87 Ala. 453 | Ala. | 1888
Appellants, as transferrees, seek by the bill to foreclose two deeds of trust in the nature of mortgages, which were executed by William Scott, — one on January 18, 1875, and the other April 7, 1877, to secure the payment of two notes made by him to Bowan, Dean & Co. The grantor died in 1878. On May 9, 1879, Bowan, Dean & Co. transferred the deeds of trust, and delivered the notes, to Winfield Scott, who transferred them, June 23, 1882, to complainants, as collateral security for borrowed money. The execution of the conveyances, the justness of the debts, and the transfers, are not controverted; and if they were, are clearly proved.
Winfield Scott, who is a son and one of the heirs of the grantor, was indebted to his father at the time of his death, for money paid as his surety.„ The other heirs of William Scott seek by cross-bill to set off the indebtedness of Winfield Scott against the notes secured by the deeds of trusts — a demand against an intermediate holder. Courts of equity, there being no special and intervening equities, adopt and follow the rules at law in relation to set-off. The well-settled and uniform construction of the statute is, that the maker of a note will not be allowed to set off a demand against an intermediate holder, unless founded on an agreement supported by a new consideration, in pursuance of which the intermediate holder procured the note, or which was entered into by the parties while it was in his hands. —Goldthwaite v. Nat. Bank, 67 Ala. 549. Though the transferree of a note not commercial takes it subject to all the equities existing between the original parties, he does not take it subject to any equities which may arise between the maker and an intermediate holder. This settled and uniform construction of the statutes is essential to the transfer of such paper unobstructed by risks other than the original equities between the original parties. The cross-bill alleges no agreement founded on a new consideration, nor any special or intervening equity, which withdraws their demand from the' operation of the general rule.
The defendants set up the further defense, that the transactions by which Winfield Scott obtained the transfer of the notes and deeds of trusts, operated a payment and extinguishment. It satisfactorily appears that Winfield Scott used his own funds to pay Bowan, Dean & Co., and took a written transfer of the deeds of trust with the delivery of the notes. These facts, unexplained, indicate a purchase. W. J. Scott,
The theory of payment, in satisfaction of the notes and extinguishment of the deeds of trust, is inconsistent with the subsequent acts of the parties. The notes and deeds of trust were left uncancelled in the possession of Winfield Scott, and in that condition remained in his possession until he transferred them to complainants. The administration of the estate of William Scott was finally settled in January, 1886, and no demand for the papers was made, prior to, at the time of, or subsequently to that settlement. His possession of the papers under such circumstances, and for so long a period, is strongly pursuasive of an intention and understanding that they should be regarded as continuing unsatisfied, and, unless explained, should preponderate, when the evidence of payment is so conflicting as to leave it in uncertainty. — Doty v. Jones, 28 Wisc. 219.
There'are other material and significant acts. The administrator held a note on Winfield Scott for six hundred dollars, dated August 8, 1872, payable to his father. Instead of settling the mutual demands, and exchanging papers, on the next day after the deeds of trust were transferred, a small payment was made, and a credit entered on the note, for the express purpose of preventing the bar of the statute of limitations, and the administrator retained possession of it. In explanation of permitting him to keep possession of the papers, the administrator testifies, that he said to Winfield' Scott, as he had only discharged his own debt, the papers should be delivered to him, as he was administrator, and ought to have possession of them. Winfield Scott declined
The statement of Winfield Scott, that when he paid the notes to Bowan, Dean & Co., he regarded his debt to his father as paid and settled, and more than settled, would tend to support the contention of defendant, were it not that his meaning is explained by the further statement, that he kept them, not only to show that his debt was paid, but also the excess paid by him for his father, and to collect the same if it became necessary.
The burden rests on defendants to prove payment. On which party the law casts the burden of proof, should be regarded and taken into consideration in weighing the sufficiency of the evidence as to any question of. fact. The rule is not technical, nor a fiction. Its observance will serve to promote the ascertainment of truth. Keeping in mind that the onus is on the defendants to establish the defense of payment, and considering the whole evidence, we can not say that payment, or satisfaction and extinguishment, is satisfactorily proved. At least, the mind is left in doubt and uncertainty, in which case the defendants must fail for want of proof. Both the indebtedness of Winfield Scott to his father, and the indebtedness of his father to Bowan, Dean & Co., were discharged and extinguished, or neither was. The inquiry is pertinent; if paid, why the resort to a mode to prevent the presumption of payment arising from the operation of the statute of limitations? We conclude, that it was not intended to dis
The complainants are in equity entitled to receive only the amount of their claim against Winfield Scott, and attorney’s fees. If they recovered the full amount of the notes, they would hold the excess for him. The defendants have a clear equity to set off his indebtedness against this excess. The decree should be moulded so as to effectuate a complete adjustment of the rights and equities of all the parties. If the land is divisible, it should be sold in parcels, and only so much sold as will be sufficient to pay the amount ascertained to be due complainants by Winfield Scott, and reasonable attorneys’ fees and costs of suit. His indebtedness should be set off against the balance of the notes. To authorize such decree, the cross-bill will have to be amended, so as to strike out all the averments in relation to payment, which is not the subject of a cross-bill.
Reversed and remanded.