National Bank of the Republic v. Dickinson

BRICKELL, C. J. The original bill was filed by the appellant, and seeks the vacation of a sale of goods and a transfer of choses in action, made by an insolvent debtor for the payment of pre-existing debts. The principles of law applicable to the case are well definéd, and are not now matter of controversy. A failing or insolvent debtor, unrestrained by statute, may prefer and pay one or more creditors, though the effect of the preference is the hindrance and delay of all other creditors, or the deprivation of all possibility of their payment from the present assets of the debtor ; and it maybe, the result was contemplated and known by the debtor giving, and the creditor accepting the preference. When, as in the present case, the preference is created by a sale, as against existing creditors, to sup por tit, when assailed, the parties claiming the preference, must prove its consideration — that the debt preferred in payment is a just debt, of legal obligation — -'that the property taken in payment does not in value materially exceed the amount of the debt. ' These facts being shown, the sale will be supported, unless it is shown that there was a secret trust for the benefit of the debtor, or the reservation of some benefit to him — a benefit not the mere incident of the sale itself. The decisions affirming these principles a,re [271] numerous, are well known, and no reference to them is necessary. ' The consideration of the sale in part, was the promise of the purchasers to pay the debts of certain creditors of the vendor. The promise was m-ide without the knowledge of these creditors, and of consequence, without acceptance by them. It was binding on the purchasers ; of their ability to perform it there was no doubt, and pro tanto, it formed a valuable consideration supporting the sale. — McCord v. Tennille, 81 Ala. 168 ; Merchant’s & Mechanics’ Bank v. Coleman, ib. 170. There was immediate payment of the debts, extinguishing the liability of the vendor, and all the requirements of the law as fully met, as if the debts had been owing the purchasers, and satisfied eo instantI the sale. Security of the payment for the entire term of the rent of the storehouse, in which the goods sold were, and in which the vendor was carrying on business, is not a fact casting any just suspicion on the fairness of the sale. The renting was for a term of one year, a large part of which was unexpired. The landlord had a lien on the goods for the payment of the rent superior to all other lions, except those for the payment of the taxes, which the sale gave him the right to enforce by attachment. (Code, § 3069-70.) The security of the payment of the debt, avoiding the probability of the issue of an attachment and its attendant costs, could not by possibility result in injury 1o the unsecured or unpreferred creditors. If it had been shown, that the unexpired term was of greater value than the rent, a different question would be presented. Carter and Black had been employed by the vendor as clerks for a particular time, at stipulated wages, the term not having expired. The contract was entire, creating a liability on the vendor for the stipulated wages. The vendor could not of his own volition, rescind or modify the contract — he could not by creating a necessity in which their services would not be of the value or use he may have contemplated, convert it into a contract for a shorter term, lessening their wages. These were just debts, payment of which the vendor could rightfully prefer. The purchase of the goods cannot properly be said to be without the scope of the partnership of Long & Rhodes. Such a purchase is oi*dinarily within the [272] scope of all partnerships formed for and pursuing the busines of buying and selling merchandise. Haying the power to purchase, the partnership was not limited . to any particular mode of paying the price — whatever mode was in accordance with the usages of trade could be adopted, binding, the partnership in its entity, though the transaction was conducted by one partner only. The debt of the vendor to his wife is clearly proved ; indeed we do not find in the argument of counsel, any disputation of ids existence and validity. The husband could prefer her in payment — he was under no duty to leave her unpaid, that other creditors, to whom he did not owe duties corresponding to the duties of the relationship, might be paid. We have examined the evidence, and if we concede there are badges of fraud, circumstances of suspicion attending the transaction, these are of no importance in the presence of clear evidence of the existence of the preferred debts, that the)?- were a fair equivalent for the goods and choses in action, which were sold and transferred, and that the object and purpose of the sale and transfer, an object and purpose which have been accomplished, was the payment of the debts. Each case of this character is dependent largely on its own facts and circumstances — no' two of them are twin brothers ; and a discussion of the facts of one, can afford but little aid in determining another, and can but seldom form a precedent of value. We abstain from any further reference to the evidence, and simply announce our concurrence in the conclusions of the chancellor. Let the decree be affirmed.