Harmon v. McRae

COLEMAN, J. If several creditors sue out, at different times, separate writs of attachment against a common debtor, and cause them to be simultaneously levied by the same officer, the levy being wrongful, they will be regarded as joint wrong-doers, though they may have acted separately, without concert, and each was endeavoring to secure a priority of lien. The wrong in such cases consists in the levy and seizure of the property, which was done by" the same officer, at the same time, for each and all of the attaching creditors. They contemporaneously committed the wrong, by a common agent.—Sparkman v. Swift, 81 Ala. 233. Where there is but one taking of personal property by an — 409 — officer, upon separate writs of attachment, sued out by two creditors against the same debtor, the talcing will be deemed the joint act of the creditors, in an action of trespass brought against them and the officer for the talcing.—1 Waterman on Trespass, § 434;—Wehle v. Butler, 42 How. Pr. Rep. 399; Ellis v. Howard, 2 Vt. 334. The authorities are not in harmony, as to whether trespass could be maintained for a second levy, the property being in gremio legisn by virtue of the first levy. In the case of Ginsberg v. Pohl, 35 Md. 505, it was declared that trespass could not be maintained for a second levy, the property being in gremio legis. See, also, Scarborough v. Malone, 67 Ala. 572; Cordaman v. Malone, 63 Ala. 558; McLellan v. Lipscomb, 56 Ala. 256; 81 Ala. supra. The two suits could not be properly maintained against the sheriff for the levy, though made in the interest of separate creditors, and the plea in abatement to the second suit was properly filed.—Foster v. Napier, 73 Ala. 595; 3 Brick. Dig. p. 10, §§ 41, 44. If there had been any conflict in the evidence, or objection by the plaintiff to the action of the court in passing upon the sufficiency of facts introduced in support of the plea, without the intervention of a jury, it would have been proper to have referred the question of fact to a jury. 6 Ala. 873, 171; Day v. Huckabee, 60 Ala. 425. An important question in this case is, whether John F. Harmon was a creditor of Harmon Bros., within the meaning of the law which permits an insolvent debtor to prefer and pay one or more of his creditors by an absolute sale and conveyance of property. To properly understand the relation of the parties, the following facts, as they appear in the record, are here stated: Harmon Bros, applied to Lehman, Durr & Co. for a loan of $5,000, which was refused to them. In order to effect the loan, John F. Harmon executed his promissory note to Lehman, Durr & Go. for the amount, and secured the same by a mortgage duly executed upon his property. The individual members of the firm of Harmon Bros, signed the note with John F. Harmon. The Iban was placed to the credit of John F. Harmon by Lehman, Durr & Go., and he then gave his check to'Harmon Bros, for the money; and upon this check the money was placed to their credit on the books of Lehman, Durr & Co. The consideration of the conveyance attacked as fraudulent was, that John F. Harmon released and indemnified Harmon Bros, from all liability for this debt, and his assumption to pay and satisfy Lehman, Durr & Co. whatever might be due on the loan, expressed in the conveyance to be $5,000. In the case of Proskauer v. People's Savings Bank, 77 Ala. — 410 — 261, it was held: “The mere fact of having become surety on an antecedent bond is not a valuable consideration, sufficient to sustain an absolute conveyance against the creditors of the grantor, the surety incurring no new,, additional, or contemporaneous liability; and an absolute conveyance by an embarrassed debtor, secretly intended to operate as indemnity against an antecedent liability on the administration bond, reserves a benefit or use to the grantor, and is fraudulent as to existing creditors.” Here, the conveyance was held invalid as against creditors, because there was no “new, additional, or contemporaneous liability;” and for the further reason, that the conveyance, absolute in terms, was intended as an indemnity, and reserved a secret interest to the grantor. In the case of Pennington v. Woodall, 17 Ala. 687, it was said: “Surely, if a surety finds his principal in failing circumstances, he may seek indemnity; and if he can get it by assuming the debt, or even by assuming other debts, it is perfectly fair and lawful for him to do so, so that it is done honestly, and without intention to defraud any one.” Here, the deed of trust was executed upon a contemporaneous assumption of a debt of the principal by the surety; and it was held sufficient, in the absence of actual fraud. A note executed by a principal to his surety, in consideration that the surety assumes to pay the debt of his principal, is based upon a valuable and sufficient consideration. An attachment sued out upon such a note, and levied, creates a valid and prior lien from the date of the levy against existing creditors. A conveyance oí property in payment of such a debt, by an insolvent debtor to such creditor, .there being no other cause of objection, will be upheld as a valid conveyance. These propositions are abundantly sustained by the following authorities: McWhorter v. Wright, 5 Ga. 555; Marshall v. Hutchinson, 5 B. Mon. 305; Roosevelt v. Marks, 6 Johns. Ch. 283; Little v. Little, 13 Pick. 426; Gladwin v. Garrison, 13 Cal. 332; 15 Mass. 69; 11 N. H. 390. The case of Mobile Savings Bank v. McDonnell, 89 Ala. 441, may be cited as an authority which goes far to support the same principle. We hold, that John E. Harmon was a creditor of Harmon Bros., within the meaning of the law, and though insolvent debtors, they could prefer him over other creditors by a sale of property, subject to the conditions and restrictions applicable in such cases. It has been uniformly held, since the case of Hodges v. Coleman, that an insolvent debtor may sell the whole or a part of his property in payment of an antecedent debt, and the sale will be upheld, if the debt be Iona fide, its amount not mate — 411 — rially less than the reasonable value of the property, and no use or benefit secured or reserved to the debtor. The effect of the sale on other creditors, and the intent of the parties,, are not material inquiries.