G. Ober & Sons Co. v. Phillips Buttorff Mfg. Co.

• Decision Date: 08 February 1906
• Citation: G. Ober & Sons Co. v. Phillips Buttorff Mfg. Co., 40 So. 278, 145 Ala. 625 (Ala. 1906)
• Parties: G. OBER & SONS CO. v. PHILLIPS BUTTORFF MFG. CO.
• Court: Alabama Supreme Court

40 So. 278

145 Ala. 625

G. OBER & SONS CO. v. PHILLIPS BUTTORFF MFG. CO.

Supreme Court of Alabama

February 8, 1906

Appeal from Circuit Court, Marshall County; A. H. Alston, Judge.

"To be officially reported."

Action by G. Ober & Sons Company against Barron & Russell (the Continental Insurance Company, garnishee), in which the Phillips Buttorff Manufacturing Company claimed the funds. From a judgment against the plaintiff in the garnishment, it appeals. Affirmed.

O. D Street, for appellant.

John C Forney, for appellee.

ANDERSON J.

This issue was made up under sections 2199 and 2200 of the Code of 1896, between the plaintiff in garnishment and the claimant of the fund, as suggested by the garnishee. The fact and bona fides of the transfer are alone in issue. Rowland v Plummer, 50 Ala. 182; McMullen v. Lockard, 64 Ala. 56.

It seems that the assignment of the policy was made after the loss by fire, and by the following indorsement: "The interest of Barron & Russell, as owners of property covered by this policy, is hereby assigned to Phillips Buttorff Mfg. Co., subject to the consent of the Continental Insurance Company. [ Signed] Barron & Russell. Dated Albertville, Ala., March 30th, 1899." Under section 876 of the Code of 1896 this indorsement was sufficient to authorize an action on the policy by the assignee, and, this court has held, transferred the policy, when made after the fire, although the policy contained a stipulation prohibiting the assignment. Perry v. Merchants' Ins. Co., 25 Ala. 355.

The evidence shows that the debt for which the policy was assigned was only about one-third of the value of the policy; that the defendants were insolvent, or in failing circumstances; and that the assignees either knew, or had knowledge sufficient to charge them with notice, of the fact. This court has repeatedly held that if the property conveyed by an insolvent debtor in payment of pre-existing debts does not materially exceed in value the amount of the indebtedness owing and paid by the conveyance, and no benefit is reserved to the grantor, the conveyance is lawful as against his other creditors, regardless of the motives of the parties to the conveyance or of badges of fraud in the transaction. Pollock v. Meyer, 96 Ala. 172, 11 So. 385. The price, however, must be reasonable, and if the debt is materially less than the value of the property conveyed in settlement thereof the law stamps the transaction as fraudulent as against the other creditors. Moore, Marsh & Company v. Penn & Co., 95 Ala. 200, 10 So. 343; Mobile Bank v. McDonnell, 89 Ala. 434, 8 So. 137, 9 L. R. A. 645, 18 Am. St. Rep. 137; Morrow v. Campbell, 118 Ala. 330, 24 So. 852; Gordon, Rankin & Co. v. Tweedy, 71 Ala. 202; Bump on Fraudulent Conveyances,§ 44.

The assignment of the policy was indivisible, and if it operated to transfer the amount thereof, over $1,900, to pay a...