Harmon v. McRae

91 Ala. 401
Supreme Court of Alabama·Decided November 15, 1890·Published·Cited by 10 cases

Opinion

COLEMAN, J.

If several creditors sue out, at different times, separate writs of attachment against a common debtor, and cause them to be simultaneously levied by the same officer, the levy being wrongful, they will be regarded as joint wrong-doers, though they may have acted separately, without concert, and each was endeavoring to secure a priority of lien. The wrong in such cases consists in the levy and seizure of the property, which was done by" the same officer, at the same time, for each and all of the attaching creditors. They contemporaneously committed the wrong, by a common agent.—Sparkman v. Swift, 81 Ala. 233.

Where there is but one taking of personal property by an [409] officer, upon separate writs of attachment, sued out by two creditors against the same debtor, the talcing will be deemed the joint act of the creditors, in an action of trespass brought against them and the officer for the talcing.—1 Waterman on Trespass, § 434;—Wehle v. Butler, 42 How. Pr. Rep. 399; Ellis v. Howard, 2 Vt. 334. The authorities are not in harmony, as to whether trespass could be maintained for a second levy, the property being in gremio legisn by virtue of the first levy. In the case of Ginsberg v. Pohl, 35 Md. 505, it was declared that trespass could not be maintained for a second levy, the property being in gremio legis. See, also, Scarborough v. Malone, 67 Ala. 572; Cordaman v. Malone, 63 Ala. 558; McLellan v. Lipscomb, 56 Ala. 256; 81 Ala. supra.

The two suits could not be properly maintained against the sheriff for the levy, though made in the interest of separate creditors, and the plea in abatement to the second suit was properly filed.—Foster v. Napier, 73 Ala. 595; 3 Brick. Dig. p. 10, §§ 41, 44. If there had been any conflict in the evidence, or objection by the plaintiff to the action of the court in passing upon the sufficiency of facts introduced in support of the plea, without the intervention of a jury, it would have been proper to have referred the question of fact to a jury. 6 Ala. 873, 171; Day v. Huckabee, 60 Ala. 425.

An important question in this case is, whether John F. Harmon was a creditor of Harmon Bros., within the meaning of the law which permits an insolvent debtor to prefer and pay one or more of his creditors by an absolute sale and conveyance of property. To properly understand the relation of the parties, the following facts, as they appear in the record, are here stated: Harmon Bros, applied to Lehman, Durr & Co. for a loan of $5,000, which was refused to them. In order to effect the loan, John F. Harmon executed his promissory note to Lehman, Durr & Go. for the amount, and secured the same by a mortgage duly executed upon his property. The individual members of the firm of Harmon Bros, signed the note with John F. Harmon. The Iban was placed to the credit of John F. Harmon by Lehman, Durr & Go., and he then gave his check to'Harmon Bros, for the money; and upon this check the money was placed to their credit on the books of Lehman, Durr & Co. The consideration of the conveyance attacked as fraudulent was, that John F. Harmon released and indemnified Harmon Bros, from all liability for this debt, and his assumption to pay and satisfy Lehman, Durr & Co. whatever might be due on the loan, expressed in the conveyance to be $5,000.

In the case of Proskauer v. People's Savings Bank, 77 Ala. [410]*410261, it was held: “The mere fact of having become surety on an antecedent bond is not a valuable consideration, sufficient to sustain an absolute conveyance against the creditors of the grantor, the surety incurring no new,, additional, or contemporaneous liability; and an absolute conveyance by an embarrassed debtor, secretly intended to operate as indemnity against an antecedent liability on the administration bond, reserves a benefit or use to the grantor, and is fraudulent as to existing creditors.” Here, the conveyance was held invalid as against creditors, because there was no “new, additional, or contemporaneous liability;” and for the further reason, that the conveyance, absolute in terms, was intended as an indemnity, and reserved a secret interest to the grantor.

In the case of Pennington v. Woodall, 17 Ala. 687, it was said: “Surely, if a surety finds his principal in failing circumstances, he may seek indemnity; and if he can get it by assuming the debt, or even by assuming other debts, it is perfectly fair and lawful for him to do so, so that it is done honestly, and without intention to defraud any one.” Here, the deed of trust was executed upon a contemporaneous assumption of a debt of the principal by the surety; and it was held sufficient, in the absence of actual fraud.

A note executed by a principal to his surety, in consideration that the surety assumes to pay the debt of his principal, is based upon a valuable and sufficient consideration. An attachment sued out upon such a note, and levied, creates a valid and prior lien from the date of the levy against existing creditors. A conveyance oí property in payment of such a debt, by an insolvent debtor to such creditor, .there being no other cause of objection, will be upheld as a valid conveyance. These propositions are abundantly sustained by the following authorities: McWhorter v. Wright, 5 Ga. 555; Marshall v. Hutchinson, 5 B. Mon. 305; Roosevelt v. Marks, 6 Johns. Ch. 283; Little v. Little, 13 Pick. 426; Gladwin v. Garrison, 13 Cal. 332; 15 Mass. 69; 11 N. H. 390. The case of Mobile Savings Bank v. McDonnell, 89 Ala. 441, may be cited as an authority which goes far to support the same principle.

We hold, that John E. Harmon was a creditor of Harmon Bros., within the meaning of the law, and though insolvent debtors, they could prefer him over other creditors by a sale of property, subject to the conditions and restrictions applicable in such cases.

It has been uniformly held, since the case of Hodges v. Coleman, that an insolvent debtor may sell the whole or a part of his property in payment of an antecedent debt, and the sale will be upheld, if the debt be Iona fide, its amount not mate[411] rially less than the reasonable value of the property, and no use or benefit secured or reserved to the debtor. The effect of the sale on other creditors, and the intent of the parties,, are not material inquiries.—Knowles v. Street, 87 Ala. 360. The use and benefit here referred to is that beyond what the law, without such agreement, would secure to him.—McDowell v. Steele, 87 Ala. 497. If, by the agreement, the failing-debtor secured to himself a paying employment, which, but for the sale and agreement, he would not have had, this was a benefit reserved, which renders the transaction fraudulent. Stephens v. Regenstein, 89 Ala. 561.

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Harmon v. McRae, 91 Ala. 401 (Ala. 1890).

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