McDuffee v. Collins Bros. & Co.

HEAD, J. Both counts of the complaint are for money had and received. The first specially defines the money claimed; the second generally. Otherwise, they are of the same legal effect. The demurrer was properly overruled. One Cannon, owning a mule and other personal property, mortgaged the same to the plaintiffs to secure a debt greater in amount than the value of the mule. The State having a lien on the mule for Cannon’s taxes, the tax collector lawfully seized and sold it for a sum which, after paying the taxes and' costs, left a surplus in his hands of sixty odd dollars. Both Cannon, as the general owner, and the plaintiffs as mortgagees, claimed this surplus. The collector paid -it to Cannon, and plaintiffs brought this suit against him to recover it. The mortgage debt did not mature until some months after the institution of the suit, but the mortgage expressly stipulated that the mortgagees should have the right to take the property into their possession whenever they might think it necessary to do so, either before or after the maturity of the debt. We think it clear that the plaintiffs were entitled to the money. They were the legal owners of the mule with the right to its immediate possession, subject to the superior right of the tax collector- to seize and sell for taxes. As against any one other than that officer, they could have maintained trespass or trover for any wrongful taking or conversion of the mule. — Boswell v. Carlisle, 70 Ala. 244, and authorities cited. The surplus proceeds in the hands of the tax collector represented the property ; the right of the mortgagees to the property, as against Cannon, at the time of the seizure and sale attached to the surplus and they were entitled, on demand, to receive it,-as they would have been entitled to demand and receive the property itself had there been no conversion of it into money through the processes óf a paramount lieu. [492] ' We do not think section 541 of the Code, to which we are referred, is of controlling influence upon the question here presented. The provision therein that “any balance remaining shall be paid to the owner of the property,” is merely declaratory of the law as it already existed. The gist of that section is the succeeding authority given to the collector to deposit the balance with the county treasurer or probate judge, if there be no treasurer, if the owner is not present at the sale, or being present refuses to receive it. The purpose was to relieve the collector of the duty of seeking the owner and paying him the balance, or of retaining it in his hands if the owner should refuse to receive it. It does not undertake to define what relation to the property a person must bear in order to be its “owner” within the terms of the section. That is left to be controlled by the general principles of law applicable to the case. If no superior claimant had made known his claim and demanded the money, the collector would have been authorized to pay the surplus to the tax payer from whom he obtained possession of the property, but a claimant appearing and asserting his right, the collector, like any other holder of funds to • which, there are known rival claimants, necessarily, if he paid to either, took upon himself the peril of seeing that the payment was made to the party lawfully entitled. This is the well known general rule of law, as applicable to ordinary' citizens, and it applies alike to persons receiving money in their official characters. — 24 Am. & Eng. Encyc. of Law, 962-3-4. Suppose the plaintiffs, instead of holding a mortgage on the mule, had held an absolute bill of sale ffom Cannon, transferring to them unconditionally the entire property and right of possession, and had upon notification of this title to the collector claimed of him the surplus, it is apparent, at a glance, that he could not have protected himself by paying to Cannon. The mortgage title was of the same effect, so far as the right to the surplus in this case was concerned. ■ Statutory and equitable interpleaders, where there are such disputes between rival claimants of money or property in the hands of an indifferent holder, as, under the statute or general rules of equity, those remedies are available, may be resorted to by the indifferent holder for his protection, and it can never be allowed that any [493] person, whether he be officer or private citizen, may choose whom he will pay and secure protection, without regard to whether or not the choice falls upon the party lawfully entitled. It is a mistake to suppose, as counsel have done, that this rule -would require the officer to search the records for junior liens in order to ascertain if there be some one other than the general owner who is entitled to the surplus money. A person enforcing a lien upon property is not required to look out for, and protect junior liens of which he is not notified. Constructive notice which, by law, the public records concerning titles afford, does not apply to such a person. He need concern himself