First Nat. Bank v. Henderson

• Decision Date: 18 June 1914
• Docket Number: 662
• Citation: 187 Ala. 285,65 So. 949
• Parties: FIRST NAT. BANK OF JACKSONVILLE v. HENDERSON.
• Court: Alabama Supreme Court

65 So. 949

187 Ala. 285

FIRST NAT. BANK OF JACKSONVILLE v. HENDERSON.

No. 662

Supreme Court of Alabama

June 18, 1914

Appeal from Chancery Court, Talladega County; W.W. Whiteside, Judge.

Suit by the First National Bank of Jacksonville against R.W Henderson as trustee. Decree for defendant, and plaintiff appeals. Affirmed.

Willett & Willett, of Anniston, for appellant.

Blackwell & Agee, of Anniston, for appellee.

DE GRAFFENRIED, J.

At common law a debtor, "though in failing circumstances or involved, could convey the whole or a part of his property, by assignment, or by any form of conveyance or transfer, operating, or intended to operate, as a security to pay the whole or a part of his creditors in unequal proportions." Danner & Co. v. Brewer, 69 Ala 191.

To provide against preferences in general assignments the Legislature of this state adopted a statute, which appeared in the Code of 1876 as section 2126, and which was in the following language:

"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."

After the above-quoted law went into effect an assignment with preferences was executed by a failing debtor in this state. Included in the assignment were lands situated in the state of Mississippi. In construing the above statute this court in the case of Danner & Co. v. Brewer, supra, held that the preferences were void as to all the property covered by it, except as to the lands in Mississippi. As to the lands in Mississippi, this court, speaking through Brickell, C.J., said:

"The statute is in abrogation of the common law; is introductive of a new principle, giving to the assignments to which it refers an operation and construction different from that which the common law attached to them. The presumption is the common law prevails in Mississippi, where a part of the lands embraced in the mortgage is situated. The law of Mississippi, not the law of Alabama, must determine the nature and extent of the estate and interest, legal or equitable, passing by the mortgage in and to the lands there situate. Story, Con.Laws, § 445; Nelson v. Goree, 34 Ala. 565. The principle is quite universal that real estate, as to its enjoyment and transmission, is governed by the law of the place where it is situated."

The gist of the decision of this court in the above case was that in Alabama, where a statute prohibited preferences in a general assignment, none would be allowed by our courts as to lands situate in this state, but that as to lands situated in the state of Mississippi, the lex rei sitae governed, and that as such preferences were permissible at common law, which, in the absence of evidence to the contrary, was presumed to prevail in Mississippi, our court would uphold such preferences as to the lands in Mississippi. In other words, this court, in the above case, upheld the preferences in so far as the Mississippi lands were concerned, because, under the laws of Mississippi, such preferences were lawful. As to the lands in Mississippi, this court applied to the instrument under attack the laws of Mississippi.

(1) The facts in this case are succinctly stated by the counsel for appellant in their brief, and we copy the following from their brief:

"The bill in this case was filed by appellant for the purpose of having a certain deed made by the Taylorsville Ginning Company, a corporation chartered under the laws of the state of Alabama, to certain real estate located at Taylorsville in the state of Georgia in consideration of a past-due

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