—Knowles v. Street, 87 Ala. 360. The use and benefit here referred to is that beyond what the law, without such agreement, would secure to him.—McDowell v. Steele, 87 Ala. 497. If, by the agreement, the failing-debtor secured to himself a paying employment, which, but for the sale and agreement, he would not have had, this was a benefit reserved, which renders the transaction fraudulent. Stephens v. Regenstein, 89 Ala. 561. On the trial, the evidence disclosed that the debt due Lehman, Durr & Go., assumed by John F. Harmon, without interest, was $5,000, and with interest to date of trial was over $6,200. The sale by Harmon Bros, included goods, fixtures, and all notes and accounts; and-the entire value of the same, according to the evidence, did not exceed $4,500. The evidence showed that John F. Harmon was indebted to Harmon Bros, in an amount exceeding fifteen hundred dollars, for advances and supplies during the year. There was evidence, also, to show that at the time, and prior to the formation of the partnership of Harmon Bros., an individual member of the firm was indebted to John F. Harmon in the sum of thirteen hundred dollars. The bill of exceptions also states : “The evidence further showed, that all the books, notes and accounts of Harmon Bros., which said notes and accounts did not exceed six hundred dollars, had been delivered to John F. Harmon at the time of the sale.” This statement is not controverted. It would, therefore, seem that the debt due Harmon Bros, from John F. Harmon was not included, and did not pass by the sale and conveyance. It was claimed by John F. Harmon that the debt due from him was credited by virtue of an agreement to that effect, with the debt of the individual member of the firm. There was some conflict as to when this agreement was made, and whether it was made with the firm, or with the individual partner who owed the debt to John F. Harmon. The law defining the conditions and restrictions under -which an insolvent debtor may prefer one or more creditors, ought not to be relaxed, or further extended. If the insolvent debtor has a cross-claim against such creditor, the amount of such cross-claim should be deducted from his debt, and only the balance left be considered the proper amount due the creditor; or, if the surety assumes to pay the debt of an insolvent principal, his own indebtedness to his principal should be deducted. Any other rule would tend to hinder, delay and defraud the creditors of the insolvent debtor, and render the transaction fraudulent as against existing creditors. — 412 — If, however, when Harmon Bros, began business, and before the debts of the attaching creditors were contracted, it was agreed between Harmon Bros, and J ohn F. Harmon, that the purchases made by J ohn F. Harmon should be paid for by the individual debt of one of the partners, and the goods were purchased with this understanding, this fact would relieve the transaction from the imputation of fraud. Charges 1, 3 and 6 ignore the evidence tending to show that such agreement was made with the firm, and for this reason ought not to have been given. Charge 10 observes the distinction when such a contract was made with the debtor member of the firm, and not with the firm; and under this view of it, the charge asserts a correct proposition of law. The evidence shows the debt for $716 due Lehman, Durr & Co. had been assumed by Harmon Bros, as a partnership debt, and paid, so far as the evidence discloses, early in the Spring of 1886, and long before the debts of the attaching creditors were contracted. Charge No. 2 ought not to have been given. Charges No. 4 and 7 were abstract. There was no evidence to support the former, and the principle invoked does not apply. Charge 7 was entirely irrelevant to any issue before the jury. The consideration expressed in the conveyance was five thousand dollars — the obligation Avas to pay whatever was found due. Although John F. Harmon may have believed on a settlement that not more than fifteen hundred dollars was due, the real amount was unknown and uncertain, and he agreed to pay whatever might be found to be due. The fact that he may have supposed a less amount was due than that expressed, and by the agreement he was to retain the excess in value, would not render the conveyance void. A court of equity might reach and subject this excess. Charge 5 ought to have been refused. Charge 8 is in conflict with the principles of law declared in this opinion, and should not have been given. Charge 9 should not have been given. An agreement to pay the excess, if any, to the creditors of Harmon Bros., would not render the sale void. There was no evidence of any such agreement, and the charge was abstract. The conveyance was a fact, and not a “simulation.” If the meaning intended was that the property was not to pass by the conveyance, it might have been correct. As written, charge A is bad, and should have been refused. It matters not what the intention or device of the parties was. The question is, did the property pass by the conveyance, and was the effect to pay the debt? Charge B was bad, and should have been refused. — 413 — Charges C, D, E, F and G were properly given. In considering a transaction between parent and child, a jury should consider and make due allowance for the relationship; but a charge which requires a jury to determine that the proof, in the case before them, must be stronger than a hypothesized case, is an invasion of the province of a jury. Charge H should have been refused.—60 Ala. 571; McAlpine v. State, 47 Ala. 83. Charges I and J are argumentative. We do not understand the purport of charge K as it is written. Charges should be “clear, explicit, and of easy interpretation.”—Hughes v. Anderson, 68 Ala. 280; 74 Ala. 37. Some of the charges have been commented on which would not work a reversal, and have been referred to that their faults may be corrected on another trial. A reversal will not result merely because a charge is abstract, or misleading, when it asserts a correct proposition of law, unless it affirmatively appears that such charge injuriously influenced the jury. Reversed and remanded.