Granberry v. Johnson
In Granberry v. Johnson, 491 So. 2d 926 (Ala. 1986), the Court discussed the showing necessary to void a transaction as fraudulent:
"The law on fraudulent conveyances is expressed in Code 1975, 8-9-6:
"'All conveyances or assignments in writing, or otherwise, of any estate or interest in real or personal property ... made with intent to hinder, delay or defraud creditors, purchasers or other persons of their lawful actions, damages, forfeitures, debts or demands ... are void.'
Thus, under the statute, the concurrence of three elements is necessary before a conveyance can be declared fraudulent: (1) that the creditor was defrauded; (2) that the debtor intended to defraud; and (3) that the conveyance was of property out of which the creditor could have realized his or her claim or some portion of it. Roddam v. Martin, 285 Ala. 619, 235 So. 2d 654 (1970). The debtor-creditor relationship is created not by a judgment, but by the wrong which produces the injury; and it is the date of the wrongful act, not the date of the filing of the suit or of the judgment, which fixes the status and rights of the parties. 285 Ala. at 628, 235 So. 2d at 656. Hence, a tort claimant is a creditor, and the alleged tortfeasor is the debtor. See also Pope v. Payne, 289 Ala. 203, 266 So. 2d 761 (1972).
"In Smith v. Wilder, 270 Ala. 637, 120 So. 2d 871 (1960), this Court further articulated some of the principles governing fraudulent conveyances. An existing creditor seeking to set aside a conveyance may do so because of either actual fraud or constructive fraud. Actual fraud denotes the actual mental operation of intending to defeat or delay the rights of the creditor. On the other hand, constructive fraud is based on facts and circumstances which courts have said constitute legal fraud, regardless of actual intent. The term 'constructive fraud' is generally used to refer to those instances where a grantor, indebted at the time, conveys property without receiving valuable consideration. 270 Ala. at 649, 120 So. 2d at 882. See also J.C. Jacobs Banking Co. v. Campbell, 406 So. 2d 834, 841-42 (Ala. 1981).
"The Smith Court further stated that where one seeks to set aside a conveyance because of constructive fraud, the complainant bears the burden of showing that his or her debt antedated the conveyance. When such proof is made, the burden shifts to the grantee to show that (1) the grantor owed a debt to the grantee; (2) the consideration for the conveyance was the extinguishment of the existing debt; and (3) the value of the property conveyed was no more than a fair equivalent for the debt amount. Smith v. Wilder, 270 Ala. at 650, 120 So. 2d at 883. Conveyances of property between family members in the face of a pending suit against the grantor must undergo especially careful scrutiny. Reese v. Smoker, 475 So. 2d 506 (Ala. 1985)." (491 So. 2d at 928-29 .)