Brinson v. Edwards

WALKER, J. — -In the record proper no mention is made of any pleas filed by the defendants, nor is there anything in the judgment-entry to indicate upon what issues the case was tried. The bill of exceptions recites that “the defendants, in short by consent, plead the general issue and justification under a writ of attachment issued against D. B. Avenger.” It is true that it is not a function of the bill of exceptions to show the pleadings in a cause, and that, as a rule, when the pleas are not set out in the record proper, the presumption to be indulged on appeal is that the case was tried on the general issue, and that special pleas were not interposed. Pollak v. Searcy, 84 Ala. 259; Hatchett v. Molton, 76 410. In no event can a recital in the bill of exceptions be allowed to contradict the record, as to a matter which ought to appear in the record proper rather than in the bill of exceptions.— Courie v. Goodwin, 89 Ala. 569. If, however, the record proper is wholly silent as to what issues were presented by the defendant, but the bill of exceptions states that a certain special plea was filed, and the whole tenor of its recitals shows that the matters urged by both parties, and considered by the court without objection, were such as could have been properly presented only by the special plea mentioned, then it can not be said that the statement of the bill of exceptions that such plea was interposed is a contradiction of the record proper in this regard; and, in such case, it seems more reasonable to look to the showing made by the bill of exceptions, than to disregard it altogether and indalge an indisputable presumption that the only plea that was filed was one which did not present the question which, without objection of either party, was treated as the main matter of contention in the trial. In Petty v. Hill, 53 Ala. 641, this court declined to ignore a plea which appeared only in the bill of exceptions, though it was fully recognized that that was not the proper place for it. From the recital in the bill of exceptions in this case, of the evidence introduced by both the parties, from the part of the general charge of the court to which au exception was reserved, from the charge given at the request of the plaintiff, and from the charges requested by the defendant and refused, it clearly appears that the contest in the trial court was on the question of the validity, as against the defendants, who were attaching creditors of Avenger, of his sale of the stock [452] of goods to the plaintiff. Conceding that the question could have been raised only by a plea of justification under legal process, though the attaching creditors themselves were parties defendant, which was not the fact in the case of Daniel v. Hardwick, 88 Ala. 557; still we do not feel at liberty to indulge the presumption that such plea was not interposed, merely because the record proper is silent on the subject, when the bill of exceptions affirmatively states that there was such a plea, and makes such a showing of the proceedings oh the trial that a presumption of the non-existence of the plea would involve the imputation upon both the parties litigant and upon the trial court that they addressed themselves almost exclusively to questions not presented by the pleadings. In such circumstances, to avoid imputing error to the trial court, it' will be presumed that the issues upon which it is manifest that the case was tried, were duly presented by the pleadings.In the present case, we can not presume that the special plea of justification under legal process was not interposed, :and the rulings of the trial court upon the question of the validity of said sale will be reviewed. Those rulings appear in their proper place, in the bill of exceptions. So far as the pleadings are concerned, the bill of exceptions is looked to only for the purpose of ascertaining that the issue involved by the special plea in question was raised. Chandler v. Chandler, 87 Ala. 300. There was evidence tending to show that the stock of goods, valued by the parties at $1,231.54, was sold by Avenger at ■that price, and that he was paid therefor by the discharge of •debts against him amounting to $830.54, and in the two notes of the purchaser for the balance. As only part of the consideration was the payment of antecedent debts, the validity of the sale as against other creditors is to be determined by the rules governing sales by debtors for a new consideration — Owens v. Hobbie, 82 Ala. 466. In such a case, though the purchaser pays a full price, yet if he is chargeable with notice that the seller is insolvent, or in failing circumstances, and that it is his purpose by the sale to put his property beyond reach, or otherwise to hinder, delay or defraud his creditors, then such sale is invalid as against other creditors. — Lehman v. Kelly, 68 Ala. 192. An insolvent debtor has the right to pay one or moie of his debts in preference to all others, though by so doing his remaining creditors are left empty-handed; but, in securing his own claim, the preferred creditor must not fraudulently aid the debtor in putting beyond the reach of other creditors property which [453] they have the right to reach and subject. The other creditors can not complain of such transaction, if it can not have ■effect to hinder, delay or defraud them as to some resource to which they are entitled as a matter of right for the payment of their, claims. The sale of his property by an insolvent debtor may be made the means of preferring not only the purchaser but other favored creditors. As such preferences are allowed, and the act itself is legal, the fact that the result is to leave other creditors unprovided for does not render the transaction assailable by them, for the appropriation of the property is such as the law permits. — Carter v. Coleman, 84 Ala. 256. In the case just cited, only a part of the consideration was an antecedent debt due to the purchaser. The seller received the balance in cash, to be used in paying other creditors, and it was so used. The sale was sustained against the attack of creditors who were not provided for. It would have been equally legitimate if such cash balance had been paid to the debtor, to be retained by him as exempt, if such sum, together with his remaining property, did not amount to more than he could claim