110 Ala. 360 | Ala. | 1895
The reasoning and conclusions expressed in the following opinion, except in respect of the special plea interposed by the defendants, are the individual views and conclusions of the writer only.
On December 31, 1892, the defendants, Montgomery Carriage Works, a partnership, sold and conveyed to their co-defendants (appellant), substantially all their property, in absolute payment of existing debts, severally, owing to the latter. The complainants are creditors of the partnership, and file this bill in behalf of themselves and all other creditors who will come in, make themselves parties complainant, and contribute to the expenses of the suit. It will be noticed that all creditors are invited, and have the right to come in and join in the suit, without regard to when their demands were contracted, or what relations they bore to the transactions out of which the special equities the bill seeks to enforce are supposed to have arisen. It would seem, therefore, that to maintain the bill, in this shape, it must show a case whose equity inures alike to every creditor of the partnership, though his debt were contracted on the day, but before, the bill was filed. The complainants’ claim is, that the property sold and conveyed, as aforesaid, is charged with a trust in behalf of all the creditors of the partnership ; and the prayer is, that the purchasing defendants be decreed to be trustees and held to account as such. The case was formerly be
It will be observed that the bill is not one to reach equitable assets of the debtor upon which complainants have no lien. Being simple contract creditors, merely, they can obtain no such relief. Nor is it a bill to reach property fraudulently conveyed by the debtor, for there are no allegations nor prayer looking to relief of that nature. Nor does it assert a statutory lien of any character. The complainants’ equity, therefore, if any they have, must necessarily consist in a lien or charge upon, or equitable interest in, the property, created by contract with some holder of the legal title, entered into by themselves, or some other or others with whom they are in privity. We must look to the bill then to see if it discloses alien or charge or interest, so created.
The facts, as the body of the bill avers them, are simp-ply these : That the said Montgomery Carriage Works, being embarrassed and un'able to meet their debts, at maturity, if not actually insolvent, owing the complainants the debts they now seek to enforce, and the defendants, the debts which said property was sold and conveyed to pay, and owing others, on February 8, 1892, sent a circular letter to all their creditors, stating that they were temporarily embarrassed ; that they desired to place themselves in the hands of their creditors, without preference or favor, and calling upon them to attend a meeting to be held in Montgomery, Ala., on February 17, 1892, to decide what was the best course to be pursued by them, and to determine what should be done in reference to the application of their assets to the equal payment of their creditors. Responding to this request, fourteen of the creditors, representing about three-fourths of the indebtedness, met’ and organized, and the attorney of the debtors stated to the meeting that they placed themselves and their assets in the hands of their creditors for an equal and fair pro rata division among them ; that if their creditors so desired, they would then and there execute a general assignment for the benefit of all
This implied agreement is peculiar in another respect. It is, according to the frame of the bill and the relief sought, far reaching and comprehensive. It makes no distinction between property owned by the debtors at the time it was made and that subsequently acquired ; but all is within its grasp. It is not averred in the bill that an article of the property conveyed to the defendants was owned by the Carriage Works at the time of the agreement. The supposed trust so accommodates itself to conditions, that it turns loose its hold upon property, when sold by the debtors to others than a creditor, and fastens itself upon any new property the debtor may acquire. Nor does it discriminate between then existing and subsequent creditors, whether the liability of the debtors arose ex contractu or e.r delicto; but all may come in and share as beneficiaries of the trust. They may never have assented to the trust agreement, or bound themselves, for a moment, to postpone collection of their debts, yet, under the bill, their rights are the same as the rest.
I am of opinion that the agreement, the parties made means only what it plainly says. The creditors agreed to nothing but the extension of their debts. They did not bind themselves not to accept payment of their debts, if voluntarily tendered them ; nor did the debtors bind themselves not to pay a debt. The parties were competent to make such contract, and put it in such form, as they chose. If they had desired to provide for the distribution of the property of the debtors, on any contingency, they could, all parties assenting, have easily done so. But no reference is made to any distribution, whatever, to take place at any time, or on any contingency. No trust, of any sort, to take effect either before or after the notes, or any of them, should mature, is, in the con
It is said, in our former opinion, that the agreement has many of the controlling properties of a composition among creditors with their common debtor. That is true, and it is that which constitutes the consideration which supports the agreement of each to extend his debt; just as, in a case of composition proper, the composition —the combined agreement of all the creditors — constitutes the consideration which supports the agreement of each to receive less than his whole debt, in full payment. If every creditor of a debtor, acting independently of the others, agrees to extend, or to receive less than the whole, in full payment, his agreement does not bind him, for the want of consideration ; but if it is a combined agreement of all the creditors, this concurrence or composition forms a valuable consideration, and each is bound. But we must not permit the fact that the consideration assumes this form, to mislead us to an enlargement or extension of the terms of the agreement which it supports. We must look to the terms themselves to ascertain their import. When, as in the present case, we pass over this mutual meeting and concurrence of the creditors, as forming the consideration of the contract, and look at what they set down in the contract, as the things agreed to be done or omitted, we find them stated without doubt or ambiguity — so plainly stated that they do not admit of construction. The statement in our former opinion, that “By an irresistible implication, it was an agreement among all the assenting and acquiescing creditors to move as a unit, and share a common fate, at least until default should be made by the debtors,” I now think, is inacu-rate. The agreement was that the creditors would not move at all; indeed they disarmed themselves of all power to move; and most surely, the common fate, or
I am of opinion the demurrers and motion to dismiss the bill for want of equity, ought to have been sustained.
But we are all of opinion that the special plea interposed by the defendants ought to have been sustained. This plea alleges that the said Montgomery Carriage Worles in violation of their said agreement not to create any new indebtedness until all of said notes were paid in full, created and contracted other and additional indebtedness, for the purchase of goods, to the large amount of about seventeen hundred dollars, without the knowledge or consent of defendants ; and by reason of said default and breach of said agreement, the defendants aver that the notes given them by said Carriage Works, in said settlement, became immediately due and collectible ; and were due and collectible at the time of said sale. It will be remembered that it was stipulated in the agreement that the said debtors should not create any new indebtedness until all of said notes given by them should be paid in full; and in the event they should create other or additional indebtedness, then, all the notes given in settlement, as provided in the agreement should immediately mature and become due and collectible. Hence, if new or additional indebtedness was contracted, as alleged' in the olea, the defendants’ notes became, by law, collectible, and the defendants had the right to accept payment thereof. For the error in overruling the plea, the decre-
Reversed and remanded.
Briokell, C. J., not sitting, having been of counsel.