Cullum v. Bloodgood

COLLIER, C. J. The complainant and Everett, Hoyt, and Bates, with the view of reimbursing the defendant, John Bloodgood, about twenty-five thousand dollars, which he had advanced for Ross & Ford, drew four several bills on the latter ; these bills were accepted, and the acceptors failing to meet them at maturity as they had undertaken, they were protested for non-payment. In order to protect the complainant and the other drawers of the bills, and to indemnify Mr. Bloodgood, Ross Sf Ford placed in the hands of C. Del-linger, the agent of Mr. Bloodgood certain notes and other securities, for money due them from third persons, amounting to about $29,000. These securities have been realized, and notwithstanding their collection, Bloodgood has made no appropriation of their proceeds to the payment of the bills ; but has recovered judgments against the complainant and Everett and Hoyt, and is seeking to enforce the judgment against the complainant. The bill particularly alledges these facts, prays that an account be taken, and that the judgment against the complainant be perpetually enjoined. Conceding that the allegations of the bill are founded in truth, and they show that the complainant had a defence [40] which he might have asserted at law. They affirm a contract between Ross & Ford and Bloodgood, through his agent Dellinger, to apply the collections made upon the collateral securities to the payment of the bills. This contract was not for the exclusive benefit of the acceptors, but inured also to the drawers, and it was competent for the latter to show the amount collected, and insist upon its appropriation to the extinguishment of their liabilities. To have made out the defence it was not necessary at law, any more than in equity, to prove that the money collected, went into Blood-good’s hands — the receipt of it by his attorneys at law, would be as effectual in one court as the other. In either case it would be money received for the use of the party, to whose benefit it was to be applied, and if it was converted to other purposes by Bloodgood, or his agents, it was no less a payment under the contract, in virtue of which the securities were delivered. This being the case, we can conceive of no objection to the legal defence. It has been repeatedly held, that where money is deposited with one person to be handed to another, or where money is received by a trustee under an assignment for the benefit of creditors, in either case the beneficiary may maintain an action for money had and received. Hitchcock et al. v. Lukens & Son, 8 Port. Rep. 333; Stewart v. Conner, 9 Ala. R. 803; Huckabee v. May, 14 Ala. 263, and citations there found. But it is insisted that the equity of the bill is defensible on the ground that the controversy embraces matters of account between the parties. It must be admitted, that “ in matters of account, growing out of privity of contract, courts of equity have a general jurisdiction where there are mutual accounts, (and a fortiori where those accounts are complicated;) and also where these accounts are on one side, but a discovery is sought, and is material to the relief. But on the other hand, where the accounts are all on one side, and no discovery is sought or required; and also where there is a single matter on the side of the plaintiff seeking relief, and a mere set off on the other side, and no discovery is sought or required, in such cases courts of equity will decline taking jurisdiction of the case.” 1 Story’s Eq. 441; Kirkman et al. v. [41] Vanlier, 7 Ala. Rep. 217 and cases there cited. In the case at bar, the complainant’s indebtedness was ascertained by the bill which he drew, and if any part of the transaction in question rested in account, it was the collections made by Blood-good on the collateral securities. Here then the accounts are all on one side — by no means complicated, and from any thing alledged in the bill, we cannot infer that a discovery is necessary. It should rather be inferred from the manner in which the complainant has stated his case, that the proof was accessible through the debtors of Ross & Ford, whose debts were transferred, or the attorneys to whom the collection of them was entrusted. The case then does not come under the head of equity jurisdiction, which the parties have invoked. See also, Halstead v. Rabb, 8 Porter’s Rep. 63; Poage v. Wilson, 2 Leigh’s Rep. 490; Knotts v. Tarver, 8 Ala. Rep. 742. It is a general rule, so well established as to have become an axiom, that a court of chancery will not entertain a cause where the complainant has a plain and adequate remedy at law. Where no circumstances of surprise, accident, or fraud, appear to have prevented a party from having a full and fair trial at law, upon the matters which form the ground of his application to equity, an injunction will not