Maulden, Montague & Co. v. Armistead

DARGAN, C. J. We will first examine the right of the complainants to retain the proceeds of the crop of cotton raised by Robert B. Armistead in the year 1842, in opposition to the deed executed by him to James Semple on the 17th day of March, 1842; and then we will endeavor to ascertain their rights under that deed. If we can come to correct conclusions on these questions, we then can see whether the chancellor erred in dissolving the injunction. [510] That the deed executed by Robert B. Armistead, on the l'7th day of March 1842, was valid and conveyed to him the legal title to the cotton, is not an open question; it was so decided in the case of Maulden, Montague & Co. v. Armistead, 14 Ala. 702. But the bill alleges that Robert B. Armistead was indebted to the complainants in the sum of nineteen hundred dollars, and that in consideration that the complainants would accept his bill for two thousand dollars, payable to William Armistead, and due at one hundred and twenty-five days from date, he on the 25th day of February 1842, promised and hypothecated to the complainants his crop of cotton, to be grown that year, and to send it to them, when gathered and prepared for market, for sale and for the payment and reimbursement to them both of the amount of said nineteen hundred dollars and the amount of said bill, together with the usual commissions for accepting and paying the same. Does this contract give to the complainants an equitable right to the cotton, made by Robert B. Armistead in the year 1842, that a court of equity will enforce against the legal title? I am clearly of the opinion that it does not. The only ground upon which the complainants could contend that their title should be prefered in equity, is that Semple, having notice of the contract between Robert B. Armistead and themselves in reference to the cotton, at the time the deed was executed, a court of equity ought specifically to enforce it. But the general rule is not to enforce the specific execution of a contract respecting goods or chattels. Indeed it will never be done, where compensation in damages for a breach of the contract would furnish a complete remedy. — 2 Story Eq. §718. There may be cases found where a court of equity will decree a specific performance of a contract in relation to personal property, where the remedy at law would prove unavailing or incomplete. See Clack v. Flint et al., 22 Pick. 231. But I apprehend that such contracts only will be enforced, as convey a specific legal or equitable title to the chattel in favor of the party seeking to enforce it. If the contract gives no legal or equitable title to the goods, a court of equity cannot decree a specific execution of it against an assignee, even with notice. Now at the time of entering into this contract, the cotton was not in esse, nor did the contract give to the complainants any interest in the land upon which the cotton was grown, nor in the slaves by whose [511] labor it was cultivated. They then took no title to the cotton, nor any lien upon it. They could only acquire a title, by the terms of their contract, after the cotton was gathered and shipped to them, consequently, the legal title to the cotton, acquired by Semple under the deed of the 17th of March 1842, cannot be defeated by the contract set forth in the bill, nor can the complainants claim any interest in the proceeds, of the cotton in opposition to this deed. 2. We next must ascertain what interest the complainants take in the cotton under or by virtue of the deed. It appears that Robert B. Armistead, being largely indebted to- Hugh Campbell, of Virginia, upon which William Armistead and James Semple were securities, for the purpose of securing this debt and protecting his securities, on the 30th day of July 1839, executed a deed of his land and a large number of slaves, conveying them to trustees, with power to sell the same, whenever the said Hugh Campbell should recover a judgment against the said securities, or either of them, on any portion or all of said debt, and from the proceeds to pay such judgment and all costs. The property remained in that condition until the L7th of March 1842, when the said Robert B. executed another deed, whereby he conveyed to James Semple other slaves, a house and lot near Greensboro’, his horses, mules, farming utensils, &c., together with the crop that might be raised on the plantation during the year 1S42, with all his stock of cattle and hogs, upon trust to secure the debt due to Hugh Campbell; but if the proceeds of the property when sold should not be sufficient to pay said debt, then the trustee was directed to pay the residue out of the crop, to be raised that year, and out of the, same crop to pay to the complainants a bill for two thousand dollars, which is the same bill described in the pleadings, and which, the deed recites, was accepted by Maulden, Montague & Co. on the faith of the crop of cotton, to be raised that year by the grantor, and also to pay the same firm 'nineteen hundred or two thousand dollars, due by account to them by the said Robert B., and, after having discharged said debts, then to pay certain other specified creditors in the order named in the deed. The defendants insist that they were prefered creditors, not only in regard to the property conveyed by the two deeds, but if that should prove insufficient to pay the entire debt to Hugh Campbell, [512] then the residue of his debt was to be first paid from the crop raised in the year 1842 ; and the complainants contend that their debts were to be first paid out of the cotton crop raised that year, whether the other property was sufficient to pay the entire debt to Hugh Campbell or not. It is manifestly clear that all the property conveyed by the deeds, except the crop of cotton to be raised in the year 1842, was appropriated by the deeds, in the first instance, to the payment of the debt due to Campbell, and no other creditor could claim to participate in the trust funds arising from the