only with liens and titles prior and paramount to that he enforces, notice of which the records, or other circumstances, constructively'give, or of which he is actually notified. — Wade on Notice, § 203 ; 1 Brick. Dig., 545, § 232. We think the undisputed evidence shows, without room for a contrary inference, that there was, after the sale, dispute between plaintiffs and Cannon, each asserting a right to the proceeds, after payment of the taxes, and that defendant decided the dispute in’Cannon’s favor and paid the money to him. He states himself that he paid it to Cannon, because of the doubtful construction of the statute, knowing that plaintiffs held a mortgage on the mule, and were claiming the right to credit the balance of the proceeds on the mortgage debt. When plaintiffs bid off the mule at $70, defendant declined to yield to their demand to be permitted to satisfy the bid by paying the taxes and costs and crediting the balance on the mortgage debt, for the asserted reason that he must have the balance to pay to Cannon. He then accepted the next highest bid of $65, received the money and paid the surplus to Cannon. If there was error in the principles of law ruled by the court touching the objections to the testimony of John Collins in reference to the amount owing upon the mortgage debt, it was without injury to the defendant, for the reason that there was no othei* evidence in the case tending to show that any part of the note secured by the mortgage had been paid ; so that, if the testimony objected to had been excluded the jury would have been compelled to treat the entire debt as unpaid. The crea [494] tion of the mortgage debt and security being established, the burden was upon the defendant, who stands upon the rights of Cannon, to prove they had been subsequently satisfied, if such was claimed to have been the case. The action for money had and received is an appropriate remedy under the facts of this case. It was the defendant’s duty to pay the surplus to the party lawfully entitled to receive it, and the law implied a promise on his part to do so. It is unlike the case of Osborn v. Bell, 5 Denio, 370, 49 Am. Dec. 275, relied upon by appellant’s counsel. There the tax collector tortiously sold property of the plaintiff’s intestate. The plaintiff waived the tort and sued in assumpsit, as for goods sold, and for money had and received, but there was no proof that the officer had received the proceeds, hence none whether or not he had, in his official capacity, paid them over to the State without- any claim or demand therefor having been made upon him by the owner of the property. The court suggested the question whether, if these facts had appeared, there could have been a recovery against the officer for money had and received, but held, that if there could have been, yet, no recovery could be had upon proof merely of trespass. The court, after referring to these deficiencies of proof, said : “But in all these respects, the bill of exceptions is deficient; it does not show that the defendant received or paid over any money, or that he ever heard of the claim of the intestate, until this action was brought. The case then, so far as respects a right to recover for money had and received, is but partially presented, and that question not being formally, made in the trial will be dismissed without the expression of any opinion on it. The judge charged, ‘that the action for goods sold was well brought * * * ’ to which an exception was taken by the defendant, and this presents the point to be considered.” That court, so far as any principle declared in the opinion is to the contrary, would have held the defendant liable, in this .form of action, for a surplus received upon a lawful sale, under the circumstances of this case. By every sort of legal intendment the surplus was received .by the defendant under expectation and promise to pay it to its lawful owner. What else did, [495] or could he expect to do with it? He did not intend to pay it to the State. Did he expect to appropriate it to his own use, or pay it to some one not entitled to it? Plaintiffs had the right, but were not compelled, to remove the tax lien before sale. It was optional with them. Touching the motion of defendant to require plaintiffs to produce their books, no such question is raised by this record as the act of December 13, 1894, (Acts, 1894-95, p. 60, Code of 1896, §§ 1859,1860), authorizes. If under the circumstances of this case, it might .be assigned as error in this court, that the trial court refused to give the party opportunity to make a motion under the act, it did not appear from the oral motion which was made, that any fact existed which the statute provides as basis of the order requiring the production of books or writings. The mortgage was executed to Collins Bros. & Co., a partnership in its firm name. The suit was brought in the names of the members of the partnership as partners doing business under the firm name of Collins Bros. & Co. This was proper. There was no variance. Affirmed.