala. 26, 134 So. 623. The trustee cannot sue to recover land conveyed by the bankrupt prior to adjudication, on the mere ground that the deed had not been recorded. Sparks v. Weatherly, 176 Ala. 324, 58 So. 280; Harper v. Dothan Nat. Bank, supra.
The bill attacks the deed from J. J. Lawler and wife to P. H. Lawler and a mortgage from P. H. Lawler and wife to John Dodd Wholesale Grocery Company. It is insisted that the deed from J. J. to P. H. Lawler of date January 15, 1924, was not made at that time, but was made within four months of the bankruptcy of J. J. Lawler and was dated back. As to this, reliance is had on the evidence of Funderburk, the acknowledging official. True, Funderburk testified to acknowledging some instrument for J. J. Lawler which was dated back, but, when shown the deed in question, he admitted that it was not the instrument to which he referred, but was written by him and signed and acknowledged on the 15th of January, 1924. So the deed was signed and acknowledged on the day it bears date, and whether it was recorded later matters not, unless it appears, which is not the case, that the claims of the creditors arose between the execution of the deed and the recordation of same, in so far as this bill of complaint may affect the mortgage of the John Dodd Company, who appears to be a bona fide purchaser. P. H. Lawler had the record title to the store lot when the John Dodd Company's mortgage was given, and, while said company had notice of the bankruptcy of J. J. Lawler, the evidence does not show that said company knew of the insolvency of J. J. Lawler when he made the deed to P. H. Lawler.
The fact that J. J. Lawler collected the fire insurance on the property, and remained in possession of the store until the fire, even if not satisfactorily explained by J. J. and P. H. Lawler, cannot prevent the Dodd Company from being a bona fide purchaser, and the bill of complaint does not seek to subject the equity of J. J. Lawler in the property or to redeem from the Dodd Company mortgage or to do equity. It simply seeks a cancellation outright of both the deed and mortgage.
The decree of the law and equity court is affirmed.
Affirmed.
THOMAS, BROWN, and KNIGHT, JJ., concur.