Folmar v. Lehman-Durr Co.

• Decision Date: 28 April 1906
• Citation: 41 So. 750,147 Ala. 472
• Parties: FOLMAR ET AL. v. LEHMAN-DURR CO.
• Court: Alabama Supreme Court

41 So. 750

147 Ala. 472

FOLMAR ET AL. v. LEHMAN-DURR CO.

Supreme Court of Alabama

April 28, 1906

Rehearing Denied June 30, 1906.

Appeal from Chancery Court, Montgomery County; W. L. Parks Chancellor.

"To be officially reported."

Suit by the Lehman-Durr Company against George A. Folmar and others. From an adverse decree, defendants appeal. Reversed, rendered in part, and remanded.

The bill alleges an indebtedness of George A. Folmar to the Lehman-Durr Company of $4,104.71, with interest thereon from April 4, 1896, and that the debt accrued prior to June 12 1896. It alleges a sale and transfer of certain lands therein described to the other defendants for love and affection, and a recited consideration of $1 and $2. It also alleges that the grantees in the deed from George A. Folmar and wife are the children of the grantors, and that the conveyances are voluntary and made for the purpose of hindering, delaying, or defrauding complainants in the collection of their debts. The defendants answered, denying any indebtedness on the part of George Folmar, admitting the making of the deeds and that they were children, and denying that said conveyances were made to hinder, delay, or defraud creditors.

W. L Martin and Gunter & Gunter, for appellants.

J. M Chilton, for appellee.

ANDERSON J.

The transfer of the debt passes to the transferee the right of the transferror in such security or property pledged. Code 1896, § 947; Randolph on Commercial Paper, §§ 731, 1675; Duval v. McLoskey, 1 Ala. 734; Hatch v. White, Fed. Cas. No. 6,209.

Not only did the law give the respondent Felix Folmar the $7,500 note held as collateral upon the assignment to him of the notes held by the complainant against Beall & Coston, but the undisputed evidence is that it was expressly agreed that, when the notes which this bill seeks to enforce were executed, it was expressly understood that the complainants should not only assign to Felix Folmar the notes against Beall & Coston, but all collateral held by them to secure the indebtedness of said firm, for the benefit of George A. Folmar. That being true, a withholding of said collateral note of $7,500 deprived the assignee of the benefit of a collateral to which he was entitled, and the complainant, having failed to transfer the said collateral note of $7,500, is required to exhaust the same before seeking payment from Geo. A. Folmar of so much of the Beall & Coston debt as may be included in the indebtedness. If said collateral is sufficient to discharge the debt of Beall & Coston assumed by Geo. A. Folmar, then the complainant cannot come upon Folmar for same; but, if insufficient, then they would be entitled to a decree for what the collateral would lack of paying the debt, giving the complainant the benefit of the $350 already realized by the assignee on the collaterals that were assigned.

It is needless to discuss whether or not the complainant, under a subsequent agreement with Beall, had the right to hold the firm's collateral for the individual debt of Beall, as the complainant's own evidence shows that, if such an agreement was made, it was secondary to the purpose for which the original note was hypothecated. Roman admits that the note was originally left with them to secure the indebtedness of the firm, and that Beall subsequently agreed that it should be held to secure his own debt, after the firm debt was paid. The fact cannot be doubted that when George A Folmar gave complainant his notes assuming the debt of Beall & Coston, and the firm notes were transferred to Felix...