sale of this property, until his debt was extinguished. But in reference to the crop of cotton to be raised that year, the deed contemplates that it shall be applied, not only to the extinguishment of the residue of the debt that might remain due to Campbell, but also to the payment of the debts due to the complainant. But which debt shall have priority in payment from the crop, we cannot ascertain from the deed. It is clear, we think, that the grantor supposed that, with the property conveyed and the cotton to be raised, the debts due to Campbell and to the complainants would be entirely paid. This may have been the reason why he did not declare which debt, as between Campbell and the complainants, should be first paid. But he has not declared a preference, nor directed which of these creditors should be first paid from the proceeds of the cotton, and this fund has proved insufficient to pay both. Under such circumstances, a court of equity can only make a pro rata distribution of the fund ; it certainly will not create a preference, for equality is equity. If a preference is created by a debtor in favor of a particular creditor, it must be allowed and enforced, but then the party, claiming such preference, must show from the instrument creating the trust that such preference was intended. If that be not shown, the court can only act on its own principles of equity, and make an equal distribution of the funds amongst all the creditors secured thereby. .This is the principle that must govern in the distribution of the proceeds of the cotton between Campbell and .the complainants, for we do not see that Robert B. Armistead, by his deed of the 17th of March 1842, created a preference between them, as to the crop of cotton, and consequently we can allow none. We come then to the conclusion that the complainants do take an interest under the deed, [513] which is, that the crop of cotton, raised in the year 1842, should be applied pro rata between their debt and the residue of the debt that may remain due to Campbell, after applying all the other property, conveyed by the two deeds, to its payment. 3. The last question to be examined is whether the injunction should have been retained until the final hearing. The judgment at law is for the proceeds of the cotton, raised on the plantation of Robert B. Armistead, in the year 1842. The cotton was shipped to the complainants by the trustee, James Semple, and after it was sold, the complainants refused to pay over the money, but claimed the right to retain it in satisfaction of debts due them. It is alleged in the bill that other property conveyed by the two deeds has been sold and the money applied to the debt of Campbell, which the complainants charge to be paid and satisfied. The answer admits that the other property has been sold and the money applied to Campbell’s debt, but states that there yet remains due about five thousand dollars. As the cotton was to be applied to the payment of the debts due to the complainants and to the residue of the debt due to Hugh Campbell, pro rala, if the other property was insufficient to satisfy them in full, it is clear that the injunction was properly granted in the first instance; for if the entire debt of Campbell was paid as the bill alleges, then the complainants would be entitled to the whole of the cotton, for' their debts amount to more than the proceeds of the cotton, and a court of equity will restrain the execution of a judgment at law, when the defendant would be entitled, upon paying it, to file his bill against the plaintiff and recover of him the same money. But the answer denies that the debt to Campbell is paid in full, and-states that there is still due to him about five thousand dollars. When an injunction has been properly granted, it should not be dissolved unless the answmr clearly and explicitly denies the equity of the bill. — See Rembert & Hale v. Brown, 17 Ala. 667, and cases there cited. If the answer shows that the complainant is entitled to some equitable relief, but not to the extent claimed by the bill, the injunction may be dissolved in part, or continued upon such terms as will ensure the ultimate ends of justice between the parties. So, if it appear that a part of a judgment at law only should be enjoined, the injunction may be perpetuated as to such part, and dissolved as to the residue. — Lyes v. Hat514 ton, 6 Gill & J. 122; Bell v. Cunningham, 1 Sumner, 89. Now if the answer had clearly and explicitly shown the precise amount which the plaintiffs at law were entitled to collect upon the judgment, the chancellor might have required the complainants to pay this amount into court, as a condition upon which the injunction would be retained, or he might have dissolved the injunction in part, and continued it as to the residue. But to dissolve an injunction as to part of a judgment at law, or to require the complainants to pay a portion of the judgment into court, as a condition for continuing the injunction until the hearing, the answer ought to show explicitly the amount which the plaintiff at law is in equity entitled to receive. If this be not done, and there is no danger of the debt being lost by continuing the injunction, it ought not to be dissolved until the final hearing. We cannot ascertain from the answer in this case how much the respondents will be entitled to recover of the complainants upon a final settlement of the accounts and the execution of the trust, for it is uncertain how much of the debt due to Hugh Campbell is still unpaid. We, therefore, think that the chancellor erred in dissolving the injunction. His decree must be reversed and the injunction here reinstated. Hereafter, when it shall appear how much is due to Campbell, and how much the complainants are entitled to retain in their own hands, the chancellor may make such order or decree, even before the final hearing, as will protect the rights of all the parties in interest. Let the decree dissolving the injunction be reversed, and the injunction here reinstated.