On Application for Rehearing..
Upon a further consideration of this case, the majority of the court is of the opinion that the decree of the chancellor of June 6th, 1895, is not a final decree, holding that all of the equities of the bill are not adjudged and determined by said decree, inasmuch as it does not decree an indebtedness by the respondents Pinson Bros. & Co, to the complainant. The writer, however, is of a different opinion, and for the following reasons: The bill avers a transaction between the complainant and Pinson Bros. & Company wherein the complainant sold to said Pinson Bros & Company a certain stock of hardware in the city of Gadsden at and for a given price; that five hundred dollars of the purchas© price was paid in> *681cash, and for the balance the -said Pinson Bros. & Company executed to the complainant their eleven promissory notes; that these notes were subsequently reduced to judgments against the said Pinson Bros. & Co. and remain unsatisfied, and are held by said complainant. These averments in the bill were -confessed by the respondents Pinson Bros. & Company. The answer of respondent, D. C. ¡á-avage “denies the statements contained in paragraph two of the bill as therein -stated.” The above averments are -set out in said paragraph two. The answer of respondent Jas. H-. Savage is evasive in its. denial, in that it “denies that all of said judgments remain unsatisfied,” instead of denying that any of -said judgments remain unsatisfied. Testimony was taken, and as shown by the record the cause was submitted for final decree on the pleadings and proof. Transcripts of these judgments were in evidence, a-s shown by the note-of testimony, -and evidence that the -same remained unsatisfied. On this state of the case the decree in question was based. The decree reads a-s follows: “This-cause coming on to be heard at the present term was. submitted .for decree on the 'pleadings and proof as-noted by the clerk, and on consideration, it is ordered, adjudged and decreed that the -complainant is entitled to the relief prayed for in his bill of -complaint.” The decree then proceeds with particularity to ascertain and determine the status of the respondents Savage: “It is-further ordered, adjudged and decreed that the defendants, James I-I. Savage and I). C. Savage, are trustees-ex maleficio of the stock of goods, chattels, and choses in action belonging to the firm of Pinson Bros. & Co., Avhich Avent into their hands, or either of them, -and- are hereby held to account to complainant for the value of the-same1 at the time said defendants, or either of them, Avent into possession of the same.” “It is further -ordered, adjudged and decreed, that the stating of the account- be, and the same is hereby referred to the clerk of this court.” “The said clerk will charge the defendants, Jas. H. Savage and I). C. Savage, with the value-of the stock of goods, chattels and the choses in action at the time the same went into their hands, togetherAvitli interest on -said amount from said date, and Avhich *682belonged, to tlie firm of Pinson Bros. & Co.” “He will give'credit to said defendants for all such payments as he may find to have been made by said defendants, or either of them, on any claim which he may find to be a lien on said property, at the time said defendants went into possession thereof.” “He will also allow interest on such payments from the date of each.” “On the hearing of this reference and the stating of the account, the clerk will receive all relevant and competent testimony, whether oral or written, including any relevant testimony already of record in the cause, touching the value of said stock of goods, chattels and dioses in action, and any payment to which these defendants may he entitled, as indicated hereinbefore in this decree.” “The clerk will proceed to execute this reference at his earliest convenience and make report of his action to this court.” “The clerk will further ascertain and report the amount due complainant on his several debts against said Pin-son Bros. & Co., or defendant R. T. Pinson, F. IT. Amberson and M. L. Hicks, arising out of the transaction of the purchase of said stock of goods by them from complainant, at the time Pinson Bros. & Co. began business, as set forth in the bill of complaint.”
