15 Ala. 501 | Ala. | 1849
Before proceeding to notice the main points so elaborately discussed at the bar, we will briefly dispose of some objections made to the frame of the cross bill, and questions of practice, as to the dissolution of injunctions by the chancellor in vacation.
The statute (Digest, 358, § 82,) requires that the answer must be filed, before the chancellor in vacation can dissolve, but after it is filed, the chancellor should look to the whole case made by the pleadings, and if the bill contain no equity, dissolve the injunction, although the answer admits its allegations.
The authorities on which he relies, (7 Ala. 233, and 1 Paige, 226,) show, that the court may refuse to treat the pleading as a cross bill, in the absence of such prayer. But this is an objection to mere matter of form, which is clearly amendable, and which the chancellor should not regard,
A cross bill is a mode of defence, to which a defendant resorts when he seeks some discovery, or asks relief touching the subject matter of the original bill. It is treated as an auxiliary suit, forming, with the original bill, but one cause or suit. 7 Johns. Ch. Rep. 252; Story’s Eq. Pl. § 399; Dan. Ch. 1742. It is true, the allegations of the cross bill must relate to the subject matter in controversy in the original bill; but the rule does not, as is supposed by the counsel, restrict its office so as to confine it to the issues in the original cause.
Thus, a cross bill has been allowed to answer the purpose of a plea puis darrein continuance at the common law. Mitford’s Eq. Pl. 82; Story’s Eq. Pl. § 393; Dan. Ch. Pr. 1743.
So also, for obtaining an equitable set-off, (4 Met. Rep. 104;) and to rescind a contract, where the original bill sought to enforce a lien for the purchase money. Wickliffe v. Clay, 1 Dana, 589. Or to establish and confirm a conveyance, where the original bill sought to set it aside. 11 Wheat. Rep. 446; Dan. Ch. Prac. 1744.
These authorities may suffice to show, that Nelson and Hatch may well set up the defences they attempt to make, so far as the frame of the bill is concerned. That some of their counter claims, or deductions, are cognizable at law,,
The complainant in the cross bill, as against the complainant in the original bill, is not bound to show any ground of equity to support the jurisdiction of the court. 4 Met. Rep. 104; Dan. Ch. Prac. 1747; Story’s Eq. Pl. § 399.
The defendants submit to the jurisdiction which has thus attached to the subject matter, and averring their readiness and willingness to pay what may be found due to Dunn, after allowing them the abatements claimed, file their cross bill to obtain such allowance. Having obtained jurisdiction upon the application of Dunn, the court of chancery will proceed to do full justice between the parties, and restrain either of them from taking an inequitable advantage in the law court. Certainly Dunn cannot object that the defendants have no business in the chancery court, when they were brought there upon his bill, to which theirs is but a mode of defence.
The rule certainly is, that he who seeks the aid of a court of equity, must himself do what is equitable, and if he admits an amount due to the defendant, the court of chancery will not become active in his behalf, until he pays, or offers to pay, as the court may direct, the sum thus admitted to be due.
It seems, however, that in a bill for an aeeount, it is not necessary for the plaintiff to offer to pay whatever balance may be found against him. 1 Smith’s Ch. Pr. 8; Dan. Ch. Pr. 442; Colombian Government v. Rothschild, 1 Sim. 94, 105. But if such averment were necessary in the cross bill, which seeks an account of the sums to which the plaintiffs are entitled as abatements upon the notes held by Dunn, we think the allegation, that they are ready and willing to pay whatever sum may be due, after allowing them the abatements to which they may be entitled, is a substantial com
Before proceeding, however, to inquire as to the respective equities of the parties with respect to the deductions claimed by Nelson and Hatch as connected with, or growing out of the original transaction between them and Hendorson, we should observe, that as to the claims secured by the assignment of the four notes to Dunn, and which were purchased in by Nelson, amounting, with interest, as averred in the cross bill, to $ 10,667 38, we think Nelson and Hatch have the clear right, under the present state of the pleadings, to have the collection of that sum enjoined. Dunn admits that Nelson has bought up the claims, but says he will not be entitled to the full amount of said claims, but only to a pro rata distribution. That the four notes assigned to him when collected, after the expenses incurred are deducted, will not be sufficient to pay all the debts they were intended to secure. The answer of Dunn does not say what the expenses are, or how much the notes will fall short of paying the several demands secured, nor what the amount of Nelson’s pro rata share will be. He however avers, “that this pro rata he has no wish or desire to collect from said Nelson and Hatch.” Now, as Dunn could have made this matter plain — as he is presumed to know the amounts of the ex-! penses which are to be deducted from the proceeds of the four notes, and has failed to furnish any data upon which the court could act understandingly, we feel bound, so far as the injunction is concerned, to assume the amount stated in the cross bill, as the amount to which Nelson is entitled, and as to this sum, the chancellor should have continued the injunction. There is certainly no equity in allowing Dunn to collect funds which, when collected, the court the next moment would order to be refunded, more especially, as Dunn
It has been decided by this court, that the assignment of the notes is pro tanto an assignment of the deed of trust designed for its security,'and that the assignees are entitled to priority of payment out of the trust fund, in the order in which the assignments were made, and not according to the time of the maturity of the notes. Cullum et al. v. Erwin, adm’r, 4 Ala. Rep. 452; see also Hop. Ch. Rep. 569, 575; 2 Story’s Eq. Jurisp. § 1233, p. 600, n. 1, 3d ed.
