Graham v. Nesmith

PARSONS, J. It is not the complainant’s object to treat the purchase as an entire contract, and to rescind it because he did not get title to part of the land. Plis bill is not adapted to such relief, nor does he, in fact, now contend for any such thing. [765] Two of his notes for the purchase money were, payable absolutely; the third was made payable in express terms* if the title should be made; so that no recovery upon that note could have been had against him, before the titles were completely conveyed. The reason of this difference in the notes is easily understood from the circumstances of the transaction. The complainant at the time got a perfect title to one part of the land, but not of the other: to indemnify himself against the risk of having to pay for the latter part before he should get a title to it, the third note was made payable if the title should be made. There is nothing in the case to satisfy us that this indemnity was not ample for the loss of the part of the land to which the complainant did not get a title. ,We are bound to infer from the circumstances of the case, that the complainant so regarded it himself, and that no other was agreed upon or contemplated by either of the parties. Nesmith himself, therefore, might have recovered judgment on the two other notes against the complainant, and he could have found no relief in equity, for those notes were payable absolutely, and the inference from the entire case is very strong that they were made and accepted on account of the part of the land to which the complainant got a title. It may be conceded that the complainant paid the note which first matured, and that his rights with respect to the present.question are to stand upon the basis of his -having d-one so in ignorance of the fact that Snell was the holder of the second note. Against Snell, in this view, he is entitled to all the advantage-of such payment. The complainant, in his bill, states it as his opinion that Ne-smith transfered the second note to Snell as collateral security of an existing debt which the former-owed to the latter, but that he does not know the amount; and the bill proceeds to state that Snell paid little or no consideration for the note — and the complainant, by his bill, “insists that said Snell answer and set forth fully and particularly the terms and conditions on which he received the said note from said Nesmith, arid that he shall also answer and set forth what was the consideration and the amount passing from him to said Nesmith for said note. Snell responds to this, in substance, that he purchased the note of Nesmith before it was due; that he took it in discharge of two debts which Nesmith owed, amounting together, with-the inte [766] rest thereon, to something over eight hundred dollars, which was the full Value of the note. * With the exception of the time of the purchase, this part of the answer is strictly responsive and is evidence. Nesmith passed' the third note, which was made payable if the title should be made, to another person, and the complainant took it up from the holder, paying less than half its amo'unt, however; and now .having discharged: the first and the third notes, he seeks to enjoin Snell from collecting the second, because he failed to get title to part of the land, although he had otherwise indemnified himself for that, on the face of the third note, which he chose to take up. But he did this, as the proof shows, after he knew that Sn'ell held the second oote. It is not possible for him to find relief in equity against Snell, under such circumstances. He relies upon the facts, that Nesmith became insolvent and left this State, and that when Snell purchased the note he was aware of all the facts of the case. It is not obvious how the complainant was prejudiced by the insolvency or absence of Nesmith, and if Snell knew all the facts, he knew that the second note was good and valid and that the coinplainant was bound to pay it, and this being so, when Snell purchased the second note, the complainant, with sufficient, knowledge of that purchase, could not destroy Snell’s rights by purchasing the third note, and consequently there is no equity in his case. It is conceived that the cases of Smith v. Pettus, 1 Stew. & Por., 107, and Lucas v. Kernodle et al., 2 Ala. 199, do not apply to the present question. The complainant had no latent equity or other defence against the second note, at or before the time when he had notice that it belonged to Snell. He founds his equity upon a. subsequent and wrongful act of his own. At least his act was^ wrongful if he intended to make it injurious to Snell. — See Nelson & Hatch v. Dunn, 13 Ala. 259. Let the decree be affirmed.