Smith v. Wilder

• Decision Date: 24 March 1960
• Docket Number: 4 Div. 878
• Parties: T. C. SMITH et al. v. Tracey B. WILDER, as Executor, et al. Tracey B. WILDER, as Executor, et al. v. Ray C. SMITH. ,-A.
• Court: Alabama Supreme Court

Page 871

120 So.2d 871

270 Ala. 637

T. C. SMITH et al. v. Tracey B. WILDER, as Executor, et al.

Tracey B. WILDER, as Executor, et al. v. Ray C. SMITH.

4 Div. 878, 4 Div. 878-A.

Supreme Court of Alabama.

March 24, 1960.

Rehearings Denied June 2, 1960.

Frank J. Tipler, Jr., Andalusia, for appellants and cross-appellee.

Murphy & Murphy and Allen Cook, Andalusia, for appellees and cross-appellants.

LAWSON, Justice.

This case was submitted on briefs without oral argument. At the time of submission it was assigned to another Justice. It was assigned to the writer of this opinion on January 11, 1960.

The bill was filed by A. C. Wilder, Sr., and A. C. Wilder Land Company, a corporation, as contract creditors of the respondent, T. C. Smith.

The bill seeks to subject to the payment of debts alleged to be owed complainants by T. C. Smith certain real estate attempted to be conveyed by him in fraud of complainants' rights, to the respondents Opal Newton Smith and Ray C. Smith, the wife and son of the respondent T. C. Smith.

The bill seeks the cancellation of the conveyances made by T. C. Smith to Opal Newton Smith and Ray C. Smith on two grounds: That they were constructively fraudulent, executed voluntarily and without consideration; and actually fraudulent, that is, they were executed with the intent to hinder, delay and defraud the complainants and to place the property of T. C. Smith beyond the reach of complainants.

After a hearing where testimony was taken ore tenus, the trial court decreed that the conveyance from T. C. Smith to his wife, Opal, was voluntary and therefore void as to debts owed the complainants and ordered that conveyance cancelled and annulled.

The trial court further decreed that the complainant A. C. Wilder Land Company have and recover of the respondent T. C. Smith the sum of $14,851 and that the complainant A. C. Wilder, Sr., have and recover of T. C. Smith the sum of $3,214.

The trial court refused to vacate the conveyance from T. C. Smith to his son, Ray C. Smith. Complainants were held to be entitled to no relief against Ray C. Smith and as to him the bill as last amended was dismissed.

From the decree against them the respondents T. C. Smith and Opal Newton Smith appealed to this court.

Complainants being dissatisfied with the trial court's action in regard to the respondent Ray C. Smith filed a cross appeal.

A. C. Wilder, Sr., died after the appeals were taken. As to him, the appeal and cross appeal were revived in the name of the executor of his estate, Tracey B. Wilder, by an order entered at time of submission in this court. See § 808, Title 7, Code 1940.

The appellants T. C. and Opal Newton Smith have assigned as error the action of the trial court in overruling their demurrers interposed to the bill as last amended.

The decree overruling the demurrers to the bill as last amended is general, no reference being made therein to the aspects to which grounds of the demurrer were addressed. Hence our review is limited to those grounds of the demurrer addressed to the amended bill as a whole which have been argued in brief. Rowe v. Rowe, 256 Ala. 491, 55 So.2d 749; McCary v. Crumpton, 263 Ala. 576, 83 So.2d 309; Green v. Mutual Steel Co., 268 Ala. 648, 108 So.2d 837.

It is contended that the grounds of the demurrers taking the point that the amended bill is multifarious should have been sustained.

The rule is settled that different grantees of the same debtor, though they claim and hold under different conveyances affecting different property, may be joined in the same bill with the debtor, to cancel such conveyances and subject the property to the satisfaction of the debts owed by the debtor. Green v. First National Bank of Jacksonville, 224 Ala. 47, 138 So. 550, and cases cited.

It is also well settled that any number of creditors, whether judgment or simple contract creditors, and whether with or without liens, may join as complainants in a bill to set aside alleged fraudulent conveyances. Carothers v. Weaver, 220 Ala. 584, 127 So. 151; Brooks v. Lowenstein, 124 Ala. 158, 27 So. 520; Steiner Land & Lumber Co. v. King, 118 Ala. 546, 24 So. 35; Gibson v. Trowbridge Furn. Co., 93 Ala. 579, 9 So. 370; Tower Mfg. Co. v. Thompson, 90 Ala. 129, 7 So. 530; Ruse v. Bromberg, 88 Ala. 619, 7 So. 384.

In McClintock v. McEachin, 246 Ala. 412, 20 So.2d 711, the bill sought the cancellation of conveyances made by two people who were made respondents to the bill. There was nothing in the bill to show that either conveyance had any connection with the other. To like effect are the other cases cited. Callahan v. Auburn Production Credit Association, 240 Ala. 104, 197 So. 347, 129 A.L.R. 893, and Price v. Stewart, 259 Ala. 299, 66 So.2d 453.

