Lehman v. Meyer

67 Ala. 396

• Court: Supreme Court of Alabama
• Decided: December 15, 1880
• Status: Published

Opinion

BRIOKELL, C. J.

— It is not the practice to notice any errors apparent on the record which are not assigned, unless it be a want of jurisdiction of the subject-matter in the primary court, necesitating in any event, a reversal of the judgment or decree, and which would not, except under special circumstances, if there was an absence of jurisdiction, be followed by remanding the cause. All other errors may be waived, and the waiver is presumed, if there is an omission to assign them. — McDaniel v. Moody, 3 Stew. 314; Evans v. St. John, 9 Port. 186. And in civil causes, it is within the discretion of the court whether it will notice errors assigned, but not insisted upon in argument. — 1 Brick. Dig. 102, § 285. No one of the assignments of error require that the court should consider whether the receivership is not broader than is warranted by the averments of the bill, drawing into the custody of the court, property which could not by the court in this bill properly be subjected to the payment of the demands of the complainants, who stand only as simple contract creditors. Without approving or disapproving the authority conferred upon the receiver, we pass to a consideration of the errors assigned. The first of these refer to the decree overruling the demurrers to the bill, and the motion to dismiss it for want of equity.

As we have said, the complainants are simple contract creditors, who have not reduced their demands to judgments at law, and the object of the bill is to reach personal property subject to levy and sale under execution at law, upon allegations that it has been by their debtors transferred with the intent to hinder, delay, and defraud them. A court of equity, in the exercise of its original jurisdiction, would not intervene to relieve simple contract creditors, or creditors at large, (for so they are indifferently termed), until they reduced their demands to judgments at law. Until then the creditor had not established the justness of his demand, and that he really was a creditor, with a right to inquire into the fairness and validity of the dispositions of property the debtor may have made. Unless, as it was justly said, he had a certain claim upon the property of the debtor, he had no concern with his frauds.— Wiggins v. Armstrong, 2 Johns. Ch. 144; Brinkerhoff v. Brown, 4 Johns. Ch. 671; Reese v. Bradford, 13 Ala. 837; Sanders v. Watson, 14 Ala. 198. Having obtained judgment and execution at law, there were two classes of cases in which a court of equity would intervene to assist the creditor in obtaining satisfaction. The first was, when there was a fraudulent conveyance or transfer of property, upon which the judgment, or the execution, would operate a lien. Under the statutes formerly existing, the judgment, from the day of its rendition, was a lien on lands coextensive with the State, and the execution on goods and chattels within the county to which it was issued, from the day of its delivery to the sheriff. In this class of cases, without waiting until there was a return of execution, no property found, the court would aid the creditor by removing the transfer, or conveyance, fraudulently or inequitably interposed, obstructing or embarrassing the fair and complete execution of the process at law. The other class of cases, was, when the creditor sought the assistance of the court to reach assets not subject to execution at law. In this class of cases, the court would not interfere until the creditor had exhausted his legal remedies — had execution returned no property found, for until then, it could not be known the remedy at law was inadequate. Kirkman v. Vanleer, 7 Ala. 217; Dorgan v. Waring, 11 Ala. 988; Williams v. Brown, 4 Johns. Ch. 682; McDermott v. Strong, Ib. 687; Beck v. Burdett, 1 Paige 305. There was another class of cases dependent upon the jurisdiction of the court over the administration and marshaling of the estate of deceased persons, in which the court was accustomed to intervene for the relief of creditors, though judgments at law" had not been obtained and legal remedies had not been exhausted, if a necessity existed; and the necessity existed, when there w'as a deficiency of other assets for the payment of debts. This class of cases embraced fraudulent alienations made- by the debtor in his life, and depended upon a jurisdiction of the court, distinct and independent of that to which the creditor of a living man could' resort. — Pharis v. Leachman, 20 Ala. 662; Watts v. Gayle, Ib. 817; State Bank v. Ellis, 30 Ala. 478; Quarles v. Grigsby, 31 Ala, 172; Saltmarsh v. Smith, 32 Ala. 404; Todd v. Neal, 49 Ala. 266; Halfman v. Ellison, 51 Ala. 543.