The equities of the complainant’s bill are predicated upon the complainant’s debt against Pinson Bros. & Co., arising out of the transaction of the sale of the •stock of goods by complainant to said Pinson Bros. & Co., which said debt or claim was reduced to judgment, and the wrongful taking of such stock of goods by the defendants Savage in such manner as to constitute them trustees. The decree with particularity and in express terms adjudges the Savages trustees as to said stock of goods. Does it determine the other equity, i. c., the debt of complainant against Pinson Bros. & Co.? It must be ■conceded that without this debt, the complainant would not be entitled to the relief prayed for, and his bill would have been dismissed. The decree here recites: “on consideration it is ordered, adjudged and decreed that complainant is entitled to the relief prayed for in his bill of complaint.” This is not a mere opinion of the chancellor, but a solemn decree of the court. Nor is it conditional, nor qualified, by anything subsequently oc*683curring in tlie decree 'ordering a reference for tlie statement of an account, as I understand and construe tlie order for an accounting. The court must have -ascertained the existence of a debt as averred by ‘the complainant, before it could have solemnly adjudged that he was entitled to tlie relief prayed for in his bill. The answer of the respondent, 1). C. Savage, avers that he applied tlie proceeds arising from the sale of the -stock of goods, except one hundred and sevent}'- dollars, under the direction of Pinson, to tlie payment of certain claims against Pinson Bros. & Co., other than complainant’s, and this one hundred and seventy dollars he admits to be still in his hands. Tlie decree for the stating of the account directs that the clerk charge the defendants •Savage with the value of the stock of goods, chattels and clioses in action at tlie time the -same went into their possession, together with interest on the amount from that date, and to allow them credit for such 'payments as he may find to have been made by -said defendants on any claim which he may find to be a lien on said property at the time said defendants went into possession thereof. And for this purpose he was authorized to hear all legal and competent evidence that parties might offer. Tlie hearing of evidence by the clerk is limited by the terms of tlie decree to the statement of an account against the Bavages for tlie value of the goods, chattels, clioses in action, together with interest, and the accrediting them with payments made by them on a certain class of claims. The decree then directs the clerk to ascertain and report the amount due complainant on his several debts, not whether anything he due or not. Indebtedness to complainant by Pinson Bros & Co. vel non is not referred by the decree. This had already been determined by the court. The clerk ivas not authorized by the decree to hear any evidence on this question. All that he could do under this -decree to ascertain and report the “amount due on the several debts of the complainant against Pinson Bros. & Co.,” was to compute the interest on the several judgments, and report to the court the total of principal and interest on the same. INIor cover, the court in this decree particularly describes these several debts as “arising out of the *684transaction of tlie purchase of said stock of goods by them (Pinson Bros. & Oo.) from the complainant, at: the time Pinson Bros & Co. began business as set forth in the bill of complaintIt seems from this that the decree not only determines the question of indebtedness ■vcl non by Pinson Bros. & Oo. to complainant, but particularizes it as one arising out of a certain transaction as set forth in the bill of complaint. It seems clear that the equities upon which, the bill is predicated were finally determined and adjudicated in this decree.
The defendant D. O. Savage confessed in his answer that he had in his possession one hundred and seventy-five dollars, proceeds of the sale of the said goods by him, and to this extent his liability as a trustee under the decree was fixed, and the stating of an account by the clerk under the decree, would necessarily charge the Savages to this extent, if not more.