We hold that the grounds of demurrer taking the point that the bill as last amended is multifarious were correctly overruled.

Section 897, Title 7, Code 1940, expressly authorizes a simple contract creditor without a lien to file a bill in equity to discover, or to subject to the payment of a debt, any property which has been fraudulently transferred by his debtor, without first exhausting his legal remedies under a writ of nulla bona whether the debtor be living or dead. Freeman v. Pullen, 119 Ala. 235, 24 So. 57. See Anderton v. Hiter, 238 Ala. 76, 188 So. 904.

An allegation that the conveyance of the property was voluntary and without consideration is sufficient averment by an existing creditor to vacate, without regard to any other circumstance. Crisp v. First Nat. Bank of Birmingham, 224 Ala. 72, 139 So. 213. See Harrison v. American Agricultural Chemical Co., 220 Ala. 695, 127 So. 513; Drain v. F. S. Royster Guano Co., 231 Ala. 422, 165 So. 239; Lacey v. Wilson, 268 Ala. 215, 106 So.2d 31.

The bill as last amended does not in terms allege that complainants were existing creditors, but it does aver that the respondent T. C. Smith 'owed the complainants the said indebtedness' at the time the conveyances sought to be vacated were executed and delivered. This is sufficient to show that complainants were existing creditors. Crisp v. First Nat. Bank of Birmingham, supra.

The bill as last amended is good as against the general demurrers, there is no equity in the bill and the complainants have an adequate remedy at law, directed to the amended bill as a whole. See Percoff v. Solomon, 259 Ala. 482, 67 So.2d 31, 38 A.L.R.2d 1100.

It is argued that the grounds of the demurrers to the effect that the bill as last amended shows on its face that complainants are guilty of laches were well taken.

This insistence is made in regard to the debt alleged to be owed by T. C. Smith to A. C. Wilder, Sr. No such insistence is made in regard to the debts alleged to be owed by T. C. Smith to the corporate complainant. Hence, grounds of demurrer raising laches addressed to the amended bill as a whole were overruled without error.

Finding no merit in those grounds of the demurrer argued in brief, we hold that the trial court did not err in overruling the demurrers interposed to the bill as last amended.

The bill alleged and the proof shows that the complainant A. C. Wilder Land Company is the holder of two promissory notes executed by the respondent T. C. Smith on October 4, 1947.

In one of the notes T. C. Smith promised to pay to A. C. Wilder, Sr., or order the sum of $7,500 on October 1, 1948. This note was transferred to A. C. Wilder Land Company by A. C. Wilder, Sr., on October 22, 1947.

In the other note T. C. Smith promised to pay to Tracey B. Wilder or order the sum of $5,000 on August 1, 1948. This note was transferred to A. C. Wilder Land Company by Tracey B. Wilder on May 31, 1948.

Each of the notes secured by mortgages on personal property, which were also transferred to A. C. Wilder Land Company.

The A. C. Wilder, Sr., mortgage includes 100 shares of stock in the Covington Consolidated Packing Company, Inc., of Andalusia, and stock certificate No. 36 of that company to the effect that T. C. Smith was the owner of 100 shares of its stock was attached to the instrument.

The Tracey B. Wilder mortgage includes eighty shares of stock in the same corporation and its stock certificate No. 38 to the effect that T. C. Smith was the owner of eighty shares of its stock was attached to that instrument.

The respondents sought to show a verbal agreement between T. C. Smith and A. C. Wilder, Sr., at the time the notes and mortgages were executed to the effect that the 'stock was the only thing that stood for said notes.'

The trial court's refusal to permit proof of the claimed verbal agreement is assigned as error.

We are of the opinion that the ruling of the trial court is in accord with the holdings of this court.

In Regional Agricultural Credit Corporation of Washington, D. C. v. Hendley, 251 Ala. 261, 37 So.2d 97, the Credit Corporation brought suit against Hendley on a promissory note executed by Hendley for funds advanced him for the purpose of producing a peanut crop.

In his Plea 3 Hendley averred in effect that at the time of the execution of the note he and the plaintiff agreed that the note would be payable only from the monies which he received from the sale of the peanut crop raised with the proceeds of the loan; that if the amount which he received from the sale of the peanut crop was insufficient to pay all of the loan the balance would be waived. Plaintiff's demurrer to Plea 3 was overruled. We held such action to constitute reversible error on the ground that the agreement set forth in the note sued on appeared to be complete on its face and the agreement alleged in the plea contradicted that set forth in the note. We pointed out that parol evidence is not admissible where the effect would be to change or to defeat the legal operation and effect of a written instrument. See Ison Finance Co. v. Glasgow, 266 Ala. 391, 96 So.2d 737; Brown Shoe Company v. Rowell, 237 Ala. 404, 187 So. 498; Jackson v. Sample, 236 Ala. 486, 183 So....