89 Ala. 207 | Ala. | 1889
On November 30, 1887, Adam Curtis, a merchant engaged in the retail boot and shoe business in Mobile under the name of A. Curtis & Co., sold and trans
Complainants do not controvert the rule, well settled by repeated decisions of this court, that an insolvent debtor may prefer one or more of his creditors, to the exclusion of the others, and that an absolute sale of the whole of his property, in payment of an antecedent bona fide debt, at a reasonably fair price, not reserving or securing to himself any benefit, or trust by which he may be benefitted, is valid, and will be sustained, whatever may have been his intentions, and whatever notice the preferred creditor may have of such intentions. Neither is the transaction rendered fraudulent by reason of an express stipulation, that the purchasing creditor will pay debts due to other specified creditors, and such debts are in fact paid.—Hodges v. Coleman, 76 Ala. 203; Levy v. Williams, 79 Ala. 171; Rankin & Co. v. Vandiver, 78 Ala. 562.
In the original bill, the main attack was made on the alleged grounds, that the value of the stock of goods, accounts and fixtures was greatly in excess of the amount of the indebtedness to Chipman, Calley & Co., and of the debts assumed to be paid, and that a secret understanding existed, whereby a benefit was reserved to Curtis. The amendment to the bill specifically charges, that the transfer of the leasehold interest was upon a secret consideration to be paid to Curtis, or was without consideration, and operated to secure a benefit to him, and to put the leasehold beyond the reach of his creditors. The amount and bona fides of the debts, the payment of which constituted the consideration price of the property, are not controverted.
The amended bill alleges that, at the time of, and contemporaneously with the making of the bill of sale, Curtis, in
Having carefully considered the evidence relating to the value of the property, we are forced to differ with the chancellor as to his conclusion in this regard. The weight to be given to the opinions of witnesses, of the value of property, depends on their experience in dealing in such property, and their knowledge of its condition. All the witnesses, with one exception, examined on part of complainants as to value, and several examined by defendants, were unacquainted with the stock of goods, or its condition. It therefore becomes material to ascertain, as nearly as practicable, the real condition of the stock at the time of the sale. The evidence shows that a part of the stock on hand consisted of goods recovered by Curtis, after being burned out in 1886; that the goods which he purchased prior to March, 1887, had been on hand from eight to fourteen months, sales having been made therefrom, which were not replenished, and a portion shop-worn; and the amount of the goods purchased from the first of August to the time of the sale, was about two thousand dollars. From the fact that the part of the stock taken by Curtis as exempt was valued by him at five per cent, less than the original cost, it is evident that they were selected from the new goods. From the testimony of the witnesses who knew the stock, and of those who examined the portion shipped to Boston, it sufficiently appears that the stock of boots and shoes at the time of the sale consisted of several hundred dollars worth — about nine hundred — which were greatly damaged by fire and water, some worthless; one-half or more of the balance was broken stock, which had not been replenished, and some shop-worn; the remainder being new goods in the original condition, from which some sales had been made. The hypothesis of the witnesses who testified that the depreciation in value at the expiration of fourteen months business would not exceed ten
Also, there were other articles of property included in the sale, the book-accounts, store-fixtures, and leasehold. The sale was an entirety, each kind of property being an integral part. In such case, it should not be declared fraudulent, because the parties may have placed on one kind of property a valuation materially (less than its real value, if the valuation placed on the other kinds of property exceed their real value to such extent that the market value of the entire property does not exceed the consideration paid. The inquiry is, was all the property sold at a reasonably fair price, taken as a whole ? It' is evident that the store-fixtures and equipments were estimated greatly in excess of their value, at least $300. Calley testifies, that he estimated, if the loss on the lease did not exceed three hundred dollars, his firm would come out fairly well, but that he regarded the value of the leasehold as merely nominal, because the chance of re-letting the store for the balance of the year was so unfavorable. This accords with the testimony of the real-estate dealers, who testified that, the time for renting having passed, the leasehold possessed no fixed value, from the fact that whether or not the store could have been rented depended upon contingencies which might or might not arise. On account of the happening of unforeseen contingencies — a fire, and the change of location of a merchant — they did realize $377.50 in addition to two months occupancy. If the amount thus realized, and its rental value for the time occupied, be estimated as the value of the leasehold, the aggregate value of the whole property sold does not exceed the consideration paid. This conclusion is sustained by the amount of the proceeds realized from the subsequent sales of the property, including the portion of the stock sold by the sheriff.
But this contention is founded in a misapprehension of the pleadings and the testimony, unless it is intended to be confined to the written agreement. On examination of the original bill, we find that it alleges, that Johnson claimed to be in possession of the stock of goods, and the store, as the agent of Chipman, Calley & Co., and was carrying on the business; and the agreement, attached to the answer of Curtis, shows that the notes given by him for the rent of the store, amounting to $750, constituted a part of the debts agreed to be paid by them. Possession and continued
In Carter v. Coleman, 84 Ala. 256, it is said: “So long as the law allows a' failing debtor to prefer some of his creditors at the expense of others, it permits, if it does not invite, a race of diligence. The points of inquiry in such transaction are, the bona fieles and sufficiency of the consideration, and the question of benefit, open or secret, reserved or secured to the paying debtor. If the contract be unassailable at these points of attack, it is impregnable.” We have shown that the value of the whole property, whether determined by the evidence, or the actual proceeds realized subsequently, did not exceed the consideration paid. Chip-man, Calley & Co. have either paid the debts agreed to be
[Reversed and remanded.