15 Ala. 472 | Ala. | 1849
This bill was filed by George F. Taiman, Ashbel Ralston and Gerard Ralston against the Mobile and Cedar Point Rail Road Company, Miguel De Eslava, Alexis D. Durand, and Michael Portier, and*charges that on the 19th June, 1839, the Mobile and Cedar P. R. R. Co. being indebted to the American Life Insurance and Trust Co., a corporation situate in the State of Maryland, in the sum of $5,810 50, the better to secure the same, executed to said Trust Co., of that date, a mortgage, granting to said Company certain real estate in the city of Mobile, to secure the payment of said indebtedness, which was evidenced by note, due the 16th day of June, 1840. That Taiman is the assignee of said note note and mortgage, which remains unpaid, and the mortgage has become forfeit.
A. and G. Ralston represent, that on the 16th July, 1836, the Mobile & C. P. R. R. Co., by resolution passed on the 14th July, 1836, authorized one Moore to pledge all the real and personal estate of said company, in procuring for said company by contract, iron, locomotives, tenders, cars, &c. That Moore applied to said A. and G. Ralston to furnish the iron, and offered to pledge the company’s real and personal estate for any advances they might make. That they (A. & G. Ralston) did agree to furnish the iron upon the pledge by Moore of all the real and personal estate of the company, and on the 31st August, 1836, said Moore, by virtue of a resolution of the corporation, and a letter from the president, secretary and treasurer thereof, requesting him to conclude the purchase, and authorizing him to pledge the estate of the company, entered into a written agreement, signed by him and A. and G. Ralston, by which the Ralstons as agents of the company, agreed to purchase and pay for a certain amount of rail road iron in England, and caused it to be insured and shipped to Mobile, and the Mobile and C. P. R. R. Co. agreed •' to pay to their said agents, the said A. and G. Ralston, or order, in cash, in Philadelphia, or equivalent thereto, at the rate of exchange on London, at which the Bank of the United States at Philadelphia may be then drawing, upon the arrival of the iron at Mobile. The bills for the same, including one per cent, banker’s commissions, and interest from the time of payment in England, up to the time
. J. B. Moore,
A. & G. Ralston.”
The Ralstons then aver, that there is ■due to them, and unpaid from the company, on account of the purchase of iron under said contract, the sum of $7,000 and upwards, accruing under said contract. They charge, that in addition to the real estate embraced in the mortgage, which comprises a lot of about one acre, in the city of Mobile, the company owned at the time of the agreement", and which they alledge is subject to their equities, a tract of land, situate on Mon Louis Island; containing fourteen hundred acres, and which the bill particularly describes, besides another tract, which is described as containing sixteen hundred and fifty acres. These complainants (A. and G. Ralston) insist that the company were also possessed of a large portion of iron, -steam engines, cars, &c., which were pledged by said agreement. Complainants charge, that Miguel D. Eslava has converted said chattels, or a large portion thereof, to his own use, having a full knowledge of the complainants’ equities. That said company, using the name of the Mobile and New Orleans Rail Road Company, on the 9th January, 1840, conveyed all their before mentioned estate to Michael Portier, Miguel D. Eslava and Alexis D. Durand, with full power to sell and dispose of the same, the proceeds of the sale to be applied to the payment of certain debts due from the company to certain of the stockholders thereof. That these persons took the conveyance with a full knowledge of complain
By a resolution of the company, a copy of which is exhibited with the bill, it appears, the persons who wrote the letter to said Moore, requesting him to procure the materials, &c. for the road, were appointed a committee to procure said materials, with power to make an agent or agents, to effect the object proposed.
