Simmons v. Shelton

• Decision Date: 13 November 1896
• Citation: 112 Ala. 284,21 So. 309
• Parties: SIMMONS ET AL. v. SHELTON ET AL. [1]
• Court: Alabama Supreme Court

21 So. 309

112 Ala. 284

SIMMONS ET AL. v. SHELTON ET AL. ^[1]

Supreme Court of Alabama

November 13, 1896

Appeal from city court of Birmingham; W. W. Wilkerson, Judge.

Bill by C. S. Simmons and another against D. W. Peace and others to set aside a fraudulent conveyance. A receiver was appointed and from a judgment dismissing the bill without requiring the receiver to account complainants appeal. Modified.

On the 3d of October, 1891, the appellants, C. S. and W. T. Simmons suing as Simmons & Co., filed this bill against D. W. and W H. Peace, late partners under the name of D. W. Peace & Son H. V. Peace, and W. P. and I. G. Wyatt, alleging that in June, 1891, D. W. and W. H. Peace were associated in business as a partnership under the firm name of D. W. Peace & Son and were engaged in buying and selling goods; that they bought goods of complainants in June, amounting to $666.05, which they agreed to pay on 1st July, 1891; and in July, they bought other goods to the amount of $36.87, which they agreed to pay on 1st August, following, on which, there remained a balance due, at the filing of the bill, of $447.30; that on the 3d day of July, 1891, said Peace & Son, executed to defendant, I. G. Wyatt, who was the wife of W. P. Wyatt, a bill of sale, purporting to convey to her their stock of goods; for which she paid in cash $75, and executed to them her five negotiable notes, of which notes four were for the sum of $250 each, and one for $550, which notes said W. P. Wyatt indorsed, and only one of them for $250 was due; that upon the execution of said notes, the possession of said stock of goods was turned over to said W. P. Wyatt, who has since been selling them, and has the remnant unsold in his possession; that he or his said wife, has certain moneys (what amount not stated), the proceeds of said sales of goods, in their possession; that with money derived from such sales, or other money furnished by said W. P. Wyatt, he has added other goods to said stock, and the old and new goods were so intermingled as not to be distinguishable; that said stock of goods were of the value of $1,700, and the remnant on hand, was not worth more than $400; that said Wyatt claims he has had charge of all of said goods as agent for his said wife, and that the proceeds of such as were sold, and the remnant remaining in his hands belonged to her; that said notes executed by said I. G. Wyatt to said Peace & Son, were indorsed to said H. V. Peace, who still held the same, and they were unpaid; that the stock of goods so sold and transferred to said I. G. Wyatt, were the only assets of said Peace & Son, except their claims against parties unknown to complainants, and that said Peaces and Wyatts were insolvent. It was further alleged, that the conveyance of said stock of goods by Peace & Son, was made with intent on their part, to hinder, delay, or defraud their creditors, of which intent the said W. P. and I. G. Wyatt were, at the time apprised; and the same was made in trust for the use of said D. W. Peace & Son, or for the use of one or the other of them; that said Wyatt and wife took said conveyance and executed said notes, for the purpose of hindering, delaying or defrauding their own and the creditors of said Peace & Son; that there was no valuable consideration paid by Mrs. Wyatt to said Peace & Son for said goods, and that they are, and were, as between Wyatt and wife, his property, and the entire debt owing to Peace & Son, on account of said conveyance, was the debt of said W. P. Peace; that the indorsement of said notes by Peace & Son to said H. V. Peace, was without valuable consideration and voluntary, made by Peace & Son to hinder, delay or defraud their creditors, of which intent said H. V. Peace was apprised at the time, and held said notes in trust for said Peace & Son; that on 16th September, 1891, complainants entered suit in the circuit court of Jefferson county against said Peace & Son for the recovery of their debt, and in aid of said suit, garnished said Wyatt and H. V. Peace to appear and answer what sums they or either owed said Peace & Son. Said parties were each made defendants to said bill, and the prayer was that said D. W. and W. H. Peace disclose the names of all persons indebted to them as late partners, and the amounts owing by each respectively; that H. V. Peace be enjoined from selling or disposing of said notes, and the said Wyatts from making any payments on them, and that H. V. Peace be required to file said notes in court; that a receiver be appointed; that said conveyance of said goods be declared void against complainants, and the goods sold for the benefit of complainants; for a decree against said D. W. Peace for any payments that might have been made to him on said notes, and for personal decrees against said D. W. and W. H. Peace, and W. P. and I. G. Wyatt for such amount of their debt to complainants as should remain unpaid. A receiver was appointed on the 9th October, 1891.