be granted. Holding v. Holding, 1 Murp. Rep. 10. After a cause has been fully tried and decided in a court of law, equity will not give relief. So where a defence is purely legal, and the defendant was advised, or might have become informed of it with proper diligence, and was under no disability, equity will not interfere, if he failed to avail himself of it. In such case it devolves upon the complainant to show some sufficient excuse for the failure to defend himself. Perhaps, if the defence be one of which the two tribunals have concurrent jurisdiction, and the defendant fails to assert it at law, he may notwithstanding resort to a court of equity; but if he attempts to defend himself in the former tribunal, and fails, he cannot have the matter retried in the latter. Harrison v. Harrison, 1 Litt. Rep. 137; Morrison’s Ex’r v. Hart, 2 Bibb’s Rep. 4; Wilson v. Cheshire, 1 McC. Ch. Rep. 241; Morris v. Ross, 2 Hen. & M. Rep, 408; Vanlew v. Bohannan, 4 [42] Rand. Rep. 537; French v. Garner et al, 7 Por. Rep. 549; Lee & Norton v. Ins. Bank of Columbus, 2 Ala. R. 21; Pharr & Beck v. Reynolds, 3 Ala. Rep. 521; Stinnett and another v. The Branch Bank at Mobile, 9 Ala. Rep. 120; Duncan v. Lyon, 3 Johns. Ch. Rep. 351; Murray v. Toland, Id. 569. The principles we have stated are quite sufficient to show, that the bill does state a case which entitles the complainant to relief in respect to the collateral securities delivered to the agent of Bloodgood. If the complainant was entitled, under a contract with Ross & Ford, to have any part of the sum collected on the notes of Dumas, appropriated to the extinguishment of his liability as drawer of the bill, for the accommodation of the acceptors, he might have reduced the amount of the judgment against him, pro tanto, by making his defence before a jury. The bill does not distinctly alledge such to have been the fact; and if we look out of the bill to the answer of Blood-good and the proofs, the reverse is most manifest. It is perfectly clear, the transaction between Ross, Bates & Campbell, in respect to these notes, was intended to transfer to Bates a special lien upon a sufficient amount of the proceeds, to extinguish his liability as an accommodation drawer for Ross & Ford. Such too, must be its legal effect, unless it was indispensable to the validity of the arrangement, that it Should have had the sanction of Ford. Mr. Justice Story, in his Treatise on the Law of Partnership, (§ 101,) says, “each partner virtute officii, possesses an equal and general power and authority in behalf of the firm, to transfer, pledge, exchange, or apply, or otherwise dispose of the partnership property, or effects, for any and all purposes within the scope and objects of the partnership, and in the course of its trade and business. The power extends also to assignments of property of the firm, as a security for antecedent debts, as well as for debts thereafter to be contracted on account of the firm. Nor will it make any difference, whether the assignment be for the benefit of one creditor, or of several, or of all t he joint creditors.” But the learned author concedes, that “it may well admit of some doubt, whether this power extends to a general assignment of all the funds and effects of the partnership by one partner for the [43] benefit of creditors.” Id.; see also, citations in the notes; also, <§> 126, and citations in notes. In Egberts v. Wood, 3 Paige’s Rep. 517, the right of either of the partners, before the dissolution of the partnership to apply the funds of the firm to the payment of one creditor to the exclusion of another, is distinctly recognized. If this be the law, and we believe that there is no conflict in the decisions upon the point, it was entirely competent for Ross, without the concurrence of Ford, to have made such a disposition of Dumas’s notes as entitled Bates to the money collected on them for his indemnity. The proof entirely relieves the transnetion from suspicion, ox mala fides, on the part of either of the parties, and there is no ground on which a court of chancery can deny to it validity. This view relieves us from the necessity of considering the questions which have been raised as to the lien of the several partners upon the effects of the firm, for the partnership debts, and how far this lien may be made available at the the suit of a creditor. See, however, Story on Part. §§ 97, 132, 133, 259, 260, 263, 326, 357 to 361, 390, 391; Tripler v. Olcott, 3 Johns. Ch. Rep. 473. We will not stop to inquire whether, if a proper case for equitable interference, was made out, the defendant has not slumbered too long upon his supposed grievances. The questions considered are the only ones presented by the bill, and upon these we have already said, the complainant is hot'entitled to the relief he seeks. The decree is consequently affirmed.