87 Ala. 163 | Ala. | 1888
The present record, and the record which was before us on the former appeal, do not materially vary as to the facts. By the cross-appeals, substantially the same questions which we then decided are again presented, and we are ashed to reconsider the conclusions then announced. Ala. State Bank v. Barnes, 82 Ala. 607. On the former appeal we held that the agreement of August, 1883, created neither a mortgage nor a pledge of specific cotton. Not controverting that a mortgage upon property, to be acquired in the future, does not operate to convey the legal title, if it be to secure any antecedent debt, but is only an agreement to convey when the property is acquired; counsel now insist, that, as there was no existing debt at the time the agreement was made, it was simply a contract prescribing rules for the government and construction of future transactions when had," and that the cotton, under the agreement, became the property of defendants, and the legal title vested in them, as and when the cotton was purchased and paid for. The terms of the agreement were, that defendants would advance money to pay for cotton purchased by Cleage Brothers in Greene county during the ensuing cotton season, by paying checks drawn by them on defendant as the cotton was purchased, on the condition and understanding that all cotton so bought and paid for should be the property of defendants until they were repaid all money advanced, and that they should have the right to take, hold, ship and sell the same, whenever deemed necessary for their protection; otherwise, Cleage Brothers could ship and sell the cotton to such persons as they desired; but whenever a shipment was made they should give defendants a draft for the proceeds, with bill of lading attached. The advances were to be made, and the property acquired in the future.
It is manifest from the terms of the agreement it was not intended that the cotton should become the absolute property of defendants, or that the title thereto should vest in them, but merely a security for money advanced — not for a present, subsisting debt, but for future advances. Had Cleage Brothers, at the time the agreement was made, owned the cotton, it may be that the words, should he the property of defendants, would have been sufficient to have constituted a legal mortgage. At law, a mortgage can operate only on property actually or potentially belonging to the mortgagor; If he does not own the property, there is nothing upon which the conveyance can operate. The rule is otherwise in equity;
• It is further contended, that the agreement of May, 1884, was made with reference to the agreement of August, 1883, and for the purpose of carrying the latter agreement into effect. The terms of the agreement are stated in the opinion delivered on the former appeal, and need not be repeated. We then ruled, that it created only an equitable lien, such as may exist without the delivery of possession, and did not authorize defendants to take possession of the cotton against the objection of Cleage Brothers, so as to defeat the legal title which plaintiff acquired by the indorsement of the warehouse receipt. The contract of May, 1884, is a separate, distinct and independent contract, designed to meet new and different conditions, without reference to the contract of August, 1883, except to originate an additional equitable lien for the balance due on account of the money previously advanced. This becomes manifest when the contract of October 1, 1883, an intervening contract, is considered. By this last agreement, B. B. Barnes, one of the defendants, and who was cashier of the Bank of Eutaw, stipulated that the bank should pay for all cotton purchased by Cleage Brothers at designated places in Greene county, and would not furnish other cotton buyers with funds with which to purchase cotton. Cleage Brothers were to keep a regular buyer in the market, and use efforts to throw the cotton business into the hands of the bank. The bank was to charge the usual exchange, and the profits to be divided between Cleage Brothers and B. B. Barnes. This agreement continued only a few days, when it was changed; the change being, that in lieu of one-half of the profits, Cleage Brothers agreed to pay Barnes five hundred dollars. It is said that this was a pri
On the cross-appeal, plaintiff contends that the indorsement of the warehouse receipt related back to the time of the substitution of other cotton for a portion of the one hundred bales originally included in the receipt, which had been sold by Cleage Brothers, and vested in plaintiffs a title to the substituted cotton sufficient to maintain detinue. The argument is, that by the substitution plaintiff acquired an equitable claim to the substituted cotton, and having such interest, and Cleage Brothers having an interest in upholding its validity, they could, without committing maintenance, put the plaintiff in a position to maintain its lien on the cotton. This may be conceded, but the equitable interest of the plaintiff was inchoate, and not itself acquired until ratification. Defendants had previously acquired an equitable interest, without notice of plaintiff’s claim; and a subsequent ratification, by which only an equitable interest is acquired, does not operate to cut off the intervening equity of defendants. Whatever may have been the operation of the indorsement of the warehouse receipt, as between plaintiff and Cleage Brothers, it does not pass, as against the equity of defendants, the legal title to cotton not originally included in the receipt.
After careful consideration of the questions raised and argued, we adhere to, and affirm the rulings on the former appeal.
Affirmed.
