Metcalf v. Arnold

• Decision Date: 28 June 1902
• Citation: 32 So. 763,132 Ala. 74
• Parties: METCALF ET AL. v. ARNOLD ET AL.
• Court: Alabama Supreme Court

32 So. 763

132 Ala. 74

METCALF ET AL. v. ARNOLD ET AL.

Supreme Court of Alabama

June 28, 1902

Appeal from chancery court, Montgomery county; W. L. Parks Chancellor.

Suit by Francis R. Arnold and others against H. B. Metcalf and others. From a decree for complainants, defendants appeal. Reversed.

After the remandment of the cause on the former appeal, the bill was amended. The substance of the amendment, so far as necessary to an understanding of the decision on the present appeal, is sufficiently stated in the opinion. The prayer of the bill was also amended by praying that the respondents be required to account to the complainants for so much of the goods and merchandise as was used for buying the stock issued to the respondents, respectively, and that A. P. Metcalf and M. M. Weatherly be required to pay to the complainants so much of the value of the goods, wares, and merchandise issued in paying for the stock issued to them as may be necessary to pay the amount ascertained to be due the complainants, and the costs of this proceeding. There was a motion made to strike the amendment from the file on the ground that it was a departure from the original cause of action as stated in the original bill, and that the relief prayed for in said amendment was inconsistent with the prayer for relief in the original bill. There was also a demurrer interposed to the original bill, based upon the same grounds. On the submission of the cause on the motion to strike and the demurrers, a decree was rendered overruling them. The other facts of the case necessary to an understanding of the decision on the present appeal are sufficiently stated in the opinion. The final decree in the cause was as follows: "That complainants are entitled to the relief prayed for in their said bill of complaint, and that the sale of the stock of goods belonging to the firm of H. B. Metcalf by and between the partners thereof, as well as the sale of the goods by the said partners to Mrs. Metcalf and Mrs. Weatherly, and the formation of said corporation of Metcalf Drug Company, are fraudulent and void, so far as the rights of complainants and the other creditors of said firm of H. B. Metcalf are concerned, and that complainants have a lien on said stock of goods originally owned by said partnership of H. B. Metcalf set forth and particularly mentioned in the bill. It is further ordered that the register of this court, as soon as may be convenient to him, hold a reference, ascertain and report to this court: (1) What amount of goods and effects were received by Anna P. Metcalf and M. M. Weatherly originally belonging to the firm of H. B. Metcalf, together with the interest from the date of receipt of same. (2) The number of judgment creditors, together with the amount of their judgments, with interest. It is further ordered that each creditor file with the register his claim against H. B Metcalf, including the items composing the same, with interest, within sixty days from the rendition of this decree." The respondents appeal, and assign as error the decree overruling the motion to dismiss and the demurrers and the rendition of the final decree.

Marks & Sayre and Jno. G. Winter, for appellants.

Watts, Troy & Caffey, for appellees.

SHARPE J.

On a former appeal the bill as originally filed in this case was upheld as against a demurrer, and was defined to be "a bill by a judgment creditor, seeking the aid of a court of equity to remove obstacles and hindrances to the enforcement of their judgments which the judgment debtors have fraudulently interposed." See Metcalf v Arnold, 110 Ala. 180, 20 So. 301, 55 Am. St. Rep. 24. As the bill then stood, its equity rested on grounds for raising a constructive trust in property of a mercantile partnership upon an alleged fraudulent disposition of it to a newly formed corporation in payment for shares of its capital stock issued in part to the defendants who had composed the firm, and in part to their respective wives. Since the remandment, and by way of amendment, the bill is made to allege, in substance, that since it was first filed the property has been disposed of, and is not obtainable; that H. B. Metcalf and F. G. Weatherly, who composed the firm, "before the formation of said corporation, but as part of the scheme to defraud complainants, and on or about the same day, and with a view to the formation of the said corporation, dissolved the said partnership of H. B. Metcalf, and divided the property of said partnership between themselves; that immediately after the said dissolution of the partnership and division of said partnership property, and upon the same day, the said H. B. Metcalf, being indebted to his wife, A. P. Metcalf, transferred to her a part of the property of the partnership which he had received in the division of the partnership property, and at the same time the said F. G. Weatherly, being indebted to his wife M. M. Weatherly, transferred to her a part of the property which he, the said F. G. Weatherly, received in the division of the partnership assets; that, immediately after the transfer of the said property to the said M. M. Weatherly and the said A. P. Metcalf, the said H. B. Metcalf, F. G. Weatherly, A. P. Metcalf, and M. M. Weatherly formed the said corporation, and paid for the stock...