Stollenwerck v. Fourth Nat. Bank , 205 Ala. 548 ( 1921 )

The allegations of the bill of complaint are sufficient to show that Mrs. Cobbs' assignment to Mrs. Stollenwerck of her anticipated dividends from the estate of John L. Cobbs Company, then in bankruptcy, was void under section 4287 of the Code, as to other creditors, by reason of the separate, secret, and contemporaneous agreement between them whereby a valuable benefit was reserved to the assignor.

The evidence supported the allegations of the bill in this aspect, and the decree of the circuit court overruling the demurrer to the bill and granting the relief prayed, must be affirmed.

The rule is that if there is any right reserved to the grantor which is inconsistent with an absolute, unconditional sale, or if there is any use or benefit secured which would not result, as a matter of law, from the nature and terms of the sale, whether expressed or not, the assignment will be held as void at the suit of a creditor. Goetter v. Smith Bros., 104 Ala. 481, 16 So. 534; McDowell v. Steele, 87 Ala. 493, 6 So. 288; Pritchett v. Pollock,82 Ala. 169, 2 So. 735.

Had the agreement here in question merely required the assignee to pay over to the assignor any amount in excess of the indebtedness intended to be paid by the assignment of the funds, that would not have been the reservation of a benefit obnoxious to the statute. Truitt v. Crook, 129 Ala. 377,30 So. 618; Loucheim v. First Nat. Bk., 98 Ala. 521, 13 So. 374. But it does much more than that, for it recited that Mrs. Stollenwerck (the assignee) —

"promises and agrees to so credit the said dividends [as payments on the assignor's note] and to use reasonable diligence in investing or causing said dividends to be invested in such a way as to bear interest, and when the interest thereon has been collected shall pay over the said interest to the said Mrs. * * * [assignor] during her natural life."

This stipulation was not a gratuity, nor the expression of a mere legal incident, but a binding obligation, creating a beneficial trust in favor of the assignor in the income from the entire fund, which, upon the face of the assignment itself, was unconditionally appropriated to the payment of the assignor's debt. The assignment therefore falls clearly within the condemnation of the statute, as it has been repeatedly construed. Deposit Bank v. Caffee, 135 Ala. 208, 33 So. 152.

In this view of the case the question of the fraudulent intent of the parties to that transaction becomes immaterial, and need not be considered. Hayes v. Westcott, 91 Ala. 143,149, 8 So. 337, 11 L.R.A. 488, 24 Am. St. Rep. 875; Sandlin v. Robbins, 62 Ala. 477, 484, 485.

Let the decree of the circuit court be affirmed.

Affirmed.

ANDERSON, C. J., and McCLELLAN and THOMAS, JJ., concur.