Stollenwerck v. Fourth Nat. Bank

• Decision Date: 21 April 1921
• Docket Number: 3 Div. 488
• Citation: Stollenwerck v. Fourth Nat. Bank, 205 Ala. 548, 88 So. 659 (Ala. 1921)
• Parties: STOLLENWERCK et al. v. FOURTH NAT. BANK OF MONTGOMERY.
• Court: Alabama Supreme Court

88 So. 659

205 Ala. 548

STOLLENWERCK et al. v. FOURTH NAT. BANK OF MONTGOMERY.

3 Div. 488

Supreme Court of Alabama

April 21, 1921

Appeal from Circuit Court, Montgomery County; W.L. Martin, Judge.

Bill by the Fourth National Bank of Montgomery against Emma C Stollenwerck and others, to declare an assginment void as to creditors, and to acquire money paid under it for the benefit of creditors.From a decree granting the relief, respondents appeal.Affirmed.

Ball &amp Beckwith, of Montgomery, for appellants.

Gustave Mertins and Steiner, Crum & Weil, all of Montgomery, for appellee.

SOMERVILLE J.

The allegations of the bill of complaint are sufficient to show that Mrs. Cobbs' assignment to Mrs. Stollenwerck of her anticipated dividends from the estate of John L. Cobbs &amp Company, then in bankruptcy, was void under section 4287 of the Code, as to other creditors, by reason of the separate, secret, and contemporaneous agreement between them whereby a valuable benefit was reserved to the assignor.

The evidence supported the allegations of the bill in this aspect, and the decree of the circuit court overruling the demurrer to the bill and granting the relief prayed, must be affirmed.

The rule is that if there is any right reserved to the grantor which is inconsistent with an absolute, unconditional sale, or if there is any use or benefit secured which would not result, as a matter of law, from the nature and terms of the sale, whether expressed or not, the assignment will be held as void at the suit of a creditor.Goetter v. Smith Bros.,104 Ala. 481, 16 So. 534;McDowell v. Steele,87 Ala. 493, 6 So. 288;Pritchett v. Pollock,82 Ala. 169, 2 So. 735.

Had the agreement here in question merely required the assignee to pay over to the assignor any amount in excess of the indebtedness intended to be paid by the assignment of the funds, that would not have been the reservation of a benefit obnoxious to the statute.Truitt v. Crook,129 Ala. 377, 30 So. 618;Loucheim v. FirstNat. Bk., 98

Ala 521, 13 So. 374.But it does much more than that, for it recited that Mrs. Stollenwerck (the assignee)-- "promises and agrees to so credit the said dividends [as payments on the assignor's note] and to use reasonable diligence in investing or causing said dividends to be invested in such a way as to bear interest, and when the interest thereon has been collected shall pay over the said interest to the said Mrs....