80 Ala. 78 | Ala. | 1885
The view of this bill most favorable to complainant is that of one filed for the purpose of redeeming certain shares of corporate stock alleged to have been deposited with the defendant by way of pledge or collateral security; or, more accurately speaking, to hold the defendant liable for the appreciated value of the stock, upon the ground that he had sold it without authority and without any notice to the complainant, who claims to be the owner and the pledgor. It is very questionable, however, whether the allegations of the bill will bear this construction, if subjected to proper criticism, and construed with requisite strictness against the pleader. The deposit of stock is averred and proved to have been made
The bill was, on the hearing of the cause, dismissed by the chancellor' as barred by lapse of time, and the complainant brings this’appeal.
It is our opinion, after a very careful consideration of the law and facts of the case, that the bill was wanting in equity as an attempt to enforce a stale demand, and that the decree was free from error. Considering the transaction, in the first place, as a mere ordinary pledge of stock, rather than as partaking of the nature of both a pledge and a mortgage, as it may well be construed to be, we nevertheless deem the complainant’s right of redemption' to be barred by the lapse of time.
It is true that we find the rule declared in the old books, and reiterated in many adjudged cases, ancient and modern, that if no time of redemption is fixed by the parties, the pledgor has his lifetime within which to redeem, unless quickened by notice, or through the intervention of a court of equity. This principle, however, is not in harmony with the more modern, and as we consider, the sounder and better rule, which is to exact of all claimants in cases of this character, analogously to the redemption of mortgages, the exercise of reasonable diligence in the enforcement of their equitable demands, at the risk of being debarred of all relief. It may be, as often said in the text-books, that, strictly speaking, the statute of limitations does not run against a pledgor, in an ordinary case of pledge, unless there is shown to be an adverse possession by the pledgee, brought home to the knowledge or notice of the pledgor. But staleness of demand, which is a defense peculiar to courts of equity, rests on another, though no donbt analogous principle, which is to visit on one, who sleeps on his rights, the fruits of his own negligence and infirmity of purpose. 2 Story’s Eq. Jur. § 1884. The doctrine of staleness may properly be said to be “ founded in its origin upon a sound public policy, which has a just regard for the preservation of the peace of society. It is of the utmost moment that there
The growing importance of trade and commerce, with the increase of the means of rapid transit and speedy communication, have tended in modern times to shorten the period allowed by courts of equity beyond which a demand is considered stale on the ground of laches. The common law is no rigid system of unbending iron rules, but the elasticity of its principles is daily yielding to the growing wants of an advancing civilization. A rule of absolute repose has accordingly been adopted, in comparatively modern times, which is applicable to all human transactions open to judicial investigation, and by common consent, is fixed at a period of twenty years.— Garrett v. Garrett, 69 Ala. 429. The doctrine of staleness accommodates this rule to the equities of each particular case. If it were otherwise, the numberless mercantile and other transactions of our populous towns and cities would, in due course of time, oppress the courts with a burden of litigation which they would be incapable of enduring. No sound reason is perceived why the redemption of pledges should constitute an exception to this salutary principle. There is nothing in the relation of pledgor and pledgee which makes an invasion of the general rule, as applicable to them, either proper or desirable. And such, in our judgment, is the current of authority among the law writers, and especially the more recent ones. We accordingly find in Story on Bailments the principle asserted, that while prescription or the statute of limitations does not run against a pledgor’s right of redemption, yet that “ after a long lapse of time, if no claim for redemption is made, the right will be deemed to be extinguished, and the property will be held.to belong absolutely to the pawnee.” “Under such circumstances,” it is added, “a court of equity will decline to entertain any suit for the purpose of redemption. A like rule is adopted in the common law in cases of mortgages.” — Story on Bailments (8th ed.), § 346. So in the recent treatise of Mr. Schouler on Bailments, after asserting that modern prescription, as applicable to pledges, runs rather by lapse of years than the uncertain span of human life, and that “ time puts an absolute barrier to the pursuit of all such remedies, irrespective of the living or dead,” the author further observes: “ Strictly speaking, the statute of limitations does not run against a pledge; but, inasmuch as it runs against the pledgee’s enforcement of the secured debt or engagement, so will equity decline to entertain the pledgor’s bill for redemp
