Cox v. Birmingham Dry Goods Co.

125 Ala. 320

• Court: Supreme Court of Alabama
• Decided: November 15, 1899
• Status: Published

Opinion

SHARPE, J.

Action by the appellants against the appellees upon an attachment bond.

According to the agreement embodied in the abstract, the only question presented to this co'urt for descision is, whether, under the facts and evidence stated in the abstract, appellants have fraudulently disposed of their property, that being the only ground relied upon by appellees to justify the suing out of the attachment.

It is well settled that the conveyance by a debtor of his homestead is not fraudulent as to creditors who could not have subjected 'it by legal process to the payment of debts, for the reason that 'the conveyance withdraws nothing they could have reached in any event.- — Kennedy v. Bank, 107 Ala. 170; Hodges v. Winston, 95 Ala. 514; Fuller v. Whitlock, 99 Ala. 411.

Upon the sanie principle it was held bjr this court in Adkins v. Bynum, 109 Ala. 281, that a mortgage given upon'goods as a part Of the Same transaction in which they were purchased ancTto secure their purchase price, is not constructively fraudulent as to creditors. In such case, the purchase of the goods and their conveyance being simultaneous, no interest in them was acquired by the debtor previous to the conveyance. The effect -of the transaction upon his ownership is merely to revest him with the right to own the property upon paying for it, and by at'the situation of the-creditor is not worsted.

' It is an .axiom of the law that one cannot convey that which he hath not.' The mortgage provision purporting to convey goods to be thereafter acquired in replenishing the stock had no effect as a present conveyance. Grant v. Steiner 65 Ala. 499; Purcell v. Mather, 35 Ala. 570. It could only attach to the goods after their acquisition 'by the mortgagors and then under legal or equitable principles operating to carry into effect the original agreement of the parties. — Booker v. Jones, 55 Ala. 271; Penock v. Coe, 23 How. (U. S.) 117; Dexter v. Curtis, 91 Me. 505; 64 Am. St. Rep. 266; 15 Am. & Eng. Encyc. Law, 749.

The mortgage rested upon such‘after-acquired goods an encumbrance which obstructed their subjection to debts other than that secured by the mortgage, but what effect would be given to 'the transaction if there was-■shown an actual fraudulent intent of the mortgagor 'to shield her property from other debts, or as in the case 'of a debtor’s insolvency, that 'it had the necessary effect to'prevent, hinder or delay the collection of other debts are questions ntit raised on this appeal.

There is no evidence tending to show that M. E. Cox acted with actual fraudulent intent: The mere act of selling such property by M. E! Cox in the ordinary course of trade and the application of the proceeds partly in tbe payment of debts and partly for tbeir family and farm, does not in itself tend to show actual fraud. Neither do the facts in evidence show that M. E. Cox was insolvent or that she did not have ample property other than that in tbe mortgage which might have been subjected to her debts.

Upon the facts in evidence, as stated in the agreed abstract, it cannot be here held that either the original mortgage which conveyed nothing subject to' the claims of creditors, or the subsequent purchase and passing of goods under its terms can be charged to the appellants as a constructively fraudulent disposition of property without regard to insolvency of the appellees, which is not liere shoivn. The mortgage was admissible in evidence, but there ivas error in giving the general affirmative charge for the defendants, for which the judgment will be reversed and the cause remanded.

Reversed and remanded.