Allen v. Pierce

• Citation: 163 Ala. 612,50 So. 924
• Parties: ALLEN v. PIERCE.
• Decision Date: 14 December 1909
• Court: Supreme Court of Alabama

50 So. 924

163 Ala. 612

ALLEN v. PIERCE.

Supreme Court of Alabama

December 14, 1909

Appeal from Chancery Court, Montgomery County; L. D. Gardner Chancellor.

Bill by C. E. Pierce against Eliza B. Allen to set aside a fraudulent conveyance. Judgment overruling demurrers to the bill. Respondent appeals. Affirmed.

The bill alleges, in substance: That during the years 1903 and 1904 Charles A. Allen was possessed of considerable property and was conducting several kinds of businesses in the city of Montgomery, which required the use of considerable money that the business was done under the firm name of Allen &amp Leak, but that Allen was the head of the firm and the only one having any property or credit, and that Allen used his credit for the conduct of his business and contracted large debts, up until about the month of May, 1904, but that during the whole period he was so conducting his business and had in view and contemplation its continuance; that the business was one which exposed him to great risks financially, from the fluctuations of the market value of the articles dealt in by him and his firm. (2) That during said period Allen was continually in debt, and that the proceeds of new debts contracted and new credits extended were used to take up the older debts, so that his indebtedness was continuing as in a running account, although it might be with different persons and that during said years of 1903 and 1904 Allen, by himself or by his firm, carried on a continuous running account with the Union Bank & Trust Company, a banking corporation in the city of Montgomery, debits and credits being entered in the way of a continuous running account. Loans of money were made to him and his firm from time to time, and were renewed or extended, and new loans made; the old debts being taken up by deposit, or new loans. That in the month of May, 1904, while said business was conducted by Allen with said banking corporation, he obtained a loan of $3,000 on his promissory note, due March 1, 1905, payable to said banking company, the said money so loaned being used to pay the older debts of said Allen, and to secure the payment of said loans Allen conveyed to said banking company a tract of about 250 acres of land. But orator avers that the land did not belong to C A. Allen, but belonged to his wife, Eliza B. Allen, who was in the possession of the same, and enjoying the rents and profits thereof, and that the said debt was the individual debt of C. A. Allen, for which his wife was not responsible and that, although his wife joined in the conveyance with him to the said banking company, she did not thereby pass her right and title to the same to said trust company; and orator further avers that afterwards all the interest of said C. A. Allen and Eliza B. Allen in said 260 acres of land was sold to pay the decree in said cause in a suit in the city court of Montgomery in which the said C. A. Allen and Eliza B. Allen were parties. (3) That during said period of business of the said trust company and some time prior thereto, or during the month of May, 1904, the said C. A. Allen conceived and undertook a scheme of hindering, delaying, or defrauding his creditors, and particularly persons who might thereafter extend credit to him, including said trust company, and in pursuance of said scheme, by deed bearing date October, 1903, conveyed all the visible and tangible property to his wife, Eliza B. Allen, upon consideration of love and affection only. (A copy of the deed is attached as an exhibit.) It is further alleged that there was no ostensible change in the possession of said property upon the conveyance being made, and that the conveyance was withheld from registration until the 24th day of April, 1905, when it was hurriedly registered just in time to anticipate the rendition of judgments and liens thereof in suits pending against the said C. A. Allen; and orator avers that said deed was not executed and delivered on the day of its date, but long afterwards, and was antedated and held from delivery for the better carrying out of the fraudulent scheme of hindering, delaying, and defrauding creditors. (4) That the property so conveyed by Allen to his wife was at the date of delivery to her incumbered with liens for large amounts of money, and after such delivery became further incumbered for large amounts of money, the same being debts of the said C. A. Allen, and the amount of the incumbency being about $10,000; and, in order to protect said property conveyed in said deed for his said wife, Allen used $10,000 or other large sum of his own money to pay said liens and incumbrances, some of which payments were made after the creation of the said debt to the said trust company, and all of which amounted to and were intended to be acts to hinder, delay, and defraud creditors of said C. A. Allen, including said trust company. That said Eliza B. Allen, being a volunteer, had no right to claim that the estate of said C. A. Allen left in his hands should be used to clear such property of said incumbrances, and the use of the money of said C. A. Allen for that purpose amounted to a new fraudulent conveyance of the date of the said respective transaction. That by said conveyances to said Eliza B. Allen...