Ex parte Wilkinson

Decision Date21 November 1929
Docket Number6 Div. 470.
Citation126 So. 102,220 Ala. 529
PartiesEX PARTE WILKINSON.
CourtAlabama Supreme Court

Rehearing Granted Jan. 28, 1930.

Petition of Horace C. Wilkinson for writ of prohibition to Hon William M. Walker, as Judge of the Circuit Court of Jefferson County. Writ awarded on rehearing.

Appeal from decree appointing receiver without supersedeas did not suspend court's power to conserve property through receiver.

Lienholder not in possession of property may intervene in receivership suit (Code 1923, § 9485).

The petition alleges the filing in the circuit court, in equity of a bill by C. A. Goodwin & Co., against Mrs. Clemmie L Bell, Louise Snow Bell, Margaret Bell, and Clemmie Bell (widow and daughters of A. W. Bell, deceased), the American-Traders' National Bank, as administrator of the estate of A. W. Bell, deceased, several life insurance companies, and C. E. Thomas, as liquidating agent of the Woodlawn Savings Bank.

The bill, as exhibited, is a general creditors' bill seeking to subject to the payment of debts of the decedent the proceeds of policies of life insurance issued upon the life of decedent, aggregating some $300,000 and payable to the wife and daughters of decedent. To this end, the bill seeks the removal of the administration of decedent's estate from the probate court to the circuit court in equity, and the appointment of a receiver to receive and collect on these policies of insurance.

After hearing, the American-Traders' National Bank was appointed as receiver, and it was ordered that the policies of insurance be delivered to it as such.

Thereafter the receiver having made demand upon the petitioner, Wilkinson, as agent of C. E. Thomas in the liquidation of the Woodlawn Savings Bank, for said policies of insurance, and Wilkinson refusing to deliver them up, complainants filed in the circuit court a petition praying that said Thomas and Wilkinson be cited to appear and show cause why they should not be held in contempt; whereupon a date for hearing was set and said Thomas and Wilkinson cited to appear.

The petition further alleges that the law firm of which petitioner is a member was employed by Mrs. Clemmie Bell to collect the insurance policies in question, the policies being delivered to said firm; that petitioner's firm was also employed by C. E. Thomas, state superintendent of banks, to represent him in liquidating the Woodlawn Savings Bank; that it was agreed by the superintendent of banks and Mrs. Bell that petitioner's firm should act for both in the collection of the policies, a part of the proceeds of which to be paid over to the superintendent of banks on account of claims of the Woodlawn Savings Bank, the other part to be paid to Mrs. Bell; that it was agreed that petitioner's firm should be paid by the superintendent of banks a reasonable fee for its services in collecting said policies, which employment was prior to the institution of suit by Goodwin & Co.; that said firm has performed certain services looking to the collection of said policies and is now engaged in performing its contract in that regard, and that its fee has not been paid. It is further shown by the petition that after the decree appointing a receiver, Mrs. Bell appealed therefrom to the Supreme Court, filing security for costs.

The prayer is that the writ issue prohibiting the respondent circuit judge from hearing and considering the contempt proceedings, upon the grounds that the original bill was without equity; that petitioner was not a party to the suit; that respondent had no jurisdiction to interfere with petitioner's performance of his contract of employment; and that respondent's jurisdiction of the cause ceased upon appeal from his decree appointing a receiver.

See also Bell v. Goodwin (Ala. Sup.) 126 So. 108.

Bouldin and Sayre, JJ., dissenting.

Horace C. Wilkinson, of Birmingham, pro se.

A. Leo Oberdorfer and O. D. Street & Son, all of Birmingham, for appellee.

BOULDIN J.

The writ of prohibition is supervisory in character-one employed to effectuate the supervisory power vested in this court by the Constitution over inferior jurisdictions. Const. 1901, § 140. It is not granted except for usurpation or abuse of power.

Usurpation involves the attempted exercise of power not possessed by the inferior officer, or what is the same thing, going beyond or exceeding the power vested in him.

If the proceeding sought to be prohibited is not within itself a usurpation or abuse of power, the writ will not issue on a mere assumption that abuse may intervene in course of the proceeding.

If abused in fact, the more appropriate writ is one to review and supervise such action when made to appear. Ex parte Johnson, 203 Ala. 579, 84 So. 803; Goodwin v. McConnell, 187 Ala. 431, 65 So. 788; Ex parte Hamilton, 51 Ala. 62; Epperson v. Rice, 102 Ala. 668, 15 So. 434.

