Anniston Carriage Works v. Ward

• Decision Date: 09 January 1894
• Citation: 14 So. 417,101 Ala. 670
• Parties: ANNISTON CARRIAGE WORKS ET AL. v. WARD ET AL.
• Court: Alabama Supreme Court

14 So. 417

101 Ala. 670

ANNISTON CARRIAGE WORKS ET AL. v. WARD ET AL.

Supreme Court of Alabama

January 9, 1894

Appeal from city court of Anniston.

Bill by R. D. Ward & Co. and others against the Anniston Carriage Works and the Anniston Loan & Trust Company to have a mortgage declared an assignment for the benefit of creditors. From a decree for complainants, defendants appeal. Affirmed.

R. D Ward & Co., and other creditors of the Anniston Carriage Works, on the 28th day of January, 1892, filed their bill in the city court of Anniston seeking to have a mortgage executed by the Anniston Carriage Works to the Anniston Loan & Trust Company declared a general assignment for the benefit of all creditors of said Anniston Carriage Works. It is alleged that on the 2d day of November, 1891, the Anniston Carriage Works executed a mortgage conveying to the Anniston Loan & Trust Company substantially all of its property, to secure a pre-existing debt. The mortgage was due 60 days after date, and matured on the 1st day of January, 1892. The prayer of the bill is that the mortgage be declared a general assignment for the benefit of all the creditors, and that the Anniston Loan & Trust Company be held the account to the creditors for the value of the stock of buggies, carriages and merchandise, alleged to be of value $11,000, for the benefit of the general creditors. The respondents, the Anniston Carriage Works and the Anniston Loan & Trust Company, answer the bill, and allege that the Anniston Carriage Works was indebted to the Anniston Loan & Trust Company in the sum of about $5,000 for advances made by said Anniston Loan & Trust Company, which was doing a banking business, in paying drafts drawn by said Anniston Carriage Works, and over-drafts made by the latter, the aggregate of which amounted to over $5,000, and for which it negotiated a loan with said bank, due 60 days after date, and executed a mortgage to secure the same upon its stock of buggies carriages, and other merchandise, consisting, substantially of all its property, prior to the maturity of this debt, and on the 3d day of December, 1891, the Anniston Carriage Works paid the debt in full, and the mortgage was satisfied, and the Anniston Loan & Trust Company, which had temporarily assumed possession of the mortgaged property, restored the same to the mortgagor, and the mortgage was canceled and satisfied. Afterwards, and before the filing of the bill in this cause, the Anniston Carriage Works executed a new mortgage upon the same property to one William Noble contemporaneously with the making of said mortgage, and subsequently made a bill of sale of William Noble in extinguishment of this mortgage. Both respondents pleaded that William Noble is a proper and necessary party respondent to the bill, and the Anniston Carriage Works filed a separate plea setting up the invalidity of the mortgage because it had not been authorized by a stockholders' meeting, nor had 30 days' notice of any meeting for that purpose been given to the stockholders, or any of them. Each of the respondents file demurrers for the nonjoinder of other creditors of the Anniston Carriage Works as co-complainants. The court below overruled the demurrer and plea, and entered a decree granting the relief prayed for by complainants.

J. J. Willett and Knox, Bowie & Pelham, for appellants.

Cassady, Blackwell & Keith, for appellees.

COLEMAN J.

On or about the 2d day of November, 1891, the Anniston Carriage Works, a body corporate, being then indebted to complainants the appellees, and other creditors, to secure a past indebtedness due and owing to the Anniston Loan & Trust Company, also a body corporate, executed a mortgage upon substantially all its property and effects. Complainants, creditors of the Anniston Carriage Works, filed the present bill, seeking to have the mortgage conveyance to the loan and trust company declared a general assignment for the benefit of all its creditors. The mortgage to the Anniston Loan & Trust Company was executed in the name of "Anniston Carriage Works, by Randolph St. John, Secretary and Treasurer." The evidence is sufficiently satisfactory that this mortgage was executed by authority granted by the board of directors. It was certainly...