Winston Jones & Co. v. Peebles

| Ala. | Nov 15, 1901

DOWDELL, J.

The appellants filed their bill in the chancery court of Pickens county for the purpose of enforcing the specific performance of a contract made and entered into by them under the firm name of Winston Jones & Oo., on the 13th day of January, 1896, with the appellees, Mamie E. Peebles and Dr. J. Moody as the administrators of the estate of E. B. Peebles, deceased. In addition to the special prayer, the bill contained the general prayer for relief. Upon the final hearing on the pleadings and proof, the chancellor denied the relief sought ag’ainst the respondents by the bill in their representative character, holding that they as administrators were without authority and powerless to bind the assets of the estate of their intestate by entering into said contract, but under the general prayer, granted only partial relief against the respondent, M. E. Peebles. From this decree the present appeal is prosecuted. While error is also complained of in the decree in the directions for the stating of the account between the complainants and respondents under the order of reference for that purpose, the main question involved in the controversy on this appeal is that of the authority and power of the administrators, as such,-to enter into the contract sought to be specifically enforced, and its consequent validity.

Pertinent to this question, the hill and the facts in the case show that E. B. Peebles, respondents’ intestate, was the owner of a large quantity of land in Pickens county, and during his life, for many years, and up to the time of his death, farmed extensively, and also merchandised, during which time he had business transactions with the complainants, Winston Jones & Go., who did a commission business in the city of Mobile, and who were the said E. B. Peebles’ commission merchants. In March, 1895, the ¡said E. B. Peebles and Winston Jones & Go. had a settement of accounts between sai'd Peebles and Jones & Co., in which it was ascertained that the said Peebles was largely indebted to the said Jones & Co. A written agreement was then' entered into between them, in which it was agreed that the said Peebles would upon certain conditions stated in said agreement execute a mortgage on a large amount of land and personal property, which lie then owned, to said Winston Jones & Co. to secure his indebtedness to them. Pursuant to said agreement, all the terms and conditions of which having been complied with by the said Winston Jones & Go., the said E. B. Peebles did on the 10th day of July, 1895, make' and execute a mortgage to the said Winston Jones & Go., a copy of which is made an exhibit to the complainants’ bill. In December, 1895, the said E. B. Peebles died, leaving his estate encumbered 'with said mortgage. In January, 1896, the respondents Dr. J. Moody and Mamie E. Peebles took letters of administration on the estate of the said E. B. Peebles, deceased, and immediately qualified and entered upon the discharge of their duties as such administrators, and on the Í3th day of .January made 'with Winston Jones & Co. the contract in question. The facts show that it wa,s the purpose and intention of the parties, in entering into said contract, to pay off and discharge said mortgage indebtedness from E. B. Peebles to Winston Jones & Co., with the rents, income and profits from the mortgaged property, and thereby save to the estate of the said E. B. Peebles, deceased, and to his heirs, the land and other property covered by the mortgage (and to that end and for that purpose, the said Mamie E. Peebles pledging the rents and income from her individual estate). The facts show that- the contract was just and fair and reasonable in its terms. In accordance with its provisions, the cotton grown and raised on the lands for the year 1896, was shipped to Winston Jones & Co. a.t Mobile, and by them sold and the proceeds applied under the terms of the contract, and the contract otherwise, in all of its terms, was carried out by all of the parties for the year 1896. The facts further show that Winston Jones & Co. continued for the next year, 1897, to carry out said contract in good faith, and have all along performed their part, until they were prevented from further performance by the respondents; that the respondents received all of the benefits under the provisions of said contract in growing and raising the crop of 1897 in the way of advances in money and supplies to the. respondents and their tenants on said lands, made by said Jones & Co. in accordance with the terms of the contract, but that the said Mamie E. Peebles, respondent, after said crop of 1897 bad been so grown and gathered, refused to ship said crop to said Jones & Co. according to the contract., and wholly refuses to further carry out and perform said contract. The facts further show that under the agreement of settlement of March, 1895, between the said E. B. Peebles and Winston Jones & 'Co. and unde]- the mortgage of July 10, 1895, executed pursuant to said agreement, as well as under the contract of January 13, 1896, entered into between the complainants and respondents for the ‘purpose of paying off and discharging said mortgage indebtedness and thereby preserving the lands under said mortgage to the estate of their intestate, certain benefits were to accrue, and would accrue to,,Winston Jones & Co. in the performance of said contract, which operated as an inducement for entering into the same, and for such as no adequate and just compensation could be had in an action at law, in thé assessment of damages, on a breach of the contract.

