Barnes v. Bell

• Decision Date: 17 October 1935
• Docket Number: 6 Div. 556
• Citation: 163 So. 616,231 Ala. 84
• Parties: BARNES v. BELL et al.
• Court: Alabama Supreme Court

163 So. 616

231 Ala. 84

BARNES v. BELL et al.

6 Div. 556

Supreme Court of Alabama

October 17, 1935

Appeal from Circuit Court, Jefferson County; J. Russell McElroy Judge.

Suit in equity by E.J. Barnes and another against Clemmie L. Bell and others. From the decree, complainant Barnes (as surviving partner of C.A. Goodwin & Company) appeals.

Affirmed.

Oliver D. Street, of Birmingham, for appellant.

Cabaniss & Johnston and Paul Johnston, all of Birmingham, for appellee First Nat. Bank.

KNIGHT Justice.

The bill in this cause was filed as a general creditors' bill by E.J. Barnes and C.A. Goodwin, partners doing business under the name of C.A. Goodwin & Co., against Clemmie L Bell, widow of the late Dr. A.W. Bell, and others.

The major purposes of the bill were for the appointment of a receiver, discovery of assets, and to subject certain insurance issued upon the life of Dr. Bell to the payment of complainants' claims against the estate of said decedent and to the payment of claims of such other creditors of Dr. Bell who were willing to join in the litigation.

The basic equity of the bill was rested upon the averments substantially charging that Dr. Bell, prior to his death, and while insolvent, had procured a large amount of insurance, in sundry companies, some unknown to complainants, and greatly in excess of the amount authorized by the statute (section 8277 of the Code) and had caused his wife, Clemmie L. Bell, or his wife and his two daughters, to be named therein as beneficiaries. That while in some of the policies his wife and children were not named as beneficiaries, he had subsequently caused the original beneficiary, or beneficiaries, to be changed, so that the same would be payable to his wife, or to his wife and daughters. That being insolvent, and the annual premium paid on said policies being in excess of $1,000, this action was constructively fraudulent as against the creditors of Dr. Bell, as to all insurance in excess of the amount that an annual premium of $1,000 would purchase, on his life, as an ordinary life policy in a standard life insurance company.

It was also a theory of the bill that, inasmuch as the insurance policies were not payable to the estate of Dr. Bell, administrator could not sue thereon. That the policies not being payable to the estate, and not being in possession of the administrator, any effort on the part of the administrator to reach the same would entail numerous suits, possibly first suits in detinue to secure possession of the policies.

It was also averred that the American Traders National Bank, as administrator of the estate of Dr. Bell, had made "no claim against any part of the proceeds of said policies for the benefit of the estate of Dr. Bell, deceased." We find this averment in the bill notwithstanding the fact that it was filed less than a month after Dr. Bell's death, and less than ten days after the actual appointment of the administrator.

It appears that Dr. Bell died on July 6, 1929, as above stated, that the administrator was appointed on July 25, 1929, and the bill was filed on August 3, 1929. We call attention to these facts for the imputation is carried by the bill, and it is also so argued in brief of counsel for appellant, that the administrator had taken no steps, when the bill was filed, to collect any one of the policies, and, to quote language of appellant in brief now before us: "There was no indication that it intended to do so. It had no funds with which to prosecute the complex litigation before it."

It appears, however, that upon its appointment as administrator of said estate, the American Traders National Bank joined in the request of complainants for the appointment of a receiver.

Shortly after the filing of the bill, on petition of the complainants, the administration of the estate of Dr. Bell was removed from the probate court of Jefferson county into the circuit court of said county, in equity, and the American Traders National Bank was duly appointed receiver in said cause.

The American Traders National Bank, as receiver, was ordered and directed by the court to take over and reduce to money the policies of insurance mentioned in the bill, "and/or" in the answer of the respondents filed thereto, and "such other or further policies of insurance as may be thereafter discovered to exist on the life of Dr. Bell, deceased."

