Donegan v. Davis , 66 Ala. 362 ( 1880 )

STONE, J.

This is the same case as Barnard v. Davis, 54 Ala. 565. It is a bill filed by the assignee in bankruptcy of Zebulon P. Davis, to recover, for the benefit of creditors, certain property alleged to have been conveyed by the bankrupt in fraud of his creditors. The conveyances were made, chiefly, in 1866 and 1867, and the petition in bankruptcy was filed in 1872. The present bill was filed in less than two years afterwards. The chancellor refused complainant relief, and dismissed his bill on final hearing, without assigning any reason therefor. We suppose the decree was rendered on the testimony; and, hence, it will be our duty to affirm his decree, unless we are clearly convinced that it is wrong.—Rather v. Young, 56 Ala. 94; Bryan v. Hendrix, 57 Ala. 387.

It is contended for appellees, that the decree of the chancellor should be affirmed, because the record fails to show that any creditor had proved his claim against the bankrupt estate. Section 5077 of the Bevised Statutes of the United States declares how claims against bankrupts shall be proved, and the next two sections direct by and before whom such proof must be made. Neither section declares tohen the claim must be proved. Sections 5068-9 make provision for the proof of certain classes of claims, at any time before the final dividend is declared. We can not know there were not creditors of this estate falling within one of these classes. But we do not deem it necessary to invoke this possible category. By the adjudication in bankruptcy, the appointment of an assignee, and the assignment of the district judge or register, the title and right to sue pass eo instanti to the assignee, who may then demand, sue for, and possess himself of the bankrupt assets, as their legal owner. His authority to maintain suits, in such fiduciary right, stands on the same footing as that of an executor or administrator. It can not be collaterally assailed, except by showing the appointment to be void ab initio.—Blumensteil’s Bankruptcy, 228; Herndon v. Howard, 9 Wall. 664; Sloan v. Lewis, 22 Wall. 150; Cone C. Purcell, 56 N. Y. 649; Dambman v. White, 12 B. R. 438; Abb. Tr. Ev. 9, § 23. If it were affirmatively shown that no debts were proved, that none existed which could be proved, that would, possibly, be an answer to the suit. That, however, would be defensive matter, and is not this case.—Page v. Waring, 76 N. Y. 463, 473; Charman v. Charman, 14 Vesey, 580; In re Hoyt, 3 B. R. 55; Perry on Trusts, § 352. There is nothing in this objection.

The dwelling, or homestead, is claimed as the property of Mrs. Williametta Davis, wife of the bankrupt, as a gift or present from her son, George L. Davis. The facts connected with the purchase of the homestead are as follows : McCalley & Co. held a judgment against Z. P. Davis, which, in 1866, amounted to over four thousand dollars. In July, 1866, Geo. L. Davis purchased from Price, Farriss & Co. a note, or bond, made by McCalley & Co., on which there was due nearly seven hundred dollars, for which he gave and paid three hundred and ninety-three dollars. He brought suit on this note, or bond, against McCalley & Co., and had garnishment served on his father, Zebulon P. Davis, as a supposed debtor to McCalley <& Go. In September, 1866, a settlement and adjustment were had between George L. Davis and McCalley & Co., by which the latter conveyed to the former their said judgment against Zeb. P. Davis, in consideration of said note or bond so purchased from Price, Earris & Go., and of eight hundred and seventy dollars in money, paid by Geo. L. Davis to McOalley&Co. Thissaidjudgmentof McCalley&Co. against Zeb. P. Davis thus cost George L Davis twelve hundred and seventy-three dollars. The homestead was sold by the sheriff, under an execution issued on this judgment; was bought by said George L., in the name of his mother, title made to her, •by his direction, and the property paid for by total or partial credit on said judgment. The property cost George L., in money, $1,273, though the judgment with which he purchased it amounted to over four thousand dollars. There is no charge or claim that the homestead was worth more than the sum of the judgment under and with which it was purchased. The contention is, that George L. had no money in his own fight, and that the money with which the note and judgment were purchased were the property of Zeb. P. Davis, and, therefore, this is but an indirect gift of Zeb. P. Davis to his wife, in fraud of his creditors.

