Pool v. Cummings

CHILTON, J. 'This was a bill in chancery, filed by John O. Cummings & Co. and Yincent & Pitcher against Pool and — 568 — others, alleging, that on the 12th day of January, 1837, said complainants entered into an agreement with said Pool for the entry and purchase in copartnership of certain coal lands in Tuskaloosa County, Alabama. An agreement, signed by them respectively, is appended to the bill, by which it appears, that on the date above, the parties agreed to form a company for the purpose of entering or purchasing coal lands, and for the purpose of mining coal, should they thereafter determine to mine; the interest or proportion of the parties in the enterprise to be, one third to Pool, Yincent & Pitcher one third, and the remaining one third to John 0. Cummings & Co. The two firms last named, who are the complainants, it is recited, “have paid the said Pool the sum of five hundred dollars, in consideration of which he is to use his best exertions to ascertain where the most desirable entries of land for coal may be made, and with the consent of the company enter, or have the same entered, for account of said company, and is also to superintend the working of said mines, in case the company should determine upon working them.” The complainants agreed to advance the money required to make such entries as should be deemed advisable, in equal proportion; that is, Cummings & Co. were to furnish one half, and Yin-cent & Pitcher the other halfj “all such advances to be refunded them, with interest, out of the first funds realized by the companybut advances made for purposes other than the entry of lands, &c., should be borne by the parties respectively, in proportion to their interest. Pool agreed to transfer to the company the entry last made by him next before the date of the agreement. There are other provisions in the agreement, but it is unnecessary to set them out, as they are not involved in the questions before us. The complainants further allege, that in pursuance of such agreement they advanced the money, and the said Pool entered divers tracts of lands at $1 tVó per acre, amounting in the aggregate to 809 TVo acres; that they have incurred expenses in payment of taxes and surveying the lands, none of which has been returned to them ; that since the lands were purchased nothing has been done with them; that Pool became insolvent and removed to Iowa; that Pitcher was discharged under the bankrupt act, having previously sold his — 569 — interest to the defendant Aiken; and that Moody and Dou-tbit claim an interest in some of said lands, which they, as defendants, can discover. The prayer is for a sale of said lands, and after a return of the purchase money and expenses incurred, with the interest, the division of the remainder according to the agreement. Moody answers the bill, and substantially denies the interest of the complainants, and requires proof of the allegations of their bill. He insists that he was the creditor of Pool by note bearing date 2d Januar}?-, 1837, ten days before the date of Pool’s agreement with the complainants; that he obtained judgment on this note against Pool 5th February, 1839; and that 480 acres of the land, which the bill alleges was purchased by Pool with complainants’ money, were sold under execution and purchased by him, as appears by the sheriff’s deed to him, dated 5th August, 1839 ; that he bought in ignorance of the complainants’ claim; has caused his deed to be regularly recorded, and claims the benefit of a Iona fide purchase for a valuable consideration; and also insists that his title, which has been duly recorded, should not be postponed to the unrecorded title of the complainants. It appears, by the certificate from the Commissioner of the General Land Office, that Pool, on the 6th Jan., 1837, had entered in his own name one 80 acre tract; that he entered three other 80 acre tracts on the 12th, two more on the 16th, and two on the 19th of the same month, all which, being entered in his own name, he transferred in the Land Office, on the day last named, to Kinney Pool, John 0. Cummings, Chas. G. Pitcher, ¥m. L. Powers and John H. Vincent. These, with two other tracts, each embracing eighty acres, bought on the 23d January, 1837, and transferred on the same day in like manner, constitute the entire lands which the complainants allege were purchased under the agreement. Upon these transfers patents were issued to the several persons above named, as assignees of Pool, dated the 20th September, 1839. The complainants also introduced the original copartnership agreement, and two receipts of said Pool, executed on the 12th January, 1837, acknowledging the reception by him, to be expended in the entry and purchase of land, of $600 ; also the bond of Pool, dated 23d. January, 1837, by which he — 570 — acknowledged to be due tbe complainants $337 T\9„, being for Pool’s one third of tb'e cost of certain lands entered to date in company with them, and binding himself to pay to the complainants said sum, with interest from date, out of his proportion of the first funds realized by the company, through sale of the lands o>’ otherwise, or whenever he should make sale of his interest. The signatures to these several instruments were admitted to be genuine. Moody introduced the record of the recovery of his judgment, and the sheriff's deed, as before stated, and this constitutes the case made by the record before us. The Chancellor decreed a sale of the lands, but held that the lands bought by Moody should not be charged with the payment of the demand sought to be enforced as a lien for the purchase money, but that all the lands should be liable for the taxes, and the expense of surveying made by the company, and that Moody should have one third the nett proceeds of those he had purchased. Both parties are dissatisfied with the decree: Moody, that the court should at all interfere with his title; the complainants, that Moody’s third should not also be charged with the indebtedness of Pool to them, for his share of the purchase money. 1. Conceding that Pool had such interest as could be sold under execution at law, and that the legal title to the lands bought by Moody, vested in him by virtue of the sheriff’s deed, this cannot aid him in the Court of Chancery, which looks to the equities between the parties, and regards the holder of the mere legal title as a trustee for the benefit of all parties equitably interested. 