Hunt v. Stockton Lumber Co.

COLEMAN, J. On the 2d day of June, 1883, the following agreement was entered into between the ap — 395 — pellant, Henry J. Hunt, and a partnership styled Robinson & McMillan : “This memorandum of agreement, made at Stockton, Ala., on the 2d day of June, 1888, between Robinson & McMillan of the first part, and H. J. Hunt of tlie second part, all of Baldwin County, Alabama, witnesseth: “That Robinson & McMillan agree to pay two notes due the Jos-. Silver estate by H. J. Hunt, the first note now due of two thousand and five hundred dollars ($2,500), and second note due twelve months from date, for three thousand dollars ($3,000), and have titles of all lands with improvements thereon belonging to the estate of Jos. Silver, and lying in Baldwin and Clarke counties, and now controlled by H. J. Hunt, made to Robinson & McMillan*. “Further, that Robinson & McMillan agree to open and keep an account with ‘Silver Land,’ charging said account" with these notes and all interest annually that may accrue on them, also with all or any other expense they may incur on account of these lands. “Further, that H. J. Hunt agrees to protect these lands against all depredations, and to pay five hundred dollars ($500) for the use of said lands this year, 1883, which is to be placed to the credit of said land acount. It is agreed that said lands are to be used after this year, 1883, as may be agreed upon by Robinson & McMillan and H. J. Hunt, to be most profitable to all concerned, and all payments to Robinson & McMillan on account of these lands, and all profits arising therefrom are to be credited .to said land account, and when said land account and expenses, with interest, is all paid and the account balanced, Robinson & McMillan agree to make titles to H. J. Hunt, for one-half interest in all aforesaid lands. “It is further agreed that H. J. Hunt is to pay at least five hundred dollars a year to make this agreement binding. “This agreement is made on this 2nd day of June, 1883, and signed by “Robinson & McMillan, • “H. J. Hunt.” In April, 1891, the appellant filed the present bill, based upon the above agreement, in which complainant Hunt avers that under the agreement he caused — 396 — the. legal title to the lands to be vested, in Robinson & McMillan — they having paid said purchase money; a compliance on his part with the agreement, a sale and conveyance of the lands by the partnership to the respondent, the Lumber Company, notice to the Lumber Company of the agreement, payment of the two notes by complainant as therein provided for, and prays for a reference and statement of account. The complainant avers that he is entitled under the agreement to have an undivided one-half interest in the lands conveyed to him, and prays that respondent be required to specifically perform his part of the agreement The complainant offered to do equity by paying whatever balance, if any, should be found to be due on the notes. Robinson & McMillan and the S.tockton Lumber Company were made parties respondent. Geo. W. Robinson and Benjamin F. McMillan, parties composing the partnership, each answered the bill admitting the execution of the agreement, the purchase and conveyance to the partnership of the land, but denied the facts averred upon which complainant’s rights and equity were rested. The Stockton Lumber Co. answered denying all knowledge of the transaction between Hunt and the partnership, and set up the claim of a bona fide purchaser. The parties entered into a written agreement in which certain stated facts were admitted to be true. After stating the facts agreed upon, and which need not be specially stated, the agreement proceds as follows : “ It is also expressly understood and agreed that the foregoing statement of facts should be taken and treated as evidence only upon the question as to whether or not the equity of the complainant in said lands ever existed, and if it did so exist, whether or not the same is still alive, and that no part hereof shall be taken and treated as evidence upon reference to the register for the statement of said account, or for any other purpose save as above stated. “It is further agreed by and between the solicitors of record in the above entitled cause, that this cause be, and the same is submitted upon the pleading and the within agreement for decree in vacation as to whether or not the equity which is asserted by the complainant ever existed, and still continues alive ; and it is further agreed that if the chancellor shall be of the opinion that — 397 — said equity would exist and continue assuming that status of said land account to be as asserted by complainant, then the chancellor shall render a decree declaring said equity of full force and effect, subject to the adjustment of said land account, and that the chancellor shall, in vacation, render a decree ordering the register in chancery to hold a reference in this cause, upon which reference either party may introduce whatever evidence they may see fit, as to the proper and true status of the said land account, provided for by the agreement between Henry J. Hunt and Robinson & McMillan, which was made and entered into on the 2d day of June, 1883, and that upon the taking of such testimony, the register shall asscertain and report to the court not later than the first day of the next term thereof, a true statement of said account, to which said report either party may file such exceptions as they may think proper, and such exceptions shall be made and supported according to the usual practice in like cases. “It is further agreed that upon the coming in of the report of the register, which is herein provided for, the said cause shall be submitted for a final decree upon the