Orman v. English & Scottish Mercantile Investment Trust, Ltd.

PARDEE, Circuit Judge (after stating the facts). Under the laws of Alabama, the attachment creditor who perfects his lien by the recovery of judgment is a bona fide creditor from the inception of the lien. Bank v. Pinckard, 87 Ala. 577, 6 South. 364. And the lien, by force of the statute, relates back to, and has priority from, the levy of the attachment. Hardaway v. Semmes, 38 Ala. 657; Hurt v.- Redd, 64 Ala. 85; Abels v. Insurance Co., 92 Ala. 382, 9 South. 428. The levy of Orman’s attachment, the lien of which was subsequently perfected by the recovery of judgment, was prior to the granting and recording of the deed of trust of March 5, 1892. Therefore, Orman has a prior lien on the property attached to that claim by the appellee under said deed of trust. The sworn bill filed by appellee in the court below charges that at the date of the levy of the attachment, and prior thereto, Orman had full notice of the execution and delivery of the first deed of trust by the North Alabama Development Company to the appellee. This renders it necessary to consider the character and effect of the first deed of trust, and the circumstances existing at its date. Said deed of trust was executed December 22, 1890, after the creation of the obligation in favor of Orman, and has never been í’ecorded. The second clause of the deed grants and conveys to the trustees all lands, mines, buildings, works, and hereditaments, and other real estate of the company, wheresoever situated, and also all the undertaking and business of the granting company, and all other assets, effects, and personal property of the company, other than personal chattels in England, and the benefit of all contracts and agreements, and all options, privileges, and rights, subject to the provisions of clause 15, which are as follows: “The conveyance and assignment purporting to be made by clause 2 are intended to be by way of floating- security, only, and not to prevent-or hinder any sale,, exchange, lease, or other dealing by the company, in the course of its business, of or with any part of its property, until either the trustees or trustee shall make entry as aforesaid.” In short, the deed of trust conveys all .the property of the North Alabama Development Company in this country, real and personal, in trust to secure debts .thereafter to be contracted; leaving the grantor to hold, retain, sell, transfer, and exchange the same at will. The appellants contend that this instrument is void against creditors existing at the date of its execution, because it is a conveyance which, leaving the grantor in full possession and management of his property, and with a material interest therein, necessarily hinders and delays creditors. We agree with this construction of the deed in question. See Code Ala. 1886, § 1735; Ruse v. Bromberg, 88 Ala. 628, 7 South. 384; Renfro v. Goetter, 78 Ala. 314, 315; Bank v. Brewer, 71 Ala. 574; Reynolds v. Welch, 47 Ala. 203. The first deed of trust being void as against Orman, an existing creditor at the time it was executed, it was immaterial whether Orman had notice thereof, or not, prior to the levy of his attachment. As Or-man’s lien under his attachment is prior in rank to the lien granted the appellee under the second deed of trust, the injunction issued by [41] tlie court below, iiostponing- Orman’s lien, should not have been issued. Tlie order of the circuit court, of the 11th day of November, 1893, granting an injunction restraining the appellant and the marshal of the district from making a sale of the property mentioned and described in the bill, and from interfering with or disposing of said property until the further order of the court, should he reversed, and the cause remanded to the circuit court, with instructions to further proceed in the same according to the views herein expressed, and it is so ordered