In Garry & Welpin v. Jenkins, Moore & Co., 109 Ala. 471, so far as appears from the statement of facts, the decree of the chancellor did not in terms adjudge that there was any debt due the complainants, but this court said in passing upon the question of the finality of the decree in that case: “All that remained to be done was a reference to the register to ascertain the amounts of the debts of the complainants, ‘the existence of their debts being confessed, and of the creditors coming in under the bill, and of the precise amount of Drennen’s liability as trustee -in invitum of the proceeds of the property sold by him, and the making of orders and decrees necessary to the collection of such amount and its distribution among the creditors — a mere matter of accounting and settling the amounts to be paid and received under the decree of June 29th, whereby the creditors’ rights to demand and receive, and Drennen’s liability and duty to account and pay, Avere fully and finally adjudged and decreed.” And in support of this, after adding, “under all the authorities this” (the decree of June 29th) “avus a final decree,” BrickelF's Digest is cited, where it is said : “When a decree is final upon the merits —adjudging the equities and settling the rights of the parties — an appeal will lie under the statute. If a decree possesses these properties, it is immaterial, so far *685as affects tlie right of appeal, that the cause is still in progress, awaiting further proceedings necessary to entitle the successful party to the possession and enjoyment of the rights adjudged to him,” citing numerous authorities which I need not here recapitulate. The cases of Garner v. Prewett, 32 Ala. 13, Walker v. Crawford, 70 Ala. 567, and Kimbrell v. Rogers, 90 Ala. 339, were differentiated from the case of Garry & Welpin v. Jenkins, Moore & Co., supra, in that, in those cases the question of indebtedness r.el non being referred to the :register, to be by him ascertained and reported to the court, left an essential equity in the case between the parties undetermined by the decree. And we say for the same reason they can he differentiated from the case at bar. In Garry <G Welpin v. Jenkins, Moore cG Go., the decree was rendered upon the submission on the pleadings and proof as noted by the register. Likewise in the case at bar, the decree was upon the submission on the pleading's and proof as noted iby1- the clerk. In the former case, in passing upon the nature and character of the decree as to the question of its being a final decree such as would support an appeal, the decree not in terms adjudging that complainant had a debt, resort was had by this court to the 'pleadings upon which the •submission ivas had in determining that decree was final. If resort can be had to the pleadings upon -which the cause ivas submitted in connection with the proof, to •determine the nature of the decree, as to whether it be final, it mair be asked why resort may not be had to the proof upon which the submission was had in connection with the pleading, for the same purpose? Both the pleadings and the proof were before the chancellor for consideration, and both considered by him, and upon such consideration he solemnly orders, adjudges and decrees that the complainant is entitled to the relief prayed for in his bill; or, in other words, that the complainant has a debt, otherwise he would not be entitled to relief. I think the principle laid down in Garry & Welpin, supra, is correct, aud T think this case comes within its influence. And I think what was there said is applicable here, viz.: “In the present case no equity remained undetermined after the decree of June 29th, 1892. Com*686plainants’ debts were not denied, but expressly admitted.” (In the case at 'bar, complainant’s debts were denied, but were proven). “They prayed for specific relief, and the decree determined they were entitled to it. All the rights and liabilities of all parties were adjudged by the decree; and it only, remained to ascertain amounts of admitted indebtedness” (here amounts of proven indebtedness) “and the amount for which Drennen” (here Savage) “was liable as trustee in invitim.” If the decree had formally recited, “upon consideration it is adjudged that the complainant has several debts-against the said Pinson Bros. & Co,” followed by an order of reference to the clerk to ascertain and report to the court the amount due the complainant on his said several debts, it would not be questioned but that such a decree would be a complete adjudication of indebtedness vel non from Pinson Bros. & Co. to the complainant. In effect and substance, this was the decree of the court. The adjudication by the court of complaint’s debts is .implied in the form of the decree, and the language used and by a reasonable construction of the decree, the' conclusion as to this implication is unavoidable. A court of equity looks more to substance than to form.
Haralson, J., concurs with the writer in the foregoing view as to the character of the decree in question, but as the -majority of the court are of the -contrary opinion, holding that the decree is interlocutory and not final, it follows that the appellee’s motion to strike the assignments of error 'based upon this decree -and the orders of the court anterior thereto, must be overruled.
This necessitates a consideration of those assignments of error. And the first question that is presented, and, we might say, the vital question, goes to the equity of complainant’s bill.
