Henderson v. Farley Nat. Bank

• Decision Date: 15 June 1899
• Parties: HENDERSON ET AL. v. FARLEY NAT. BANK.
• Court: Alabama Supreme Court

26 So. 226

123 Ala. 547

HENDERSON ET AL. v. FARLEY NAT. BANK.

Supreme Court of Alabama

June 15, 1899

Appeal from chancery court, Pike county; Jere N. Williams Chancellor.

Bill by the Farley National Bank against J. M. Henderson and others. From a decree overruling a demurrer to the complaint defendants appealed. Affirmed.

In addition to the averments of the bill, which are copied in the opinion, it was further averred therein that, pending the suit of the complainant against J. M. Henderson in the circuit court of Pike county, J. M. Henderson was in the mercantile business in Troy, Ala., but prior to the rendition of the judgment in said suit he sold out his interest in said mercantile business to Alex. Henderson, who is his son, and W. C. Black, who is his son-in-law; that at the time of said sale and transfer of the mercantile business there was also a suit pending against said J. M. Henderson in the city court of Montgomery, sitting in equity, wherein a decree was rendered in favor of the complainants in said suit, and that Alex. Henderson and W. C. Black and each of the other respondents in this case knew of the pendency of said suits that said transfer of said mercantile business to Alex. Henderson and W. C. Black was made by J. M. Henderson with the intent and for the purpose of hindering, delaying, and defrauding his creditors, and especially the complainant that J. M. Henderson was desirous of placing his property beyond the reach of his creditors by disposing of all of such property as might be subject to levy and sale under execution; that Alex. Henderson and W. C. Black knew of this fraudulent purpose of J. M. Henderson at the time of said transfer, and they knowingly and intentionally aided and assisted the said Henderson in converting his property into money for other property which could be placed beyond the reach of his creditors. It is then averred that if the complainant was mistaken in the foregoing averments as to the sale of said stock of goods, there was a fictitious and simulated transfer of said mercantile business or of J. M Henderson's interest therein to Alex. Henderson & Co. and Alex. Henderson and W. C. Black for the purpose of running said business in the name of Alex. Henderson & Co., while in fact it was being carried on for the use and benefit, in whole or in part, of said Henderson, he being the party really interested in said business, after said simulated or fictitious transfer; and that said transfer was made for the purpose of hindering, delaying, and defrauding the grantors of J. M. Henderson, and this purpose was known to Alex. Henderson and W. C. Black. It was further averred that during the pendency of the suit by the complainant in the circuit court of Pike county against J. M. Henderson the said Henderson purchased a lot in the town of Troy, Ala., for $2,000, and, although he paid the purchase price thereof, he had the title taken in the name of, and the deed executed to, his wife, Maggie Henderson. After said purchase, J. M. Henderson built a house and made other improvements on said lot to the value of $5,000, or other large sum, which building and improvements were made with the money of said J. M. Henderson; that J. M. Henderson had the title to said lot taken in the name of Maggie Henderson, and the improvements made thereon, for the purpose of placing the same beyond the reach of J. M. Henderson, and for the purpose of hindering, delaying, and defrauding the complainant.

The prayer of the bill was as follows: "And upon a final hearing of said cause may your honor determine and decree that the transfer or sale and transfer of said stock of goods, wares, and merchandise and other assets embraced in said business in which J. M. Henderson is interested to Alex. Henderson and W. C. Black, or to Alex. Henderson & Co., in which they are interested, is fictitious, fraudulent, or simulated to the extent of the interest of the said J. M. Henderson, and that they be required to pay the same, or the value thereof, to orator, in payment and satisfaction of said judgment against the said J. M. Henderson, or that the said business in the possession or under the control of Alex. Henderson and W. C. Black is in whole or in part the business and property of the said J. M. Henderson, and subject to the satisfaction of orator's judgment; and may your honor order an accounting and settlement of the partnership business and property of the said J. M. Henderson, and ascertain the interest in said business of the said J. M. Henderson, and condemn his interest in said business, and the assets thereof, to the satisfaction of orator's said judgment. And may your honor ascertain the whereabouts of the assets and property of the said J. M. Henderson, and condemn the same, in whosesoever hands or possession they may be found, to the payment and satisfaction of orator's said judgment; and may your honor set aside and cancel the alleged title and interest of the said Maggie Henderson to the house and lot hereinbefore described, where the said J. M. Henderson now resides, and condemn the same, and order it sold, and the proceeds of sale applied to the payment and satisfaction of orator's said judgment; and may your honor grant unto orator all such other and further general relief as in equity and good conscience it is entitled to, the premises being considered."

To the bill the respondents demurred upon the following grounds: (1) Said bill of complaint seeks a discovery of the assets and effects of the defendant J. M. Henderson, and the allegations thereof are not sworn to. (2) Said bill of complaint seeks to have a discovery of the assets and effects of the defendant J. M. Henderson, and requires him to answer the interrogatories and allegations thereof, but waives his oath to answer required of him. (3) The bill of complaint does not allege that the facts sought to be discovered cannot be proved without the answer of the defendant J. M. Henderson. (4) Said bill shows upon its face that said complainant knows of effects belonging to the defendant J. M. Henderson which are subject to the payment of his debt without a resort to this bill of complaint, in that it alleges that the said J M. Henderson is a member of the firm of J. M. Henderson & Co., and also alleges that the said J. M. Henderson & Co. has a large amount of money due it, and is therefore without equity as to the discovery sought therein. (5) Said bill of complaint does not show why the indebtedness of the complainant cannot be made at law, without resorting to this proceeding, out of the interest of the said J. M. Henderson & Co., and is therefore without equity as to the discovery sought. (6) Complainant has an adequate remedy at law for the collection of its debt, as shown by the allegations of its bill, for they show that J. M. Henderson's interest in the business of Alex. Henderson & Co. is subject to the payment of his debts, and that execution can be levied thereon, and the debt of the complainant collected, without a resort to equity for a...