The deed of trust under which the defendants below claimed, was executed to Michael Portier, Miguel D. Eslava and Alexis D. Durand, the 9th January, 1840, and purports to have been done by resolution of the board, entered into the day previous to its execution, which recited that the company, having failed to negotiate a loan, by virtue of a previous resolution, to meet the exigencies .of the company, did, on the 7th July, 1887, resolve that the real and personal estate then belonging to it, should be pledged to indemnify and save harmless, such of the stockholders as should, from time to time, lend their names to the company, for the purpose of raising money for its use. That in virtue ■ of this last resolution, F. Ravisies and Alexis D, Durand, on the 10th July, 1837, executed their note, payable to, and indorsed by M. D. Eslava, for $3,000, which was negotiated in the Branch of the Bank of the State of Alabama at Mobile, and the proceeds applied to pay off the debts of the company. Another note, made about the same time, was negotiated and applied in the same, manner, made by E. De Vandell and Du-rand, and indorsed by M. Portier, for $200. A third note discounted at the Bank of Mobile, and the proceeds in like
Pending the suit, at the spring ter'm, 1844, the death of Durand was suggested, and a scire facias issued to Julius Delchamps, his executor, which was duly executed the 4th February, 1845. In April, 1845, an order of the court was made by consent, appointing Adrian S. Dumee, trustee under the deed to Portier, Eslava and Durand, to act in the place of Durand, deceased, and to represent the trust in this cause. In April, 1846, the bill was taken for confessed against Portier and Eslava, on personal service. In December, 1846, Messrs. Stewart & Easton came into court and entered an appearance for all the defendants, except M. D. Eslava. Afterwards, on the 6th April, 1847, a decree pro confesso was entered against the rail road company, Eslava, Portier and Dumee, the entry reciting, that “ the mortgage and notes being produced and proved, are, with the bill, referred to the master to ascertain, and report the amount due, and to state" the amount between the parties. The master having reported as due to Taiman, on the 1st January, 1847, the sum of $4,528 40, and to the Messrs. Ralstons, on the 31st December, 1843, $7,832 04, upon which had been paid, April 22, 1844, the sum of $4,041 20; and on the 29th May, 1845, $681 11, with interest on the respective items up to 8th April, 1847. The chancellor then confirmed the report,
At the same time, a petition for a re-hearing was filed, by which M. Portier avers, “ that he has a meritorious defence to the bill, which from circumstances, he was not able to present before the decree was made; that the execution of the decree would be highly injurious to him; that he is advised the bill is defective, and bad on demurrer, and that the court should dismiss it for want of equity, upon being advised as to the defects appearing on its face, &c. The court refused to open, or set aside the decree. It does not appear that any process of subpoena was ever served upon Alexis D. Durand, or that Dumee had been made a party, otherwise than by the order appointing him trustee in place of Durand. The defendants, having brought the case to this court by writ of error, now insist that the decree is erroneous: Because—
1. The bill is multifarious.
2. The allegations of the bill are too indistinct, and uncertain, to justify the decree.
3. The court erred in rendering a decree pro confesso against A. S. Dumee, when he had not been made a party defendant, by any allegation of the bill.
4. That no decree should have been rendered, without a decree pro confesso against Delchamps, on whom process had been served as the executor of Durand.
5. That the decree is uncertain — it does not ascertain what property shall be sold — who has it, nor how much of it.
7. The decree determines that the claims of complainants are paramount to the deed of trust under which the plaintiffs in error claim, when, it is insisted, the face of the bill shows the contrary.
8. The decree does not ascertain the amount to be paid, nor establish the rate of interest to be calculated.
9. The decree is against the Mobile- and Cedar Point Rail Road Company, whereas the style of the company has been altered by an act of the legislature to that of the President and Directors of the Mobile and New Orleans Rail Road Company.
We will notice these assignments in their order; and
1. We regard the bill as not obnoxious to the objection of multifariousness. The Ralstons assert a lien on all the property, while Taiman only claims a portion. It is conceded by the bill, that the lien of the latter is to be preferred, but the Ralstons will take the surplus, if their claims succeed, so that in respect to the lot on which Talman’s mortgage creates a lien, the complainants have a common interest, and the defendants claim the whole. The principle involved is not unlike the point decided in Donalson’s ex’r v. Pope & Posey, 13 Ala. Rep. 752. See also Wendell v. Wendell, 3 Paige, 509. If, however, the objection were available, it cannot be made for the first time in this court. It is a matter of form, not usually affecting the merits of the decree, and is always discouraged by the courts, when it tends to impede, rather than promote, the ends of justice. Kennedy’s heirs v. Kennedy’s ex’rs, 2 Ala. Rep. 571; Chapman v. Chunn, 5 Ala. Rep. 397; McGowan et al. v. Br. B’k of Mobile, 7 Ala. Rep. 823-8; 1 Dan. Ch. Pr. 350, and authorities in note 2; Sto. Eq. Pl. & 544, and notes. It must be pointed out by demurrer, or is considered as waived. Welborne et al. v. Tiller et al. 10 Ala. Rep. 310.
2. It is certainly true, as an elementary principle of equity pleading, that the plaintiff must show clearly, by his bill, that he has a right to the thing demanded, or such an interest in the subject matter of complaint, as gives him aright to institute a suit concerning it. 1 Dan. Ch. Pr. 360; Story’s Eq,
This averment of title is sufficient. The defendants are fully advised of the facts constituting the claim, or title of the plaintiff — he derives his title from the mortgagee directly by assignment. The case of McKinley v. Irvine does not in the slightest degree militate against this proposition. In that case, the plaintiff derived his title to three shares of stock by purchase from the heirs and distributees of one James Montgomery, deceased. That title was put in issue. He then attempted to sustain his bill, by proof of a title derived from James Montgomery by his vendors, not as heirs and distributees, but by virtue of the will of said Montgomery, as devisees. This title, we held, was not put in - issue by the pleadings; that proof of a will was without the issue, and the plaintiff could not recover-upon a title not averred. The ease at bar is wholly dissimilar.
