Collier v. Wood

• Decision Date: 19 July 1888
• Citation: 85 Ala. 91,4 So. 840
• Parties: COLLIER ET AL. v. WOOD ET AL.
• Court: Alabama Supreme Court

4 So. 840

85 Ala. 91

COLLIER ET AL. v. WOOD ET AL.

Supreme Court of Alabama

July 19, 1888

Appeal from chancery court, Pike county; JOHN A. FOSTER, Chancellor.

Suit in equity by Wood Bros. against G. C. Collier and Thomas H Jones, as partners under the firm name of Collier & Jones and E Warrick, to have a mortgage declared a general assignment for benefit of creditors. The bill alleged that on the 9th day of May, 1884, the complainants obtained a judgment against the defendant E. Warrick on a promissory note containing a waiver of exemptions as to personal property; that execution was issued on this judgment, and returned "No property found," and that alias executions were continuously issued upon the said judgment in order to keep the same alive, the next to the last being returned on the 8th day of April, 1885; that the last execution issued July 23, 1886, which was also returned "No property found;" that on the 21st day of May, 1886, the said Warrick executed a mortgage to his co-defendants, Collier & Jones, conveying to them, as security for advances previously made and to be made to him all his personal property and the crop to be grown by him during the year of 1886; and that at the time of the issuance of said last execution the defendants Collier & Jones had not advanced to Warrick anything near the amount of the consideration as stated in said mortgage. Upon these averments the complainants sought to have the mortgage declared a general assignment; and that an account be taken to find out the indebtedness of Warrick to Collier & Jones and that the complainants be declared to have a right to a distribution of the assets of Warrick, as conveyed to Collier & Jones, and some of which were then in their hands. In their answer defendants showed that the consideration, as expressed in the mortgage, was for antecedent debts, for advances made during past years, and also to secure them in the advances they expected to make to Warrick during the year of 1886, to enable him to make a crop; and that the property conveyed in the mortgage was not more than enough, if, indeed, enough, to liquidate his indebtedness to them, and set out a statement showing this fact. Upon a final hearing, after reference to the register, the chancellor decreed that the mortgage be declared a general assignment; that the complainants were entitled to the relief prayed for; and that the execution in favor of the complainants was a lien on the property conveyed, which should prevail over the mortgage. From this decree defendants appealed. Code, Ala. § 1737, provides that "every general assignment made by a debtor, by which a preference or priority of payment is given to one or more creditors, over the remaining creditors of the grantor, shall be and inure to the benefit of all the creditors of the grantor equally; but this section shall not apply to or embrace mortgages given secure a debt contracted contemporaneously with the execution of the mortgage and for the security of which the mortgage was given."

M. N. Carlisle, for appellants.

STONE C.J.

As to all the property then in actual existence, conveyed by Warrick's mortgage of May 21, 1886, and as to all the debt to Collier & Jones, save that part which was contracted simultaneously with the execution of the mortgage, we agree with the chancellor that the conveyance must be held a general assignment. Code 1886, § 1737. It is clearly shown and without conflict, that the conveyance contains substantially all of Warrick's property, and it must "inure to the benefit of all the creditors of the grantor equally." Holt v. Bancroft, 30 Ala. 193; Stetson v. Miller, 36 Ala. 642; Crawford v. Kirksey, 55 Ala. 282; Bromberg v. Heyer, 69 Ala. 22, 74 Ala. 524; Watts v. Bank, 76 Ala. 474. In holding that Wood Bros. had a vital lien by virtue of their execution, which prevailed over the mortgage, the chancellor erred. Their latest execution, issue prior to the making of the mortgage, bore date December 21, 1884, and was returned April 8, 1885. This was more than 12 months before the mortgage bears date,-May 21, 1886. This caused a lapse of more than an entire term, and the lien was lost. Code...