Davenport & Harris Funeral Homes v. Kennedy

• Decision Date: 14 January 1943
• Docket Number: 6 Div. 964.
• Citation: 243 Ala. 613,11 So.2d 379
• Court: Alabama Supreme Court
• Parties: DAVENPORT & HARRIS FUNERAL HOMES v. KENNEDY.

11 So.2d 379

243 Ala. 613

DAVENPORT & HARRIS FUNERAL HOMES v. KENNEDY.

6 Div. 964.

Supreme Court of Alabama

January 14, 1943

Boutwell & Pointer, of Birmingham, for appellant.

DeGraffenried & McDuffie, of Tuscaloosa, for appellee.

FOSTER Justice.

The bill in this case was filed in equity by a judgment creditor of V.L. Harris and against appellant, a corporation, as sole respondent. Its theory is that undescribed assets of V.L Harris were made a part of the assets of defendant corporation organized a few weeks prior to the date of the judgment and were so placed for the purpose of attempting to defeat the claim of complainant; and that the property of V.L. Harris was fraudulently placed in said defendant corporation with the intent to defraud complainant, and that the incorporators, of whom V.L. Harris was one, had knowledge of the suit of complainant against V.L. Harris.

It is said to be largely patterned after that in Metcalf v Arnold, 110 Ala. 180, 20 So. 301, 55 Am.St.Rep. 24. Demurrer to the bill was overruled, and a final decree rendered for complainant. Respondent appeals and assigns the two decrees as error.

The first question presented goes to the sufficiency of the bill on demurrer.

The chief contention made by appellant in that connection is that the property sought to be subjected is not described and no discovery is sought.

The bill in that connection alleges that the assets of V.L Harris "were made a part of the assets of the (respondent) corporation which were possibly all its assets." There is no effort at a description of such assets. The prayer is to enforce a lien upon all the property of respondent without further description.

The remedy provided in section 893, Title 7, Code of 1940 derived from a statute enacted in 1844. It gives to a judgment creditor, when execution for money had been issued and not satisfied, a right to go into equity against such defendant (in the judgment) to compel a discovery of his property and decree such property to the satisfaction of the debt. This remedy has no field of operation except for a discovery: since the right to set aside a fraudulent conveyance or to subject equitable assets otherwise existed. Henderson v. Hall, 134 Ala. 455, 539, 32 So. 840, 63 L.R.A. 673.

Prior to the statute, it had long been held that a judgment creditor who had exhausted his legal remedies might go into equity to subject certain interests of the debtor which could not be reached on execution or other legal process, or had been fraudulently conveyed. "But in such case it was necessary that the allegations should be specific, and the bill should be relieved from the imputation of being speculative and vague. Bills thus restricted as to the scope of their inquiries, often fail to admit complete justice to be administered to the complainant. The complainant was not always sufficiently informed of the rights and interests of the defendant to enable him to state with exactness and precision what property the defendant had, in possession or action; or had parted with, that could be subjected to the judgment. To remedy this defect in the law, and to authorize the administration of justice through the medium of chancery, by a course of procedure more liberal than had been hitherto recognized, the statute in question was enacted." Brown v. Bates, 10 Ala. 432, 438; Martin v. Carter, 90 Ala. 96, 7 So. 510; (Those cases were criticised in Henderson v. Hall, 134 Ala. 455, 545, 32 So. 840, 63 L.R.A. 673, but not in respect to this point.) 27 Corpus Juris § 672, page 769.

Sections 897, 898, same Code, give the same remedy to a creditor without a lien or judgment (Zelnicker v. Bingham, 74 Ala. 598); and section 898, supra, includes also a judgment creditor with execution returned "no property found" as well as a simple creditor. Section 898, supra, stems from an Act of 1871, also declaring it to be a contempt if defendant shall fail to discover as ordered. Its effect in this respect was upheld in Ex parte John Hardy, 68 Ala. 303, 314. It is an enlargement to some extent upon section 893, supra, and provides more detail, as well as an inclusion of creditors without a judgment, and includes a discovery from others than the debtor, Hays v. McCarty, 239 Ala. 400, 195 So. 241. But it has no field of operation except in connection with a discovery. Hackney v. Yarbrough, 233 Ala. 365, 172 So. 107; Elliott v. Kyle, 176 Ala. 167, 57 So. 752; Pollak v. Billing, 131 Ala. 519, 32 So. 639; Anderton v. Hiter, 238 Ala. 76, 188 So. 904.

So that by sections 893 and 898, a judgment creditor may have a discovery by a bill which is not merely a fishing bill (Lawson v. Warren, 89 Ala. 584, 8 So. 141), and by sections 897 and 898 the same right is extended to a creditor without a judgment, for his remedy would be wholly inefficient without this statutory discovery, it is said. Sweetzer v. Buchannon, 94 Ala. 574, 10 So. 552; Drennen v. Alabama National Bank, 117 Ala. 320, 23 So. 71.

Since the enactment of these statutes when a bill is filed in equity by a creditor to subject to his debt property of the debtor, it should either seek a discovery with an allegation of the existence of property of the debtor, and that its nature and character or location and description are unknown and concealed from him, thereby pursuing the remedy provided in sections 893, 897 and 898, Code, supra (Hackney v. Yarbrough, supra; Henderson v. Hall, 134 Ala. 455, 537, 538, 539, 540, 544, 32 So. 840, 63 L.R.A. 673; Elliott v. Kyle, 176 Ala. 167(4), 172, 57 So. 752), or he may proceed in equity without a discovery, when the property, its nature, character, description and location are known to him, seeking the benefits of section 7, Title 20, Code of 1940, which are also available to this complainant without any of such statutes, since he is a judgment creditor with execution returned "no property found," (Cruise v. Sorrell, 181 Ala. 237, 238, 240, 61 So. 894; Hall & Farley v. Alabama T. & I. Co., 143 Ala. 464, 39 So. 285, 2 L.R.A., N.S., 130, 5 Ann.Cas. 363); but in pursuing the latter remedy without a discovery, as shown by the authorities supra, he must make precise allegation as to the character, description and location of the property sought to be subjected. See, also, Little v. Sterne, 125 Ala. 609(2), 27 So. 972.

In the case of Metcalf v. Arnold, supra, on which appellee relies, the transaction related to a stock of goods in a drug business in Montgomery (and it was so described). The demurrer did not go to the insufficiency of the description of the property, and that question was not considered by the court insofar as the opinion shows. But that authority supports the general theory of the bill in the instant case. See, also, Harris v. First National Bank, 227 Ala. 86, 149 So. 86.

The demurrer to the bill now under consideration on the ground of the insufficiency of the description of the property sought to be subjected,...