Ross-Meehan Brake Shoe Foundry Co. v. Pascagoula Ice Co.

Cooper, C. J., delivered the opinion of the court. Nothing is presented by this appeal, except the question, whether, on the facts stated by the complainant, the cause is one of equitable jurisdiction. The facts are, that the Southern Ice Machine Company sold to the Pascagoula Ice Company an ice machine, under a contract by which it was provided that the machine was to be erected and put in operation by the seller, in a house to be built by the purchaser in the town of Scranton. The machine was to be paid for partly in cash and partly in installments of six and twelve months. The contract contained provisions as follows: “ It is further agreed upon between the parties hereto, that, upon the erection of said buildings by said party of the second part, and erection of said machine by the party of the first part, and before and after it is in complete running order, the party of the first part shall be the sole owners, and the machinery so erected and in running order shall be the property and title of the party of the first part; and the party of the second part agrees to execute a deed of trust on all their lands, buildings and machinery owned by them to the party of the first part, or such personal security as is acceptable to the party of the first part, to secure the payment of the notes given as above. . . The parties of the second part further agree to keep machinery and buildings insured in favor of the said Southern Ice Machine Company, to the amount as their interest may require. . . It is understood and agreed that, if, when the machine is completed and running, the parties of the second part prefer giving their sixty days’ note for the second payment in lieu of cash, then the party of the first part agrees to accept said note, same being secured as the others mentioned. ’ ’ After the machine had been constructed, there was some controversy between the parties relative to the capacity and sufficiency thereof, all of which resulted finally in the execution, by the defendant company to the Southern Ice Machine Company, of the following note: [614] “ ScraNTON, Miss., May 4, 1892. “Eight months and twenty days after date, for value received, we promise to pay to the order of Southern Ice Machine Company $3,450 (thirty-four hundred and fifty dollars), with interest at the rate of eight per cent, per annum, at the banking rooms of British-American Trust Company, in Scranton, Miss. Secured by vendor’s lien on machinery of Pascagoula Ice Company, of Scranton, Miss. ’ ’ This note the Southern Ice Machine Company indorsed, for value, to the appellant, which exhibited its bill in equity in the chancery court of Jackson county against the Pascagoula Ice Company, and against L. T. Belt, its president, and against one B. J. Jane, who had sold to the Pascagoula Ice Company the land on which the machine was erected, and held a vendor’s lien thereon, seeking to subject the machine and the building in which it stands and the land to the payment of the note given as aforesaid. The bill avers that the complainant owned, by transfer and assignment, both the note and the contract under which the machine was sold, and was entitled to have the machine subjected, because the Southern Ice Machine Company had retained title thereto, which title it had assigned to the complainant. The complainant further claimed that it was entitled to have a specific performance of the agreements made by the Pascagoula Ice Company with the Southern Ice Machine Company to execute a mortgage on the machinery, buildings and land to secure the payment of the note, and to keep the property insured for the protection of the debt. The defendant company admitted by its answer that the complainant was the assignee of the note and contract, and much testimony was taken by the parties respectively to prove and disprove (1) a failure of consideration to the extent of the amount of the note sued on, because of defects in the machine, (2) accord and satisfaction for all claims for defects of machine; (3) a waiver by the Southern Ice Machine Company of all security retained or stipulated for by the contract. [615] The cause was set for final hearing, and, while being heard, the defendant company asked leave to amend its answer by striking therefrom the admission that the complainant was the assignee of the contract between the Southern Ice Machine Company and itself, and to substitute therefor a denial of that averment contained in the bill. This the court permitted to be done, and, thereupon the amendment having been made, the defendant moved the court to dismiss the bill for the want of proper parties defendant. This motion the court sustained. The complainant, finding itself thus inched out of court, asked leave of the court to amend its bill by making the Southern Ice Machine Company a defendant. This motion the court denied, upon the ground that the cause of action of complainant was, in its nature, legal, and that a court of chancery would not have jurisdiction were all the parties in interest parties to the suit. The complainant appeals, and, averring that it was put out of court for one reason and kept out for another, assigns for error the action of the court in dismissing the bill, in refusing leave to amend, and in not granting relief on the bill as framed. The right of the seller of personal property to make a conditional sale thereof, reserving title until payment of the purchase price, is too firmly settled in this state to admit of controversy. Duke v. Shackleford, 56 Miss., 552; Burnley v. Tufts, 66 Ib., 48. But the reservation of the title is but as security for the purchase price, and if the property is recovered by the seller, he must deal with it as security, and with reference to the equitable rights of the purchaser. Duke v. Shackleford, supra; Dederick v. Wolfe, 68 Miss., 500; McPherson v. Lumber Co., 70 Ib., 649; Tufts v. Stone, Ib., 54. Being but a security for the payment of money, the benefit thereof follows the debt when assigned, as an incident thereof. Kausler v. Ford, 47 Miss., 289; Kerr v. Moore, 54 Ib., 286; Taylor v. Nelson, Ib., 524. The jurisdiction of chancery to enforce conventional liens is [616] too well recognized to require argument or the citation of authoi’ities. Indeed, in Richardson v. Warnick, 7 How. (Miss.), 131, it was earnestly insisted by eminent counsel that a statute conferring upon a common law court jurisdiction to enforce a statutory lien was unconstitutional, in that it vested that court with a part of the exclusive jurisdiction of equity. It was, however, decided that, while the jurisdiction in equity existed, it was not exclusive but concurrent. We need not now decide whether the assignor of the note is a necessary party to a proceeding by the assignee to foreclose the lien in equity. The general rule is, that the holder of the legal title to property sought to be reached should be made a defendant to the bill, but the rule is more particularly applicable when the subject-matter is land. In this case the contract by which the title was reserved contains stipulations obligatory on the Southern Ice Machine Company, and, in order that a complete settlement of all matters involved may be made, it is proper that that company or its representative should be joined as a defendant. The decree is reversed', the catóse remanded a/nd leame gimen compla/Lnant to a/mend its MU as asked.