With this preliminary statement of the facts as shown in the record we proceed to the discussion of the propositions of law applicable thereto and which we think control in the case.

The doctrine of equity jurisdiction to compel the specific performance of contracts is well settled. It rests upon the just principle that men should be required to act in good faith towards each other in their business transactions; and that they should not be permitted to idolate solemn contracts entered into, AAhen it avouIcI be to the detriment of the other contracting parties for them to do so. When a proper case is presented for its exercise the party injuriously affected by a breach of the contract, is entitled to the relief as a matter of right; a,s much so as they would be entitled to a judgment for damages in an action at laiv for the breach. Chambers v. Ala. Iron Co. 67 Ala. 358; Bogan v. Daughdrill, 51 Ala. 314; 1 Story Eq. Jur., §§ 715-717-717a, 742; 3 Pom. Eq. Jur., § 1404. What will constitute a proper case for the exercise of equity jurisdiction for enforcing the specific performance of a contract, in general, is determinable upon the inadequacy of any remedy in a court of laAV to fully -meet the ends of justice. In the following cases it seems to be clear upon authority, that the jurisdiction will obtain and relief be granted, Adz.: Where the remedy at law is for any reason doubtful, uncertain, or inadequate. — Casey v. Holmes et al., 10 Ala. 785. Or, where an action at law in damages for a breach Avould not put the parties in a situation as beneficial to them as if the agreement had been specifically performed. — 1 Story Eq. Jur., §§ 716 et seq.; 3 Pom. Eq. Jur., p. 441, note 2. Or, Avhere the nature of the case is such that a performance alone will answer the ends of justice. — Catheart v. Robinson, 5 Pet., 264" court="SCOTUS" date_filed="1831-02-18" href="https://app.midpage.ai/document/cathcart-v-robinson-85730?utm_source=webapp" opinion_id="85730">5 Peters, 264. Or, where there are special circumstances that operated as an inducement to the making of the contract 17111011 a -court of law could not consider in an action in damages for a breach; and in -every -case where an action at law for damages would not afford complete relief.- — Kirksey v. Fike, 27 Ala. 386; Johnson v. Brooks, 93 N. Y. 338; 3 Pom. Eq. Jur., p. 444.

The facts and circumstances in the present case as shown by the record, bring the case fairly within the principles above stated. They show that the complainants were commission merchants and cotton factors in the city of Mobile; that their business and profits in this particular consisted in advancing money and supplies to merchants and farmers, to enable them to grow crops and buy -cotton, in order that they, Jones & Co., might secure the handling and sale thereof; and for which advances and supplies and sales of cotton they received a commission from the parties dealing with them. The facts also show that Jones & Co. were largely interested as owners in the steamboat companies on the Bigbee river-, by which this particular cotton was shipped to Mobile, Ala., -and on account of which they received a profit from freight charged for shipping said cotton. They were also interested in the compress and warehouses in Mobile, by which the cotton would be handled, and in the insurance companies by which the cotton w'ould be insured, sharing in the profits arising from these -sources. All of these profits being of such character that they -could not be considered in the measure -of damages for a breach of the contract in an action at law, yet were advantages -accruing to Jones &' Co. from the -contract which induced them to enter into it. Apart from the consideration of the question of the power of the respondents in their representative character to make the contract, the contract in its terms and under the peculiar circumstances -of the case, -is such as -clearly calls for the exercise -of the jurisdiction and power of a -court- of equity -for its specific performance.

