Aycock v. Ft. Branch Mill. Co.

McCLELLAN, J. This bill’s single theory and purpose is to have a debtor’s assignment and transfer of substantially all of his property to a single creditor declared a general assignment and as such enforced for the benefit of all creditors of the debtor entitled to participate in the distribution of the fund thus subjected. It clearly appears that at the time Sims (the debtor) [328] made the assignment and transfer to Aycock (the creditor) Sims was insolvent. And it is equally clear that the assignment thus made was of substantially all of Sims’ property. It is insisted for appellant that since Aycock, by the terms of the agreement between Sims and Aycock, extended the time of payment of the unpaid, by assignment, part of Sims’ indebtedness to Aycock, a new consideration, of then present efficacy, was afforded the assignment. An extension of time of payment, by a creditor, of an existing indebtedness, may afford a consideration independent of the old indebtedness; but this is upon the theory of detriment suffered by the creditor and of advantage inuring thereby to the debtor. Where, as here, the debtor is insolvent, and under such circumstances assigns to the creditor substantially all of his property, and yet leaves unpaid the part of the indebtedness the time for payment of Avhich the creditor extends to a definite date 11 months after, there could not be present a detriment suffered by the creditor nor an advantage inuring the impotent debtor. Insolvency, once shown, is presumed to continue for a reasonable time. — 22 Am. & Eng. Enc. Law, p. 1239. If extensions under such circumstances were treated as affording a new, present consideration for assignments by insolvent debtors to their creditors, the statute against preferential dispositions of property by such debtors would be defeated of effect. Aycock was not a bona fide purchaser for value. The statute (Code, ■§ 4295) ex vi termini rendered the transfer of all his property by Sims to Aycock a general assignment, and it inured to the benefit of the complainant and all other creditors similarly entitled. —Smith v. McCadden, 138 Ala. 284, 36 South. 376. It was wholly immaterial whether Aycock knew of Sims’ [329] insolvency when the transfer was made, or of his indebtness to complainant or others at the time. Insolvency and an assignment of substantially all of the debtor’s property to a creditor or creditors, thereby working a preference, are the concomitant facts upon which the statute operates to characterize the act as a general assignment. The case of Randolph v. Webb, 116 Ala. 135, 22 South. 550, was unaffected by the statute (section 4295) as we now have it. The decree is affirmed. Affirmed. Dowdell, C. J., and Sayre and Somerville, JJ., concur.