Burnwell Coal Co. v. Setzer

• Decision Date: 22 May 1919
• Docket Number: 6 Div. 872
• Citation: 203 Ala. 395,83 So. 139
• Parties: BURNWELL COAL CO. et al. v. SETZER.
• Court: Alabama Supreme Court

83 So. 139

203 Ala. 395

BURNWELL COAL CO. et al. v. SETZER.

6 Div. 872

Supreme Court of Alabama

May 22, 1919

Rehearing Denied Oct. 23, 1919

Appeal from Circuit Court, Walker County; J.J. Curtis, Judge.

Bill by Russ Setzer as administrator, against the Burnwell Coal Company and others, to set aside a conveyance as fraud on creditors. Decree for complainant, and respondents appeal. Affirmed.

Cabaniss & Bowie, of Birmingham, for appellants.

James J. Ray, of Jasper, for appellee.

ANDERSON C.J.

(It must be borne in mind, in order to properly understand this opinion, that, while there is quite an identity in name, the "Burnwell Coal Company" and the "Burnwell Coal Mining Company" are separate and distinct corporations.)

The bill as last amended is in the alternative and seeks: First to declare the conveyances in question a general assignment under section 4295 of the Code of 1907; or, second, to have the same declared fraudulent and void as to the complainant and existing creditors. The conveyances were not preferences to an existing creditor or creditors so as to operate as a general assignment under said section 4295, but were sales to a purchaser for a new or subsequent consideration, and must have been fraudulent and void as to this complainant in order for him to obtain the relief sought. The fact that the bill sought this alternative relief did not render it bad. Hard v. A.T. & S. Bank, 76 So. 30; Smith v Young, 173 Ala. 190, 55 So. 425. This case must therefore be considered under the rule relating to fraudulent grantees for a new or subsequent consideration, as distinguished from those who purchased as creditors, or for an antecedent debt. While the general rule is that a fraudulent intent on the part of the grantor is necessary to bring conveyances within the terms of the statutes, it is well settled that fraud may arise as an inference of law, and that, when the conveyance is made under such circumstances that the result must necessarily be to hinder and delay creditors, it will be presumed that such was the intent of the grantor in making it. O'Conner v. Coosa Furnace, 95 Ala. 614, 10 So. 290, 36 Am.St.Rep. 251; Stern v. Butler, 123 Ala. 606, 26 So. 359, 82 Am.St.Rep. 146. In order to defeat a transfer which has been made with the intent to defraud creditors, it is not necessary to show that the transferee had actual notice of or was an actual participant in the fraud of the transferor. Crawford v. Kirksey, 55 Ala. 282, 28 Am.Rep. 704; Simmons v. Shelton, 112 Ala. 284, 21 So. 309, 57 Am.St.Rep. 39; Ledbetter v. Davenport, 154 Ala. 336 45 So. 467, 129 Am.St.Rep. 62. It is sufficient if at the time of or before making the transfer the transferee had notice of such facts and circumstances as would arouse the suspicion of an ordinarily prudent man and cause him to make inquiry as to the purpose for which said transfer was being made, which would disclose the fraudulent intent of the maker, except in the case of a transfer to secure a debt due him from the transferor. Crawford v. Kirksey, supra; Simmons v. Shelton, supra.

There can be no doubt but what the complainant's claim was an obligation against the Burnwell Coal Company, whether the bill charged that the deceased was killed through its negligence or not. The bill charges, and the proof shows, that he was killed in the mine before the conveyance to the American Company, that suit was brought for the death of the deceased, and eventually resulted in a final judgment against said Burnwell Coal Company. The complainant's claim accrued upon the commission of the tort, and should date therefrom regardless of the time of bringing suit or of obtaining judgment. Gunn v. Hardy, 130 Ala. 642, 31 So. 443.

It is true the judgment was only evidence of a debt or demand as of the time of its rendition, and it was therefore incumbent upon the complainant to establish the existence of his debt or demand when the conveyance was made by the Burnwell Coal Company to the American Company. The bill of complaint charged a judgment under a complaint filed against the Burnwell Coal Company, that the intestate, while an employé of the defendant, was killed in the mine on the 21st day of March, 1911, that complainant subsequently brought suit as administrator of intestate, and recovered a judgment, etc. True, the bill of complaint does not specifically charge that the judgement recovered was for the death of the deceased and counsel contend that there was no proof of the existence of a demand when the first conveyance was made. There is an agreement admitting the recovery of the judgment as charged in the bill of complaint, and there is also an agreement dispensing with the necessity of setting out the complaint in the action at law upon which the judgment was obtained, and that the counts were under section 3910 of the Code of 1907. The suit being by the plaintiff as administrator of Roy Setzer, and under section 3910, it could have only been for his death under section 3912, and the complainant testified that the said Roy Setzer was killed in the mine March 21, 1911, and which was prior to the conveyance from the Burnwell Coal Company to the American Company on, to wit, May 10th. While the averment and proof are not as specific as they might be, we think the only reasonable inference to be drawn is that the judgment so recovered was for the wrongful death of the intestate by the defendant, Burnwell Coal Company, and which occurred prior to the conveyances in question, thus bringing this case within the influence of the rule declared in Yeend v. Weeks, 104 Ala. 331, 16...