Merchants' Bank of Mobile v. Parrish

• Decision Date: 17 December 1925
• Docket Number: 1 Div. 380
• Citation: 106 So. 504,214 Ala. 96
• Parties: MERCHANTS' BANK OF MOBILE v. PARRISH et ux.
• Court: Alabama Supreme Court

106 So. 504

214 Ala. 96

MERCHANTS' BANK OF MOBILE v. PARRISH et ux.

1 Div. 380

Supreme Court of Alabama

December 17, 1925

Appeal from Circuit Court, Mobile County; Saffold Berney, Judge.

Bill in equity by the Merchants' Bank of Mobile against B.R Parrish and wife. From a decree dismissing the bill complainant appeals. Affirmed.

Stevens McCorvey, McLeod, Goode & Turner, of Mobile, for appellant.

Thornton & Frazer, of Mobile, for appellees.

SAYRE J.

Appellees are man and wife. Appellant is a creditor of the husband. Appellant, complainant in the trial court, filed its bill to annul a conveyance made by defendant husband to his wife as having been made in fraud of its rights. The conveyance of dairy cattle, dairy equipment, farming implements, and a secondhand automobile, all worth about $3,500, was made in part payment of an indebtedness of the defendant B.R. Parrish to his wife in the sum of $6,500. Complainant denies that there was a bona fide indebtedness, but we think defendants' version of the facts as to that must be accepted. Complainant's debt is not denied. The bill fails to aver the simulation of the consideration upon which the conveyance was made, but complainant insists that such was the case. Grantor and grantee were husband and wife, as we have said, and defendants have assumed the burden of proving the bona fides of the consideration, and must concede that the transaction between them will be more closely scrutinized by the court, at the instance of a creditor, then a transaction between strangers. Moog v. Farley, 79 Ala. 246; Zelnicker v. Brigham, 74 Ala. 598. Still, relationship is not, of itself, sufficient to stamp a transaction as fraudulent, and a bona fide creditor, however closely related to his debtor, may take property at a fair price in payment of his debt (cases supra), provided the transaction be not such as to fall under the influence of section 8040 of the Code of 1923, and no benefit be reserved to the grantor.

In September, 1922, defendants lived in Kentucky, but the husband's health was not good, and he determined to move to some point on the Gulf Coast. He had something more than $7,500 in cash, bills receivable to the amount of $2,500, and these items, along with his dairy cattle, constituted an estate in the close neighborhood of $15,000. Testifying as a witness, he estimates his property at $20,000; but he seems to have had in mind other unnamed assets; but, in any case, we are of opinion that he was fairly worth $15,000. The record warrants the finding that he owed no debts; that is, his testimony, and there is nothing to the contrary. In these circumstances he gave his wife $6,500, put $1,100 in his pocket, and went to Mobile, taking along his wife, his children, and his dairy outfit. That he gave his wife a check for the amount of his gift and that it was passed to her credit in the Kentucky bank is not denied. His testimony is that he intended thereby to make some provision for his family; that he had no creditors, present or in specific prospective, though he intended, of course, to go into business wherever he might locate. We are unwilling to hold that in his circumstances he might not lawfully make provision for his family as he did; nor do subsequent facts justify a finding that any fraud against future creditors was then intended. He had expected to begin business in his new location by renting a place; but at the end of two weeks he had found a place that he preferred to buy at the price of $11,500. He then borrowed the balance of his wife's $6,500--some $300 or $400 had been expended by her--placed her check to his credit with complainant bank, paid $4,000 on his purchase, and later on negotiated loans with complainant for amounts which total $4,500, of which $1,500 has been repaid. Of the moneys thus borrowed, $10,000 was expended in permanent improvements on the place. This is the grantor's testimony. It has corroboration in the record; nor is there any evidence to the contrary. We find no sufficient reason for rejecting it as untrue. Later, when complainant pressed for security, he gave a second mortgage to secure the balance of $3,000 then due on complainant's debt.

Two other creditors, whose combined debts amount to $334.56, with interest, have filed petitions seeking to intervene as in case of a general creditors' bill; but complainant's bill is not a general creditors' bill, and complainant had the right to file a bill for its exclusive benefit, and so the cause should have proceeded until complainant or some other creditor by proper...