Ruse v. Bromberg

• Decision Date: 17 December 1889
• Citation: 88 Ala. 619,7 So. 384
• Parties: RUSE ET AL. v. BROMBERG.
• Court: Alabama Supreme Court

7 So. 384

88 Ala. 619

RUSE ET AL. v. BROMBERG.

Supreme Court of Alabama

December 17, 1889

Application for rehearing overruled April 24, 1890.

Appeal from chancery court, Mobile county; THOMAS W. COLEMAN Chancellor.

Action by Fred C. Bromberg, assignee of the Alabama Insurance Company and the Citizens' Insurance Company, against John C. Ruse and others, to set aside an alleged fraudulent conveyance. From a decree in complainant's favor defendants appeal.

Code Ala. 1886, § 3544, provides: "A creditor without a lien may file a bill in chancery to discover, or to subject to the payment of his debt, any property which has been fraudulently transferred or conveyed, or attempted to be fraudulently transferred or conveyed, by his debtor."

Overall & Bestor, for appellants.

G. L. & H. T. Smith and F. G. Bromberg, for appellee.

CLOPTON J.

Appellants complain that the chancellor refused to allow an amendment of the answer to the amended bill, and on this ground ask a reversal of the decree. The amendment, though not formal, may be regarded in the nature of a demurrer, and will so be treated. Under the statute authorizing the incorporation of a demurrer in the answer, and the liberal construction placed upon the statute of amendments, a defendant has the right to amend his answer, at any time before final decree, by incorporating a demurrer therein. Shaw v. Lindsey, 60 Ala. 344. But a denial of the right will not reverse the decree, if it appears that defendants were not prejudiced thereby.

The bill is filed by appellee in the capacity of assignee of two distinct and insolvent corporations, the Alabama Insurance Company and the Citizens' Insurance Company, and assails for fraud certain conveyances of a lot of land in Mobile. Appellee was appointed by separate assignments. The first question raised by the proposed amendment relates to the right of complainant to unite distinct claims, assigned separately by the companies, in a bill attacking for fraud a conveyance of his property by a common debtor, without having first obtained judgments at law, on which executions have issued, and been returned "No property." The contention is that the statute which authorizes a creditor, without a lien, to file a bill in chancery to subject to the payment of his debt property fraudulently conveyed by his debtor, does not extend to such creditors the general rule which permits separate judgment creditors to join as complainants in a bill having such object. The statute has been in operation nearly 30 years. From the time of its enactment it has been the common practice to unite in such bills two or more creditors, without a lien, seeking to enforce separate and distinct demands.

Many cases have been reviewed in this court without the propriety of the practice being questioned. The statute has been generally considered as operating to place simple contract and judgment creditors, as to the remedy, on the same footing. Were it difficult to perceive any sound principle of equity pleading on which to justify it, we would long hesitate to disturb a practice so general and continuous, especially as its tendency and effect are to promote convenience, and to prevent multiplicity of suits.

In Railway Co. v. McKenzie, 85 Ala. 546, 5 South. Rep. 322, the bill was for discovery, and was filed under section 3545, Code 1886. The section was construed as creating a right in both judgment and simple contract creditors, and, in connection with the succeeding section, (3546,) as providing the remedy for the enforcement of the right. The latter section provides that any number of judgment creditors upon whose judgments executions have been issued, and returned "No property found," may join as complainants in such bill. On this express and limited provision, and the omission therefrom of creditors without a lien, it was held that the statute does not allow the latter class of creditors to become common suitors. Section 3544, under which the present bill is filed, does not create, but only extends to simple contract creditors, without restriction or qualification, express or implied, a right and remedy which judgment creditors possessed independent of statutory provisions. But whether separate creditors, without a lien, may join in such bill, is not the precise question presented by the amendment. The claims of both companies are assigned and unite in complainant, by which he acquires a common interest in them. They are of the same standing and dignity. The purpose of the bill is to subject to their payment a common estate, and all the defendants are interested in the subject-matter of the suit. By joining the claims in one bill, expense is diminished, unnecessary and multiplied litigation avoided, and the defendants are not prejudiced. We can see no difficulty that can arise from allowing complainant to assert in one bill his title as assignee to a common relief in respect to the several claims. On the coming in of the report of the register the decree may be so moulded as to properly adjust the rights and equities of the respective parties.

The amendment further controverts the right of complainant to proceed to subject property alienated by the debtor to the payment of notes given for the unpaid capital stock subscribed for or purchased by him until, by proper proceedings against all the shareholders, the amount of the outstanding liabilities of the corporation is ascertained the pro rata proportion of each assessed, and a call therefor made. When the liability is upon a subscription to the capital stock, and the charter or contract of subscription provides that the shares shall be paid in as required by the board of directors, the general rule is, that the stockholder's liability does not mature, and he cannot be sued by the company, until a call is made. If the charter and contract of subscription are silent as to the time of payment, a call or assessment is an implied condition precedent to a matured liability. The rule is otherwise when, by the provisions of the charter or of the contract, the subscription is payable at specified times, and in specified amounts. In such case the liability matures, and the subscriber is bound to pay in all events, on the...