134 Ala. 580 | Ala. | 1901
Lead Opinion
The bill in this case was filed by the complainants as creditors of .Miller and Palmatier against them and Penney to have declared fraudulent and void a mortgage -executed by them to Penney upon certain personal propérty conveyed by it and to require him to account for the. value of the property appropriated or converted to his own use; and prayed a personal decree for such value; a condemnation to sale for the satisfaction of the complainant’s debts and-costs, the property not used, converted or appropriated by him, and for general relief.
The allegation's of facts upon which the complainants based the relief thus prayed for, were in substance, that each of the complainants were prior to the 29th day of November, 1895, -existing creditors of Miller and Palmatier who had for some months prior to that date been engaged as partners under the name of the “Oo-operative Furniture'Company,” sometimes called the “Co-operative Furniture Factory” in the manufacture of various kinds of furniture for sale; that on the 29th day of November, 1895, they executed to Penney the mortgage assail-ell to secure a recited and alleged indebtedness of $525.94 upon certain articles of their partnership property which they then owned or was held in trust for them, a part of which property conveyed by the mortgage was. stock in trade, a part was raw material in process of manufacture into furniture and a part was machinery and bools. That the partnership was badly embarrassed financially and there was no consideration for the mortgage; and since the execution of the mortgage Penney had taken possession of the property described in it, a portion, of wliicji
The respondent Penney answered the bill, iucorpo- . rating in his ansAver four grounds of demurrer, aaLícIi Avas OA’erruled by the chancellor. This demurrer is so manifestly untenable Ave aaí.11 not consider it. The an-SAver contains nothing but a mere general denial of the allegations of fa.ct charged in the bill and Avas utterly insufficient, to relieve the respondent of the prima facie case made against him and upon Avliom 'rested the burden of overcoming not only by clear proof the presumption of unfairness and mala fides, but by a clear and distinct response to each averment of the hill. — Moog v. Barrow, 101 Ala. 209; Robinson v. Moseley, 93 Ala. 70; Wood v. Pebbles & Co., 121 Ala. 100.
But-aside from this, under the aArerments of the bill Avhen the complainants established the existence of them respective debts, it then, devolved upon the respondent to prove that the notes evidencing the debt claimed by him against Millar and Palmatier Avere given for a bona fide debt, due to him, in the sums recited in them, and that the mortgage Avas to secure this bona ficle debt, untainted Avith any fraud.
The evidence establishes beyond disputation that the complainants Avere creditors of the. Cooperative Furniture Oompanv for material sold to be used in the manufacturing of furniture and that practically all of it Avas used and constituted a, portion of the manufactured articles which AA'ent into the possession of Penney under bills of sale, made to him by Miller and Palmatier some time prior to tire 'execution of this mortgage. It is also practically undisputable from the evidence, that the debt secured by the mortgage Avas the same debt., at least the greater portion of it, which Avas secured hy bills of sale to the same property made by Millar and Palmatier to Penney. In fact Penney himself testifies
It is useless to pursue any further the investigation into the facts as disclosed hy the evidence relied upon hy Penney to establish the bona fhles of the transaction. Nearly every item composing' the account making up the recited consideration in subject to some infirmity going to ite integrity us a just demand effecting the validity of the, mortgage as against the complainants. Indeed, upon Peainey’sf oaati testimony the conclusion cannot he escaped that the. whole transaction had its inception in fa and of the creditors of Miller and Palmatier. The first act consummated hy the. parties Avas to bring into •existence a fraudulent conveyance, confessedly fraudulent by the recei Auction of a benefit to Miller and Pa,1 matter — a bill of sale, absolute upon its face for the security of a debt; and this top to secure in the main their individual, indebtedness to him. By tifie acceptance of it and dealing Avith the property as Avas shown by the evidence in this canse, Penney became a. trustee for these complainants not. only for the proceeds of a.ll property sold by him, but for the value of all property AAdiich he suffered Mill-er or Palmatier to dispose: of. — Dickinson v. National Bank of the Republic, 98 Ala. 546; Bir
The decree of the court must be reversed and a decree here rendered in accordance with the views here expressed.
Reversed and rendered.
Rehearing
On application for rehearing.
On application for rehearing a majority of the court hold, that the: decree of this court reversing the decree of the lower court on cross-appeal was error, and that tire decree of the chancellor should be affirmed; Justice Tyson not concurring in these views, but holding to the views expressed by him in his opinion.