Boyett's, Inc. v. Gross

• Decision Date: 16 April 1964
• Docket Number: 3 Div. 978
• Citation: Boyett's, Inc. v. Gross, 163 So.2d 610, 276 Ala. 452 (Ala. 1964)
• Parties: BOYETT'S, INC., et al. v. Sara McNair GROSS.
• Court: Alabama Supreme Court

Page 610

163 So.2d 610

276 Ala. 452

BOYETT'S, INC., et al. v.Sara McNair GROSS.

3 Div. 978.

Supreme Court of Alabama.

April 16, 1964.

J. O. Sentell, Jr., and Miles S. Hall, Montgomery, for appellants.

Walter J. Knabe and Rodney R. Steele, Montgomery, for appellee.

COLEMAN, Justice.

This is an appeal by respondents from decree overruling demurrer to a bill in equity.Appeal was taken prior to approval of ActNo. 72, 1961Acts of Alabama, page 1947, amending§ 755,Title 7,Code 1940.

Complainant is a natural person.Respondents are the corporation and three natural persons.By implication, it appears that two of these three natural persons were among the incorporators of the corporate respondent in 1959, but the three natural persons are not otherwise shown to have any connection with the corporation.

Complainant alleges that she recovered a judgment against respondent, Boyett's, Inc., a corporation; that said judgment has not been satisfied; that Boyett's, Inc., was the owner of certain personal property; and that subsequent to the judgment, Boyett's, Inc., 'deeded' to respondent, 'Rena Boyett its entire interest in said personal property by a chattel mortgage.'

Complainant prays that said conveyance made by the respondent, Boyett's, Inc., a corporation, to respondent, 'Sue Rena Boyett,' be declared null and void as to complainant; that if said conveyance be not declared null and void, then that it be declared a general assignment for the benefit of creditors; that respondents be required to make an accounting of the assets of Boyett's, Inc., a corporation; for discovery for the purpose of determining the extent, if any, of the commingling of the assets of the corporation with the assets of the other respondents; for full payment of complainant's claim; and for general relief.

Respondents demurred to the bill as a whole and separately to each of its several aspects.Demurrer to the bill as a whole and to each aspect was overruled and respondents appealed.

I.

The averments of the bill setting out the facts to support the aspect seeking to set aside the conveyance as being without consideration are as follows:

'That your orator recovered of the respondent, Boyett's, Inc., a judgment in the Circuit Court of Montgomery County, Alabams, in the sum of $6,000.00 and the further sum of $50.00; that a certificate of judgment was filed in the Office of the Judge of Probate of Montgomery County, Alabama, on the first day of February, 1961, which said certificate is duly recorded in judgment record 12, at page 133.Orator further shows that execution was duly issued on said judgment and that said execution by the Sheriff of Montgomery County, Alabama, has not satisfied that said judgment with the cost and interest thereon and that said judgment with the cost and interest thereon is still outstanding, due and unpaid.

'2.Your orator further shows unto Your Honors that on the 8th day of March, 1961, the said Boyett's, Inc., was the owner of certain personal property situated in Montgomery County, Alabama, consisting of tools and equipment for the repair and service of automobiles.This property is more specifically described in a certain chattel mortgage to which reference is hereinafter made.

'Your orator further shows that on the 8th day of March, 1961, the said Boyett's, Inc. deeded to Rena Boyett its entire interest in said personal property by a chattel mortgage which is recorded in mortgage book 941, at page 363, in the Office of the Probate Judge of Montgomery County, Alabama.

'Your orator further shows that while said chattel mortgage recites a consideration of $1,620.00 and purports to be made in payment of certain promissory notes of even date made by the said Boyett's, Inc. to Rena Boyett, that in truth and in fact your orator is informed and believes and upon such information and belief avers the fact to be, that there was no real consideration for said chattel mortgage, the same being simulated and said conveyance was, in fact, a voluntary conveyance, and that the debt to the said Sara McNair Gross by said Boyett's, Inc. being in existence and past due at the time of said conveyance to the said Rena Boyett.'

Respondents demurred to this aspect on the grounds that the chattel mortgage sought to be set aside is neither set out in the bill nor its substance alleged, that the tools and equipment alleged to have been conveyed to Rena Boyett are not described, and that the allegation that 'Boyett's, Inc., deeded to Rena Boyett its entire interest in said personal property by a chattel mortgage' is a mere conclusion of the pleader.

The reference in the bill to the book and page in the office of the judge of probate is wholly indequate to make the mortgage a part of the bill, nor does it otherwise appear in the transcript.Jones v. Caraway, 205 Ala. 327, 328, 87 So. 820.