The bill purports to he a general creditors’ bill, filed on behalf of the complainant as a creditor of the firm or partnership -of Pinson Bros. & Co., and on behalf of such other creditors as may see proper to join in the 'bill. By the -averments in this bill it is shown that the resnondents, James H. Savage and D. O. Savage falsely and fraudulently represented and pretended to Pinson *687Bros. & Co. tliat D. O. Savage had been appointed by the chancery court upon a bill filed for that purpose, receiver for said Pinson Bros. & Co., and by means of such false and fraudulent pretenses and representations, obtained from said Pinson Bros. & Co. the possession of their stock of merchandise, books and accounts, dioses in action, and all of the personal assets of said firm. It is not charged that any conveyance was made by Pinson Bros. & Co. to said D. O. Savage, or that there was any collusion betiveen Pinson Bros. & Co. and the Savages, nor that Pinson Bros. & Co. in anywise participated in the alleged fraud of the Savages, but on the contrary, it is made to appear that Pinson Bros. & Co. were wholly innocent of any wrong, or of any intent to injure or defraud their creditors, and in fact, were the innocent and unsuspecting victims of the alleged fraud practiced and perpetrated by the Savages. The prayer of the bill is that the said James I-I. and I). C. Savage be decreed trustees cw maleficio, and be held to an accounting for the property of said Pinson Bros. & Co., which they so fraudulently obtained possession of. It is not pretended that the bill is filed under either section S14 or 819 of the Code, for there 'is no averment of the issuance and return of an execution not satisfied as against the defendants, Pinson Bros. & Co., nor is any discovery sought. Can it be maintained under section 818? That section (818 of Code, 1896) reads as follows: “A creditor without a lien may file a bill in chancery to discover or to 'subject to the payment of Ms debt any property which has been fraudulently transferred or conveyed, or attempted to be 'fraudulently transferred or conveyed by the debtor.”
As to what kind of fraud is within the statute, it is said in Bump on Fraudulent Conveyances (4th ed.)’, § 20 : “Nor is a fraud which is directed against the debtor and not against Ms creditors within the statute. The creditors of a party defrauded have no light, even though the fraud has the effect to diminish his means of paying them, to look into such fraud or unravel it. It is for Mm and Mm alone to do so, and if he chooses to acquiesce in the fraud, or suffers himself to be concluded of his right to investigate or undo it; his creditors must *688be content to abide by tlie legal rights remaining in him. There is a manifest distinction between a fraud upon the debtor and a fraud upon creditors.”
The bill in this case does not allege any fraudulent transfer or conveyance, nor any attempted fraudulent transfer or conveyance by the debtor, and allegation and proof of this fact is essential to any relief under section 818 of the Code. It Is immaterial Avhat shape or form the fraudulent transfer may assume, AArhether by the direct act of the debtor, or by his collusion Avith another suffering it to be done through some legal proceeding, but it is essential that the debtor in some Avar participate knoAAÚngly in the fraud.
In the case of Builders and Painters Supply Co. v. First National Bank, 123 Ala. 203; 25 So. Rep. 311, the above section received our consideration and construction. In that case the bill aatis a creditors’ bill and Avas filed for the purpose of setting aside an alleged fraudulent attachment against the common debtor, but no fraud or collusion Avas charged against the debtor, and it Avas held by this court that the bill Avas Avithout equity. There, as in this case, the debtor, by the averments of the bill, Avas innocent of any Avrong of fraud, 'and was shown to be the victim of the alleged fraud. In determining the equity of the bill by reference to this statute, the controlling principle in the two cases is the same. And that is, that in the absence of any fraudulent transfer or conveyance or attempted fraudulent transfer or conveyance by the debtor, a creditor AAdthout a lien cannot resort to a court of equity to reach and subject property of the debtor of AAdiieh 'the debtor has been defrauded, or which has been Avrongfully taken from him.
In the case of the Builders and Painters Supply Co. v. First National Bank, supra,, other decisions by this court bearing on this question Avere there cited and commented on. We think it clear that the bill in this case can deiuve no Adtality 'by reason of any statute of this State. Can the bill find support in any recognized common law principle of equity jurisprudence? It cannot be denied that the complainant’s demand here sought to ¡be enforced is a purely legal demand. Nor can there be any doubt under the statutes and decisions *689in this State of the right of the creditor to have his execution levied upon the property of the partnership debtor. There is no averment in the bill that any execution had ever been issued on any judgment against the partnership of Pinson Bros. & Co. and a return thereof not satisfied, nor any excuse given for a failure to issue execution. Where the demand sought to be enforced is a purely legal demand, in order to give a court of equity jurisdiction, the bill should show that the complainant had exhausted his legal remedies, or show some good reason for his failure to do so. — 3 Pomeroy’s Eq.. Jur., § 1415, where authorities are collated.
