Pollock v. Meyer

• Decision Date: 21 June 1892
• Citation: Pollock v. Meyer, 96 Ala. 172, 11 So. 385 (Ala. 1892)
• Parties: POLLOCK ET AL. v. MEYER ET AL.
• Court: Alabama Supreme Court

11 So. 385

96 Ala. 172

POLLOCK ET AL. v. MEYER ET AL.

Supreme Court of Alabama

June 21, 1892

Appeal from city court of Selma; WILLIAM H. TAYLOE, Special Judge.

Bill by J. Pollock & Co. and others against M. Meyer & Co. and others to set aside certain conveyances alleged to be in fraud of creditors. Judgment for defendants, and plaintiffs appeal. Affirmed.

On November 27, 1888, M. Meyer & Co., who were doing a wholesale and retail business in the city of Selma, made a bill of sale to Jacob Rothschild, as trustee for the Commercial Bank of Selma, and Emilie Meyer, of the stock of goods, wares, and merchandise contained in their stores, upon the consideration of an indebtedness then due the said bank and Emilie Meyer who was the wife of M. Meyer. On the same day the said firm of M. Meyer & Co. conveyed to the said Rothschild, as trustee for the benefit of other of their creditors, all bills notes, goods, and choses in action belonging to said firm and on the same day conveyed to Albert Meyer a certain lot to secure an indebtedness due him from said firm. All of these several creditors, on the day after the conveyances were executed, accepted them in writing in payment of a debt alleged to be due; and it was admitted that M. Meyer & Co. thus disposed of substantially all of their property. In December following this transfer, by bills filed in the city court of Selma, the trustee in the above-named deeds was removed upon certain grounds alleged in said bill, and receivers appointed in his stead. The defendants interposed demurrers to the bill, and filed their answers denying the allegations of the bill in reference to the fraudulent disposition of their property, and the summary of facts which go to show their defense is sufficiently shown in the opinion. Among other claims on the part of the plaintiffs they contended that M. Meyer & Co., in effect, paid the bank $7,096.72 on account by indorsed paper, on which other persons remained bound, thereby reducing the actual amount of the purchase money, on account of which the actual value of the goods exceeded the actual amount of the consideration paid for them. The bill of sale and the testimony fully negative this contention, and show that M. Meyer & Co. did not pay any part of the indorsed paper, but were released from it.

David T. Blakey and Tompkins & Troy, for appellants.

Thomas B. Roy, Pettus & Pettus, and White & Craig, for appellees.

COLEMAN J.

Plaintiffs as creditors of M. Meyer & Co., filed their bill for the purpose of having certain conveyances executed by the defendants to other creditors set aside and annulled as being fraudulent and void, and to have the property conveyed subjected to the payment of their demands. The bill does not seek to have the several conveyances assailed declared a general assignment for the benefit of all the creditors, but proceeds entirely upon the theory that the several conveyances were fraudulent and void. The gravamen of the charges is that the debts in payment of which the conveyances were made, were simulated in whole or in part, and also that a benefit was reserved to the grantors. The record is voluminous, and large amounts are involved in the litigation. There is no material conflict in the evidence, that we have discovered, and no new principle of law invoked on either side. The real contest is over the legal effect of proven facts upon the transaction, and we think this is narrowed down to the conveyances to Rothschild, trustee for the Commercial Bank, and Emilie Meyer, wife of respondent M. Meyer. In Knowles v. Street, 87 Ala. 360, 6 South. Rep. 273, it is said: "Since the decision in Hodges v. Coleman, 76 Ala. 103, which has been uniformly followed, it should be regarded as settled law in this state that the sale of the whole or a part of his property by an embarrassed or insolvent debtor to his creditor, in payment of an antecedent debt, will be upheld, if the debt be bona fide, its amount not materially less than the fair and reasonable value of the property, and the payment of the debt is the sole consideration, and no use or benefit is reserved to the debtor. In such case the inquiry should be directed to the bona fides of the debt, the sufficiency of the consideration, and the reservation of a benefit to the debtor. If the transaction is not assailable on some one of these grounds, fraud otherwise has no room for operation. Whether there exist the ordinary badges of fraud, whether the debtor intended to hinder or defraud his other creditors, whether the purchasing creditor was swift in the race of diligence for the purpose of defeating other creditors who were pressing their demands, or whether such is the necessary consequence, are not material inquiries. By devoting his property to the payment of an honest debt, the debtor merely performs a lawful act." In Meyer v. Sulzbacher, 76 Ala. 128, it is said: "The sale of the goods being shown to be in absolute payment of a debt, proved to be due by Sulzbacher to his wife, and the price paid being fair and adequate, and no interest being reserved by the grantor, the performance is one authorized by...