It is however said, that the plaintiff should have averred the assignment was by writing, and we are referred to 1 Daniel’s Pr. 419, 420. The authority merely affirms, that where a thing is originally created by statute, and required to be in writing, it must then be stated, with all the circumstances required to render it valid. Such, for example, as a title to lands claimed by devise, (which, by the common law, was not valid,) must be alledged to have been, devised by writing, which is the only form the statute recognizes as valid. But it is a well settled rule, both at law and in equity, that where the act averred might originally have been done at the common law by parol, and the statute requires it to be in writing, the form of pleading it is not affected by the stat
3. There was no necessity for amending the bill making Du mee a party in the place of Durand, who had died. He was admitted, upon the motion of Portier and Eslava, the two surviving trustees in the deed of trust to them by.the rail road company, “ to act with them, and to represent the trust fund before the court in this case, as a defendant.” The record shows this order was made by consent, and any irregularity, which might otherwise render the appointment erroneous, is consequently waived. 4 Por. 245.
Having appeared by counsel, and failing to answer within the time prescribed by the rules of court, there was no error-in taking the bill for confessed against Dumee.
4. The bill prays that Durand may be made a party defendant. No process was ever served upon him, and although ‘ a scire facias was issued, and was served on Delchamps, as his executor, no other steps were taken to make him a party, and it is very clear, that under such circumstances, he cannot be regarded as a party to the bill. 1 Dan. Ch. Pr. 341. It is true, that upon the decease of a sole trustee, his.interest passes to his executor, and if suit be instituted by such trus
The deed transfers to the trustees, and their successors, the exclusive management of the property conveyed, and they must be regarded as representing the interest of the cestui que trusts. Such being the case, the decision in Walker et al. v. Miller & Co. 11 Ala. Rep. 1086, is in point to show, that the cestui que trusts need not be made parties. Durand was not made a party as cestui que trust, but as trustee, and his place has been supplied by the substitution of Dumee. There was, then, no error in failing to revive against his executor.
5. We come next to consider the objections to the decree, as presented by the five remaining assignments of error. And before taking them up seriatim, let us determine the right of the Ralstons (so strongly contested by the counsel for the plaintiff in error) to any decree foreclosing what is termed by their counsel, their equitable mortgage.
It is proper, in the first place, to remark, that the term “pledge,” as used in the charter of the rail road company, as well as the resolutions passed by it, and the agreement entered into by its agent, Moore, should not be construed in its technical sense, as a mere right to deposit its effects in pawn for the security of its creditors, but should be understood in the more enlarged sense, of conferring the power to create liens upon its estate, both real and personal, for the security of demands which should exist against it. It is manifest, the company could not have carried out their enterprize, if the property were required to be delivered over to those who might advance money for the purpose of erecting the road; so that the idea of a pledge, technically so called, which requires a delivery, is opposed to the object and design, both of
It is insisted, that the claim of the Ralstons is not sufficient to warrant a decree in their favor; that the agreement entered into by Moore, as the agent for the company, is not a mortgage ; that it is not sealed. It is most certainly not a technical mortgage, which must convey the land from the debtor to the creditor, as a pledge and security for the payment of a sum of money borrowed, and. which contains a proviso that the conveyance is to be void on the payment of the money, and interest, on a certain day. But a court of equity will look to the intention of the parties, to be gathered from the instrument, rather than to its form, and will give effect to that intention, if lawful, and it may do so without interfering with paramount equities. The resolution of the board of directors, appointing a committee to negotiate for the iron, &c. for the benefit of the rail road company, fully authorized that committee to appoint an agent to contract for the articles specified in the resolution, and to pledge the real and personal estate of the company, for the fulfilment of the contract. This the agent in good faith did, and on the assurance of his written pledge, of all the personal and real estate belonging to the company, the Messrs. Ralstons furnished the iron to construct the road. The company received the iron under this agreement, without objection, so far as we are advised by the record, to the acts of its agent, Moore. Having availed itself of the benefit of the contract, it would be repugnant to the plainest dictates of justice, to permit it now to say, the contract is invalid — it wants the formality of a seal — it purports to be a pledge, and is void, without delivery — the agent transcended his authority, in vesting in the Ralstons too great a latitude, as to the price to be paid for the. articles, &c. Without intimating that any of these objections could have been successfully urged at any time against the validity of this contract, it is most certain, that the company must be deemed to have waived them, when, after a knowledge of the negotiation, the articles contracted for, and secured by the pledge, were received and used by the corporation. This would seem necessarily to result, unless indeed corporate bo
But it is insisted, this agreement of the company with the Ralstons cannot be decreed an equitable mortgage, because it is not sufficiently specific, being of all the property, both real and personal, of the corporation. This objection does not per se render the agreement invalid. A sweeping conveyance of all one’s estate, is certainly a badge of fraud, but in this case, no fraud is alledged. The same may be said respecting the uncertainty as to the amount to be secured by the deed, and that the security is for advances to be made in futuro. The doctrine is well settled, that a mortgage may provide for future advances. Mr. Justice Story, in delivering the opinion of the court in Conrad v. the Atlantic Insurance Company, 1 Peters’s Rep. 448, says, “ mortgages may as well be given to secure future advances and contingent debts, as those which already exist, and are certain and due. The only question which arises in. such cases, is, the bona fides of the transaction.” So in England, it has been repeatedly held, that an equitable mortgage created by deposit of title deeds, may be extended so as to cover further advances. See the cases referred to in 3 Powell on Mort. 1056. See also, as to what will constitute an equitable mortgage, the case of Stewart v. Toulmin, decided in 1822, in which the Vice Chancellor of England held that a written instrument, promising to pay a sum of money, with interest, “ out of the estate of William Hall,” and signed by the parties entitled to the estate, created an equitable mortgage upon the real estate of W. H., after the personalty had been exhausted. Vide 3 Powell Mort. 1049, b.
