Opinion
8 Div. 501.
June 15, 1933.
Appeal from Circuit Court, Colbert County; J. Fred Johnson, Jr., Judge.
R. L. Polk, of Sheffield, for appellants.
The bill is defective in failing to aver that complainants have a lien upon the property referred to and that same was not exempt or a part of the homestead which is exempt, the conveyance of which cannot be impeached. Morris v. Fidelity M. B. Co., 187 Ala. 262, 65 So. 810; Talladega First Nat. Bank v. Browne, 128 Ala. 557, 29 So. 552; Kennedy v. Tuscaloosa First Nat. Bank, 107 Ala. 170, 18 So. 396, 36 A.L.R. 308; Nance v. Nance, 84 Ala. 375, 4 So. 699, 5 Am. St. Rep. 378; Fellows v. Lewis, 65 Ala. 343, 39 Am. Rep. 1. It is likewise insufficient in failing to show the remaining property of J. C. Harris was not ample to satisfy complainants' demands. Morris v. Fidelity M. B. Co., supra. The First National Bank being a subsequent creditor, the bill must show that the various conveyances were made with specific intent to defraud it and that the grantees had actual knowledge of and participated in the scheme to defraud it. McCrory v. Donald, 192 Ala. 312, 68 So. 306; Smith v. Thompson, 201 Ala. 633, 79 So. 195; Code 1923, § 9092; Marshall v. Bishop, 140 Ala. 206, 37 So. 324; Long v. Gwin, 202 Ala. 358, 80 So. 440. A new matter accruing after the filing of the original bill, and forming proper material for a supplemental bill, but which is brought in as an amendment to the original bill, is ground for demurrer. 10 R. C. L. 492; Scheerer v. Agee, 113 Ala. 383, 21 So. 81; Whitman v. Whitman, 223 Ala. 557, 137 So. 666. Complainant must allege with clearness and certainty that he was a creditor of respondent at the time of filing the bill. 12 R. C. L. 658; Harper v. Raisin Fert. Co., 158 Ala. 329, 48 So. 589, 132 Am. St. Rep. 32; Merrell v. Witherby, 120 Ala. 418, 23 So. 994, 26 So. 974, 74 Am. St. Rep. 39; Simmons v. Shelton, 112 Ala. 284, 21 So. 309, 57 Am. St. Rep. 39. Complainants are not entitled to maintain their bill because the bill shows on its face that the claims on which the suit is based did not mature until after complainants had filed their bill. McDuffie v. Lynchburg Shoe Co., 178 Ala. 268, 59 So. 567; Freider v. Lienkauff, 92 Ala. 469, 8 So. 758; Jones v. Massey, 79 Ala. 370; Simmons v. Shelton, supra; Yeend v. Weeks, 104 Ala. 331, 16 So. 165, 53 Am. St. Rep. 50; Merrell v. Witherby, 120 Ala. 418, 23 So. 994, 26 So. 974, 74 Am. St. Rep. 39; Pippin v. Tapia, 148 Ala. 353, 42 So. 545; Martinez v. Meyers, 167 Ala. 456, 52 So. 592; Little v. Sterne, 125 Ala. 609, 27 So. 972. A bill by a simple contract creditor is without equity where there is no conveyance by the debtor. Builders' Painters' Supply Co. v. First Nat. Bank, 123 Ala. 203, 26 So. 311. It was necessary to allege that the debtor did not have sufficient funds or property to satisfy the complainants' demands. 12 R. C. L. 660; Wilson v. Stevens, 129 Ala. 630, 29 So. 678, 87 Am. St. Rep. 86.
C. P. Almon, of Florence, A. H. Carmichael and A. L. Shaw, both of Tuscumbia, and Wm. L. Chenault, of Russellville, for appellees.
The question of homestead exception is defensive matter. It cannot be raised by demurrer, but only by plea or answer. Code 1923, §§ 7882, 7890, 7895, 7896. The conveyances being voluntary and therefore void as to existing creditors, the solvency of the grantor, the intention of the parties, and the value of the property conveyed were immaterial. Wooten v. Steele, 109 Ala. 563, 19 So. 972, 55 Am. St. Rep. 947; Moore v. Altom, 192 Ala. 261, 68 So. 326; Hudson v. Bauer Gro. Co., 105 Ala. 200, 16 So. 693; Boutwell v. Spurlin Mercantile Co., 203 Ala. 482, 83 So. 481; Wood v. Potts Potts, 140 Ala. 425, 37 So. 253; McCrory v. Donald, 192 Ala. 312, 68 So. 306; Allen v. Overton, 208 Ala. 504, 94 So. 477; Cook v. Clark, Davis Co., 212 Ala. 257, 102 So. 213; Gant v. Dunn, 215 Ala. 411, 110 So. 903. Thurmond Harris is a stockholder in the corporations, and holder of title under the conveyances, and is a proper party. But if he has no interest and no relief sought against him, he cannot complain. Toney v. Chenault, 204 Ala. 329, 85 So. 742. The bill makes a complete case, and is not subject to demurrer. Calvert v. Calvert, 180 Ala. 105, 60 So. 261; Callaway v. Selma T. S. Bank, 215 Ala. 367, 110 So. 809; Skinner v. So. Gro. Co., 174 Ala. 359, 56 So. 916; Burnwell Coal Co. v. Setzer, 203 Ala. 395, 83 So. 139. Complainants are entitled to maintain their bill as ordinary creditors without a judgment. Code 1923, § 8038; Galloway v. Shaddix, 197 Ala. 273, 72 So. 617. Where corporations are organized to evade personal liability, the same being a guise for personal operations, the same is no more than the action of the persons themselves, and is a fraud on creditors. Dixie C. M. M. Co. v. Williams, 221 Ala. 331, 128 So. 799; Metcalf v. Arnold, 110 Ala. 180, 20 So. 301, 55 Am. St. Rep. 24.