pleadings, and upon the within statement of facts, as ivell as upon the report of the register, and the exceptions thereto, and the evidence in support of such report and such exceptions.” The cause was submitted under this agreement to the chancellor for decree in vacation, and in August, 1892, he rendered the following decree : “This cause having been submitted in vacation by agreement between the solicitors of record, upon the pleading and an agreement of .facts, it is ordered, adj udged and decreed : “1. That the defendants, George W. Robinson and Benjamin F. McMillan, having no interest in this litigation, be and they are discharged in accordance with the prayer of their answer. “2. That the Stockton Lumber Company is the owner of the legal title to the lands which are the subject of this litigation, subject, however, to the rights and equities asserted by the complainant in his original bill of complaint, as amended; and that the complainant Henry J. Hunt is entitled to the - relief prayed for in said bill of complaint, subject only to the proper adjustment of said land account. — 398 — “8. That the register of this court forthwith, and he is hereby directed, after giving due notice to all of the parties in interest, to hold a reference and ascertain and report to the chancellor not later than the first day of the next term of this court, the present status of the said account so provided for by said agreement, charging said account with all items with which it is properly chargeable, and crediting it with all items which the said Henry J. Hunt may be entitled to have so credited. “4. That all other questions are reserved for the future consideration and decree of this court.” No appeal was prosecuted from this decree, and more than twelve months after the next regular term of the chancery court, and after the evidence had been closed and the reference executed, the complainant filed an amendment to - the original bill which was allowed by the register. By the amendment, the complainant averred, that the written agreement between Henry J. Hunt and Robinson & McMillan of June, 1883, above set out, was intended to operate as a mortgage; that the money paid to Silver for the land was a mere loan to Hunt, and that the transaction was usurious, the usury consisting in the agreement that in addition to the repayment of the money with legal interest, the partnership was to become the owner of a half interest in the lands. The prayer to the amendment was, that upon payment of the money averred to have been loaned, with legal interest, that respondent be required to convey to complainants the entire interest in the lands. For several reasons the amendment should not have been allowed. Under section 3449 of the Code of 1886, amendments are allowable at any time before final decree to meet any status of the evidence, which does not make an entirely new case, nor cause a radical departure from the original bill, uor work an entire change of parties. — Code, supra, and authorities there cited. We fail to find any state of evidence which authorized the améndment, even if the decree rendered in August, 1892, had not been a final decree. We are clear, however, that the decree of that date was not only correct, but final. By the terms of the agreement and the facts admitted to be true, bearing upon the complainant’s equity and right to relief, upon which the submission was made, it was the duty of the court to adjudicate the substantial merits — 399 — of the case. It was so adjudicated, and in favor of complainant, upon the case made by his bill and the agreed state of facts. Nothing was left open, and, as we construe the agreement and decree, nothing was intended to be left open, affecting complainant's right to relief., but the execution of the reference and its result.-Adams v. Sayre, 76 Ala. 509; Thompson v. Maddux, 105 Ala. 326. The other assignments of error relate to the rulings of the court upon exceptions to the report of the register. After an examination of the abstract and the various stated accounts contained in it, -we are not satisfied that the rulings of the court upon exceptions reserved, and its conclusion as to the balances due, are correct. It may be that the data furnished is sufficient to enable this court to state a correct account, but that is a duty which properly belongs to the register, and as the transactions are very numerous, complicated to some extent and extending over many years, to undertake it would impose a burden on this court which we are not willing to assume. Neither the bill of complaint, nor the answer of respondents, indicate that there were individual mutual accounts between any of these parties. No relief is prayecl for by either party as to their individual dealings with each other. The balances that may be found to be due on a settlement of their actual individual accounts, have no place hi the adjudication of the questions involved in this litigation. Evidence that there were individual dealings and accounts other than the “Silver Land account,” provided for in the original agreement and referred to in the bill of complaint, was necessarily admissible, in stating and determining the “Silver Land account.” Under and by virtue of the agreement, “Robinson & McMillan agreed to open and keep an account with ‘Silver Land,' charging said account with the notes-[the notes paid by them for the land] and all interest annually, and with all or any other expense they may incur on account of these ]ands.” Hunt was to pay five hundred dollars for the use of the lands that year, and at least five hundred dollars annually on the land account, and it was agreed “that all payments to Robinson & McMillan on account of these lands, and all profits arising