Pulliam, Wills, Rankin & Co. v. Newberry's Administrator , 41 Ala. 168 ( 1867 )

A. J. WALKER, C. J.

The declarations and conduct of the defendants in attachment, proved by the sheriff, transpired after the transfer to the claimant, and after the levy, and did not accompany, qualify, or explain any material fact in the case; and the claimant can not be affected by them. The court, therefore, committed no error in excluding them.

2. There was no error in the admission of the evidence of Hybert. Its tendency was to establish the sale of the stock of goods to the claimant, a material fact in the case; and it therefore could not be obnoxious to the objection of being mere declarations of the parties.

3. The charge asked should have been given. It was certainly neither abstract, nor tending to mislead. “ If the purchase between the parties was intended by all of them to hinder, or delay, or defraud” creditors, it surely cannot be doubted that the sale was void as to creditors. It is not sufficient to sustain a conveyance, as against creditors, that it should be upon a valuable consideration; it must also be bona fide. The intent to defraud creditors will vitiate a transfer of property, although made upon valuable consideration. Bozeman v. Draughn, 3 Stew. 243; Terrell v. Green, 11 Ala. 207, 213; Tatum v. Hunter & Thomas, 14 Ala. 557; Corprew v. Arthur, 15 Ala. 525; Huggins v. Perrine, 30 Ala. 396; Rives, Battle & Co. v. Walthall, 38 Ala. 329.

Note by Bepobter. — On a subsequent day of the term, in response to an application by the appellee’s counsel for a re-hearing, the following opinion was delivered:

4. The first charge asked by the claimant, and given by the court, is, perhaps, obscure; but we would not affirm that the court erred in giving it. If it tended to mislead the jury, the plaintiffs should have sought an explanation from the court. Certainly, the buying of goods for a valuable consideration, does not constitute a fraud at all; but, if the transfer of the goods was made to defraud creditors, the valuable consideration would not sustain the transfer. The valuable consideration may be relied upon, and commented upon as evidence of bona fides; but it is not conclusive of it.

There was no error in giving the second charge asked, notwitstanding it too, unexplained, might mislead the jury. A debt is a sufficient consideration to sustain a sale of property; but nevertheless, if a sale of property be made in consideration of a good debt, with a fraudulent intent, it is void against creditors.

We do not think it is necessary for us to notice the other charges given in this case. The points arising, or likely to arise, are covered by what we have already said. While the defendants had a right to transfer their property to their father, in payment of a just debt, they had no right to make such transfer for the purpose of defrauding any creditor.—Young v. Dumas, 39 Ala. 60.

The judgment is reversed, and the cause remanded.

A. J. WALKEB, C. J.

The counsel for the appellee having presented a petition for a re-hearing, we have reexamined the questions arising upon the record, and are constrained to adhere to our former opinion.

It is argued in support of the petition for a re-hearing, that the charge asked by the plaintiff, and refused by the court, was abstract, and that therefore the court committed no error in not giving it. The charge is said to be abstract, upon the ground, that there was no proof that the defendant in attachment was indebted to plaintiffs. The reply to this is, that it is settled, by decisions of remarkable frequency, that for the purpose of the trial of the right of property, the attachment is sufficient evidence that the plaintiffs were creditors of the defendants, and the claimants can not question the plaintiffs’ debt. “ The only question to be litigated is, whether the goods claimed really belonged to the claimant or not, as against the plaintiff, a creditor. For the purpose of this controversy, the plaintiff must be regarded as a creditor, without the production of proof of indebtedness,” he having given in evidence his attachment.—Butler & Alford v. O'Brien, 5 Ala. 316; Taliaferro v. Land, 23 Ala. 369, 376; Harrell v. Floyd, 3 Ala. 16; Huff v. Cox, 2 Ala. 310 ; Stone v. Stone, 1 Ala. 582; Hardy v. Gascoigne, 6 Porter, 447; Franklin v. Elliott, 5 Porter, 182; Hooper v. Pair, 3 Porter, 401; Collingsworth v. Horn, 1 Stew. & P. 237; Carlton v. King, 1 Stew. & Por. 472.

If the question presented were, whether property given without valuable consideration, and in the absence of a fraudulent intent, were subject to an attachment, it would be necessary to prove the existence of the debt at the time of the conveyance; for, in such, case, the conveyance would be good as to all subsequent creditors, and bad as to existing creditors. But, if there was a positive intent to defraud, the conveyance may be avoided by subsequent creditors, and the property subjected “to after-contracted debts.” Williams v. Avery, 38 Ala. 115 ; Huggins v. Perrine, 30 Ala. 396. If, therefore, in this case, there was a fraudulent intent of the parties who made and accepted the transfer, the plaintiffs may subject the property transferred, though their debt had no existence prior to the issue of the attachment; and the claimant can not controvert that the plaintiffs were creditors at that time. Therefore, the introduction in evidence of the attachment, was such proof of the plaintiffs’ character of creditor, as would justify the charge that the fraudulent intent of the parties would vitiate the transfer, and the charge asked was not abstract.

It is next contended, that the charge asked and given is inconsistent with the decision in the case of Young v. Dumas, delivered at the January term, 1868. In that ease it was decided, that a bona-fide creditor may, by fair contract, purchase and receive the effects of his debtor in payment of his debt, “ even though the known effect may be to hinder or defeat his other creditors.” A similar doctrine is stated, though not so strongly, in Borland, v. Mayo, 8 Ala. 104, 118. The principle is, that the mere fact, standing alone, that the necessary effect of the conveyance would be to hinder and defeat other creditors, would not vitiate it. But this principle is not in conflict with the charge asked.. The doctrine of that charge is, that the fraudulent intent would make the property liable to debts; and the invalidity of the conveyance, in Young v. Dumas, would have been declared, if a fraudulent intention had been present. The authorities cited in our original opinion show, that a valuable consideration would not sustain a conveyance made with the intention of defrauding creditors.

It is contedned, also, that the parties could not intend to “hinder, or delay, or defraud creditors,” by securing a just debt, and that therefore the charge contains a solecism. We think not. The agency of a conveyance to secure or to pay a just debt, may be employed to effect a fraudulent purpose; and if so, it is void as to creditors. We think the charge asked should have been given.

The application for a re-hearing is refused.