So also, agreements to mortgage may be implied from defective assurances between debtor and creditor, lender and borrower. Dale v. Smithwich, 2 Ver. 151; Card v. Jaffray, 2 Sch. & Lef. 374, cited, 3 Powell on Mortg. 1050, a.
We conclude, from the general principles of equity applicable to such defective conveyances or contracts, when the design of the parties is manifest, as also from the foregoing authorities, and the decisions of this court, which hold that inaccuracy of description, either as to. the debts secured, or
It is furthermore insisted, that the agreement entered into between the Ralstons, and Moore, as the agent of the company, does not ascertain the debt. The property to be purchased, and paid for by the Messrs. R’s, was described, and not knowing what it would cost, the amount could not have been more specifically stated, but being contingent as to amount, could not constitute an objection to a security by mortgage. See 1 Peters’s Rep. 448, supra. Neither is it an available objection, that no time is fixed for redemption. In all such cases, the law affixes a reasonable time. We are also of opinion, the averments of the bill are sufficient, as to a compliance on the part of the Ralstons with the contract, and the amount they expended in the purchase of the iron. They charge, “ that there is now due to them from the company, the sum of $7,000 and upwards, accruing to them under the contract, and that they proceeded to purchase the iron, and furnished it to the company according to the stipulations of the contract, having advanced the money therefor, &e.
6. Having ascertained that the agreement entered into with the Ralstons, must, according to the established doctrine of the court of equity, have the effect of an equitable mortgage, we proceed with the objections to the decree, in the order proposed. It is insisted, that the decree is uncertain : that it does not ascertain what property shall be sold — who has it in possession, nor how much of it shall be exposed to sale; that it does not ascertain the amount to be paid, nor establish the rule of interest to be computed.
We think the decree is utterly wanting in that precision and certainty, so necessary in the final judgments of judicial tribunals, which are to furnish guides and protection to the ministerial officers of the court, who may be charged with their execution, and which ascertain the rights, and fix the liabilities of the respective parties to the proceedings upon which they are rendered.
In Gayle v. Singleton, 1 Stew. Rep. 566, it is said, a decree -ordering the sale of property in the-hands of heirs, must specify and identify it. In that case, the decree was to be levied of the personal -estate of M. G., deceased, in the hands of his administrators and heirs: held insufficient. So also, a final decree for money must specify the sum, and not leave it to be ascertained 'by a commissioner. Clark v. Ball, 4 Dana, 16. In McCartney et al. v. Calhoun et al. 11 Ala. Rep. 120, this court reversed the decree -of the chancellor, which referred it to -the master to ascertain what sum each defendant should 'pay, and after their non-payment of the sums demanded, to issue execution. The reason assigned is, the defendants would have no opportunity of excepting to his -report ,• so in -this case, the master -must find the -rate of interest, and if he err, the parties could have -no opportunity of excepting.
7. As 'this -case will .‘have to be sent back, an opinion upon the other points raised in the argument, which we have not ■already decided, may be unimportant, inasmuch as the case may assume a different aspect, when the respective claims of the parties are fully presented. We would, however, observe, that we cannot well conceive how the defendants helo-w can be injured by the preference conceded by the Ralston’s to 'Talman’-s -mortgage. If both mortgages take precedence of •theirs, it is a matter of perfect indifference to them, which is first satisfied.
Perhaps it would be premature to express a -definite opinion as to the character of the mortgage -made to -the plaintiffs in error. It is however younger than either of the -others, and must be 'postponed to them, unless there be equitable grounds for referring it back to the time the stockholders
Our conclusion is, that bhe decree of the chancellor in the particulars mentioned above, is erroneous. It is therefore, reversed, and the cause must be' remanded, for further proceedings.