Robert Graves Co. v. McDade, Boyle & Butler
Robert Graves Co. v. McDade, Boyle & Butler
Opinion of the Court
1. This was a general creditor’s bill, filed on the 19th day of August, 1892, by appellants, against G. W. McDade, Jr., P. T. Boyle and C. E. Butler, composing a partnership doing business ünder the name-of McDade, Bo.yle & Butler, and G. W. McDade, Sr., Mrs. 0. E. Butler '(otherwise known in the suit as Sarah A. Butler), and' D. E. Boyle. O- W, McDade,
G. W. McDade, Sr., was the father of G. W. McDade, Jr. Sarah Butler was the wife of C. E. Butler, and D. F. Boyle was the brother of P. T. Boyle.
2. The bill avers, “that no real and bona fide sale of said stock and business of said McDade, Boyle & Butler has ever taken place; that said firm believing that by going through the form of a sale merely, they could put their property beyond the reach of creditors, by the use of a different name, have attempted to make said sale; that the member’s of said firm are now in possession and control of said business, and have been, ever since said attempted sale, in all respects as they were before said sale ; that although they claim to be running said business for and in the name of G. W. McDade, Sr., and Mrs. C. E. Butler, they are in truih and in fact the beneficiaries of said sale, and that said sale is colorable and fraudulent, and was entered into with the knowledge and consent of all parties thereto, as an arrangement to put said firm’s property, at least temporarily, beyond the reach of the creditors of said firm, and to put the said McDade, Boyle & Butler in the control and management thereof, for their own benefit; that the said firm was not indebted to said Mrs. C. E. Butler in the sum of $4,000, nor any part thereof; that said sale is fraudulent, and made upon a fictitious indebtedness so far as Mrs. Butler is concerned; that the sale of the realty made by P. T. Boyle to his brother, Daniel Boyle, was made on the alleged consideration of $1,200 to him in hand paid; that that sum is an inadequate consideration for said
The defendants demurred to the bill on the ground of multifariousness and because complainants had an adequate remedy at law. The demurrers were overruled and the cause having been submitted on pleadings and proof, the court decreed that complainants were not entitled to the relief prayed for, and dismissed the bill.
The validity of the debts of complainants and their existence at the time of the two conveyances is not disputed.
3. In a suit to set aside a transfer of property to a creditor of the grantor, as in fraud of the other creditors, when complainant’s claims were contracted before the transfer, the onus is on the purchasing creditor to show, by clear and satisfactory evidence, not only a bona fide debt, but also that the amount thereof wás not materially less than the fair and reasonable value of the property ; and when a near relationship exists between him and the debtor, it is a fact, like confidential relations, relevant to be considered, in connection with all the other circumstances tending to show fraud. — Lehman, Durr & Co. v. Greenhut, 88 Ala. 478 ; Moog v. Farley, 79 Ala. 246; Frances v. Page, 97 Ala. 377 ; Calhoun v. Hannon, 87 Ala. 277 ; Teague v. Lindsay, 106 Ala. 266; Troy Fertilizer Co. v. Norment, 18 So. Rep. 201. Tested by this rule of law, let us examine the transaction between P. T. Boyle and his brother.
4. At the time the conveyance was made to D. F. Boyle, he was a few months more than twenty-one years of age, he and his brother, as it seems, were and had been, living at the same house with their mother and sister in Montgomery. Their father had died years before, leaving no property except the Montgomery city lots, the P. T. Boyle undivided interest in which, was the subject-matter of the conveyance. Daniel F. Boyle had no other property and no sources of income, so far as is made to appear, except his wages as a machinist. His testimony is, that he let his brother have the last of
Daniel Boyle is equally indefinite. . He cannot tell the amount, of a single one of the numerous loans he states he made, nor the date of any one of them. He does not know the largest or the smallest amount his brother got from him, at any one time. He cannot even approxi-made the number of loans made. He took no note or other evidence of the loan or loans. He kept no accounts. He had no agreement about interest or when the money would be repaid to him. At the time of the settlement, and just before the deed was made to him,
We also think that the value of the property conveyed was materially more than the amount of the alleged debt. The property conveyed was P. T. Boyle’s undivided interest in the real estate of his deceased father, the said city lots. Disinterested witnesses put the value of this property, at the time of the conveyance, at $8,000 and $8,500, respectively. The Boyles testify that there was $2,000 taxes due on the property, but they do not explain how or why. But admit the contention, and allow the value of the property to be $8,000, — the smaller of the estimates of its value placed on it by the witnesses, — and this leaves the value at $6,000. There were three children; hence the interest of each was of the value of $2,000. This is materially more than the alleged consideration.
It is urged that the widow was entitled to dower in this property, but this is not shown. On the contrary, the evidence shows that the husband and father died more than twenty years before the conveyance was made. That number of years raises the presumption that the claim was relinquished or otherwise barred or cut off.— Barksdale v. Garrett, 64 Ala. 277 ; Elyton Land Co. v. Denny, 96 Ala. 336.