What lapse of time shall be regarded as rendering a pledgor’s right of redemption stale can not of course be formulated into any fixed rule applicable to all cases. Each case must necessarily depend upon its own circumstances, having regard not alone to the mere question of time, but also to the circumstances and relative situation of the parties, the nature of the property pledged, whether stationary or fluctuating in value, and other facts affecting the justness or equity of the right asserted. It is, therefore, as said by Mr. Schouler, “largely a matter of judicial discretion.” Schouler’s Bailments, 225, note 2. It is not questioned, so far as we know, by any authority, that the pledgor may always claim at least the period of six years, or the full period of time during which the pledgor is permitted to sue upon his secured debt or engagement. In Humphries v. Terrell, 1 Ala. 650, it was held, that the right of both a pledgor and of a mortgagor to redeem personal property would be barred in six years; and the plea of the statute of limitations of six years in that case was held good as a bar to the pledgor’s right to redeem, without any positive evidence of an adverse possession. There is other respectable 'authority for the same view. But this case, in the phase of it now under consideration, does not necessarily require that we should carry the rule to this extent. The case of a mere pledgee, it is apprehended, is different, in some material aspects, from that of a mortgagee in possession, in whose favor the statute of limitations commences to run from the law day of the mortgage, because of his presumed adverse holding from that time. Byrd v. McDaniel, 33 Ala. 18; McCoy v. Gentry, 73 Ala. 105. All that we need say on this particular phase of
It is well settled that a much shorter time will be allowed the pledgor within which to exercise the right of redemption where he seeks to make a profit out of the unexpected rise in the value of pledged stocks, than where he seeks merely to compel the pledgee to account for a surplus received by him from the sale of the stocks in ordinary cases. Schouler’s Bailments, 225- The case of Hancock v. Franklin Ins. Co., 114 Mass. 155, cited and relied on by appellant’s counsel, was obviously a case of the latter kind, and was determined, strictly speaking, rather on the ground of the statute of limitations than upon any alleged staleness of the demand. This rule of redemption is clearly analogous to the one which requires the exercise of any simular option in property, real or personal, to be put in action with reasonable diligence. There is something in the nature of fluctuating stocks which makes the principle especially just when applied to them. As said by Mr. Justice Miller, in a recent case, decided by the Supreme Court of the United States, “the injustice is obvious of permitting one, holding the right to assert an ownership in such property, to voluntarily await the event, and then decide, when the danger which is over has been at the risk of another, to come in and share the profit.” Twin-Lick Oil Co. v. Mar-
These observations apply with great force to this case. The stock in question is shown, at one time during the period it was pledged, to have been worth as little as twenty cents on the dollar. At the time of its sale by the defendant it was not above par. When the bill was filed it had rapidly increased in value, and during the progress of the cause reached about eight times its par value, or nearly forty times the lowest rate to which it had once fallen. It is manifest that, in cases like this, justice can be administered only by curtailing the period allowed for exercising the option of redeeming within bounds which reasonably conform it to the equities of the peculiar emergency.
Upon this state of facts we hold that the complainant’s right of redemption was a stale demand, .and must be deemed to have been barred by unreasonable delay in its assertion. Sleeping on his rights for so great a length of time constitutes a degree of laches now fatal to their enforcement.
There is another analogous view of this case, incidentally adverted to by us above, and which is equally fatal to the maintenance of the bill. It is the defense of the statute of limitations of six years, the ground upon which the case was decided by the Chancellor.
The transfer of the stock in controversy is something more than a mere pledge. It partakes of the nature of both a pledge and a mortgage, because the transferree holds both the possession and the title of the thing transferred. The chief difference between a pledge and a mortgage is, that in the former possession is transferred, and in the latter title, usually unaccompanied by possession. No reason is preceived why the two forms of security may not be combined in one as is here done. Casey v. Cavoroe, 96 U. S. 467, 477. In Nabring v. Bank of Mobile, 58 Ala. 204, it was said, arguendo, that a transfer of stock, like that in the present case, was rather a pledge than a mortgage, following the view expressed in Wilson v. Little, 2 N. Y. 442. But the decision of this point was a dictum, in as much as it was immaterial and unnecessary, the same result following whether the transfer was construed to be the one or the other. In this aspect of the law, to which I am not averse, there can be no room for disputation as to the fact that the case made by the bill was barred in six years from the day of forfeiture, there being no proof of any recognition of the complainant’s title within this period, and
The bill was properly dismissed, and the decree of the chancellor is affirmed.