therefrom are to be credited to said land account, ’' — 400 — &c. The agreement is easily understood. The complication and difficulties have arisen from the manner of their dealings with each other and the keeping of different accounts. The parties had the authority by mutual agreement, express or implied, to modify this agreement as. to the application of payments. This the evidence satisfies us has been done. The respondent is estopped from denying that Hunt has paid five hundred dollars annually. Hunt has been charged with this amount in his individual account, and the respondent received the benefit of this sum as a debit to diminish liability.on the individual accounts. Hunt cannot now claim the annual payment of five hundred dollars as a credit on the land*account, in any case where he has received the benefit of such payment, and credit has been given for it in the statement of the account between him and Robinson & McMillan, or between him and the respondent. Wherever he received the benefit of these payments on his individual account voluntarily, or at least without objection after statements of accounts to this effect were rendered to him, he cannot insist on their being applied to the “Silver Land account.” Except when the cash was actually paid by him under the original agreement, on the land account, the balance on this latter account must stand undiminished by the annual payments of five hundred dollars, except it should appear that he had been charged with the five hundred dollars, and had not been credited with it. He is not entitled to two credits — one on his individual account and one on the “Silver Land account” — for one and the same payment. The statement of the account, involves mere questions of correct book-keeping. What has been said in regard to the five hundred dollar payments applies to other payments. The parties are bound by -their own contracts, and the evidence satisfies us, that the rule, that where a statement of account has been rendered without objection within a reasonable time, or agreed upon by the parties, it becomes binding, subject of course to correction of mere mistakes, or avoidance by reason of fraud. Items of debit or credit which were not entered upon the accounts rendered, and have not become binding upon the principles stated, will be determined by the original agreement of the parties as to whether they should be stated in the “Silver Land account.” The — 401 — chancellor ruled correctly in placing the proceeds of the sale of the land to the credit of the “Silver Land account,” and if the sale of a portion of the land to Slaughter since the commencement of this suit is ratified by Hunt, the purchase money should be applied to the credit of the “Silver Land account.” The conclusion that the proceeds of the land should be thus applied is sustained by the agreement itself, by the testimony of Hunt and by the account rendered by the respondent, or Robinson <fc McMillan. We make this suggestion to avoid the filing of a supplementary bill, if the parties see proper to resort to this method of settlement, without additional delay and expense. In computing the interest on the “Silver Land account, ’ ’ annual rest should not be made so as to allow compound interest, but the interest should be computed as provided in section 1753 of the Code of 1886. We have not examined to ascertain whether an account when stated as herein directed, would result beneficially to the appellant, and entitle him to a reversal of the cause because of injury sustained in stating the account. We think the decree of the chancellor erroneous and unjust-to appellant in another respect. It seems to have been in evidence on the reference, that a portion of these lands had been sold to Slaughter, by respondent, for a large sum. The complainant if he sees proper should be allowed to ratify this sale and for the reasons given, as to the credit of proceeds of sale of other parts of the land, the proceeds of this sale should be credited to the “Silver Land account.” It may be that this sale has materially interfered with the power of complainant to raise money to satisfy any balance that may be due from him. Equity and justice entitled the complainant to the benefit of this transaction, or to an equitable interest in the lands. If the decree in this case had directed, that upon the failure of complainant to pay the balance decreed against him, conceding that there was a balance unpaid on the “Silver Land account,” within a reasonable time stated, his bill should stand dismissed without prejudice, it may be that such a decree would have been free from reversible error. Or, if respondents had in their answer averred a balance due and unpaid on the “Silver Land account, ’ ’ and had asked that its answer be taken as a cross bill, and had prayed for a sale of the equitable in — 402 — terest of complainant, to satisfy such, balance as might be found due from him, such relief also could have been equitably granted. Considering the long dealings between the parties, their previous confidence in each other, and the mutual mistake as to their respective rights, under which they labor, the fairness with which they seem to have testified throughout, commend them especially to the benefit of that favorable consideration of a court of equity, which delights in meting out equal and exact justice to all parties. The decree in this case which finally concludes one party from all interest in the lands, except upon compliance with a hard condition to be performed, and which gives the other party all of the proceeds of a sale, or the lands to which the complainant in equity and good conscience has an equitable interest, is not equal justice. The decree is reversed and the cause remanded.