Garry v. Jenkins

• Decision Date: 27 April 1896
• Citation: 20 So. 8,109 Ala. 471
• Parties: GARRY ET AL. v. JENKINS ET AL.
• Court: Alabama Supreme Court

20 So. 8

109 Ala. 471

GARRY ET AL. v. JENKINS ET AL.

Supreme Court of Alabama

April 27, 1896

Appeal from city court of Birmingham; W. W. Wilkerson, Judge.

Bill by Jenkins, Moore & Co. and others, on behalf of themselves and others, against Garry & Welpin and others, to set aside a conveyance as in fraud of creditors. From a decree rendered after the rendition of a decree for plaintiffs, defendants appeal. On motion to strike out assignments of error. Motion granted, and decree affirmed.

Arnold & Evans, for appellants.

Mountjoy & Tomlinson, for appellees.

McCLELLAN J.

The bill in this case was filed by Jenkins, Moore & Co. and others, on behalf of themselves and all other creditors of Garry & Welpin who should come in and propound their claims etc., against said Garry & Welpin, Charles Drennen, and the Jefferson County Savings Bank. The bill alleged that the complainants were creditors, in the several amounts set out therein, of Garry & Welpin on and prior to October 1st, 1891 that Garry & Welpin were then insolvent, and known to the other respondents to be so; that on said day said Garry &amp Welpin sold and transferred their entire stock of goods wares, and merchandise, and also the lease of the storehouse in which they were doing business to Charles Drennen; that this sale was ostensibly made in payment of a debt alleged to be due from Garry & Welpin to Drennen, and that the sale was fraudulent and void as to creditors, for that said alleged debt was not real, but simulated, but, if not simulated, was materially less than the value of the property transferred to Drennen as in payment of it, but that, if not simulated, and not materially less than such value, a secret benefit was reserved to the sellers; or, if mistaken in these averments that the sale was upon a cash consideration, etc.; and that the sale was made with the intent on the part of the sellers, known to and participated in by the purchaser, to hinder, delay, and defraud their creditors. The bill also alleged that the Jefferson County Savings Bank "is interested in said bill of sale to said Charles Drennen, but your orators do not know how or what interest it has, but your orators aver that it is participating in and conspiring with said other defendants in said fraudulent sale." The prayer of the bill is that said sale be declared fraudulent; that the stock of goods be subjected to the demands of the complainants; that said Drennen and the bank be held as trustees in invitum as to, and made to account for the proceeds of, any of said property which may have or shall have been disposed of by them for the benefit of complainants and such other creditors of Garry & Welpin as should come in and share the expenses of the suit; and for such other relief as complainants may be entitled to, etc. Answers were filed by all the respondents, admitting Garry & Welpin's indebtedness to complainants as alleged in the bill and the sale by them to Drennen, but denying all averments of fraud in respect thereto, and alleging facts going to show that the sale was made in good faith in payment of an antecedent debt not materially less than the value of the property; that no secret benefit was reserved, etc.; and for the bank it was further denied that it had any connection with or interest in the sale, etc. The testimony was taken, and upon the bill and answers and evidence there was, on May 22, 1893, a submission for final decree on the merits of the case. It is not now sought to have the conclusions of the city judge on the facts reviewed, and the evidence is not set out in the record. It is shown by the opinion of the city judge, however, that it was proven in the case that Drennen took possession of the stock of goods on the day of the alleged sale, and continued for about three weeks to sell the same in the usual course of the business, and to receive the proceeds of such sales, and then he sold the entire remaining stock to a newly-organized corporation for a round sum, which he testified had been paid to him. This corporation, purchaser from Drennen, the court below found to be in reality Garry & Welpin continuing the business under the corporate name of Southern Store Supply Company. The opinion of the city judge concludes as follows: "The court is of the opinion that the firm Garry & Welpin and the Southern Store Supply Company were allotropic conditions of the same business. There was no difference in the composition of the two, but only in the appearance and method of combination. The court is of the opinion that the sale to Dr. Drennen was simulated for the purpose on the one part of hindering and defrauding creditors, and on the other of obtaining a benefit not authorized by law. The court is of opinion that the defendants have not shown by the necessary measure of proof that the consideration for the sale was adequate. The court is further of opinion that the evidence in this cause is not sufficient to impose a liability to complainants on the defendant the Jefferson County Savings Bank." And then, having reference to these conclusions, the court proceeds to decree relief as follows: "Wherefore, in the cause of Jenkins, Moore et al. v. Garry & Welpin et al., in equity in the city court of Birmingham, it is ordered, adjudged, and decreed by the court that complainants are entitled to the relief prayed for in their bill against defendants Garry & Welpin and Charles Drennen, and that the sale of the stock of goods made by Garry & Welpin to Charles Drennen on October 1, 1891, be, and the same is hereby, declared and held to be fraudulent and void as to the creditors of said Garry & Welpin, who were such creditors on October 1, 1891, and said sale is hereby set aside. It further appearing to the court that said Charles Drennen has disposed of said stock of goods, it is ordered, adjudged, and decreed by the court that he be held as trustee in invitum thereof for the benefit of the complainants and such other creditors of Garry & Welpin who shall come in this suit and be entitled to the benefit thereof. It is further ordered, adjudged, and decreed by the court that complainants are not entitled to the relief prayed for against the Jefferson County Savings Bank, and that as to it complainants' bill be, and the same is hereby, dismissed. It is further ordered that this cause be retained in this court for such other and further orders and decrees as may be proper." This decree was rendered on June 29, 1893. On July 31, 1894, the present appeal was taken,-more than a...