North Alabama Development Co. v. Orman

McCORMICK, Circuit Judge. Defendant in error brought his actions at law in a state court in Alabama on a certain covenant in a deed from one Parish and wife to the plaintiff in error, which covenant is in these words: “And it is hereby covenanted and agreed by the said party of the second part, to and with the said party of the first part, that the said party of the second part will assume, and does hereby assume, the full and just payment at maturity of the two notes hereinbefore mentioned, given by the said party [19] of the first, part to said TV. A. Orman for the deferred payment of and for the lands and mineral rights herein conveyed, each dated May 12, 1890, and each for the sum of $7,245.22, and hearing interest from April 4,1890, due respectively April 4, 1801, and April 4, 1802, which said notes and interest thereon the said party of the second part hereby covenants to pay as a part of the purchase money of said lands and mineral rights, and of the consideration of this conveyance, when the same falls due.” The notes referred to are identical in terms except as to date of maturity, — one due 4th of April, 1891, and the other due April 4, 1892, — expressed in words and figures as follows: “$7,245.22. Russellville, Ala., May 12, .1890. “On or before the fourth day of. April, 1892, I promise to pay to the order of W. A. Orman the sum of seventy-two hundred and forty-five dollars and twenty-two cents, with interest from the 4th clay of April, 1890. The condition of this note being that I have this day given W. A. Orman a mortgage on certain lands in Franklin county, Alabama, and, should said lands have to be sold wider the mortgage, then I am only liable under this note u> the amount of (lie proceeds of said sale, and no more. Such proceeds to constitute a cancellation of this note. ¡ Signed] “A. Parish.” Attachment was sued out and levied on the general estate of plaintiff in error. The ground for asking the attachment was that the defendant in attachment, plaintiff in error Itere, was a foreign corporation, created and existing under the laws of Great Britain. The plaintiff in error by proper proceedings removed the action into the United States circuit court for the northern division of the northern district of Alabama. The cases were there consolidated, and the plaintiff in error moved in that court to dissolve the attachment substantially on these three grounds: (1) That the plaintiff in attachment could not proceed at law on the covenant counted on; (2) that the covenant would only warrant a special attachment on the mortgaged property; (3) the affidavit that the defend-' ant in attachment is a foreign corporation does not authorize an attachment. On the trial of this motion the parties filed in court the following agreement in writing: “in the above-entitled cause it is agreed that they shall be consolidated, and that the complaint filed in case numbered 1,5(59 shall be considered, held, and treated as the complaint in the consolidated case. It is further agreed that said cases as so consolidated shall be submitted to the court for its decision without the intervention of a jury, upon the complaint and motion of the defendant to dissolve and discharge the attachment in the case, together with the following agreed statement of facts: (i) The original notes, as set forth in said complaint, and the original deed from Alfred Parish and wife to the defendant, set forth in the complaint. It is agreed that the said notes were given by said Parish as they purport, and that said deed was executed and delivered by him to tlio defendant, and accepted by it, and that said notes remain due and unpaid; and that said nobis as copied in the complaint (the originals of which are offered in evidence) are the same notes that are referred to in the said deed of conveyance from said Parish and wife to the defendant It is further agreed that if the court should overrule said motion to dissolve and discharge said attachments, then it shall enter judgment in favor of the plaintiff for the amount called for by said notes, with interest thereon. No steps have been taken by the plaintiff to sell the lands referred to in said notes under the mortgage therein also referred to. The motion of the defendant in the one case above mentioned shall apply to the other in [20] the same maimer and to the same extent, both in this court and upon appeal or writ of error to any other court; and it is further agreed that if this court shall overrule the motion to dissolve or discharge the attachments, the defendant shall have the right to file any pleas which shall raise the questions of its liability to any suit at law by the plaintiff; its liability, if any exists, for more than the proceeds of the sale of the lands for which the notes of Parish were made to Orman, the plaintiff; and also of the jurisdiction of the •court at common law to hear and determine this case; so that the judgment of the court may be upon the merits of the case, and not solely upon the ground that the present motion or rule is not the proper mode of raising the questions involved.” There was judgment for plaintiff in attachment for the amount ■of his demands, and an order to sell the property taken by the attachment. Defendant in attachment prosecuted this writ of error, and urges that the circuit court erred in overruling each of its grounds above stated