Title: Southern Slag Products Co. v. Thomas

State: alabama

Issuer: Alabama Supreme Court

Document:

413 So. 2d 1073 (1982)
SOUTHERN SLAG PRODUCTS COMPANY
v.
Lynn Edward THOMAS, et al.
80-658.

Supreme Court of Alabama.
April 23, 1982.
*1074 G. Daniel Evans of Evans & Lyerly, Birmingham, for appellant.
Richard O. Jones, Tuscaloosa, for appellees.
MADDOX, Justice.
This is an appeal from a judgment in the trial court denying plaintiff/creditor's request to have certain conveyances from a defendant/debtor/husband to his wife set aside as being fraudulent and made for the purpose of avoiding the satisfaction of a $19,312.03 debt.
The trial court made the following findings of fact and conclusions of law:
The appellee, in brief, stated substantial facts, which we, after examining the record on appeal, conclude were sufficient to support the trial judge's findings and conclusions:
Other testimony was introduced that Mrs. Thomas had stated to her husband as early as May, 1979, that she wanted to have the property transferred to her because she was making all the payments on the mortgages and had supplied the money for the down payment.
The couple maintained two joint bank accounts from which the various mortgage payments were made. Testimony was given at trial that Mr. Thomas primarily used an account in a Moundville bank and Mrs. Thomas primarily used an account in a Tuscaloosa bank, but that Thomas had written checks on and transferred funds deposited in the Tuscaloosa account.
Mr. Thomas is the president and majority stockholder of Southeastern Solar Systems of America (S.E.S.S.A.) which was incorporated in July of 1977. (At the time of trial, S.E.S.S.A. was no longer in operation and had not been served with notice of the suit. Therefore, S.E.S.S.A. is not a party defendant.) In the operation of his corporation, defendant had become indebted in the amount of $19,312.03 on an account with plaintiff Southern Slag Products Company under a personal guaranty to plaintiff on any and all debts of S.E.S.S.A.
On November 27, 1979, plaintiff sent Mr. Thomas a mailgram demanding full payment *1076 by December 1, 1979. On December 6, 1979, plaintiff's attorney wrote a letter to Mr. Thomas demanding S.E.S.S.A.'s outstanding balance to be paid within ten days. On December 27, 1979, Mr. Thomas's attorney replied that Mr. Thomas had a previous personal agreement with Southern Slag whereby all future orders placed by S.E.S. S.A. would be paid in full plus an amount equal to ten percent (10%) of the order placed, to be applied to the outstanding balance. Mr. Thomas's attorney stated that unless he heard from the plaintiff, that Mr. Thomas would continue to satisfy the debt according to the personal agreement. On December 28, 1979, Lynn Thomas conveyed all his interest in the four lots and one residence to Mary Anne Z. Thomas by quitClaim deeds. The stated consideration for each conveyance was $10.00.
On August 12, 1980, plaintiff recovered a judgment against defendant Mr. Thomas in the amount of $19,312.03 in the Circuit Court of Tuscaloosa County. Plaintiff then brought this suit to have the conveyances set aside as fraudulent under Code 1975, § 8-9-6.
In Gurley v. Blue Rents, Inc., 383 So. 2d 531 (Ala.1980), this court was presented with an almost identical issue of an alleged fraudulent conveyance between a husband and wife. There, this Court stated:
In order to meet the requisite burden of proof, the grantee/spouse is not limited to showing that the consideration that actually passed was sufficient, but may also present evidence of circumstances, salaries, financial contributions from other sources and relevant matters tending to prove that the ownership which was transferred was supported by adequate consideration. The grantee/spouse may present evidence tending to show that the original interest owned by the husband was a mere convenience and that the grantee/spouse initially purchased the property with funds from her own separate estate.
In this case, Mary Anne Thomas met the burden by testifying as she did at trial and in her sworn answers to interrogatories. Specifically, defendants answered plaintiff's interrogatories concerning the *1077 consideration paid for the transfer of the property from Mr. Thomas to Mrs. Thomas as follows:
As we have already stated, we have reviewed the evidence concerning the reason why the titles were originally transferred "jointly with right of survivorship." In resolving the issue presented, we have applied the rule that Mrs. Thomas, in this case, had the burden of proving that the conveyance was based upon a valuable consideration, substantial and not merely nominal. We have also applied the rule that "[w]here the trial court makes findings after hearing witnesses ore tenus, every presumption will be indulged in favor of the court's findings, and its findings will not be disturbed on appeal unless they are found to be palpably wrong." Russell v. Russell, 361 So. 2d 1053, 1054 (Ala.1978); Gurley v. Blue Rents, Inc., supra.
The judgment of the trial court is due to be affirmed.
AFFIRMED.
TORBERT, C. J., and JONES, SHORES and BEATTY, JJ., concur.