132 Ala. 74 | Ala. | 1902
— On a former appeal the bill as originally filed in this case was upheld as against a demurrer, and was defined to be “a bill by a judgment creditor, seeking the aid of a court of equity to remove obstacles and hindrances to the enforcement of their judgments which the judgment debtors have fraudulently interposed.” See Metcalf v. Arnold, 110 Ala. 180. As the bill then stood its equity rested on grounds -for raising a constructive trust in property of a mercantile partnership upon an alleged fraudulent disposition of it to a newly formed corporation in payment for shares of its capital stock issued in part to the defendants who had composed the fir-m and in part to their respective wives. Since the remandment, 'and by Avay of amendment, the bill is made to allege in substance that since it was first filed the property has been disposed of and is not obtainable; that H. B. Metcalf and F. G. Weatherly, who composed the firm “before the formation of said corporation but as part of the scheme to defraud complainants, and on or about the same day and with a view to the formation of the said corporation, dissolved
Nor is it a valid objection to the bill that it does not allege the partnership was insolvent. The debtors are charged with actual as distinguished from constructive fraud. A solvent debtor may by conveying his property with intent to defraud creditors, be guilty of a fraud which under section 818 of the Code will authorize them to pursue the property or its proceeds regardless of whether he has other property subject to debt.—O’Neal v. Birmingham, etc., Co., 101 Ala. 383; Smith v. Collins, 94 Ala. 394; Carter v. Coleman, 82 Ala. 177; Lehman v. Mayer, 67 Ala. 396. And when done with such intent the transfer by one partner. to another of his interest in the firm property will place the transferee in the attitude of a fraudulent grantee. Weingarten v. Marcus supra. The demurrers to the bill as last, amended and the motion to strike the amendments were properly overruled. But for reasons not clearly indicated by their, demurrers, the bill is not sufficient to warrant relief against Mrs. Metcalf and Mrs. Weatherly. First it was adapted to enjoin them as stockholders'and directors of the corporation from disposing of the property, but that is not now a feature of the case. With the alleged fraud of the debtor® in transferring to them in payment of indebtedness to them, it fails to connect Mrs. Metcalf and Mrs. Weatherly by any averment whether of fact or conclusion. Their debts are not impugned as lacking bona fieles or as inadequate to form the consideration for the goods received by them and it is not alleged that those defendants had notice, actual or constructive, of the alleged fraudulent scheme of their transferors. Simple contract creditors, such as complainants were at the . time, have no lien on property of a debtor partnership. There are cases in which in equity they may be availed of the lien, which, when not released, exist® in favor of each partner for the purpose of having the property applied to the partnerships debts. But this cannot be where the
As against the principal debtors the case is made out both by the bill and the evidence. By decisions of this court the use of an insolvent firm’s property in payment of individual debts of the 'partners has been held fraudulent per se.—Goetter v. Norman, 107 Ala. 585; Pritchett v. Pollock, 82 Ala. 169. The effect on creditors is the same and the law is the samé, when the firm is made insolvent by such use of its property. But apart from that doctrine an intent on the part of these debfc ors to hinder and delay if not to otherwise defraud creditors, is convincingly evidenced by the course they took in diverting from the partnership all its property while making provision for its debts whereby besides paying ¡their individual debts, they secured to themselves a substantial interest in the corporation formed in consummation of their scheme.
The decree appealed from will be reversed on the assignments of error made by Mrs. Metcalf and Mrs. Weath-erly, and a decree will be here rendered dismissing the bill as to them and ordering a reference to the register for the ascertainment of the value of that part of the partnership property received by H. B. Metcalf and F. G. Weatherly, respectively, and ¡the amounts due from them to each of the -complaining creditors including those who have been or miay hereafter be admitted as parties under the bill. After the execution of the reference, the chancery count will decree appropriate relief by holding defendants H. B. Metcalf and F. G. Weatherly each liable as trustees for those creditors in' proportion to the amount of their respective claims and to the extent of the value of that part of the partnership property received by those defendants, respectively, in the division had of that property.