in that mode. To the extent that exemptions are allowed, the debtor has as much right to prevent his creditors reaching property that may be so claimed, as he has to dispose of any of his property for the payment of preferred debts. A provision for the authorized exemptions. is as lawful as a provision for the preferential payment of debts. A creditor has no right to complain of the appropriation of the debtor’s property to either of these purposes, for in neither case is he unlawfully deprived of an opportunity of reaching property which he has the right to subject. If Avenger, as a resident of this State, was entitled to exemptions of personal property ; if the debts which formed part of the consideration for the sale of the stock of goods were justly due; if the two notes made payable to Avenger, together with his remaining personal property, amounted to no more than $1,000 in value, and the sale of the stock of goods was for a fair and adequate consideration , then the whole effect of the transaction was to make an authorized preference among the seller’s creditors, and secure to him a sum of money which was not liable to his other debts. It is plain that Avenger had the right to pay the preferred debts with their equivalent in value from the stock of goods, and if what was left, together with his other personal property, did not amount to more than $1,000 in value, and he was a resident of the State, he could have disposed of such remainder of the stock just as he pleased; for, [454] if the debtor’s property does not exceed in value the amount exempted, the exemption privilege is attached to it by operation of the statute without any act of selection by him, and creditors can not be prejudiced by any disposition of property which is not liable to their demands., — Nance v. Nance, 84 Ala. 375; Alley v. Daniel, 75 Ala. 403 ; Myers v. Conway, 90 Ala. 109. By selling the whole stock in bulk, and taking notes or cash for the difference between its estimated value and the debts paid, no greater benefit was reserved to the debtor, nor was the position of his creditors changed for the worse. Whether the property that could be claimed as exempt was disposed of in the one way or the other, the result would not be to secure to the debtor anything more than he was entitled to retain, or to put out of the way of other creditors any property which they had the right to have applied to the satisfaction of their claims. No more in the one case than in the other does the debtor acquire any benefit beyond what the law would have secured to him. — McDowell v. Steele, 87 Ala. 593. If Avenger was entitled to exemptions, it could make no possible difference to his creditors whether the property retained by him as exempt consisted of a part of a stock of goods or of the equivalent in value thereof in notes or in cash. There is nothing for creditors to complain of, in a transaction which can not have effect to work any detriment to their rights in reference to the property of the debtor. The charges requested by the defendants are framed upon the theory, that though the excess in value of the stock of goods above the sum of the debts paid therewith, together with Avenger’s other property, did not amount to more than he could claim as exempt, yet, if notes payable in the future were taken by the debtor for such excess, the law would pronounce the transaction fraudulent as against other creditors. Our conclusion is, that such a mere change in form of a part of the debtor’s exempt property could not vitiate the transaction, as the change involves no prejudice to the rights of creditors ; and that the charges were properly refused. Avenger was not entitled to exemptions, unless he was a resident of this State. — Code 1885, §§ 2507, 2511. The position assumed by the plaintiff was, that the transaction by which he acquired the stock of goods could not be vitiated by the fact that the notes were given for the balance of the purchase-price, and that they were made payable in the future, because such notes became part of the exemptions allowed by the law to the debtor. To the maintenance of this position pi’oof of the debtor’s residence in this State was essential. [455] In the bill of sale Avenger is described as “of the county of Lowndes and State of Alabamabut the record discloses no direct evidence upon the question of his residence, and it is not shown that the fact of his residence in Alabama was conceded. In the absence of an admission as to a material fact, unless it appears that such fact was clearly shown, and that it was not contested, the evidence in regard thereto, though clear and without conflict, must be submitted to the jury, and the trial court in charging the jury has no right to assume the existence of such fact as established. — 2 Brick. Dig., p. 336, §8; 3 Ib. p. 114, §§ 118 et seq. . While it does not appear from the bill of exceptions that there was any dispute in regard to this material fact, yet it is not shown that the existence thereof was conceded, or that the defendant in any way waived the right to take advantage of what was perhaps an inadvertence on the part of the plaintiff in failing to introduce proof on the subject. In the absence of any such showing, the court could not assume that such fact was admitted. Carter v. Chambers, 79 Ala. 223. The part of the general charge to which exception was reserved was faulty in failing to submit to the jury the question of the debtor’s residence. The transaction there hypothesized could not, as a matter of law, be pronounced valid, unless the fact existed which would entitle the debtor to claim exemptions. If that fact did not exist, and the balance of the purchase-price for the property sold was paid to the debtor in cash, such circumstances could have been looked to by the jury in determining the bonafides of the transaction (Levy v. Williams, 79 Ala. 171); and if, as in the present case, such balance was secured to be paid to the debtor in the future, there was involved such a hindering and obstruction of the other creditors as to render the transaction voidable by them. — McDowell v. Steele, supra. In the instruction under consideration, the fact of Avenger’s residence in this State should have been hypothesized. The failure to do so renders the charge erroneous. For this error the judgment must be reversed. Reversed and remanded.