Cooke v. Wilbanks

• Citation: 223 Ala. 312,135 So. 435
• Decision Date: 14 May 1931
• Docket Number: 7 Div. 964.
• Parties: COOKE v. WILBANKS.
• Court: Supreme Court of Alabama

135 So. 435

223 Ala. 312

COOKE v. WILBANKS.

7 Div. 964.

Supreme Court of Alabama

May 14, 1931

Rehearing Denied June 25, 1931.

Appeal from Circuit Court, St. Clair County; O. A. Steele, Judge.

Creditor's bill by J. G. Wilbanks against W. P. Cooke and LaFayette Cooke. From a decree for complainant, respondent LaFayette Cooke appeals.

Affirmed.

M. M Smith and W. T. Starnes, both of Pell City, W. C. Davis, of Jasper, and Victor Smith and R. B. Evins, both of Birmingham for appellant.

Frank B. Embry, of Pell City, and Thos. J. Judge and Morton Nesmith, both of Birmingham, for appellee.

THOMAS J.

The bill by judgment creditor for discovery, attaches interrogatories and prays that the moneys and properties of W. P. Cooke, in the hands of defendant L. Cooke, be held subject to the payment of complainant's judgment; that if there are not sufficient moneys so impressed and available that the purchase money notes of the Leeds Cooperage Company be condemned and ordered sold, and the proceeds applied to balance due on complainant's judgment.

It is further prayed in the bill that it be decreed that defendant L. Cooke, received from defendant W. P. Cooke, moneys and properties of an amount sufficient to pay complainant's said judgment, and that it was received with the knowledge, or facts amounting to notice, at the time of the transfer and receipt thereof, of the fraudulent intent on the part of W. P. Cooke to hinder, delay, and defraud complainant as one of the creditors; and that said L. Cooke has conveyed said property and appropriated the proceeds thereof to his own use, and that judgment should be rendered against said respondent for the amount of complainant's judgment, interest, and costs against W. P. Cooke.

Process was served on the latter, an averred nonresident of this state, by publication, and there was a decree pro confesso against W. P. Cooke; L. Cooke answered the bill and denied the material allegations thereof relating to the transfer of any property by W. P. Cooke to him; and the answer to the bill and interrogatories was in detail, and as to the title to the several properties in issue and the several judgment claims, including that of Fenner & Beane. That case is reported as 214 Ala. 558, 108 So. 370.

It will not be necessary to recite the voluminous pleadings or evidence. Much of the evidence was given ore tenus before the court rendering the decree, and his action and finding are supported by the usual presumptions. Cooke v. Fenner & Beane, 214 Ala. 558, 108 So. 370; Andrews v. Grey, 199 Ala. 152, 74 So. 62; Hodge v. Joy, 207 Ala. 198, 92 So. 171; McClurkin v. McClurkin, 206 Ala. 513, 90 So. 917; Manchuria S. S. Co. v. Harry G. G. Donald & Co., 200 Ala. 638, 77 So. 12; Gray v. Handy, 204 Ala. 559, 86 So. 548.

The trial court properly allowed the testimony of Mr. Alford of statements made at the Morris Hotel by W. P. Cooke in the presence of L. Cooke, as to their relations in the properties in question; the same was the basis of the reasonable inference of a common design of the two defendants, the father and son, the transferor and transferee, to fraudulently convey and secrete the properties of the son and place the same beyond the reach of creditors that may have the lawful right to subject same to the payment of debts and legal obligations. Declarations of the latter during the pendency of that common and fraudulent design and within its scope and purpose of the fraud and collusion are competent; and it is immaterial whether such declarations were made before or after such fraudulent transfer or conveyance, if made after the collusion and until the common design is accomplished or abandoned. Borland v. Mayo, 8 Ala. 104; Mahone v. Williams, 39 Ala. 202; Jones v. Norris, 2 Ala. 526; National Park Bank v. L. & N. R. R. Co., 199 Ala. 192, 74 So. 69; 2 Jones on Ev. § 943, p. 1740; 22 C.J. 366, § 438. There was no error in admitting Alford's testimony; it is shown that Mr. Alford did not testify in the case of Fenner & Beane, cited above. There was no error in the admission of answer of W. P. Cooke to interrogatories in the case of Fenner & Beane; it was the same matter and common design to fraudulent affect creditors in the collection of debts. There was an identity of interests, as each defendant was a party to the transaction. May v. Barnard, 20 Ala. 200.

A general statement of the relationship of the parties, that of their several business ventures or enterprises, is contained in the decision reported as 214 Ala. 558, 108 So. 370.

The rules as to a general creditor's (existing or subsequent) bill, as to setting aside fraudulent conveyances, are well understood and need not be recounted. McCrory v. Donald, 192 Ala. 312, 68 So. 306; Cooke v. Fenner & Beane, 214 Ala. 558, 108 So. 370; Breeding v. Ransom, 220 Ala. 82, 123 So. 899; Manchuria S. S. Co. v. Harry G. G. Donald & Co., supra; Hanvey v. Formby Co., 200 Ala. 696, 75 So. 1003; Watters-Tonge Lbr. Co. v. Knox, 206 Ala. 183, 89 So. 497; Allen v. Overton, 208 Ala. 504, 94 So. 477; H. B. Claflin Co. v. Muscogee Mfg. Co., 127 Ala. 376, 30 So. 555.

The trial court has correctly found:

"*** that when said cause of action accrued the respondent W. P. Cooke was a man of substantial means, that thereafter said W. P. Cooke transferred practically all of his property to his father the respondent LaFayette Cooke with intent to delay, hinder or defraud his creditors, and that the said LaFayette Cooke received such property with knowledge of and participated and shared in such fraudulent intent, and that the property so conveyed was of more than sufficient value to pay the amount of Complainant's said judgment, exclusive of all exemptions allowed by law to the said W. P. Cooke.

"The Court further finds that the respondent LaFayette Cooke after receipt of such property, sold and conveyed the same to third person, thus placing the same beyond the reach of legal process for the satisfaction of complainant's said judgment and that he has converted the proceeds from said sale to his own use and benefit, which in equity and good conscience should be applied in payment and satisfaction of complainant's said judgment.

"The Court further finds that by such transactions the respondents were guilty of actual fraud in the covering up and disposal of W. P. Cooke property in anticipation of a liability being fastened on him because of the trouble with complainant.

"The Court further finds that the respondents have not submitted that clear, full, satisfactory evidence sufficient to overcome the indicia of fraud growing out of the relation of father and son, their intimate business relations, their common knowledge of the condition growing out of the shooting, and disposition of all holdings, joint and several, in rapid succession and the fact that LaFayette Cooke at the commencement of the suit, had money or effects in his hands, which equitably belongs to W. P. Cooke and were subject to the payment of his debt."

That is to say, that the proceeds of sales by respondent L. Cooke, to third parties became equitable assets of the debtor son, W. P. Cooke, in the hands of the father, L. Cooke. The cause of consummation of the ostensible business relations in several different properties and enterprises is shown by the record in this case and the reported case in this court, as we have indicated. Cooke v. Fenner & Beane, 214 Ala. 558, 108 So. 370.

The answer of W. P. Cooke to the original bill in the Fenner &amp Beane Case was relevant and proper, and covered the same matter as here, as to admitted assets at the time in question, the disposition thereof shown by this evidence, and the circumstances...