5. The evidence adduced to establish the debt to Mrs. Butler is also conflicting and indefinite! Mr. and Mrs. Butler are the only witnesses examined on this subject. The substance of Mrs. Butler’s testimony is, that she and her husband moved to Montgomery in the year 1889 ; that she loaned to the partnership $4,850; that all of this money was sent to her, by her mother, from Henderson-ville, Ky., Franklin, Indiana, and “from different places.” Her mother and father had no property except two houses and lots, one in Shelbyville and one in Hendersonville, Ky. What their value was or whether they were paid for or encumbered or not, she did not know. She does not know when this money was sent to her,
Her husband’s testimony is just as unsatisfactory. He does not know the amount of any loan except by his best judgment, though he was a partner in the firm that borrowed the money and the husband of the lender. He does not know certainly the aggregate amount of the loans. He says his wife’s mother died here in Montgomery two years ago, to-wit, Sept. 1892. And yet his wife speaks as though her mother was still living, using such expressions as, “my mother is not now occupying a particular house, and my brother is not now living with my mother.” Although Mrs. Butler represents that all this money was sent to her by her mother, her husband testifies, that $3,500. of it was sent to her by her father as her share of the proceeds of the sale of her mother’s property, after her death. The mother died at least four months after the partnership was dissolved. He after-wards states, that the.father was here in Montgomery and brought some of the $3,500. with him. We hold that Mrs. Butler has failed to establish the existence of any debt due to her. .
6. The business of this co-partnership was paper hanging. They commenced business in March, 1891. On October 19th of that year, their written statement to one of complainants, shows that they had $4,600 assets, and only $600. firm and individual indebtedness. They ceased to do business about 15th May, 1892. About seven months after this' statement was rendered, they sell out, with a stock of between four and five thousand
The further history of this stock of goods is that it was afterwards burned. And P. T. Boyle and C. E. Butler sold the few damaged goods, rescued from the fire, the proceeds of which, according to Mrs. Butler, “went to pay the expense that the firm was under.’' The stock was insured in-the name of theMcDade-Butler Co., — the new firm. On this insurance, five hundred and ninety some odd dollars was collected. It is uncontradicted, that each one of the partners was to be paid $18. per week for running the business for Mrs. Butler andG.W. McDade Sr. Mrs. Butler in her deposition admits — “It .was understood that they were to get $18. per week, at the time the business was made over to us. That was part of the trade."
7. As to the case against Geo. W. McDade Sr., the bill alleges (paragraph 5) “that some time in May of this year, the said McDade, Boyle & Butler, claim to have sold their entire stock and business of their said firm, to Geo. W. McDade Sr., the father of the McDade of said firm, upon a consideration of, to-wit, $1,040. indebtedness, and to Mrs. C. E. Butler, wife of the said Butler of said firm, upon a consideration of, to-wit, $4,000. or over, indebtedness." The next averments of the bill as to said' McDade, Sr.’s connection with the transaction, are found in section 7, from which we have quoted at length, in the first part of this opinion. The only parts of this section, especially applicable to said McDade, Sr., are — '“Orators aver that no real and bona fide sale of said stock and business of said McDade, Boyle & Butler has ever taken place that it was a mere form of sale; that the vendors were" in truth and fact the beneficiaries of said sale, and that said sale is colorable
Now, McDade, Sr. was required to answer under oath, which made his answer evidence. Complainants evidently had confidence in him.
In answer to said section 5, quoted above, which averred no more as to McDade’s debt, than that it was claimed that such an indebtedness existed, he says, that he admits the allegations of that section, except the word pretended (claimed), and adds, “that the sale mentioned therein was actual, bona fide and for full value.” This, by all fair construction, was an averment of his, that the debt which it was said he claimed, was a real, bona fide and not fictitious claim. It is even amore direct and explicit averment of its existence, amount and bona fides
The other allegations of fraud are as fully and explicitly denied in the answer as they are averred in the bill. The allegation of a benefit reserved is general, and not that it consisted in an agreement at the time of the sale— and as part of it — to pay the vendors, after the sale, a salary, as clerks, to close out the business; -but the averment is, as before shown, “that said firm are the beneficiaries of said sale and that said sale is colorable and fraudulent, entered into with the knowledge and consent of all parties thereto, as an arrangement to put said firm’s property, at least temporarily beyond the reach of creditors,” and this is specifically denied by McDade in substantially the same language it is charged. Mrs. Butler’s evidence, that it was a part of the trade to pay each member of the selling firm $18 a week, to close out the business, is not sufficient to fix a knowledge and participation of that arrangement on McDade Sr., as against the denials in his sworn answer, of any reservation of benefit reserved to the vendors. Indeed, we feel morally certain, upon the allegations of the bill and answer and proof, that as to McDade, Sr., his connection with the transaction was with no bad intent towards the creditors of said firm — to delay hinder or defraud them. He received no part of the proceeds of the sale of the goods, and lost his entire debt. He evidently purchased, to the amount of his debt, with the hope of its benefitting, rather than injuring the creditors.
8. The conclusion we reach is, that the decree of the chancellor, as to Geo. W. McDade, Sr., or his administrator, must be affirmed; and as respects the other de
Affirmed in part, rendered in part, and remanded.
Reference
- Full Case Name
- The Robert Graves Co. v. McDade, Boyle & Butler
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- 2 cases
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- Published