Coffey v. Norwood

• Decision Date: 30 June 1887
• Citation: 3 So. 8,81 Ala. 512
• Court: Alabama Supreme Court
• Parties: COFFEY, ADM'R, v. NORWOOD AND ANOTHER.

3 So. 8

81 Ala. 512

COFFEY, ADM'R, v. NORWOOD AND ANOTHER.

Supreme Court of Alabama

June 30, 1887

Appeal from chancery court, Jackson county; S. K. MCSPADDEN Chancellor.

Bill in equity by judgment creditor to subject assets fraudulently transferred.

Syllabus by the Court.

An appeal to this court lies from a final decree in chancery in favor of a judgment creditor, subjecting assets fraudulently transferred by his deceased debtor, whose estate has been declared insolvent, and against which the decree is ordered to be filed as a claim.

When an appeal is taken in the name of one of several defendants instead of all, it may be perfected by amendment; and the failure to raise the objection before the submission of the cause is a waiver of it.

The debtor himself, though he would be a proper party to a bill filed by a judgment creditor to reach and subject assets fraudulently conveyed or transferred by him, is not a necessary party, since the conveyance is binding on him, and the fraudulent transferee may set up any defense which the grantor might assert; and if the debtor is dead, and his estate has been declared insolvent, his personal representative is not a necessary party to the bill.

If a debtor, having sold and conveyed a tract of land, afterwards surrenders the note given for the purchase money, indorsing satisfaction on it, without consideration, and for the declared purpose of defeating and defrauding his creditors the transaction is void for actual fraud, consummated with the connivance of the maker of the note; and it will be set aside in equity, at the instance of a creditor, although part of his debt had not then accrued. ^[1]

The appellees, John H. Norwood and W. H. Norwood, partners in the practice of law under the name of Norwood & Norwood, filed their bill of complaint against the appellant, John R. Coffey, as administrator of the estate of John B. Coffey, deceased, and also against the widow and heirs of said decedent. The bill alleged, substantially, that complainants were judgment creditors of one Lavinia Kirby, for the sum of $1,000; that execution had been issued on their judgment against said Lavinia, and returned, "No property found;" that said Lavinia, being seized and possessed of certain lands set forth in the bill, had sold and conveyed said lands to John B. Coffey, the intestate of defendant, John R. Coffey, for the sum of $300, for which said Coffey gave her his promissory note, which was a lien on said lands; that, subsequently, said Lavinia, with the intent to defraud complainants and her other creditors, and being insolvent, caused an entry of satisfaction to be indorsed on said note, and turned it over to said John B. Coffey, the maker thereof, although no payment had been made thereon, and said Coffey received said note with the intent to aid her in defrauding complainants and her other creditors; that said Lavinia had since died insolvent, and leaving no property "of any account" except the purchase money of said land, and that said John B. Coffey had also died, and defendant, John R. Coffey, had been appointed administrator of his estate. The prayer of the bill was that the surrender and delivery of said note by Lavinia Kirby to John B. Coffey be declared fraudulent and void as to complainants; that an account be taken of the amount due complainants on their judgment; that a decree be rendered in their favor for said amount against John R. Coffey, as administrator of the estate of John B. Coffey; that said amount be declared a lien upon said lands, and, if necessary, that said lands be sold for the satisfaction thereof, and for general relief. The answer of the defendants denied the allegations of fraud in the bill, and averred that said John B. Coffey had paid the note in full before its delivery to him. The defendants also demurred to the bill, because no administrator of the estate of Lavinia Kirby had been appointed or made a party plaintiff or defendant, and because the bill showed there were other creditors of said Lavinia who had not been made parties. The demurrer was overruled, and a decree rendered on the pleadings and proof granting the relief prayed for, and, it having been suggested and proven that the estate of John B. Coffey had been declared insolvent, it was directed that no execution or other process be issued for the collection of the decree, and that the same be certified to the probate court. In this court, the complainants moved to dismiss the appeal, because "an appeal does not lie to the supreme court from a judgment or decree rendered against the representative of an insolvent estate," and because "the sole appellant, Coffey, as administrator, is not prejudiced by the decree, and could not be benefited by its reversal."

J. E. Brown and R. C. Brickell, for appellant.

D. D. Shelby and Norwood & Norwood, contra.

SOMERVILLE J.

1. Motion is made to dismiss this appeal upon the ground that the statute does not authorize an appeal from a judgment or decree which is rendered against an insolvent estate, and certified to the probate court under the provisions of section 2581 of the present Code of 1876. There is nothing in this objection, and the motion to dismiss will be overruled. The statute allows appeals to the supreme court from any final judgment or decree of the chancery court, except only in such cases as are otherwise directed by law. Code, § 3916. The present decree settled all the equities litigated between the parties to the suit, and possessed every element characteristic of a final judgment. Adams v. Sayre, 76 Ala. 509. The declaration of the insolvency of John B. Coffey's estate did not affect the suit further than to authorize a special plea setting up this fact, so as to prevent the issue of any execution in the decree rendered, and provide a new mode of collecting the judgment in another form, to which it was, for this purpose, required to be certified. Code 1876, §§ 2580, 2581; Cunningham v. Lindsay, 77 Ala. 510. The finality of the decree is unaffected by this proceeding, or by section 2575 of the Code, as amended by the act of December 4, 1878, allowing the administrator, any creditor of the decedent, or heir or legatee to contest claims against insolvent estates by filing objections in the probate court, and causing an issue to be made up between the claimant and the objector. Acts 1878-79, p. 69.

2. The other ground of objection, that the appeal was taken in the name of one instead of all of the defendants, comes too late. It could have been remanded by a counter-motion to perfect the appeal by an amendment, and a failure of appellees to raise this objection before the submission of the cause is a waiver of it. Vaughan v. Higgins, 68 Ala. 546, and cases cited.

3. The question is raised by demurrer in this case, whether the personal representatives of the deceased judgment debtor was a necessary party defendant to the bill, the return of nulla bona having been made in the lifetime of the debtor, and she being alleged to have died insolvent, and no administrator having been appointed on her estate. The question is one upon which the authorities are in conflict. That the personal representative is a proper party in such cases is quite clear; and this much was settled in Pharis v. Leachman, 20 Ala. 662. But that case does not go further than to hold that no objection could be taken to his joinder as party defendant to a bill filed to reach equitable assets in the hands of a fraudulent grantee. The test must be whether the fraudulent debtor, Mrs. Kirby, if living, would be a necessary party for, if it would not be required to join her, neither would it be necessary to join her personal representative, in the event of her death. Would she then be a necessary party to this suit, if living; the return of "no property" found having...