Did the administrators exceed their powers and -duties, ias such, under the law, in entering into the contract? Recurring to the mortgage of E. B. Peebles, deceased, to Winston Jones & Co. of July 10, 1895, and for the purpose of paying off and discharging which, the contract of January 13, 1896, was entered into by the respondents, it will be seen that said mortgage contained a contract out of which other and future advantages were to accrue to both Jones & Co. and E. B. Peebles. After describing the property covered by the mortgage, and providing the manner of sale in case of default, tlie instrument continues, as follows: “and further, on considerations as aforesaid, I do hereby sell and mortgage to Winston Jones- & Co. all the crops of cotton, corn, fodder, peas, potatoes, hay, etc., which I may grow, or have grown on said lands or any other lands in said county and State which I may cultivate or cause to be cultivated, and I obligate myself to deliver them at convenient warehouses on the liver to be shipped to them in Mobile, and there by them sold in the usual manner on account of the above indebtedness, from year to year, all such crops of cotton as I may grow or cause to be grown; other crops to be disposed. of so as to promote the best interests of the parties to this instru-' ment as may be from time to time agreed upon, or sold a-s the other property is provided to be sold.” Under the facts and circumstances Winston Jones & Co. would have been entitled to a specific performance of this contract against E. B. Peebles, on a bill filed for that purpose. This contract was, therefore, binding on his representatives. — Hays et al. v. Hall et al., 4 Port. 385; Brewer v. Brewer & Logan, 19 Ala. 489; Chambers et al. v. Ala. Iron Co., 67 Ala. 358; Strange v. Watson, 11 Ala. 324" court="Ala." date_filed="1847-01-15" href="https://app.midpage.ai/document/strange-v-watson-6503205?utm_source=webapp" opinion_id="6503205">11 Ala. 324; Jenkins v. Harrison, 66 Ala. 345" court="Ala." date_filed="1880-12-15" href="https://app.midpage.ai/document/jenkins-v-harrison-6510759?utm_source=webapp" opinion_id="6510759">66 Ala. 345; Meyer v. Mitchell, 75 Ala. 475" court="Ala." date_filed="1883-12-15" href="https://app.midpage.ai/document/meyer-bros-v-mitchell-6511905?utm_source=webapp" opinion_id="6511905">75 Ala. 475, 480. By the contract of January 13, 1896, the administrators evidently intended to carry out the contract contained in the mortgage of their intestate to Jones & Co. of July 10, 1895, and this was not beyond their power and duty, -when in order to its performance they had only to rent out the lands of the estate. They had the authority under the statute to rent the decedent’s lands, and this without an order of the court, and when the interests of the estate required it, to rent privately; the statute imposing the duty upon them when lands are rented privately, to repaid such renting to the probate court. — Code, 1896, § 154. In Clark v. Knox, 70 Ala. 622, it was' said by this court, speaking through Brioi-cell, C. J.: “The statute (Code of 1876, § 2446),” same as section 154 of the present Code, “clothes an executor or administrator, ■with the same power to rent, publicly or privately, the lands of the testator or intestate. The power involves the duty, and if there is neglect to exercise it, lie is answerable for the loss, x'esulting, as he is for loss from neglect of any other duty with which he is charged.”

The bill prays a specific performance of the contract as to the two hundred and seventy-eight bales of cotton now stored in the warehouse of the respondent Mamie E. Peebles. It is 'exhibited against the respoxxdexibs in their individual as well as their representative capacity. The facts show that this cotton was grown and raised by tenants during the year 1897, on the lands of the estate and lands of the respondent Mamie E. Peebles, and was received by the respondents from such tenants and stored in said warehouse. Of the two hundred and seventy-eight bales, about one hundred and twenty-five bales -were raised on the lands of Mrs. Peebles, and the remainder, about one hundred and fifty-three, on the lands of the estate. Of the one hundred and fifty-three bales grown oxx the estate lands, about forty-five hales were due for rent, and the remainder, about one hundred and eight, were due for supplies and advances made to the tenants to enable than to make the cx*op on the rented lands of the estate. There can be no doubt of the validity of the contract as against Mrs. Peebles in her individual capacity, and of the right of the complainants to a specific performance against her as to the cotton grown on her individual lands, and ¡this, the chancellor decreed, but denied relief sought as to the remainder of the cotton, holding that this cotton constituted assets of the estate and that the contract was incapable of enforcement as to it, for the reason that the administrators were without authority to make the contract.

