Cooke v. Fenner & Beane

• Decision Date: 08 April 1926
• Docket Number: 7 Div. 614
• Citation: 108 So. 370,214 Ala. 558
• Court: Alabama Supreme Court
• Parties: COOKE v. FENNER & BEANE.

108 So. 370

214 Ala. 558

COOKE v. FENNER & BEANE.

7 Div. 614

Supreme Court of Alabama

April 8, 1926

Rehearing Denied May 13, 1926

Appeal from Circuit Court, St. Clair County; W.J. Martin, Judge.

Bill in equity by C.E. Fenner and A.C. Beane, partners doing business as Fenner & Beane, against W.P. Cooke and La Fayette Cooke. From a decree against respondent La Fayette Cooke appeals. Affirmed.

M.M Smith, of Pell City, for appellant.

Percy Benners & Burr and J.R. Forman, all of Birmingham, for appellees.

BOULDIN J.

A bill showing complainant to be an existing creditor, the time and manner in which the debt was incurred, the recovery of judgment thereon, return of execution "no property found," and that it is still unpaid, that at the time the debt was contracted the debtor owned property subject to the payment of debts, giving such description as to identify the same and its value, that the debtor and his father jointly interested in several business enterprises named, conspired together to sell or dispose of all the debtor's visible assets, for the purpose of hindering, delaying or defrauding the creditors of the debtor, and accordingly, within a few months, did dispose of such property, placing the same and its proceeds beyond the reach of creditors by ordinary legal process, that the proceeds of the property are so covered up and concealed as to render a discovery necessary, presents a case of actual fraud on the part of father and son, with right to discovery and accounting, in equity, and for subjection of the proceeds of property in the hands of the father, or a personal decree against him, if placed beyond reach with fraudulent intent.

An amendment alleging that certain named items of the property were sold or transferred by the debtor son to the father, that the sales were voluntary, or, if for valuable and adequate consideration, were with the intent on the part of the debtor to hinder or defraud his creditors, in which fraud the vendee participated, or had knowledge of facts, putting him on inquiry, makes a case of constructive or actual fraud in the alternative as to these items of property. On averment and proof that the vendee had thereafter converted the property by sale to third persons, the vendee became liable to personal decree for the amount of the debt, not exceeding the value of the property converted. The property or proceeds became equitable assets of the debtor in his hands. The bill as amended conforms to the outline above given, and the demurrer thereto was properly overruled.

It is clear from answers and proof that soon after defendant W.P. Cooke contracted the debt to complainants, Fenner & Beane, he had a difficulty with, shot and seriously wounded, Dr. Wilbanks; that within a few months thereafter W.P. Cooke did dispose of all his property in such way as to put it beyond the reach of legal process. La Fayette Cooke, his father, was jointly interested in several business enterprises, and was active in bringing about this result. Avoiding a prolonged discussion of facts, we give, after careful study of the record, our conclusions on such features of the case as deemed proper.

The parol gift of a farm by La Fayette Cooke to W.P. Cooke, many years prior to these events, followed by possession and perception of the rents, whether conditioned upon W.P Cooke's refraining from drink or not, is not sufficiently shown to have been held adversely for such length of time as to give him a legal title. The record title remaining in the father, and his continuing to pay the taxes, the possession of W.P. Cooke with claim of title would not alone authorize persons to extend credit to W.P. Cooke on the faith of his title so as to estop his father from reclaiming the land. If his father knew he was including the land in financial statements as a basis of credit, and acquiesced therein, he would be estopped to reclaim the land as against creditors extending credit on the basis of such statement. It does not sufficiently appear the father knew of the financial statements furnished by W.P. Cooke on which complainants relied. The only pertinence of the evidence of the father's reclaiming this land after the difficulty with Dr. Wilbanks is the light it may shed on the general movement resulting in depriving W.P. Cooke of all indicia of ownership in property. W.P. Cooke, at the time of trouble with Dr. Wilbanks, owned seven shares of stock in Bank of Odenville, and was cashier of the bank; his father being president and principal stockholder. La Fayette Cooke took charge of the affairs of the bank, discharged W.P. Cooke, and soon thereafter purchased his shares in the bank. We do not find ground for criticism in taking over the management of the bank under the conditions of public...