Anderton v. Hiter

• Decision Date: 04 May 1939
• Docket Number: 6 Div. 477.
• Parties: ANDERTON v. HITER.
• Court: Alabama Supreme Court

188 So. 904

238 Ala. 76

ANDERTON v. HITER.

6 Div. 477.

Supreme Court of Alabama

May 4, 1939

Rehearing Denied May 25, 1939.

Appeal from Circuit Court, Jefferson County; E.M. Creel, Judge.

Bill by Ethel Andrews Hiter against Henry L. Anderton, Elizabeth C Anderton, West Alabama Oil & Gas Company and F.M. Prince, to subject equitable estate of debtor to payment of the creditor's debt. From a decree overruling a demurrer to the bill, respondent Henry L. Anderton appeals.

Affirmed.

Victor H. Smith and H.L. Anderton, both of Birmingham, for appellant.

Horace C. Wilkinson, of Birmingham, for appellee.

THOMAS Justice.

The appeal challenges ruling on demurrer.

The decree on demurrer declared the aspects of the bill as amended to be the fixation of the amount of the indebtedness condemnation of certain properties or interests therein to the satisfaction of the judgment after alleged fraudulent conveyances have been set aside; and for discovery.

It is declared that a creditor without a lien may subject an equitable estate of the debtor to the payment of debts, under Section 7338, Code, if property is fraudulently transferred or attempted to be conveyed. Martin v. Carter, 90 Ala. 96, 7 So. 510; Weingarten v. Marcus, 121 Ala 187, 25 So. 852; Douglass Cotton Oil Co. v. Alabama Machinery & Supply Co., 205 Ala. 51, 87 So. 342; North Birmingham American Bank v. Realty Mortgage Co., 223 Ala. 30, 134 So. 796.

The bill is sought to be maintained under Section 7342 et seq., of the Code. In Zelnicker v. Brigham & Co., 74 Ala. 598, 602, Judge Stone said of the statute: "The present bill was filed by simple-contract creditors, under section 3886 of the Code of 1876, which enacts, that 'a creditor without a lien may file a bill in chancery, to subject to the payment of his debt any property which has been fraudulently transferred, or attempted to be fraudulently conveyed, by his debtor.' It is contended for appellants, defendants below, that this statute was intended to apply only to cases in which a discovery is sought from defendants; and inasmuch as the present bill is not so framed as to call for a discovery, it is without equity. The argument is, that because the three sections immediately preceding the one under discussion relate to bills of discovery, construing them in pari materia, it must be confined to the same subject. Perhaps, a sufficient answer to this is, that we have uniformly ruled otherwise. * * *."

In Rice et al. v. Eiseman Bros. & Co. et al., 122 Ala. 343, 25 So. 214, the bill was for discovery and alleged the existence of property concealed from creditors. The ruling was that said property can be discovered and subjected to the payment of debts only by the aid of a court of equity, and that the bill filed sufficiently averred a necessity for discovery though the nature and location of the property was not stated. Elliott v. Kyle, 176 Ala. 167, 57 So. 752; Hackney v. Yarbrough, 233 Ala. 365, 172 So. 107; Drennen v. Alabama Nat. Bank, 117 Ala. 320, 23 So. 71.

The bill was not multifarious in joinder of the several parties or interests therein sought to be subjected to payment of complainant's debts or in respect to the parties respondent. Jacobs v. Swift & Co., 230 Ala. 358, 161 So. 232; Lambert v. Anderson, 224 Ala. 110, 139 So. 287.

A voluntary conveyance of property by a husband to his wife, without a valuable consideration, is a constructive fraud as to all existing creditors. Harrison v. American Agricultural Chemical Co., 220 Ala. 695, 127 So. 513.

Appellant cites Little v. Sterne & Co., 125 Ala. 609, 27 So. 927, to the effect that a debtor's conveyance to his wife cannot be set aside for fraud by a creditor without averment of knowledge by the wife of husband's insolvency, or that she had knowledge of or participated in the fraudulent act or conveyance. The authority cited is not apt in that one alternative averment was that she was a purchaser for a valuable consideration, though the same was inadequate. In such circumstances, actual or constructive knowledge of the wife was necessary. In the instant case the averment is that the wife acquired the legal title from the husband or from a third person obligated to convey as he directs, without a valuable and sufficient consideration. In this case complainant relies on constructive fraud, and proof that the debt in question antedated the conveyance that is alleged to be voluntary and without consideration. Harrison v. American Agricultural Chemical Co., 220 Ala. 695, 127 So. 513; Buell v. Miller, 224 Ala. 566, 141 So. 223; Rogers v. Conaway, 226 Ala. 334, 147 So. 152; Williams v. Pool, 234 Ala. 242, 174 So. 789.

Anderton's interest in the stock of the West Alabama Oil and Gas Company is an equitable interest. The bill avers that he owns 6,664 shares of the capital stock of said company, but that the stock has never been actually issued to him; that the corporation has agreed to convey and that Anderton has agreed to accept a conveyance to certain described land in lieu of, or in exchange for said shares of stock and appellee avers that said transaction is about to be consummated; that it is the purpose and intention of said Anderton, when he acquires the title to the oil, gas and mineral rights in the property received in exchange for the stock, to convey the same to his wife, in an effort to put his interest in said property beyond the reach of appellee. The interest in this property being equitable may be subjected to the demand of the creditor. Appellee is not required to remain inactive until the transaction is consummated,--the legal title vested in the wife, before taking steps to subject respondent's interest in the stock or property taken in lieu thereof, to the payment of her debt.

The bill avers: "That the Respondent, Henry L. Anderton has no visible assets subject to legal process, or if he has any visible assets subject to legal process, they are wholly insufficient in value and amount to pay said notes,"...