111 Ala. 491 | Ala. | 1895
Complainants, as creditors of Steward & Eddy, a corporation, by the present bill seek to set aside and annul certain transactions entered into be
Although W. C. Steward and B. W. Eddy testify, that they did not consider the corporation insolvent at the time of the sale to W. C. Steward, it is obvious from their own testimony, that if the creditors pressed their claims, and the assets were subjected to a forced sale, that they were not sufficient to satisfy the indebtedness of the corporation, and both hoped and it was expected that W. C. Steward would.be able to get an extension of time upon the debts, and prevent a forced sale by creditors, and sacrifice of the property. It is insisted by appellant that although the resolution allowed W. C. Steward eighteen months within which to arrange and pay the debts of the corporation, that his obligation was absolute, and that he was required to pay them at once.
We will next consider the sale by Steward to I. M. Eddy, and the mortgage executed by her to the Berney National Bank together, as the bank is the party vitally concerned in this transaction. The sale to W. C. Steward was concluded on the 14th of June. At that time, Steward & Eddy, the corporation, was indebted to the Berney National Bank, with which it had done its banking business, in about five thousand dollars or añore. Thirty-five hundred dollars-was due for borrowed
We have decided that a sale made by an insolvent partnership of all its assets, to a member of the partnership, with the intent to delay and defraud its creditors, did not vest-in the purchaser a title or interest available to him under the exemption laws. — Aiken v. Steiner, 98 Ala. 355. The conscience of a court of equity must be seared, that would allow the president of an insolvent corporation, owning a controlling power, to purchase all of its asssets on a credit, and then without payment hold them under the exemption laws against its creditors. Good faith and common honesty require that he should account to the creditors for the property, and so should all others who are not bona fide purchasers.
There are some .assignments of error directed against the rulings of the court upon demurrer to the bill, and amendpd bill. We are of the opinion the object of the bill originally and as amended was to subject the assets of the Steward & Eddy corporation, which were purchased by W. O. Steward, and a part of which were subsequently mortgaged to the bank, to the payment of the debts of the corporation. The bill throughout assails both these transactions as fraudulent' and void, and states the facts upon which the charge of fraud is "made. True, in one place it avers, that the “assets were a trust fund,” but that is averred as a conclusion, and was not good pleading. A reading of the paragraph in which this statement occurs, shows that conclusion was averred as one of the grounds why the sale was invalid and and should be set aside, and why Steward could not assert a claim of exemption. The right to relief is not. based upon any lien the complainants held upon the property, but wholly upon the grounds, that the transactions were invalid and fraudulent, and should be set aside and annulled.
It is further contended that the cause was not at issue . when submitted for final decree. Decrees pro confesso
Affirmed.