The petition for writ of prohibition to prevent hearing and considering a contempt proceeding arising from alleged interference with the possession of a receiver, so far as it challenges the appointment of the receiver, is a collateral attack. The regularity or propriety of his appointment is not involved. To question his appointment collaterally, it must appear the order appointing him was void, a nullity.

The question of first moment is whether the bill in equity confers jurisdiction of the res, the policies of insurance, the subject-matter of the receivership.

Where the husband and father insures his life for the benefit of his wife and children and pays the premiums thereon, upon his death the proceeds are exempt from the payment of the debts of his estate, if the annual premiums do not exceed $1,000; "or if such premiums exceed one thousand dollars, then to the extent of the insurance which an annual premium of one thousand dollars would purchase as an ordinary life policy in a standard life insurance company." Code 1923, § 8277.

The surplus, if any, is subject to the payment of the debts of decedent. Policies payable to the estate of the insured and passing to wife and children by way of voluntary gift are subject to the law of fraudulent conveyances, and the proceeds subject to pre-existing debts of the husband free from the statutory exemption.

In either event, if the estate of the decedent is otherwise insolvent, a creditor's bill is the proper remedy to reach and subject such fund as equitable assets in so far as claims of creditors are concerned. Kimball v. Cunningham Hdwe. Co., 197 Ala. 631, 73 So. 323; Kimball v. Cunningham Hdwe. Co., 192 Ala. 223, 68 So. 309; Fearn v. Ward, 80 Ala. 555, 2 So. 114; Pope v. Carter, 210 Ala. 533, 98 So. 726.

The general equity of the bill here involved, giving the court jurisdiction of the res, the policies of insurance on the life of A. W. Bell, deceased, is manifest.

The ground on which the jurisdiction is challenged and most stressed in argument is that complainant, A. C. Goodwin & Co., is not shown to be a creditor of the estate of decedent. The basis of this attack is that the claim is not alleged to have been presented to the administrator before suit filed. Passing by all question as to revivor of the suit at law begun during decedent's life, it is sufficient to say the suit in equity wherein jurisdiction is challenged is one for the collection of such indebtedness. The administrator, as he should be, is made a party to the suit. The existence of such debt is one of the primary issues to be adjudicated. The record shows the bill was filed within twelve months after grant of administration.

From our early decisions until now, it has been settled that bringing suit upon a demand before the statute of nonclaim has perfected a bar suspends the running of the statute. If such suit is duly prosecuted, no further presentation is required. Hunley v. Shuford, 11 Ala. 203; McDougald v. Dawson, 30 Ala. 553; Malone v. Hundley, 52 Ala. 147; Weller & Sons v. Rensford, 185 Ala. 333, 64 So. 366.

This is not a case of merely filing a claim in a chancery court or other court, but of a suit on the claim.

The rule above stated has been long recognized by statute providing for taxing plaintiff with any unnecessary costs incurred. Costs which would have been avoided by presentment and payment. Code 1923, § 5820.

As to construction of this statute and proceedings thereunder, see Mitchell v. Lea, 57 Ala. 46; Wallace v. Nelson, 28 Ala. 282.

Whether the bill is subject to demurrer upon other grounds, we need not decide.

The averments of the bill support the decree removing the administration of the estate to the court of equity. Kimball v. Cunningham Hdwe. Co., supra.

This is not to say the equity of the bill and appointment of the receiver depends on averments calling for such removal. A creditor's bill to reach property conveyed in fraud of creditors of a decedent, equitable assets subject to claims of creditors, but not to claims of heirs or distributees, is not dependent on a removal of the administration to the court of equity.

Having acquired jurisdiction of the res, whether it should be taken into the custody of the court pendente lite through a receiver was a question of propriety, not of jurisdiction.

Petitioner's clients, under the averments of the bill, hold the potential fund subject to a trust imposed by law. Should such property remain in the hands of trustees in invitum, antagonistic to the claims of complainant and other creditors in like position, or does preventive justice demand that the court conserve the fund through a trustee of its own appointment? This was for the determination of the lower court, subject to review by this court on appeal, not on collateral attack.

Jurisdiction of the proceeding for contempt is further challenged on the ground that petit...

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