2. Neither does the fact that-Moody had his deed recorded, and that the complainants had no evidence of their claim spread upon the records of the county, add any potency to Moody’s title, which it would not have possessed aside from such registration. -The land, so far as the record discloses, was not in the actual occupation of any one, and the complainants do not claim an interest in them by any deed of conveyance to them which the law required to be registered in the county. The record evidence of their claim is to be found in the office of the Eegister and Receiver of the District Land Office, and the General Land Office of the United — 571 — States. Moody bas not claimed tbe land a sufficient length of time to raise any question upon tbe statute of limitations, so tbat tbe parties are remitted to tbeir equities growing out of tbe transaction. It is yery clear, tbat if tbe lands in controversy were purchased under tbe copartnership agreement, and are to be regarded as assets of tbe concern which was created for mining purposes, then each of tbe partners bas a lien on them, not only for tbe amount of bis share, but for moneys advanced by him beyond tbat amount, for tbe use of tbe partnership, Story on Par. 137; Coll. on Par. 65; 1 Ves. 142; 1 Sum. Rep. 173. On tbe other band, if they are not to be regarded as strictly partnership assets, yet if tbe complainants furnished all the money which was expended in tbeir purchase, under an agreement tbat this money should be returned to them, with interest, out of the first proceeds, here would be a lien created by tbe agreement of tbe parties, and any person who should purchase the interest of either, would take such interest charged with this lien. Further, if the complainants advanced all the purchase money, and Pool, in disregard of the agreement to buy tbe lands for tbe company, had bought them in his own name, a trust would result in favor of complainants; and as Pool would not be allowed to take advantage of bis violation of tbe trust reposed in him to defeat tbeir rights, so neither can a purchaser, who succeeds only to tbe rights which be possessed, and nothing more. So that, in any view of this case, if the proof is sufficient to establish what the bill asserts, namely, tbat tbe complainants advanced tbe money to pay for these lands, and that Pool, who paid it, was acting, not for himself individually, but as the partner or tbe agent of the complainants, a clear case is made out for equitable relief. But it is strenuously urged by Mr. Moody, tbat tbe agreement and recitals therein contained, as well as tbe receipts given by Pool to the complainants, showing the money advanced to him by them under tbe agreement, as also tbe bond which he gave them after the date of tbe last entry made by him, showing the share of tbe purchase money they bad advanced for him, and evidencing bis agreement to refund the same to them, are all of them to be regarded as the mere ad — 572 — missions of Pool, and should not be received against bim, (Moody) to defeat bis claim as a purchaser under a judgment rendered on a note of older date than the agreements. As a general rule, it is true that the recitals in a deed are not evidence of a. consideration, in a controversy between those claiming under it and a pre-existing creditor, when it is impeached for fraud, or want of consideration, by such creditor. The case of Jones & Leath v. Falconer, 15 Ala. Rep. 12, and the cases cited in the opinion in that case, show the extent to which this doctrine has been carried by this court. We are not in the least disposed to trench upon the law as it has previously been settled, and, without questioning the correctness of these cases, we are of opinion they do not affect the case before us. In McCaskle v. Amarine, 12 Ala. Rep. 17, the reason for the rule which excludes such instruments or recitals, is correctly stated to be, the danger which exists of parties simulating debts, and manufacturing in this way the ostensible proof of them, as occasion might require, and thus being enabled to place their creditors at defiance. In the case before us, there was no objection to the receipt of these instruments in evidence; the signatures to them were admitted to be genuine, and the only question was, as to their legal sufficiency to establish the fact of the advance of the money as alleged. Taken in connection with the other evidence, which, as it is made by the Commissioner of the General Land Office, there can be no reason to suppose could be made with a view of sustaining the written instruments between these parties, any further than such instruments truly represented the facts, we arrive at the conclusion, that it is sufficiently shown that the complainants advanced the money for these lands, and that Pool actually owed them, for his share of the purchase money, the amount stipulated in his bond. The amount expended in the lands entered, substantially corresponds with the amount of money furnished Pool by complainants. The dates of the entries and transfers show that these agreements were not ante-dated; these, added to the fact that the admissions which Pool made were against his own interest, and no direct attempt is made to impeach the transfers as fraudulent, sufficiently satisfy us that the sev — 573 — eral instruments were not simulated, or manufactured to suit tbe occasion, but are the genuine evidence of a real transaction, which they correctly set forth. We are unable to see in this evidence any motive which could have prompted the parties to manufacture it. Had the design been to avoid the debts of Pool, he would hardly have so arranged as to provide for the issue of the patents in his own name, as well as the names of his associates. Under the peculiar facts of this case, the proof satisfies our mind that the complainants furnished the purchase money, and consequently they have a lien on the lands for its repayment. After this, with the expenses provided for by the agreement, shall have been refunded, Moody, as the purchaser of Pool’s interest, is entitled to one third the remainder. The decree of the Chancellor must be reversed, and the cause remanded, that a decree may be rendered, and a reference awarded, in accordance with the principles indicated by this opinion. Let the costs be divided between the parties in this court.