It is, however, insisted, that the transfer to Chalmers has relation back, and should date from a previous transfer of the same notes made in June, 1840, by Henderson, to one R. W. Thomas, to secure the debt due from him to Chalmers, with other demands. However this may be in fact, we cannot come to this conclusion from the record before us, to which our inquiry must be confined. The cross bill, in setting out the answer of Chalmers to the original bill, gives the following account of the transaction: “ That Henderson came to his (Chalmers’s) house in June, 1840, and informed respondent that, by reason of the failure of the firm of Henderson, Garrett & Co., (of which he was a member,) he feared that he' was rendered insolvent. That he had sold his property to-Nelson and Hatch, and had assigned to Richard W. Thomas, of Mississippi, since deceased, notes Nos. 8, 9, 10, 11, in the bill mentioned, to pay respondent the debt due him and other creditors. That this respondent was dissatisfied with said arrangement, and said Thomas subsequently declined acting. That Henderson then went to North Caro
Was the assignment by Henderson to Thomas valid; and if so, what is the effect of the subsequent agreement between the parties? We regret that we are not more fully advised, as to the character of the assignment to Thomas. It is said, it was made to pay Chalmers, and other creditors. Now, whether the other creditors provided for, assented to this provision for their security, or whether the deed was such as to require their assent to render it valid, we are not informed. Certain it is, that Chalmers, upon being informed of the ar rangement between Henderson and Thomas, was dissatisfied.
It is too well settled by this court, to be now the subject of controversy, that a voluntary conveyance to a trustee, by a debtor, for the security of debts, is invalid to pass the title to the trustee, until it is assented to, either expressly or im-i pliedly, by the creditors whose debts are intended to be secured by it. Elmes v. Sutherland, 7 Ala. Rep. 262; Lockhart v. Wyatt, 10 Ala. Rep. 231; Hodge v. Wyatt et al. ib. 271; Pinkard v. Ingersoll et al. 11 ib. 8.
In the assignment made by Henderson to- Thomas, we are not advised that any one of the creditors, except Chalmers, was ever informed of its provisions, and he, as we have
The terms in which the agreement is couched, in the answer recited in the cross bill, explained by the subsequent act of Chalmers, in making an absolute disposal of the four notes, in the purchase of property for his own benefit, show that he acquired an interest in the notes, very different from that he possessed under the previous assignment to Thomas. We must intend that he acquired, by the new agreement, the absolute right to dispose of them for his own benefit; or, to use his own language, “ he held them free from the control of Henderson, and all other persons.” Such right is utterly inconsistent with the original agreement between Henderson and Thomas, so far as we can gather its provisions from the pleadings.
The office of trustee is one of confidence, and Thomas, the trustee, could not have delegated his trust, unless by express provision in the assignment, he was authorized to do so. A sale by him, or by Chalmers, (if he held these notes in trust,) for his own benefit, would amount to a breach of trust, for which they would have been liable to the cestui que trusts. Hill on Trustees, 175. Such breach of trust on the part of Chalmers we are not allowed to presume, but the contrary. And having this power to dispose of the notes to Nelson and Hatch, which was not conferred by the original assignment to Thomas, we conclude, he derived it by the agreement made in October, 1840, after the assignment to Dunn, and with a knowledge, as he states, of said previous assignment to Dunn. This subsequent agreement vests his interest, and must control his rights. Pinkard v. Ingersoll,