Rankin & Co. v. Vandiver & Co.

78 Ala. 562

• Court: Supreme Court of Alabama
• Decided: December 15, 1885
• Status: Published

Opinion

SOMERVILLE, J.

All the charges requested by the appellants, and refused by the court below, attack for fraud the sale of goods made by Duke to the appellees on November 18th, 1885. The transaction is claimed to be fraudulent, as one made by the seller or debtor with intent to hinder, delay, or defraud liis creditors, he being at the time insolvent and in failing circumstances. It is not denied that the price or consideration paid for the goods was fair and adequate, nor that it was in fact paid. The only objection urged to vitiate the sale is, that the purchasers paid to the seller, as a part of the consideration, the sum of two thousand dollars cash, the remainder of the consideration only, or about three thousand dollars, being the payment of an antecedent debt.

No doubt can be entertained as to the proposition, that the transaction would have been entirely unassailable for fraud, as an authorized preference of creditors by a failing debtor, but for the payment of a portion of the consideration in money. Our past decisions fully settle this. — Hodges v. Coleman, 76 Ala. 103, 120; Meyer & Co. v. Sulzbacher, 76 Ala. 120.

It is manifest that the only sound reason, upon which it can be urged that the payment of money or cash to the vendor would vitiate the sale, must be, that it is a retention of a benfit in his favor. The conversion of a failing debtor’s property into cash, which is more readily “shuffled out of sight” than property, is often a potent fact to prove that it was paid by the purchaser for the purpose of aiding him in executing a purpose to defraud. If such was this case, -without more, we might hold that many of the charges requested by the appellsnts should have been given in the form requested. — Lehman v. Kelly, 58 Ala. 192, 200; Borland v. Mayo, 8 Ala. 104; Covanhoven v. Hart, 21 Penn. St. 495 ; Eskridge v. Abrahams, 61 Ala. 134; Benedict v. Renfro, 75 Ala. 121; s. c., 51 Amer. Rep. 429.

But the facts of this case are different from those of any one which has been heretofore presented to this court for decision. It is shown that the vendor of these goods — the debtor, Duke —owed the sura of two thousand dollars to certain specified creditors, three in number, who were pressing him for payment of their demands ;■ that this fact was made known to the vendees at the time of the sale, and that they expressly stipulated with the debtor that he was not to retain this money, but was to pay it over to these named creditors, whose claims are shown to have been honestly due. This payment is shown to have been faithfully made as was stipulated. If Duke, by way of preference, had transferred the goods to the three other named creditors, jointly with the appellees, in payment of their debts, and these three purchasers had afterwards sold their interest in the goods to appellees for the same sum of two thousand dollars in money, no one would say that any interest had been reserved, benefit secured, or secret trust created in Duke’s favor. Yet the present case is obviously, in substance, precisely the same as that, saving only the circuity of the transaction. If one is fraudulent, the other must be. This mere indirection could not remove the taint of fraud, were it present; for, as has been forcibly said, “the law so abhors fraud that it will not allow technical difficulties of any kind to interfere to prevent the success of justice and truth.” — Rogers v. Hadley, 32 L. J Exch. 248.

• It is our opinion, that the payment of the money to the debtor by the appellees did not render the purchase fraudulent, in view of the fact that it was expressly agreed that it should be paid to the other bona fide creditors, and was so paid to them. There was no semblance of any locking up of the property from creditors, for the use of the debtor, nor one dollar’s worth of benefit or profit retained by him. The creditors were no more hindered, defrauded, or delayed by the disposition of this money, than by that of the goods. A sale made with intent to make a lawful preference, under the facts in evidence, is not a fraudulent sale.

There was no error in the rulings of the court touching this phase of the case.

The iron safe would certainly fall within the descriptive phrase, “goods, wares, and merchandise,” as used in the bill of sale, and would pass to the purchasers, if such was the intention of the contracting parties, as inferred from the surrounding facts and circumstances. The charge given by the court at the request of the claimants, in effect, only announced this principle, and was properly given.

We discover no error in the record, and the judgment must be affirmed.