for dissolving the attachment. It can hardly be necessary to observe in reference to the last clause of the above-recited agreement that it did not enlarge or modify the jurisdiction of the circuit court. Willard v. Wood, 135 U. S. 309, 10 Sup. Ct. Rep. 831. We consider it to be settled by the decisions of the supreme court of Alabama that the plaintiff in these actions had a right to proceed at law on the covenant counted on, and that his so proceeding was such an acceptance of the covenant as drew to him the exclusive right of action thereon. Huckabee v. May, 14 Ala. 263; Coleman v. Hatcher, 77 Ala. 217; Young v. Hawkins, 74 Ala. 370, and many other cases. Where, as in many of the states, the distinction between law and equity is not preserved, a cáse removed from the state court to the United States circuit court becomes an action at law or a suit in equity, or as to part the one and as to part the other, according to the nature of the cause of action and of the relief prayed. Where, .as in Alabama, that distinction is preserved, it may well be doubted if a defendant in an action at law can by removal to the circuit court convert the action at law into a suit in equity; and if, by reason of the nature of the cause of action, the circuit court would not have jurisdiction to adjudge the issues joined, it would seem that the plaintiff would not losé his action, but the cause would be remanded to the court which had jurisdiction. In our opinion, there is no such element of inefficiency in the constitution of the United States circuit court as would require either that the plaintiff should lose his action in this case, or that it should be remanded to the state court. Where the cause of action is such that it can be declared on in a strictly law court of the state in which the cause of action arose and is to be enforced, and is so declared on in such state court, and then removed to the circuit court, we do not doubt the jurisdiction of the circuit court to proceed with the case at law. The parties contracted with reference to the laws of Alabama. Whether the remedy is at law or in equity is governed by the law of the forum. Pritchard v. Horton, 106 U. S. 124, 1 Sup. Ct. Rep. 102; Wilcox v. Hunt, 13 Pet. 378; Willard v. Wood, supra. Is the second ground urged by plaintiff in error good? Its counsel contends that, as the notes by way of recital state that Parish [21] had given Oman a mortgage, it wan necessary to consider said mortgage and notes and the covenant declared on together as one instrument, and that, thus considered, and rightly construed, the obligor was only liable to the amount of the proceeds of the sale •of the mortgaged premises if the amount named, in the notes was not paid at maturity. The mortgage provided rent, in case oí default, the mortgagee, Mo heirs, executors, administrators, or assigns, shall have power to sell. It certainly does not in express terms require them to sell, and there is nothing In it to indicate that the sale under it would cancel the notes, even though the proceeds of the sale, after paying the costs provided cor, did not equal the principal and interest named in the notes. Therefore the recitation of the mortgage in the notes adds nothing to the force of the condition embodied in the notes. That condition does not, in terms, require the mortgaged premises to be sold in. case of default made in payment at maturity. It is urged that the parties, by the reference in the notes to the mortgage, Intended that its terms should throw some light on the meaning of the conditions as to the personal Hablliiy of Parish. May ifc not he that, even as between Parish and Orman, this condition was the price of the power oí sale granted Orman, (his heirs, administrators, and assigns.) and the guaranty that in case ho sold he would make it bring ¡he amount of the notes, interest and costs; or, if he should take it himself at Mu own sale, as he was authorized by the power to do, the debt should be discharged? The notes were -given for two thirds of che purchase price of the haul. The maker of the notes sold the same land for 11)e same price to the plaintiff in error. One third the price was paid in cash, in this sale as in Orman’s, to the seller; the remainder was to be paid to the holder of the notes in question, in installments equal to the principal and interest of each at their respective maturities. No condition is embodied in this covenant touching the effect of the sale of ¡he property under ike mortgage to Orman. Heading all the papers together, or in ¡ray wav they or each of them can be read, we do not find anything on their face to limit ike covenant of the plaintiff in error to pay at the maturity of the notes the full amount of the principal and interest of each, and now, that both have matured, to pay the amount of both. We consider that the third and last ground urged by the plaintiff in error is conclusively answered by the language of the Alabama Code. By that Code attachments may issue: “(1) When the defendant resides out of the state.” Section 2930. "’Process of attachment may issue against foreign corporations having property in this state * * in the same manner and subject to the same rules as in case of natural persons residing without the state.” Section 2940. On the case presented to us we conclude the circuit court did not err in the matters complained ofs and the judgment of that court is affirmed.