Williams, Deacon & Co. v. Jones

STONE, C. J. There is such a repugnancy between the original answer and cross-bill filed by Williams, Deacon & Co., and the amended answer and cross-bill subsequently filed by them, that we think the demurrer to it was properly sustained. The chancellor’s reasons for his ruling are strong and well put, and we could add nothing to them. The authorities supporting his conclusion will be found in the briefs of counsel. The chancellor dismissed the amended cross-bill withoutprejudice, and this is made the subject of a cross-assignment of error. It is contended for appellee, that the pleadings show a final and conclusive election made by Williams, Deacon & Co. to repudiate the settlement the bank made with the Danner Land and Lumber Company, and that they will not now be allowed to claim that that settlement was made for their benefit. The Danner Land and Lumber Company drew the bills of exchange [130] on Shadboldt & Sons, who accepted them. They were payable to the order of the Bank of Mobile, and were indorsed by it to Williams, Deacon & Co. If this indorsement had been in the usual course of business, Williams, Deacon & Co. would have become the absolute owners of the paper, with a right to proceed against any and each of the parties for its collection, provided protest and notice of it were properly carried home to the drawer and indorser. And in such case, suit might have been prosecuted against each, until satisfaction was obtained from one. Neither mere suit, in such event, could have been pleaded in bar or abatement of either of the others. Williams, Deacon & Go. claimed that the Bank of Mobile had indorsed the bills to them in the usual course of business, and their suit against Shadboldt & Sons was based on that assumption. If their right to the bills had been what they asserted it was, their suit against Shadboldt & Sons would have opposed no obstacle to contemporaneous separate suits against the drawer and indorser of the bills. The error they committed was in supposing they had acquired a right to sue Shadboldt & Sons in their own name. The legal title to the paper had not passed to them, but remained in the Bank of Mobile. They held it as collateral security — a mere equitable right to its custody and collection, until they were indemnified for the payment of the bank’s exchange drawn on them. The Bank of Mobile could have maintained a suit against Shadboldt & Sons as acceptors, and it would seem the mistake made by Williams, Deacon & Co. consisted in their suing in their own' names, instead of that of the bank. Holding the paper as collateral security for the bank’s indebtedness to them, they could have compelled the bank to allow the use of its name for the purpose of its collection. — Jones on Pledges, § 669. And such suit against Shadboldt & Sons, even if carried into judgment, would have been no bar to a subsequent suit against the Bank of Mobile, or against the Danner Land and Lumber Company, until there was a payment of the judgment against Shadboldt & Sons. And if there had been recovery against, and payment by Shadboldt & Sons, the latter would have had a right of action against the Danner Land and Lumber Company, for whose accommodation they had accepted ; and the latter’s payment to 'the bank, after being informed the bills were the property of Williams, Deacon & Co., would have been no defense to such suit. What we have said above is intended to show that the suit against Shadboldt & Sons is no evidence of an election to look to them alone for payment of the bills, and to absolve the other parties to the paper. It is the not infrequent case of a creditor supposing that he has several parties bound to him, [131] and committing the error of proceeding against one, on whom he fails to fasten a liability. This is no defense for others who are liable. We have thus eliminated from 'this controversy all influence the Shadboldt suit may be supposed to have upon it. The question in this case is thus narrowed down to the inquiry, was the institution of the present, cross-suit, without prosecuting it to a decree, such an election to disaffirrn the payment made by the Danner Land and.Lumber Company to the Bank of Mobile, as to bar all right to abandon such suit, ratify the settlement, and claim the property received in payment? Let it be borne in mind that, unless the Shadboldt acceptances were cancelled by the settlement the bank made with the Danner Land and Lumber Company, then the debt of which they were t;he evidence still rests on the company, and the bank has paid no consideration for that part of the property which the company transferred for their payment— one hundred and ten thousand dollars, as it is claimed. . This property the bank’s assignee holds, not in his own right, nor' in the right of the bank’s creditors. It paid nothing for it which the creditors could claim as assets of the bank. It parted with that which, ex ceqxio et lono, belonged to Williams, Deacon •& Co.; and in case of their disaffirmance, it parted with nothing.—Williams, Deacon & Co. v. Jones, 77 Ala. 294. If the payment be disaffirmed by Williams, Deacon & Co., then the property belongs to the Danner Land and Lumber Company, or its creditors. So, in any event, neither the bank nor its assignee has any rightful claim to the property it received from the Danner Land and Lumber Company in payment of the Shadboldt acceptances, but holds it in trust. The present cross-suit, as originally framed, did not renounce all claim to the property thus received. Its claim was, that the transaction between the Danner Land and Lumber Company and the bank was not a payment; and it is sought to disaffirm it, not in toto, but as payment. It claimed that the Danner Land and Lumber Company and the bank were still debtors, and that the property turned over was only an additional security for the payment of that debt. We held that these were incompatible claims, and that the demurrer to the cross-bill, as thus framed, was rightly sustained. The original answer, made a cross-bill, rested its right of recovery, in a very material point of view, on a repudiation of the payment in property made by the Danner Land and Lumber Company to the bank, as a payment binding on Williams, Deacon & Co.; but, nevertheless, claimed the property as an additional security. This we held could not be done, for reasons then stated. The amended cross-bill seeks to ratify the payment as payment, dis [132] charge the Danner Land and Lumber Company as its debtors, and to look alone to the property turned over, and its proceeds, for the payment of the claim it sets up. This we have held is incompatible with, and repugnant to the original cross-bill; and we affirm the chancellor’s decree, sustaining a demurrer to it on that account. This unsuccessful attempt to claim too much is in no sense a conclusive election to repudiate the payment made by the Danner Land and Lumber Company to the bank, so as to bar all right now to claim that the payment was made for its benefit. In Tatum v. Walker, 77 Ala. 563, the original bill was filed to set aside a mortgage, and have it declared inoperative and void. An amendment was filed, praying that, in the event the mortgage was not set aside, an account should be taken, and complainant be allowed to redeem. There was a demurrer, assigning as a ground that the amended bill sought inconsistent and repugnant relief; first, against the validity of the mortgage, and, second, under the mortgage, as a valid conveyance. We held that the alternate phase, brought in by amendment, was incompatible with the original bill, made a new case, and was fatal to the suit.—Heyer v. Bromberg,74 Ala. 524; Caldwell v. King, 76 Ala. 149. We said: “If we treat the redemption aspect of the bill as sufficient in averment, then it is incompatible with the primary aspect — prays repugnant relief, makes a new case, and the demurrer should have been sustained ; and if amended so as to make it a sufficient bill to redeem, the same result must follow.” We dismissed the bill, “ but without prejudice to the institution of another suit.” We had concurred with the chancellor in his finding that the proof was. not sufficient to set the mortgage aside as obtained fraudulently. The dismissal without prejudice could, therefore, have had but one purpose and meaning — a permission to complainant to file a new bill to redeem, — the only relief left open to him. There is nothing either in the assignments or cross-assignments of error, and the decree of the chancellor is free from error. What we have said is based on the postulate, that the averments of the cross-bill are true. The demurrer admits their truth. The present ruling must be interpreted in connection with our former decision in this case.—Williams, Deacon & Co. v. Jones, 77 Ala. 294. Affirmed.