Court Opinion

ID: 6518025
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:28:28.504692+00
Date Added: 2024-06-11T15:55:04.606473
License: Public Domain

McCLELLAN, C. J.
— We experience no difficulty in reaching the conclusion in this case that the Watts Coal & Iron Company, an insolvent corporation, confessed the judgment to Davidson on an understanding between them that the latter should proceed at once to levy upon the mules belonging to the former and the stock of goods in its commissary, sell the property, which was all the company owned subject to execution, buy it in, turn the mules over to the company to be used in its mining operations, carry on the commissary, and allow the company 10 per cent of the gross sales out of it to .the company’s employés, and purchase all of-the company’s output. It is clear too that it Avas the purpose and intent of both parties to get the leviable property of the company in this Avay out of the reach'of other creditors, Avho were taking steps to'subject'it to their claims, and at the same time for it still' to be used'in the company’s business. In the effectuation of this purpose and intent, the property was sold under an urgency execution sued out by Davidson and was purchased by him; and the mules Avere turned over to or retained by the company and continued to be used by it,. and. D.avidson operated the commissary, paying the wages -of the company’s employés in goods and allowing the company ten per cent upon all sales thus made; and Davidson took all the output of the mines and out of the proceeds thereof reimbursed himself for the remaining 90 per cent of the Avages thus paid and for 'other outlays he made for the company to enable it to carry' on its business. On the case thus made there are two infirmities fatal to the integrity of the transaction between Davidson and the Watts Ooal & Iron Co.: It was'not..the absolute transfer of property in payment of an adequate debt, and hence was meretricious on account of the'intent Avhicli actuated the parties; and in it there were secret benefits reseiwed to the debtor, and hence it wás fraudulent regardless of actual covinous intent.—Comer v. Heidelbach, 109 Ala. 220; Alabama National Bank v. *594Mary Lee Coal Co., 108 Ala. 295; Little Warrior Coal Co. v. Hooper, 105 Ala. 665; Stephens v. Regenstein, 89 Ala. 561.
Affirmed.