Morrow v. Campbell

BRICKELL, C. J. This was an action in which the appellant was plaintiff, and the appellee, Campbell and the sureties on his official bond, as sheriff of Marshall county, were defendants. The breach of the official bond alleged in the complaint, is the seizure and taking away from tbe possession of the plaintiff a stock of liquors, the property of plaintiff, under certain writs of attachment issuing against his son, W. H. Morrow. The plaintiff claimed to have purchased the liquors from his son in payment of an antecedent indebtedness, prior to the levy - of the attachments, and the validity of the sale was the real issue to be determined. The son was engaged in the liquor business during the year 1894, and also conducted a general mercantile business in the [338] same town, and plaintiff was clerking for Mm in the saloon under an agreement, made at the beginning of the year, by which he ivas to receive as compensation one-haif of the profits of the saloon business. On December 29, 1894, two days before the issue and levy of the attachments, the former, being at the time insolvent, sold to appellant the stock of liquors, which were worth about $300, the alleged consideration of the sale being the absolute payment of an indebtedness of like amount, $100 of which was claimed to be due for board for the preceding .year, and $200 for money loaned a few days before the sale, a part of which was money which the plaintiff had from time to time during the year taken out of the business as his share of the profits. Tt is settled law in this State that a debtor, although insolvent or in failing circumstances, may sell a part or the whole of his property to one of his creditors in payment of an antecedent debt, and such sale will be upheld, on an attack by other creditors, if the debt wasbona fide, in amount not materially less than the fair and reasonable value of the property so sold, and no use or benefit, other than the liquidation of the debt, was reserved to the debtor. When such sale is attacked the only material inquiries are, the bona fides of the debt, the sufficiency of the consideration, to be measured by the value of the property, and the reservation of a benefit to the debtor. If the first of these inquiries be found affirmatively, and the last negatively, the title thus-acquired by the purchaser is valid, unimpeachable by the creditors of the vendor. The fraudulent intent of one or both the parties to the transaction will not vitiate it, and the inquiry into their intent and motives-is, therefore, immaterial. — Hodges v. Coleman, 76 Ala. 119; Meyer & Co. v. Sulzbacher, Ib. 120; Knowles v. Street, 87 Ala. 357; Pollock v. Meyer, 96 Ala. 172. Such has been the uniform ruling of this court since the case-of Hodges v. Coleman, supra. Nor is such a transaction annulled and rendered fraudulent by the act of 1S92-93, p. 1046, amendatory of section 1737 of the Code-of 1886, (Code of 1896, §2158), providing that every conveyance by a debtor of substantially all his property in payment of a prior debt, by which a preference or-priority of payment is given to one or more creditors,. [339] shall he and ennre to the benefit of all the creditors of the grantor equally. On the contrary, a court of equity, as’ well as a court of- law, will uphold the sale, and treat the title as divested out of the vendor and vested in the vendee, but, at the election of creditors, a court of equity will impress upon the property a trust to be executed for the equal benefit of all. the creditors. Such trust character is not cognizable and enforceable in a court of law, and in neither court can the fraudulent motives of the parties be considered. — Gay, Hardie & Co. v. Strickland, 112 Ala. 567. It results, from the application of these rules, that when such sale is attacked, evidence, the only tendency of which is to show a fraudulent motive or intent on the part of the vendor or vendee, or both, is not pertinent to the issue involved. Such was the testimony, admitted against appellant’s objection, tending to show that a few days before appellant’s purchase, W. H. Morrow sold to 'his brother the stock of goods in his other store, and that the latter sale was fraudulent; and also the testimony to the effect that a year previously appellant, for the purpose of defrauding his creditors, had executed to W. H. Morrow a mortgage covering all his property to secure a simulated indebtedness. The court below erred in overruling the several objections to the questions eliciting this testimony and in refusing to exclude it. It was error also to admit the testimony of the witness, Simpson, that on the morning of the day appellant purchased the goods witness called on W. H. Morrow and requested payment of a debt, and that the latter told him he had no money, and refused to give him a note, although said Morrow had previously testified that on that day he had $1,000 in money. If offered to contradict and impeach W. H. Morrow, it was inadmissible, since it was entirely immaterial whether he had any money or not, and only such statements of a witness as are material can be made the basis for proof of contradictory statements. In an action attacking a sale made by an insolvent debtor in payment of an indebtedness, the purchaser having offered evidence tending to show a bona fide indebtedness, not materially less than the reasonable value of the property, the burden is then shifted to the [340] creditor to prove that by the transaction a benefit was reserved to the debtor. There is no evidence in the record the tendency of, of just inference from, which is that such benefit was reserved to W. H. Morrow in the transaction in controversy. Charges 1 and 2 requested by appellant should, therefore, have been given. Charge 1 given at the request of appellee, was erroneous in that it permitted the jury to consider the testimony which, as shown above, was irrelevant, namely, the execution of the mortgage by appellant a year previously. There was no evidence from which it could have been fairly inferred, that there was an express, or implied, agreement betweeen W. H. Morrow and appellant that on some future settlement as to the saloon, business any balance found to be due to either would be adjusted, and for this reason charge 2, given for appellee, was erroneous. The like criticism applies to charge 3, -which, in addition, is so involved and confused as to be meaningless, or necessarily misleading. The evidence does not justify the hypothesis of facts upon which charge 4 is predicated, namely, that appellant “took about $200 of the proceeds of sale of goods in said saloon and turned it over to said W. H. Morrow.” The only testimony on this subject was that from time to time during the year' 1894, appellant' “took out his half of the profits and turned the balance over to W. H. Morrow,” and part of the $200 loan was of money thus acquired. It was not incumbent on appellant, in order to prove the bona fides of the debt the payment of Avhich constituted the consideration of the sale, to enter into the details of the business done by the saloon, and show to the reasonable satisfaction of the jury that profits had in fact accrued from the business during the operation of the agreement under which he had been employed. Charge 5 should, therefore, have been refused. Charge 7 Avas properly given, since if there was no agreement, express or implied, on the part of W. H. Morrow to pay appellant for his board, then no indebtedness on this account Avas incurred. The kinship of the parties to a sale by an insolvent debtor to one of his creditors in payment of an indebtedness, does not raise any presumption of fraud, nor require any higher degree of proof of the bona fides of the transaction than [341] would be sufficient to reasonably satisfy tbe minds of. tbe jury if tbe relationship did not exist. — Teague, Barnett & Co. v. Lindsey, 106 Ala. 277; Harmon v. McRae, 91 Ala. 401. In civil causes the proper measure of proof is reasonable conviction or satisfaction of mind, and a charge which requires “clear and convincing” proof of a fact, exacts too high degree of proof. — Wilcox v. Henderson, 64 Ala. 535. Charge 6 was, therefore, erroneous and should have been refused. Reversed and remanded.