George L. Davis became twenty-one years old August 31st, 1866; a month after he purchased the note from Price, Parris & Go., and a month before he purchased the judgment from McGalley & Go. When he commenced those purchases, he had on deposit in bank, and in his own name subject to his check, a sum more than sufficient to pay both purchases; and about the time he made the McGalley purchase, he checked out a sum a little in excess of the cash he paid them. Was that money his, and did he make those purchases with his own money ? Possibly, this is stating the question too strongly against him. Is it shown, or do the circumstances lead to the inference, that they were made with the money of Zeb. P. Davis, his father? There is no direct proof that Zeb. P. Davis, the father, had any agency in, or connection with the transactions, which culminated in the purchase of the homestead, at sheriff’s sale. Neither is there direct proof of the source from which the money deposited in bank was derived. We are thus left to draw inferences of its source, from the facts and circumstances in evidence.

It is contended for appellants, that the earnings of George L. Davis, up to the time of his reaching twenty-one years old, belonged to his father, because the proof fails to show he had been emancipated from paternal control. If this be so, then it is fatal to Mrs. Davis’ claim of the homestead; because it is manifest the money, employed in its purchase, was acquired before George L. reached his majority. The argument is, that there can be no emancipation, so long as the minor remains under the parental roof, and continues a member of the family. Godfrey v. Haya, 6 Ala. 501, is relied on in support of this proposition. This court, in that case, referring to Nightingale v. Withington, 15 Mass. 272, said: “It can not be doubted, that if the father should refuse to support his child, and drive him from the parental roof, he could not claim his earnings. The law would be the same, if the father should permit the child to labor for his own benefit; but, in such a case, the child must cease to be a member of the family ; the relative obligation of parent and child must cease— in the language of the cast just cited, the child must be ‘ emancipated.’ * * When the child is a part of the family, the product of his labor belongs to the father; and is, therefore, subject to the payment of his debts.”

The ease referred to—Nightingale v. Withington, supra—scarcely supports some of the expressions used in the case of Godfrey v. Hays. The language of the Massachusetts court is: “ If the father should refuse to support a son, should deny him a home, and force him to labor abroad for his own living; or should give or sell him his time, as is sometimes done in the country (although this latter practice is certainly questionable, as to any promise made in consideration of it); the law will imply an emancipation of the son.” It will be seen that, according to this authority, the child may be emancipated, by selling or giving him his time ; and in this connection, nothing is said about the minor ceasing to be a member of the familj. . In that case, the report does not show whether or not the minor had left the paternal roof. The son traded and indorsed the paper given him for such services, and suit was brought upon it against the maker. Alter the transfer of the paper, and notice of it to the maker, the latter paid the sum of it to the father, and took his receipt therefor. This' payment and receipt were offered in defense of the action, and it was ruled that the payment should not avail the defendant.

In the later case of Whiting v. Earle, 3 Pick. 201, the wages of the minor son were sought to be condemned by attachment, or trustee process, to the debts of the father. The son boarded with his father, and worked out under a contract made by himself — his father not shown to have been consulted. The employer was to pay stipulated wages, and was to pay for the board of the employe. The court said: “Where such a contract is entered into, without any fraud, for the advantage of the son, on the principles of common justice, and according to decided cases, he is entitled to the profits of his own labor. We go so far as to say, that where a minor son makes a contract for his services on his own account, and the father knows of it, and makes no objection, there is an implied assent that the son shall have his earnings.”

In McCloskey v. Cyphert, 27 Penn. St. 220, Judge Black, with his accustomed force and terseness, sqid : “ The emancipation of the son from the father’s control may be as perfect when they both live together under the same roof, as if they were separated. The father’s renunciation of all legal right to the son’s labor is not the less absolute, because other family ties continue unbroken; and the son’s security in his rights of property would not be at all increased by turning his father out of doors.” Johnson v. Silsbee, 49 N. H. 343, is a strong authority in the same direction. See, also. Penn v. Whitehead, 17 Grattan, 503.