We think it quite clear that the cotton raised by the tenants oxx the lands of the estate, in excess of the rents, was tlie property of the tenants, and independent of any contract as to advances, constituted no part of the assets of the estate. If the cotton due from the tenants for advances, became a part of the assets of the estate, i[t was by virtue of the contract which is the foundation of this suit, since the supplies and advances so made were obtained through the contract. To hold that this cotton constituted a part of the assets of the estate, would be in effect a ratification of the contract. The advances to make this cotton came from Winston Jones & Go. under the contract. It would be wholly unjustifiable to ratify itlie contract as to the estate, and at the same time repudiate it as to Winston Jones & Co. In equity the cotton representing the advances made to raise and grow the same, and which was received by the respondents from the. tenants on the debt for such advances, was purchased with the money of Winston Jones & Co., and they, the respondents, should' be estopped to cleni’ the validity of the contract under which the advances were made and obtained, and by reason of which this cotton came into rthei-r possession. And this is true, whether they hold this cotton in a representative or individual capacity.

As to the forty-five bales representing’ the rent of the estate lands, and which were assets belonging to the estate, it- became and was the duty of the administrators under the law, independent of any express contract entered into by them, in their representative copacity, to apply this rent cotton on the mortgage debt, which encumbered the lands, — it was their duty to rent-out the lands for the purpose of discharging this mortgage debt with the rents, if it was to the advantage and interest of the estate for it to "be paid off in that- way. Clark v. Knox, 70 Ala. 622; Patapsco Guano Co. v. Ballard, Admx., 107 Ala. 710" court="Ala." date_filed="1894-11-15" href="https://app.midpage.ai/document/patapsco-guano-co-v-ballard-6516241?utm_source=webapp" opinion_id="6516241">107 Ala. 710. If, then, it was their duty, and they had the authority under the law to rent out the lands and so apply the r ents, it would seem to logically follow, that, they could in their representative character make a valid and binding contract with the mortgage creditor, to apply the rents to accrue, from the encumbered lands, in discharge of the encumbrance.

Our conclusion, therefore, is, that the contract of January 13, 1S96, was valid and binding and capable of enforcement against the respondents in their individual capacity as to the cotton grown on the individual lands of Mrs. Peebles, and the cotton received from tenants for advances, that was grown on the estate lands, since such cotton constituted no part of the assets of the estate. And under the principles above stated, the contract was valid and binding and capable of enforcement against the respondents in their representative character as to the rent cotton arising from (the encumbered lands.

The foregoing expresses the views ■ of the writer, and in which Justice Tyson concurs. But the majority of the court hold that the respondents were without authority as administrators to enter into the contract of January 13, 1896, and for that reason the same is invalid, and cannot be specifically enforced against them in their representative character.

We cannot consider appellees’ cross-assignments of errors, since no appeal was taken by the appellees, nor is there any consent in wilting by the appellants indorsed on transcript, nor joinder by appellants in the cross-assignments. See Rule 3 of Practice, page 1187 of the Code, and authorities cited under this rule. It may, however, be stated here, that as to (the defense of non-claim set up by the respondents in their answer, on precisely the same evidence offered in this case it was held in the ease of Jones et al. v. Peebles, 130 Ala. 269" court="Ala." date_filed="1900-11-15" href="https://app.midpage.ai/document/jones--co-v-peebles-6519077?utm_source=webapp" opinion_id="6519077">130 Ala. 269; 30 So. Rep. 564, that there had been sufficient presentation of the claim under the statute.

It follows that the decree of the chancellor must be affirmed.