In the two classes of cases to which we have just referred, the law was regarded as defective ; and there have been several statutes enacted with a view to cure the mischief. The one now material, and upon which the jurisdiction of the court must depend, reads as follows: “A creditor without a lien may file a bill in Chancery to subject to the payment of his debt any property which has been fraudulently transferred, or attempted to be fraudulently conveyed, by his debtor.” — Code of 1876, §■ 3886. The statute is remedial — its manifest purpose is to enlarge the jurisdiction of the court of chancery, and to afford creditors a remedy for the redress of injuries to them, which they had not under existing laws, without entering upon, or invoking, that vague, undefined, and indefinable doctrine of construing remedial statutes largely and beneficially, it is enough to say, that the construction it must receive must give it effect, according to the legislative intention. The legislative intention must be collected from its words, and these words must be read in the light of, and in connection with, the pre-existing laws. Reading and construing them in the light of, and in connection with, pre-existing law, we can not doubt that the intention of the legislature was to draw simple contract'creditors, or creditors at large, creditors who had not reduced'their demands to judgments at law, within the jurisdiction courts of equity originally exercised for the assistance and relief of judgment creditors only. In other words, when the- debtor by a fraudulent transfer or conveyance had offended the rights of all creditors, whether judgment creditors, or creditors at large, that all should have in equity the same right to invoke its removal. It may be supposed the term creditor without a lien, employed in the statute, is rather indefinite, and was intended as an expression that the creditor at large should resort to equity only when, if he had a lien, he could invoke the aid of the court for its enforcement. But the real meaning of the statute is, that a simple contract creditor, or a creditor at large, not having a lien by operation of law, shall have an equal right with a creditor having such lien, through the aid of a court of equity, to reach property subject to the payment of debts, which has been fraudulently transferred. Evans v. Welch, 63 Ala. 250. Property subject to levy and sale, upon which a judgment, or execution at law, would operate a lien, may be reached. So may property not subject to execution at law, on which the lien of the judgment or execution would not operate, and which the judgment creditor could not reach until there was an exhaustion of legal remedies. The real purpose of the statute is to dispense with, and.to abrogate wholly, the pre-existing law, which required that there should be a judgment at law, or if a judgment and the assets transferred fraudulently, were not subject to execution, that there should be an exhaustion of legal remedies, before the court would intervene to avoid fraudulent transfers and conveyances. That rule is blotted out, and any creditor may now, and has an equity of right to, invoke the assistance of the court to avoid such transfers or conveyances. The present bill, consequently, in its several parts, or rather so far as it seeks to avoid the mortgages, and the transfer to Birschler, whether that transfer was in writing, or rests merely in parol, contains equity. These mortgages and the transfer are averred, with a statement of numerous facts and circumstances, in support of the averment, to have been but parts of a general plan and scheme of the debtors to hinder, delay, and defraud their creditors.

It may appear from the bill that the debtors had property other than that transferred or conveyed by the mortgages of value sufficient to pay the debts of the complainants. If that be so, it is not a reason for arresting them in the pursuit of property the debtors have transferred or conveyed with, intent to defraud them. Nor have the fraudulent transferees or grantees any equity to compel a marshaling of the assets, and the exhaustion of such as were not transferred or conveyed before charging the property claimed by them.