The bill was answered by each defendant, and all charges of fraud as alleged against each were specifically denied; the said Wyatts, that they were bona fide purchasers of said goods, without any actual or constructive fraud; and the said Peaces, that they sold said stock of goods to said I. G. Wyatt for the sum of $1,546.64, she paying in cash therefor, in notes as alleged; that one of said notes for $250 had been paid in full and delivered to said Wyatt by the transfer and delivery of goods by said Wyatt to creditors of respondents, and the others were due and unpaid excepting a credit of $101.05 on one of them; that said notes were, on the day following their execution, transferred and assigned in good faith to H. V. Peace in payment of a debt long past due to him by respondents, which were so accepted, and they are now his property, and that it was not true, that said I. G. Wyatt paid on said purchase, the sum of $75 in cash; that said W. P. Wyatt having been burned out in Birmingham, and respondents hearing of his loss, went to said Wyatt and offered to sell to him their stock of goods, and a trade was concluded therefor in the name of I. G. Wyatt; that they did not know in whose name the burned stock of goods had been carried, and it was only long afterwards that they ascertained that said destroyed goods were held in the name of said W. P. Wyatt; that said Wyatt had an insurance policy of $700 on his goods which had not been collected, and that the sum, when collected would be applied towards the payment of said notes, but the same has never been collected and so applied. It was denied that said Wyatts were apprised of any fraudulent intent on the part of respondents in making said sale and conveyance of said goods to them; that they were instructed to make the conveyance to said I. G. Wyatt, but they had no knowledge or information of any fraudulent intent on the part of W. P. or I. G. Wyatt, in having it so made, and both of them are liable on said notes. Of the notes and accounts held by respondents at the time of their sale to said Wyatts, the sum of about $1,000 or $1,200 had been collected and applied towards the payment of creditors of respondents, and they had used none of the same for their individual purposes. They attach a schedule of those uncollected. H. V. Peace answered, adopting the answers of D. W. and W. H. Peace as to his ownership of said notes, and denying any knowledge or information of any fraud on the part of the other defendants, as alleged in the bill.

On the 26th May, 1892, complainants amended their bill, alleging, that after the original bill had been filed, and before a receiver had been appointed in the cause, W. P. Wyatt delivered to L. B. Shelton and W. W. Harkins, parties in business as Sheldon & Co., the unsold remnant of said stock of goods in their possession, of the value of $500, and Shelton & Co. had disposed of said goods; that said delivery was made to Shelton & Co. by said W. P. and I. G. Wyatt, for the purpose of putting them out of complainants' reach, and for hindering, delaying and defrauding complainants of their relief prayed in their original bill, and said Shelton and Harkins shared in such purposes, or knew that such was the purpose of said parties and that they knew, at the time, of the facts stated in the original bill, and of the conveyance as therein charged, or of other facts (not stated) from which, by due investigation, would have discovered to them that such conveyance was made with the intent on the part of said Peace & Son to hinder, delay or defraud their creditors, and that said Wyatts shared in such purpose. By this amendment, said Shelton and Harkins were made parties to the bill, and the prayer is for a decree for $500 against them, and for general relief.

Shelton and Harkins answered denying specifically all allegations of fraud as charged. And as to their connection with the transaction, they state, that they had sold goods to Peace &amp Son, before they sold to said Wyatt, and said Peace & Son were, at the time they sold to Wyatt, indebted to respondents in the sum of $36, which said I. G. Wyatt assumed to pay; that respondents sold goods to I. G. Wyatt, from time to time, after their purchase from said Peace & Son, and she was, on October 1, 1891, indebted to respon...