63 So. 970 | Ala. | 1913
— Appellant filed its bill to have certain mortgages, executed by F. P. Wallace and wife to W. W. Hicks, doing business under the firm name of W. W. Hicks & Co., declared a general assignment; and to enforce the assignment so declared among the creditors of said mortgagors, one or chief of whom was complainant. The suit was submitted for final decree on pleading and proof. The chancellor denied all relief and dismissed the bill upon the ground that the complainant failed in its proof to show that the several mortgages were in effect, or could, by a court of equity, be declared to be a general assignment.
The contention of the appellant was that the several mortgages — one made in 1908, and the last in 1911— should be considered together and as constituting one transaction, and that, being so considered, they constituted a general assignment, and the court should so decree. On this phase of the case the chancellor thus decreed: “The material allegations of the bill are not proven. The mortgage made by Ada E. and F. P. Wallace to respondent W. W. Hicks on 29th February, 1908, cannot be declared any part of a general assignment at the suit of complainant, because .complainant’s debts against said mortgagors did not exist at the time of the execution of said mortgage. And the mortgage made by said parties to the bank cannot be declared a general assignment because it does not .appear to include all, or substantially all, of the property of said mortgagors subject to execution. And the mortgage executed by said parties to respondent W. W. Hicks, on 3d January, 1911, does not appear to be given in payment of, or as security to, any prior existing debt, except possibly in so far as it purports to be an additional security for the debts secured by the first-mentioned mortgage. These several mortgages made in 1908, 1910,
The law in this state, on the subject in question, is to be found in the provisions of section 4295 of the Code of 1907, which section reads as follows: “Every general assignment made by a debtor, or a conveyance by a debtor, of substantially all of his property subject to execution in payment of a prior debt, by which a preference or priority of payment is given to one or more creditors, over the remaining creditors of the grantor, shall be and inure to the benefit of all the creditors of the grantor equally; but this section shall not apply to or embrace mortgages or pledges or pawns given to secure a debt contracted contemporaneously with the execution of the mortgage or pledge or pawn, and for the security of which the mortgage or pledge or pawn was given. A general assignment within the meaning of this section shall include, in addition to- the conveyances now defined as such by law, every judgment confessed, attachment procured by a debtor, or other dis
It is well-settled law that two or more instruments may so refer to, and be connected with, each other that all may be construed as one instrument, and all, taken together, be given the same effect that would be given in law to one instrument embracing all. — Sewall v. Henry, 9 Ala. 30; Holt v. Bancroft, 30 Ala. 200. Where a deed or a mortgage was made shortly before a general assignment, and was intended to be a partial disposition of all the property, the general assignment, when made, is then but a completion of the transaction begun by the execution of the deed or mortgage. One who has determined to make a general assignment of all of his property for the benefit of less than all of his creditors, and does so, cannot evade the statute by making separate deeds or mortgages to different creditors, and so depriving some of his creditors of all right to share in the distribution. In such cases equity will, at the suit of the creditors so denied the right to share, declare all of the separate deeds and mortgages to be a general as
In the case of Rochester v. Armour, 92 Ala. 435, 436, 8 South. 781, the rule we are now speaking of was declared ; and it was there said: “In the case of Holt v. Bancroft, 30 Ala. 193, the statute we are considering for the first time came before this court for interpretation. The facts of that case were that on May 9, 1854, Holt & Chambers, merchants, made a deed of trust, and thereby conveyed about one-third of their merchandise for the security of one of their creditors. ‘At the time this conveyance was executed, the debtors intended to make a general assignment of all their ef
The rule has been well stated by the Supreme Court of the United States as follows: “A debtor, even when financially embarrassed, may in good faith compromise his liabilities, sell or transfer property in payment of debts, or mortgage or pledge it as security for debts, or create a lien upon it by means even of a judgment confessed in favor of his creditor. — Preston v. Spaulding, ubi supra [120 Ill. 208, 10 N. E. 903]; Field v. Geoghegan, 125 Ill. 70, 16 N. E. 912. Such transactions often take place in the ordinary course of business, when the debtor has no purpose, in the near future, of discontinuing business or of going into bankruptcy and surrendering control of all his property. A debtor is not bound to succumb under temporary reverses in his affairs, and has the right, acting in good faith, to use his property in any mode he chooses, in order to avoid a general assignment for the benefit of his creditors.” — White v. Cotzhausen, 129 U. S. 342, 9 Sup. Ct. 313, 32 L. Ed. 677.
We fully agree with the chancellor that the three several mortgages referred to in this case were not so related or connected as that they could be treated as constituting a general assignment. It, therefore, follows that there is no error in the decree dismissing the bill; and it must be affirmed.
Affirmed.