Court Opinion

ID: 6516443
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:27:06.514185+00
Date Added: 2024-06-11T15:55:02.284405
License: Public Domain

HARALSON, J.
This bill was filed by simple contract creditors, the appellees, — whose debts were due and unpaid on the 5th of March, 1895, the date of the filing of the'bill, — against the appellant, W.'T. Comer, who was, as is alleged, insolvent on the dates of the':attachment and of the filing of the bill. - ’The object-of 'the-bill was to set aside, as- collusive and fraudulent, a writ of attachment which had been, on the day specified abóve, *222sued out by H. M. Comer, Jr., a cousin of appellant, which was levied by the sheriff on a stock of goods of the appellant, defendant in attachment, which constituted all his property. H.M. Comer, Jr., and the sheriff were made parties defendant. The prayer was for an injunction restraining H. M. Comer, Jr., from prosecuting his attachment against said W. T. Comer to judgment, and from receiving from the sheriff any money arisiug from the sale of said goods; that the sheriff be ordered not to sell the goods under said attachment; that he be required to pay into court all money he may have obtained or may afterwards obtain as the result of said levy; that the sheriff be appointed receiver, to act both as sheriff and receiver; that said attachment be declared fraudulent and void ; that a lien be declared in favor of complainants on said goods ; that the proceeds of the same, when sold, be paid over to complainants, till their debts are fully paid, and for general relief.
There was a demurrer to the bill, and a motion made by defendants to dismiss it for want of equity. The demurrer was overruled, and the motion to dismiss denied. The grounds of demurrer were, that the bill was not sufficiently specific in its allegation of fraud as alleged ; that the bill charges no fact from which the alleged collusive and fraudulent character of the attachment can b.e legally inferred, and that the bill does not aver that the attachment was sued out upon a fictitious or simulated demand, and that the amount it was sued out for was not justly due from the defendant to the .plaintiff in attachment, nor that there was in the transaction a reservation of a benefit or- secret trust in behalf of defend-' ant, W. T. Comer. . .
Section 3544 of the Code' provides, that “a creditor without á lien may file a bill in chancery to discover, or to subject to.the payment of his debt, any property which-has been fraudulently transferred or conveyed, or attempted to be fraudulently transferred or conveyed by his debtor.!’ Section 1735 makes the provision that ‘/•all conveyances or assignments in writing, or otherwise, of any estate or interest in real or personal property,'and every charge upon the same, made with intent to hinder, delay, or.defraud creditors, or other persons, of their lawful suits, damages, forfeitures, debts or demands, and. every bond, or other evidence of debt, given, *223suit commenced, decree or judgment suffered, with like intent, against the persons who are or may be so hindered, delayed or defrauded, their heirs, personal representatives and assigns, are void.” We have given construction to these statutes, in their application to a suit such as we have before us. — Cartwright v. Bamberger, Bloom & Co., 90 Ala. 405. In that case it was said: “No one doubts that a writ of attachment, issued collusively between creditor and insolvent debtor, for the purpose of giving preference, and with intent to effect a fraudulent transfer of ' the debtor’s property to the plaintiff in attachment, through the machinery of the attachment process, is a void suit or proceeding within the meaning of Section 1735 of the Code. Nor can we see any reason why the suffering such an 'attachment by the debtor, with the fraudulent intent, is not an ‘attempt’ to fraudulently transfer the attached property, within the meaning of Section 3544 of the Code. * * * Such a transfer-may be made equally through the medium of an attachment suit, and the agency of the sheriff-. * * * The arm of the'law should not be shortened in its effort to reach and arrest fraud ; and legislation, having this purpose in view, should be liberally construed to accomplish the purpose of its enactment.” That case, not distinguishable in principle from this, received elaborate discussion, and has since been approved and followed by us. There is no necessity to go over the same' ground again in this case. — Bamberger, Bloom & Co v. Voorhees, 99 Ala. 202; The Planters and Merchants Bank v. Lancheimer, 102 Ala. 457.
It can m'ake no difference that the bill does not aver that the alleged indebtedness of the defendant to' tlie plaintiff in attachment was fictitious or simulated and nothonafide. If the plaintiff and the defendant in-at-, tachment colluded together for the 'purpose of transferring the property of the latter, the effort to resort to such judicial machinery, as was said in the case we have just cited,.may be characterized as an “attempt”-to make such fraudulent transfer. It is the collusion and fradulent use that is attempted to be made of the processes of the court-in such cases, so opposed to the whole spirit and policy of the statutes, which the law abhors and denounces. If an attaching creditor fairly and honestly outstrips other creditors in a race of diligence, in s.uing *224out his attachment, to secure a first lieu on an insolvent debtor’s effects, liable to attachment, the law upholds his effort,-and rewards him, in according to him the preference of payment thus acquired. But such a creditor should come into the court with clean hands, when he seeks such a right. The law will not sanction a secret, deceitful arrangement and agreement between him and the defendant in attachment, the direct effect of which is to hinder, delay and defraud his other creditors, by means of which his property is transfexved to the attaching creditor, possibly in the interest of the debtor. Such an attachment is a “suit commenced,” with the. view of the defendant’s suffering a judgment against himself, to hinder, delay and defraud his creditors, and is void against them. — Code, § 1735.
If the debt of such a collusive creditor on which he bases his attachment is. simulated, it but adds another, but not the only, ground of fraud in such instances. The averments of collusion and fraud’ as made in the bill, are, we apprehend, sufficiently specific. The demurrer was properly overruled, and the decree of the Chancery Court is affirmed.
Affirmed.