Bilis in equity may be framed in the alternative, or as it is usually expressed, with a double aspect. But by thife it is not intended that a complainant can introduce into the bill, too inconsistent, repugnant claims to relief founded on different states of fact, and each, if true, entitling him to relief of a wholly different character. Each alternative must be the foundation for precisely the same relief. — Micou v. Ashurst, 55 Ala. 607; Shields v. Barrow, 17 How. U. S. 130; Rives v. Walthall, 38 Ala. 329; 1 Dan. Ch. Pr. 385. A complainant cannot assert a will to be invalid, claim that the court, in cases of which the court has jurisdiction, shall declare it void, or, if that be not true, that there may be under a decree of the court partition of lands devised to him and others jointly. McCosker v. Brady, 1 Barb. Ch. 329. It is, too, an established doctrine of a court of equity, that when a party sets up a case of actual fraud, making that the primary ground of relief, he cannot entitle himself to a decree by proof of facts which, independent of fraud, may create a case in which relief would be granted. — 1 Dan. Ch. Pr. 328. If, by the statements of the bill, it was shown that the mortgages and transfers covered substantially all of the property of the debtor, and that the transfer to Hirsehler was a security for a debt, and not an absolute sale, and affirmed the validity of these transactions, followed by the alternative prayer, that if they were not found fraudulent, they should be declared to operate as a gen'eral assignment enuring to the equal benefit of all creditors, the- bill would be subject to demurrer. It would present independent; inconsistent, repugnant titles to relief j and if it were confessed, it would be mere matter of speculation and conjecture with the court, as to which of the titles should be made the foundation of relief. We are aware that in Crawford v. Kirksey, 50 Ala. 590, it was held that a creditor's bill could be filed in the alternative — in one aspect assailing conveyances as fraudulent, and in another, asserting their validity, and that they constituted a general assignment enuring to the equal benefit of all creditors. We feel constrained to depart from, and to overrule that case upon this point. But this bill, though there is a special prayer that the mortgages, if not found fraudulent, may be declared to operate a general assignment (and the prayer is confined to the mortgage alone, not extending to the transfer to Hirschler), does not aver facts which would authorize that relief. The prayer is, therefore, merely impertinent, could not be made the basis of relief, and does not render the bill demurrable. — Rives v. Walthall, supra.

The rule is general, that a bill should not join distinct and independent matters, or defendants against w'hom the complainant may have distinct and unconnected demands. When a bill will be subject to demurrer on either of these grounds, i_s a question of unmixed doubt and difficulty, on authority. It seems most generally to have been decided upon considerations of convenience, in view of the facts of the particular case, rather than in obedience to any fixed, invariable rule. 1 Dan. Oh. Pr. 335 et seq., and notes. From our own decisions, it is simply impossible to collect a general rule which could be made applicable to the varying circumstances of particular cases. In some cases the court seem to have insisted rigidly upon a rule that would exclude the union in one bill of matters not having a direct, immediate connection, in all of which the defendants had not a common interest. In others, they seem to have considered only what was just and convenient in the particular case, while avoiding a multiplicity of suits, also avoiding compelling defendants into litigation of matters in which they had no interest, embarrassing them in defense of the matters in which they are interested. — 1 Brick. Dig. 619, §§ 1158-1200. Whether a bill is in this respect demurrable, or subject to objection by plea, or answer, must -be determined by reference alone to its averments and prayer. — Halsted v. Sheppard, 23 Ala. 558; Hardin v. Swoope, 47 Ala. 273.

The bill before us, with specific averments, charges the defendants with a confederation to defraud the creditors of E. Kahn & Co., and that the several transactions against which relief is sought, were but parts of the plan and scheme in which all joined. Its purpose is to obtain satisfaction of the debts of the complainants from the property the debtors had by separate mortgages conveyed to Lehman, and to Nathan Kahn, and by separate transfer to Hirschler. In bills of this kind by creditors, it is common practice, sanctioned' for a long time by the courts, to join as defendants persons holding different portions of the debtor’s property under separate and distinct conveyances. The object and purpose of the suit is single, the satisfaction of the demands of the creditors from the property of the debtor, and all that can be said is, that different persons have, or claim to have, separate interests in distinct or independent questions connected with, or springing out of that common purpose. — Brinkerhoff v. Brown, 4 Johns. Ch. 671; Boyd v. Hoyt, 5 Paige, 78; 1 Dan. Ch. Pr. 339, note 1. We are not of the opinion the Chancellor was in error in overruling the demurrers, or the motion to dismiss the bill for want of equity.

Whether there is error in the final decree rendered by the Chancellor granting relief to the complainants, depends wholly upon the evidence, whether the frauds averred were proved. The evidence, in some respects conflicting, as is to be expected in all cases of this character, it is apparent from the opinion of the Chancellor, was very carefully, thoughtfully, and deliberately examined, and considered. The conclusion reached by him must be here accepted as prima fade correct; and whoever assails it must be prepared to repel the presumption of correctness attaching to it alike as to matters of law, and of fact. We are not satisfied that his conclusions are erroneous, and unless we are satisfied of error, they must stand . — Rather v. Young, 56 Ala. 94.

The result is, the decree must be affirmed.