Where a party's right in suit, pro and con, depends directly and primarily upon a designated written instrument, the substance of the instrument should be stated in his pleading, or else it should be attached in copy, with appropriate reference.Roney v. Dothan Produce Co., 217 Ala. 475, 476, 117 So. 36.We are referring here to the mortgage and not to the judgment certificate as appellee, in her brief, seems to understand.See also: McKenzie v. North River Ins. Co., 257 Ala. 265, 268, 58 So.2d 581;Stephens v. Pleasant Hill Baptist Church, 264 Ala. 394, 88 So.2d 570.

There is no effort to describe the personalty and no indication of any inability on complainant's part to point out more definitely the property alleged to have been fraudulently transferred and which is sought for condemnation to complainant's indebtedness.Watson v. Watson, 229 Ala. 570, 158 So. 526.

In support of the proposition that it was not necessary for her to set out the judgment certificate, complainant cites Myers v. Redmill, 266 Ala. 270, 96 So. 450, 73 A.L.R.2d 746.The effect of a failure to set out the conveyance sought to be set aside, or to describe the property, is not discussed in Myers v. Redmill and apparently was not raised.In Dowling v. Garner, 195 Ala. 493, 70 So. 150, also cited by complainant, 'a copy of the deed' was made an exhibit to the bill.The two last cited cases do not aid complainant.

In the case at bar, we are of opinion that the grounds of demurrer to the aspect seeking to set aside the chattel mortgage, as being without consideration, are well taken, in that the bill fails to describe the property and fails to set out the terms of the mortgage.Overruling these grounds was error.

II.

The aspect seeking to set aside the chattel mortgage rests on two alternative averments, to wit: (1) that the mortgage was given without consideration; or (2) that the mortgage was made with intent to hinder, delay, or defraud complainant.The defects in setting out the terms of the mortgage and in describing the property conveyed appear in both alternatives of this aspect.

The alternative averments to support the aspect seeking to set aside the conveyance as one to hinder, delay, or defraud complainant are set out in paragraph 3 of the bill as follows:

'3.In the event your orator is mistaken in the averment that such deed was voluntary and without consideration, then she is informed and believes and upon such information and belief avers and alleges the fact to be that said conveyance was made by the said Boyett's, Inc. and received by the said Sue Rena Boyett for the purpose of hindering, delaying, and defranding the said Sara McNair Gross in the collection of the debt which the said Boyett's, Inc., owed to the said Sara McNair Gross at the time; and that the said Sue Rena Boyett well knowing the property of said conveyance, and being a party to said fraudulent seheme, accepted the deed to said chattel mortgage, and your orator avers that the debt upon which the judgment of the said Sara McNair Gross was procured was long past due at the time the said conveyance was made as aforesaid.'

The averments of paragraph 3 are consistent with the theory that the grantee was an existing creditor in an amount equal to the value of the property, and that the conveyance was made to satisfy such debt.If that is true, the fact as alleged that the debtor of complainant making the conveyance intended to hinder, delay or defraud his creditors does not render the conveyance subject to be vacated.Crisp v. First Nat. Bank of Birmingham, 224 Ala. 72, 139 So. 213;Hays v. McCarty, 239 Ala. 400, 195 So. 241;Smith v. Wilder.270 Ala. 637, 649, 120 So.2d 871.

We are, therefore, of opinion that the court erred in overruling grounds 2, 3, and 6 of the demurrer to that aspect of the bill which seeks to set aside the conveyance as being fraudulent for that the averments are insufficient to show fraud, are mere conclusions of the pleader, and do not show that the consideration for the conveyance was inadequate.

Appellant points out in brief, we think correctly, that the aspect seeking cancellation of the chattel mortgage rests on two alternative averments, namely, that the chattel mortgage was without consideration or that the chattel mortgage was made with intent to hinder, etc.The rule is:

'When a bill is in two aspects and the demurrer is addressed to it as a whole, and one aspect is not subject to demurrer, it should be overruled though the other aspect is defective.(Citations omitted.)

'But where one aspect of the bill predicates relief upon several disjunctive sets of averment, each as furnishing ground for relief, and one of such alternative averments is insufficient as a ground for such relief, that aspect of the bill, or it may be the bill as a whole when there is no other aspect, fails to make out a case of equitable right.(Citations Omitted.)'Hays v. McCarty, supra, 229 Ala. at page 404, 195 So. at page 243.

Countering the rule of Hays v. McCarty, supra, complainant cites the following cases: Fife v. Pioneer Lumber Co., 237 Ala. 92, 185 So....