The bill is by simple contract creditors (section 7342, Code 1923) to avoid as fraudulent certain conveyances of real estate by their debtors.
True, by amendment to the bill, it appears that since its filing complainants have recovered at law judgments against both the maker and indorser on the notes, but this was merely for the purpose of foreclosing any defensive matters (Yeend v. Weeks, 104 Ala. 331, 16 So. 165, 53 Am. St. Rep. 50; Wooten v. Steele, 109 Ala. 563, 19 So. 972, 55 Am. St. Rep. 947), and in no manner changed the original character of the suit. No final decree having been rendered, such matter was properly presented by the simple expedient of an amendment to the bill. North Birmingham Am. Bank v. Realty Mortgage Co., 223 Ala. 30, 134 So. 796; Patton, Adm'r, v. Darden, Adm'r post, p. 129, 148 So. 806.
As to complainant Howard, the note by Thurmond Harris and indorsed by his father, J. C. Harris, with waiver of notice and protest of nonpayment, was executed in December, 1925, and the transfers sought to be avoided were in 1928 and 1929. As to complainant First National Bank of Tuscumbia, the note executed by Thurmond Harris and indorsed by his father, J. C. Harris, without condition or reservation, and with a guaranty of payment at maturity, appears by the original bill to have been executed in July, 1929. But the amended bill discloses that this note was but a renewal; the original indebtedness having been contracted in February, 1926, with indorsement of J. C. Harris thereon, and on each renewal note down to the one of 1929, and that the indebtedness has been due on said notes since 1926. The bill as last amended therefore discloses that complainant bank was also an existing creditor at the time of the execution of the conveyance of which complaint is here made. Galloway v. Shaddix, 197 Ala. 273, 72 So. 617.
All conveyances are alleged to have been voluntary and without consideration, and were therefore void as to complainants who were existing creditors. Under such circumstances, the intention of the parties to the voluntary conveyances, the solvency or insolvency of the grantor, the value of the property conveyed, and that reserved by him, are utterly immaterial matters. Wooten v. Steele, supra; Callaway v. Selma Trust Co., 215 Ala. 367, 110 So. 809; Yeend v. Weeks, supra; Calvert v. Calvert, 180 Ala. 105, 60 So. 261; Tyson v. S.C. O. Co., 181 Ala. 256, 61 So. 278.
The two corporations to which conveyances are alleged to have been executed were organized in 1929 by the debtors, Thurmond Harris and his father, J. C. Harris, with Mary Harris, the wife of said J. C. and the mother of Thurmond, and the averment is that they were mere "dummy" corporations, created in furtherance of the scheme of the debtors to hinder, delay, and defraud complainants as their creditors, and that in fact the named individuals and the corporations are in reality one and the same. Under the bill's averments, such a corporation is a "mere simulacrum, formed in the image of a corporation" (Dixie Coal Co. v. Williams, 221 Ala. 331, 128 So. 799, 800), and presents no obstacle to relief; as to whatever scheme or device the debtor may resort, it lies within the province of a court of equity to remove it (Metcalf v. Arnold, 110 Ala. 180, 20 So. 301, 55 Am. St. Rep. 24).
Thurmond Harris is shown to be a stockholder in these corporations, and as such holds an interest in the property, under the facts disclosed, which is alleged to have been voluntarily and without consideration conveyed to said corporations. He is a proper party defendant. Spear v. Virginia-Carolina Chemical Corporation, 225 Ala. 17, 142 So. 33.
There is no averment in the bill indicating in the least that any of the property alleged to have been fraudulently conveyed was exempt to the grantor. This is therefore defensive matter to be brought forward by answer. Hartzog v. Andalusia National Bank, 222 Ala. 170, 131 So. 433.
Nothing concerning the interrogatories propounded to defendant, or any order sought in relation thereto, is here presented for consideration; the appeal here involving only the ruling on demurrers to the bill as amended.
The decree is free from error, and will be accordingly here affirmed.
Affirmed.
ANDERSON, C. J., and BOULDIN and FOSTER, JJ., concur.