While the averments of the bill may be sufficient to constitute the Savages trustees ex maleficio as to Pin-son Bros. & Co., will this fact authorize and support a bill by a creditor without a lien of Pinson Bros. & Co. to enforce such a trust? There is no averment in the bill that a judgment against Pinson Bros. & Co. had ever been perfected into a lien by execution placed in the hands of the sheriff, or by registering under the statute. The complainant being, then, a creditor without a lien, and showing no other right or claim in or to the property of Pinson Bros. & Co. taken by Savage, does not show such a relation as would authorize a court of equity to establish and enforce a trust ex malificio for his benefit as against Savage. In Perry on Trusts, § 245, the principle is stated: “A person may become a trustee by construction by intermeddling with and assuming the management of property without authority. Such persons are trustees de son tort, as persons who assume to deal with a deceased person’s estate without authority are administrators de son tort ” A number of authorities are cited in note “a” to this section, but in most of them the bill was filed by the person whose legal title -was violated or from whose possession the property was taken, or by some one holding in privity with such person, such as an heir. We have been unable to find a case where a party with • neither a legal nor equitable claim or title in the property could have a bill to establish and enforce a trust for his benefit against one obtaining possession of the property from another through fraud. There are, however, cases to be found *690where the courts have held that where a person, through fraud and deceit obtains possession of property under a promise that it will be held for the benefit ;of another, that the law raises a trust for 'the benefit of such other person and which he may enforce. The most common illustration of this principle is found in that class of cases where a party has procured a will or deed to be made in his favor under a fraudulent promise that the property would be received and applied to the benefit of a third person. It is thus stated in Perry on Trusts, § 181: “If a person 'by his promises, or by any fraudulent conduct, with a view to his own profit, prevents a deed or will from being made in favor of a third person, and the property intended for such third person afterwards comes to him who fraudulently prevented the execution of the will or deed, he will be held to be a trustee for the person defrauded, to the extent of the interest intended for him.” In Pomeroy’s Eq Jur., § 1053, the principle is thus stated: “In general, whenever the legal title to property, real or personal, has been obtained through actual fraud, misrepresentations, concealment, or through undue influence, duress, taking advantage of one’s weakness or necessities or through any other similar means, or under any other •similar circumstances, which render it unconscionable for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same, although he may never perhaps have had any legal estate therein.” The difficulty in the application of this principle in the case before us rests in the fact that in the first place under the alleged fraud, the legal title to the property never passed out of Pinson Bros. & Co., and in the second place it is not shown that the complainant is equitably entitled to the same. But, on the contrary, the facts as started, show that Pinson Bros. & Co. are the persons legally and equitably entitled to the property, and therefore to hold the wrongdoer, as a trustee in invitum to an accounting. It is not so much a question here, of a trust ex malificio, but who are the *691beneficiaries and entitled to enforce it. The alleged fraud in this case being that Savage represented himself as having, been appointed receiver repels the suggestion of any promise on the part of Savage that he would hold the property for the benefit of the complainant. The office and duty of 'a receiver is to preserve the property coming into his custody as such, to be disposed of by the decree of the court, of which he is an officer.
In the foregoing discussion we have treated the case upon the theory of the complainant’s being a creditor of the firm of Pinson Bros. & Company, whose property is alleged to have been taken iby the wrong-doer. Coming to the proof in the case there is a fatal objection to any right of rcovery by the complainant under the bill. The theory of the bill is based upon the complainant’s right to recover as a judgment creditor of the firm of Pinson Bros. & Company, and the judgments offered in evidence are judgments not against Pinson Bros. & Company, but against the persons who compose the firm as individuals together with two other persons not members of the firm. We are, therefore, of the opinion that the court below erred in the decree rendered in favor of the complainant, and the decree must be reversed and a decree will be here rendered, dismissing complainant’s bill.
Reversed and rendered.