Beall & Coston v. Lehman Durr Co., 110 Ala. 446

HARALSON, J.

1. It is well settled, that a solvent debtor, as well as one who is insolvent, may be guilty of a fraudulent intent in the sale of his property ; that such a debtor may convert his property into money for the purpose of putting it beyond the reach of his creditors, and a vendee who purchases with a knowledge of such fraudulent purpose, for a eash consideration, is a participator in the fraud and acquires no title as against creditors ; and that a voluntary conveyance is void per se as to existing creditors without any regard to the intention of the parties, or to the circumstances of the grantor, or the amount of his indebtedness, or to the kind, value or extent of the property conveyed. — Dickson, v. McLarney, 97 Ala. 389; Smith v. Collins, 94 Ala. 394; Sides v. Scharff, 93 Ala. 107; 3 Brick. Dig. 515, § 119. It is manifest, therefore, if the first alternative averment of fraud be true, the bill contains equity, and is not subject to the demurrer interposed,.so far as it rests on that particular ground for relief.

2. But, the bill is filed, not alone on the ground that the saléis constructively fraudulent, as against creditors whose claims existed prior to the execution of the conveyance assailed for fraud, but that it is actually fraudulent as to subsequent creditors, in that it was made with the intent to hinder, delay and defraud the creditors of the grantor.—Yeend v. Weeks, 104 Ala. 331. And, its equity is assailed, on this ground, by the demurrer, in that the “bill fails to aver, that the secret benefit alleged to have -been reserved [to the grantor] was so reserved with the intent to hinder, injure, delay or defraud complainants, or other creditors of these defendants/’ — the said Beall & Coston. But, the demurrer in this respect, is bad for two good reasons. In the first place, the alleged defect in averment does not in fact exist. This reservation of a benefit reserved to the grant- or is not set up as a distinct and third alternative averment for relief, as is assumed; but, in its connection, it was designed to be, and is a part of the second. alternative ground for relief, viz., that the conveyance is actually fraudulent, having been made with the intent to hinder, delay and defraud the grantors’ creditors. A casual reading of the 4th paragraph of the bill, discloses the fact, that relief is sought only on two grounds, — first, that the conveyance is constructively fraudulent, and, second, that it is actually fraudulent. No objection is taken to the sufficiency of the averment of constructive fraud, but the demurrer is directed to the sufficiency of averment of actual fraud. This last-averment, however, is full and sufficient. It states, in substance, that if any consideration, at all, was'paidfor the conveyance, — and this fact is denied, — it was greatly inadequate ; that the value of the stocks of ’ goods transferred and delivered to the grantee, was greatly in excess of any debt due by said Beall & Coston to the said Folmar, or any consideration paid by him to them therefor; that the goods so transferred were reasonably worth, at the time, the sum of $12,000 ; that this fact was well known to the grantors and grantee in said conveyance, and if said Beall & Coston were indebted to the said Folmar, in any sum, or, if ho paid, them anything for the goods, the amount of such indebtedness, or the sum paid for the goods did not exceed the sum of $5,000 ; that the purpose of each and all of said parties, in making the said transfer, was to place „ the said stocks of goods beyond the reach of complainants and the other creditors of the grantors, and was to hinder, delay and defraud complainant and the other creditors of said Beall & Coston ; and, in this connection, as a part of the averment, and as evidencing the actual fraud in the transaction, it was averred, not as a separate ground for relief, but as a part of the alleged fraudulent agreement made, as stated, to hinder, delay and defraud creditors, “that there was a private or secret understanding and agreement between said Beall & Coston and the said Folmar, which constituted apart of the agreement under which the transfer and delivery of said goods were made, whereby there was a reservation of a benefit to the said Beall in the said transaction, in this : that it was agreed and understood, that the said Folmar was to pay to the said Beall individually, in consideration of said sale and transfer, a large sum of money, towit, the sum of $4, 000-, for the private use and benefit of the said Beall.” It could scarcely be made much plainer, that but one transaction was here referred to, which is assailed by the averments of the bill as having been made to hinder, delay and defraud the grantors’ creditors.

3. The demurrer was properly overruled for a second reason.' It went to the whole bill, and not to a part of it. There wore two alternative grounds, on either of which, if established, relief could be granted. The first ground is not questioned.and is unassailable. A demurrer to a bill as a whole cannot be sustained, if, for any equity appearing in it, the complainants are entitled to relief .—George v. Central R. R. & Banking Co., 101 Ala. 608; Tillman v. Thomas, 87 Ala. 321; Shipman v Furniss, 69 Ala. 563.

There is no error in the decree of the chancery court, and it is affirmed.

Case Details

Case Name: Beall & Coston v. Lehman Durr Co.

Court Name: Supreme Court of Alabama

Date Published: Nov 15, 1895

Citation: 110 Ala. 446

Court Abbreviation: Ala.