77 Tenn. 63 | Tenn. | 1882
delivered the opinion of the court.
The original bill in this case was filed, on the 29th
In the progress of the case, the deposition of O.
No mention had been made in the bill or answer of any collaterals held by the bank, nor any suggestion that the bank might be indebted to Boone & Co., nor any prayer for an account, nor were Boone & Co. parties to the suit. Nevertheless, the decree of the chancellor contained the following provisions: It further appearing to- the court that O. C. Boone or O. C.' Boone & Co., for the purpose of securing their indebtedness to the Merchant’s National Bank, and as an indemnity and security for the payment of the
From this decree, the complainants took an appeal to this court, where the cause was heard and determined at the April term, 1874. The opinion then delivered is reported in 7 Baxt., 458. From this opinion it appears that the only question considered by the. court was the extent of the bank’s liability to the complainants under the allegations of the bill. The decree at first drawn up and entered was limited accordingly. A few days afterwards, another entry was made on the minutes, remanding the cause to the -chancery court fbr the taking of the account as to the assets of O. C. Boone & Co. in the hands of the Merchant’s National Bank, and. for any proper decree in reference thereto.”
On July 17, 1877, after the cause was remanded,
The object of the original bill was to hold the bank liable to the complainants for the money paid by them on the faith of the fictitious bills of lading. The prayer of the bill was that the defendant bank, or the other defendants its officers, be decreed to be liable to the complainants for the amount of the drafts mentioned, and that the same be collected by execution ; and, at all events, that said bank be declared to be bound to them upon the guaranty of said draft, nr a portion of the same. O. C. Boone & Co. were not made defendants, nor of course was any relief sought against them. Neither in the bill, nor in the answer was any statement or allusion made as to any collaterals placed in the hands of the bank or its officers for any purpose. The existence of such collat-erals was developed in the proof. The decree of the chancellor in reference to these collaterals, and the
It is an elementary principle that the courts can only act upon such matters as are properly brought before them by the parties, according to the settled law, practice and usage: Windsor v. McVeigh, 93 U. S., 282. The court cannot rightfully notice matter, however clearly proved, of which there is no allegation or issue in' the pleadings: Sheratz v. Nicodemus, 7 Yer., 13; Bedford v. Williams, 5 Cold., 207; Furman v. North, 4 Baxt., 296; Austin v. Ramsey, 3 Tenn. Ch., 118. No relief can properly be granted in chancery upon any matter which does not apirear either in the bill, or the answer: Rogers v. Breen, 9 Heis., 679. And this court jhas repeatedly held that it has no more power than an inferior court to pronounce a decree binding on the parties upon matters which are not brought before it in the regular mode for adjudication, but are entirely outside of the cause: Easley v. Tarkington, 5 Baxt., 592; Meredith v. Little, 6 Lea, 517; Hill v. Hillsman, 7 Lea, 197; Pettit v. Cooper, opinion in MS. at this term. It is obvious, therefore, that
It may be, however, in view of the tacit acquiescence of the parties in what was done, that the causé should be remanded, if desired by the complainants, in order to amend the pleadings, and bring the proper parties before the court. To this end, the merits of the case have been looked into. The balance found against the Merchant’s Bank by the chancellor’s decree consists entirely in two items of charge, both of which was brought before us by the writ of error. It is absolutely certain that not a dollar was ever received by the bank' upon the largest of these items, and the weight of testimony is that only a small part of the other was collected. The chancellor was, however, of opinion that the bank must be held liable for the nominal amount of both, because it was a pledgee without authority to settle. In this, he was clearly in error.
The lawyer who drew up the assignment from Boone '& Co. to the bank of many of the claims transferred as collateral or pledged, including the Dale claim one of those in dispute, testifies that: “All of said accounts then so assigned was made out in full against the said parties as from the books of O. C. Boone & Co., but the true amount of neither was then fixed by a final settlement with the parties thereto.” Boone says: “Of course there was a settlement to be made by Cherry with Dale.” And both the attorney and Boone say that this claim was settled with the party
A trustee, acting in good faith, may release or-compound a debt due to his trust estate: Blue v. Marshall, 3 P. W., 381; Firshaw v. Higginson, 8 D. M. & G., 827. But if he releases or compromises a debt without sufficient reason or justification, or if he sell a debt for a grossly inadequate consideration, when by proper diligence more could have been realized, he will be answerable for it in his accounts: Jevon v. Bush, 1 Vern., 342; Wiles v. Grebham, 5 D. M. & G., 770; Perry on Trust, sec. 482. A trustee must follow the collection of claims actively by legal proceedings, unless he can show that such proceedings would have been futile and void: Perry on Trusts, sec. 440. A pledgee, like a trustee, is bound to the .pledgor for the- full amount of the asset pledged, if it can be realized by law, and if the pledgor is entitled, as between-him and the debtor, to the full amount of the asset. But if the pledgor himself only holds the asset to-
The note of Dale, transferred to the bank or Cherry as collateral, was for $3,150. But as we have seen, the claim of Boone & Co. against Dale was subject to a settlement. Boone admits that as early as January, 1868, he was advised that a settlement had been made between Dale and Cherry. And the attorney, who drew the transfer for Boone, states that he learned from Dale the same fact, and that Dale had the note. Neither of these witnesses state the result of the settlement. On the other hand, Cherry testifies that, upon the settlement, it was found that only $632 was due from Dale, and this sum was paid to him. There cannot be a reasonable doubt of the correctness of the testimony of Cherry. •
The other, and much the largest claim in dispute, consisted of the note of one Burgett for $6,768. The note was payable to Mrs. Grider, and by her and her husband endorsed. The proof of Cherry and 'Grider, the. husband, is that the note was deposited by the husband with Boone & Co. as collateral to secure a debt of $1,600. Cherry says he learned the fact from Grider, shortly after he received the note, and called Boone’s attention to it, who admitted it, except lie thought the claim of the company was for about $2,000. Cherry sent the claim for collection to a lawyer in Arkansas, where the maker and the Griders lived, and went himself to consult with the lawyer in regard to ts value. He was informed, and the proof sustains
If the Burgett item be disallowed, and the Dale claim reduced to $632, there is no balance due from the bank. The balance would be the other way. And to justify a remand, the right to relief upon an amendment of the pleadings ought to be clear.
Reverse the decree, and dismiss the bill as to the matters of account, with costs.