Dickinson v. National Bank of Republic

• Decision Date: 26 April 1893
• Citation: 14 So. 550,98 Ala. 546
• Parties: DICKINSON ET AL. v. NATIONAL BANK OF REPUBLIC.[1]
• Court: Alabama Supreme Court

14 So. 550

98 Ala. 546

DICKINSON ET AL. v. NATIONAL BANK OF REPUBLIC.^[1]

Supreme Court of Alabama

April 26, 1893

Appeal from chancery court, Barbour county; John A. Foster Chancellor.

Bill by the National Bank of the Republic against H. Dickinson and others for an accounting. Demurrer overruled. Defendants appeal. Affirmed.

The bill alleges that the property, or the most of it, which it is averred was fraudulently sold, has been disposed of, and its proceeds appropriated by the vendees of said H Dickinson; and it therefore seeks to have a lien on all the property, or upon the proceeds thereof, and also asks for a personal judgment against each of the defendants. The defendants demurred to the bill on the grounds that it contained no equity; that the complainant had full, adequate and complete remedy at law; and that the relief asked as to a personal decree against all of the defendants was such as a court of law was competent to give. Each ground of the demurrer was overruled, and the chancellor's decree in that behalf is assigned as error.

S. H Dent, Jr., for appellants.

A. H. Menrill, for appellee.

HEAD J.

Section 3544 of the Code reads as follows: "A creditor without a lien may file a bill in chancery to discover or to subject to the payment of his debt any property which has been fraudulently transferred or conveyed, or attempted to be fraudulently transferred or conveyed, by his debtor." H. Dickinson, a debtor by simple contract merely to the complainant, the National Bank of the Republic, as the bill avers, with intent to hinder, delay, or defraud his creditors, sold and transferred to his codefendants the stock of goods and other property mentioned in the bill, of value more than sufficient to pay complainant's debt, which property the said fraudulent purchasers afterwards sold, and appropriated the proceeds thereof to their own use. The averments of the bill make a clear case of fraudulent disposition of the property by Dickinson, participated in by the purchasers. The bill prays for an accounting to ascertain the amount of complainant's demand, and also to ascertain the value of the property which went into the possession of said purchasers, under the fraudulent sale, and, on final hearing, for personal decrees against the defendants for the amount found due complainant, and for general relief.

The question is raised by demurrer whether the statute above copied should be so interpreted as that the remedy therein provided can be made to reach the proceeds of property fraudulently conveyed by the debtor, in the hands of the purchaser, who, after the sale, converted it; or whether the remedy is confined to a subjection of the property itself to the payment of the creditor's demand. Prior to this statute, a creditor by simple contract had no remedy by bill in equity to reach and subject property fraudulently transferred by his debtor. Only creditors who had reduced their demands to judgment and exhausted their legal remedies against the debtor could obtain such relief in the chancery court. The statute was enacted to cure that disability. It is remedial in its nature, and must receive that liberal construction and enforcement which will give full effect to the beneficial object the legislature intended to be accomplished. It will not be expounded by any narrow or strict rules of interpretation tending to impair the efficiency of the remedy given. 2 Brick. Dig. p. 461, §§ 16 17; Jones v. Smith, 92 Ala. 455, 9 So. 179. Thus construed, it is manifest the purpose was to confer upon simple contract creditors the same rights and remedies which judgment creditors who had exhausted their legal remedies then had, to reach, through the chancery court, property of the debtor liable to satisfy debts, which had been fraudulently conveyed, or attempted to be fraudulently conveyed, by the debtor. Weis v. Goetter, 72 Ala. 259; Bromberg v. Heyer, 69 Ala. 22; Reynolds v. Welch, 47 Ala. 200; Evans v. Welch, 63 Ala. 250. In determining the question now presented we may therefore have recourse to precedents and adjudged cases touching the rights and remedies of such judgment creditors in respect of the subjection by bill in equity of the proceeds of fraudulently assigned property in the hands of the fraudulent grantee or donee. In Ferguson v. Hillman, 55 Wis. 190, 12...