The spirit of modern jurisprudence is to shorten the time in which business transactions may be made the subject of juridical contention. Statutory bars are shortened, and the courts of the country at the present time are much more inclined than they formerly were to discourage and discountenance the stirring up of ancient, or stale demands. The theory on which the modern policy rests is, that claims of real merit, in these stirring times, will not be permitted to slumber through an indefinite or unreasonable number of years. And, when the case presented is one of patent inequality, one pi which the right claimed has no corresponding liability resting on the claimant, courts are much more averse to granting active relief, than if the liabilities were mutual. This Court has placed itself unmistakably on the side of the shorter limitations, and the discouragement of stale claims. James v. James, 55 Ala. 525; Gordon v. Ross, 63 Ala. 363; Cotton v. Cotton, 75 Ala. 345.
I have read and scrutinized the testimony in this record with very great and painstaking care. I find not a semblance of proof that at any time after the spring of 1875, any credit was extended to E. M. Gilmer, to J. N. Gilmer, or to any of the firms with which the latter was connected, on the faith of the stock in the Elyton Land Company as a security. I do not find it was ever mentioned between the parties, or had in contemplation in connection with any of their dealings, when they took place. On the contrary, the proof is, that whenever any credit was extended by Morris, or Morris & Co., to E. M. Gilmer, either for himself, or for any of J. N. Gilmer’s firms, other sources of payment were looked to, and stipulated for. And, in fact, I do not find the stock was ever spoken of, or looked to as a means of security, or soui’ce of payment, in any of the credits extended by Morris after the stock was transferred and placed with him in 1871, except what is hereafter stated. If it was thought of as a security for any future credits, the present record contains no proof of it. It may be, and probably is, true, that after those debts were contracted, Morris intended that if the stock ever became of sufficient value, he would resort to it as a means of security and payment as far as it would go; but there is neither averment nor proof of any
The firm of Gilmer, Browder & Co. was formed in 1868, and expired in 1873 or 1874, when the firm of Gilmer & Donaldson was formed. The latter firm expired at the death of Mr. Donaldson in 1876. The last transaction had between Morris and Gilmer & Donaldson, of which we have any testimony, were a deposit in March, 1875, and execution against J. N. Gilmer, levied on the stock and paid by Morris, charged against that firm in July, 1875.
No date is fixed by the witness, nor in any other way, when Morris “talked to Mr. Gilmer very frequently about it, threatening to sell ” the stock. Whether it was before or after the transfer of the stock on the books, or, if after, how long after, we have no means of finding out. We can not say it was later than 1876, or as late as 1876. We have Morris’ uniform testimony that he ceased to look to it as an available demand after the actual transfer of the stock in 1875, and we can not say
Whatever class the present transaction may have previously belonged to, when by the transfer on the books the title to the stock became vested in Morris, it acquired the properties of a chattel mortgage, the thing mortgaged being in the possession of the mortgagee. For nine years Morris held both the title and the possession of the stock, and during all that time Gilmer is not shown to have asserted any claim to it. In Humphries v. Terrell, 1 Ala. 650 — decided by this Court more than forty years ago — it was held that six years’ possession of a chattel pledged, without demand made, or recognition of the pledgor’s right, vested a complete title in the pledgee. That case has not been overruled, and I am not inclined to overrule it. All men will admit that a period of six years vests in the mortgagee a title to a chattel, held for that length of time in independent right.
We are asked to so far modify the chancellor’s decree as to make it a dismissal without prejudice to another suit.
The submission in this cause was on pleadings and evidence. When such is the case, if it be desirable, to have the special ruling of the court on the pleadings, it is customary to prefer a request therefor. That does not appear to have been done in this case. The ruling of the chancellor was on the testimony, and governed by it alone, he reached the conclusion that complainant’s claim was barred by staleness. We have examined the testimony with great care, and have reached the conclusion that the chancellor did not err in his rulings on the testimony, nor in the application of the law thereto. If the bill had been all the complainant could desire; if it had averred acts of recognition by Morris, so as to relieve the-claim of the imputation of staleness, the proof in the present record would not sustain such averments. The claim under the proof would still be stale, and barred on that account. This is not a case of sufficient proof, and insufficient averment. If it were, we would grant the motion and dismiss without prejudice. Cameron v. Abbott, 30 Ala. 416; Munchus v. Harris, 69 Ala. 506; Gilmer v. Wallace, 75 Ala. 220; Glass v. Glass, 76 Ala. 368;
We decline to modifv the decree of the chancellor.