In the case of Godfrey v. Hays, supra, the court say, that after emancipation, “ no doubt the father might employ his child, and compensate him for his labor, and the product of his earnings would be beyond the reach of the creditors of the father.” When this is the case, must the minor child leave home, board out, and cease to be a member of the family? The case of Lyon v. Bolling, 14 Ala. 753, states the principle pretty much as Godfrey v. Hays had done, It was. however, not necessary to be decided in that case, as the infant son had left the parental roof. Stovall v. Johnson, 17 Ala. 14, states the principle in a somewhat modified form. We can not agree that, in every case, there must be an absolute abandonment of home, a disrupting of family ties, before emancipation of a minor child is accomplished.- Emancipation vel non is, at most, a question of fact, to be determined by the circumstances in evidence. If the father be insolvent, and in the transaction assailed by creditors of the father there is simulation, or other evidences of fraud, or secret trust, this should be decisive of the claim of emancipation, and the earnings should be adjudged to belong to the father. In the present case, the testimony shows that George L. Davis, all the while, made compensation for his board; and we are convinced he must be regarded as having been emancipated during the years 1864-5. We think his adventure in the billiard-table business, and his other speculations, sufficiently account for his ownership of the money deposited in bank, which resulted in the purchase by him of the homestead. We are not clearly convinced that the father’s means entered into this purchase, and we therefore affirm the decree of the chancellor, so far as that piece of property is concerned. The wants of this case do not require us to go the length of Judge Black. Sufficient for this case, that George L. Davis was self-supporting, as the evidence convinces us he was. This takes the case without the influence of Godfrey v. Hays, supra.

The claim to the tract of land in Limestone county depends on different facts, and different intendments. This rests on the bonafides of the transfer of the Smith bonds from Zeb. P. Davis to Geo. L. Davis. The consideration of this transfer is an alleged indebtedness from the father to the son, of five thousand dollars, growing out of tlieir alleged partnership transactions during the war. This claim could scarcely be maintained, under the principle declared in Stovall v. Johnson, supra. But we go farther. The testimony in this record falls far below the rule for upholding such transactions, as laid down in many well-considered opinions of this court. Barnard v. Davis, 54 Ala. 565; Hubbard v. Allen, 59 Ala. 283; Harrell v. Mitchell, 61 Ala. 270; Thames v. Rembert, 63 Ala. 561. There is a vast volume of the testimony, and, when considered together, it does not reach that clearness and fullness required in transactions like this. It falls very far below it. We could not collate and criticise it, without swelliug this opinion unduly. The facts and circumstances of this case outweigh all general declarations of fairness, and general denials of fraud.—Thames v. Rembert, supra.

So' far as the Limestone county plantation described in the pleadings, and the money collected on the note of Donegan % Murphy, and any other collectible claims transferred by Zebulon P. to George L. Davis are concerned, the decree of the chancellor is reversed; and this court, proceeding to render the decree the Chancery Court should have rendered, doth order and decree—

First, that the money realized from the suit against Donegan & Murphy, in the hands of the register, with all accrued interest, if any, be paid to the complainant, assignee, taking his receipt therefor.

Second, that George L. Davis be, and he hereby is, enjoined from recovering or receiving any moneys on any of the claims transferred by Zebulon P. Davis to him, described in the pleadings; and that the complainant, assignee, be authorized to receive and collect the same; and, if necessary to that end, that he have leave to use the name of George L. Davis, first indemnifying the said George L. against costs, with a bond and two good sureties, to be approved by the register and payable to said George L. Davis, in such penalty and condition as such register may prescribe;

Third, that said complainant, as assignee of Zebulon P. Davis, bankrupt, have and recover of said George L. Davis the tract of land in Limestone county described in the pleadings, and bought by said George L. Davis at administrator’s sale; and that writ of possession issue to put him in possession, when the present crop is gathered, not later than the loth day of December, 1881.

Fourth, it is referred to the register to take an account of the rents of the said lands, from the time said original bill was filed, to the termination of said George L. Davis’ possession under this decree; and he will allow credit for all taxes paid, against the rent of the year for which such taxes were paid; and he will compute interest on each yearly rent, until the coming in of the report. In taking said account, he will consult the pleadings and testimony on file, and such other legal evidence as may be offered, including re-examination of witnesses heretofore examined on other matters, if necessary. He will make his report, with all convenient speed, to the Chancery Court of Madison, to be there considered and passed on. If claim is made by the said George L. for valuable permanent improvements made by him, the register will take and report the testimony to the chancellor, for his decree thereon. The sum of the rents and interest, less credits to be allowed as above, it is ordered and decreed the said George L- Davis pay to complainant, for which exe-.cution of fieri facias may issue after the confirmation of the report, and decree thereon.

Let the costs of appeal in the court below and in this court, and the costs of the Chancery Court, to be taxed by the register, be paid, one-third by the complainant as assignee, and two-thirds by George L. Davis.

Reversed, rendered, and remanded for taking the account, and for execution.

Bbickell, C. J., not sitting.