The court's order appointing the receiver further provided, in paragraph 5, as follows: "This order is made without prejudice to the rights of any parties at interest to propound their claims to any of said several policies of insurance and/or the proceeds thereof after the said policies have been reduced to money, and for the purpose of protecting the rights of all parties, the said receiver shall keep a separate record of all moneys collected on said insurance policies, and shall file in this court, initialed by a photostatic copy of each insurance policy coming into its hands. All moneys coming into the possession of the said American Traders National Bank, as such receiver, under this order, shall be held by the said receiver subject to the further orders of this court to be made herein."

Mrs. Bell and her daughter, Louise Snow Bell, prosecuted an appeal to this court from the order appointing a receiver in said cause, and this court affirmed the order, holding that the averments of the bill made a case justifying the appointment. Bell et al. v. Goodwin et al., 220 Ala. 537, 126 So. 108, 110. On that appeal, it was observed by Bouldin, Justice, in writing for the court:

"The administrator, as such, could not sue upon these policies. Payable not to the estate of the insured, but to beneficiaries named by him, they are not assets save at the suit of and for the benefit of creditors. Davis v. W.S. Stovall & Bro., 185 Ala. 173, 64 So. 586; McClarin v. Anderson, 109 Ala. 571, 19 So. 982; Davis v. Swanson, 54 Ala. 277, 25 Am.Rep. 678.

"The multiplicity of suits, the probable interpleaders, the delay, expense, and doubtful results of actions to collect these policies without this bill, we regard as emphasizing the equity of the bill.

"The bill having been filed advisedly, it seems but the obvious thing to impound the fund, provide a receiver to collect, to give acquittances, and to conserve it for distribution among those entitled as per final decree of the court. 23 R.C.L. pp. 20, 27 and 31, 34 Cyc. pp. 58, 59; 20 Cyc. p. 831."

With the propriety of the appointment of a receiver established in this court, on return of the cause to the circuit court, the complainants amended their bill in a number of particulars, bringing in new parties, among them the First National Bank of Birmingham, the Woodlawn Savings Bank, and the Woodlawn Building & Loan Association.

Thereafter numerous pleadings were filed in the cause, but we deem it wholly unnecessary to a decision of the questions presented by this appeal to refer to the same in detail.

The American Traders National Bank, in its dual capacity as receiver and as administrator of the estate of Dr. Bell, actively entered upon the discharge of its separate duties, immediately upon its appointments, and continued to so act down to the 1st day of July, 1930, when the said bank consolidated with the First National Bank of Birmingham, and upon the merger of the two banks, the First National Bank of Birmingham was appointed receiver and administrator of the estate of Dr. Bell "in lieu and stead of said American Traders National Bank."

On June 18, 1931, the cause came on for hearing, and the decree then rendered recites:

"On this the 18th day of June, 1931, came the parties to this cause by their solicitors, and upon their motion, it is ordered by the court that this cause be, and it is hereby submitted for a decree upon the pleadings and proof as noted by the register.

"Final Decree.

"This cause coming on to be heard, was submitted for final decree on the pleadings and proof as noted by the register, and, it appearing to the court that all parties at interest are present in open court either in person or by their respective solicitors of record, and it further appearing that the minor respondents, Clemmie Weaver Bell and Margaret Dudley Bell, are each represented by William Burr, Esquire, as their respective guardian ad litem, he having been duly appointed and qualified in this cause, and having heretofore duly filed an answer in writing on behalf of each of said minors, denying all of the allegations of the bill of complaint as last amended, the several cross-bills, and the several claims of the several interveners, separately and severally, and it appearing that there is a fund to be administered and disposed of, to wit, a fund aggregating approximately $163,000.00, in the hands of the First National Bank of Birmingham, as receiver of the estate of A.W. Bell, deceased, derived as hereinafter shown, and it appearing to the court that under the allegations and proof in this cause the fund in the hands of the receiver is subject to the liens and claims hereinafter decreed and should now be disbursed by proper decree; that the administration of the estate of A.W. Bell, deceased, and the funds in the hands of the administrator should be reserved for further and other orders of the court save and except as otherwise ordered herein; that the parties complainant, the respondents, the interveners, the cross-respondents and the cross-complainants herein named are entitled to relief to the extent hereinafter awarded; it is here and now by the court:

"Considered, ordered, adjudged and decreed as follows:

"1. That C.A. Goodwin and E.J. Barnes, partners doing business under the firm name of C.A. Goodwin & Company, filed the original bill of

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