Averyt Drug Co. v. Ely-Robertson-Barlow Drug Co.

• Decision Date: 14 October 1915
• Docket Number: 5
• Citation: 69 So. 931,194 Ala. 507
• Parties: AVERYT DRUG CO. et al. v. ELY-ROBERT-SON-BARLOW DRUG CO.
• Court: Alabama Supreme Court

69 So. 931

AVERYT DRUG CO. et al. v. ELY-ROBERT-SON-BARLOW DRUG CO.

194 Ala. 507

No. 5

Supreme Court of Alabama

October 14, 1915

Rehearing Denied Nov. 18, 1915

Appeal from Chancery Court, Jefferson County; A.H. Benners Chancellor.

Suit by the Ely-Robertson-Barlow Drug Company against the Averyt Drug Company and others. From a decree overruling a demurrer to the bill, defendants appeal. Affirmed.

Beddow & Oberdorfer, of Birmingham, for appellants.

Whitaker & Nesbit, of Birmingham, for appellee.

THOMAS J.

The bill is to foreclose a lien on a certain stock of drugs and fixtures sold by appellee to appellant, and prays other incidental relief. By demurrer it is insisted that there is no equity in the bill, and that there is a misjoinder of parties respondent. The Ely-Robertson-Barlow Drug Company, a corporation, sold to appellant Averyt Drug Company a certain stock of goods, wares, and merchandise, and other personal property incident to the business of a wholesale druggist, in Birmingham, which sale was evidenced by a written contract. The performance of this contract, on the part of appellant Averyt Drug Company, was guaranteed by its subsidiary stores the Lynwood Drug Company, the Madison Pharmacy Company, and the Collier Drug Company, in the following language:

"In consideration of the sum of one dollar ($1.00) in hand paid each of the undersigned, and of the further benefits which will accrue to the undersigned by reason of their participation and interest in the said purchase, the undersigned have jointly and severally agreed with the Ely-Robertson-Barlow Drug Company, that the undersigned, and each of them, will guarantee to promise the above and foregoing contract by the Averyt Drug Company, together with the payment in full of each and all the notes agreed to be executed and delivered by the said Averyt Drug Company; and that the undersigned and each of them, will, if requested by the Ely-Robertson-Barlow Drug Company, endorse each and all of the notes when executed."

By the sixth paragraph of said contract of sale, a lien for the purchase price is expressly reserved in the following language:

"It is further understood and agreed that the party of the first part has a lien upon all the goods which it has sold to the party of the second part, upon all moneys derived from the sale of said goods, and upon all accounts made by the sale of said goods, which said lien shall be prior to and superior to all other claims of any party against said goods proceeds or accounts, and that said goods, proceeds and accounts shall remain impressed with the lien of the party of the first part until the indebtedness represented by the notes herein given shall have been paid and satisfied."

It is provided by paragraph 3 of the supplemental contract that the Averyt Drug Company should deposit all proceeds derived from the sale of the property purchased from the complainant by said contract, in a special account, in the First National Bank of Birmingham, Ala., to be applied by said bank to the payment of the notes described in the said contract as the same should fall due, with the further provision that the amount so deposited should be 80 per cent. of the price at which each item should be sold, provided that no article should be sold at a less price than cost, with 10 per cent. added. The bill avers that the Averyt Drug Company wholly failed to carry out the terms of said provision and has made no deposits whatever with the First National Bank as therein provided, and, further, that said paragraph contained the stipulation that the respondent should keep an accurate and correct charge sheet of each sale made of said goods, and should furnished the complainant a carbon copy of same, and that it has failed to furnish promptly carbon copies of such charge sheets. It is further provided in paragraph 4 of the supplemental contract that the Averyt Drug Company was to keep the goods, wares, and merchandise sold to it by complainant separate and distinct and segregated from any other goods, wares, and merchandise belonging to the respondent, or to any of its subsidiary stores, and so earmarked and labeled as to be distinguishable from its other property. The bill then avers that the complainant did not know, of its own knowledge, whether the respondent had carried out this part of said contract, but that it had been informed that the Averyt Drug Company had commingled the goods, wares, and merchandise purchased from complainant with goods, wares, and merchandise belonging to it, and had failed to mark said goods with distinguishing marks and labels, as agreed, and upon such knowledge and belief charges that respondent Averyt Drug Company has failed to perform the provisions of said paragraph of said contract. The bill further avers that the Averyt Drug Company has now in its possession the mule, the horse, the two drays, and the harness, and all or a part of the furniture and fixtures sold by complainant to respondent by said contracts and covered by said lien, as above specified, and has, in addition, a certain part of the goods, wares, and merchandise thus sold and delivered by said contracts and covered by said lien as above specified, and has made certain collections from the sales of said goods, wares, and merchandise, and has on its books certain accounts for sales of said goods, wares, and merchandise which have not been collected, all of which are covered by said contracts and said lien or liens as specified by said contracts and above referred to; that complainant does not know, and has no means of knowing, and cannot ascertain, the exact amount nor the exact articles of said goods, wares, and merchandise, furniture and fixtures, nor the amount of said collections and said accounts, and that said information is entirely within the knowledge and control of respondent Averyt Drug Company, and its officers and employés. Complainant avers further that, as the said four notes aggregating $9,000 are all past due and unpaid, and are due by respondent to complainant, it is entitled to have foreclosed its liens, provided in said supplemental contract, for the purpose of securing payment of the balance of this said indebtedness due. Complainant avers, further, that, because of the nature of said lien as above specified, complainant is without an adequate remedy at law for the enforcement of said lien, and can secure complete relief only in a court of chancery; that it is entitled to have the amount of its indebtedness, due and owing to it by respondent Averyt Drug Company, ascertained and determined by the court, and to have ascertained and determined the goods, wares, and merchandise and property and money and accounts upon which it has said liens as specified in the contract of sale, and to have said liens enforced and foreclosed by the court. It is further alleged that respondent Averyt Drug Company claims certain credits or set-offs against the indebtedness due to complainant, because of alleged breaches of the warranty contained in the contracts, that said accounts and cross-claims are complicated, and are less in amount than the sum due by it on the contract, and that the total balance of the indebtedness due by Averyt Drug Company to complainant can be ascertained with certainty and with justice only in a court of chancery, and that Averyt Drug Company and its officers, agents, and employés are the only persons having full knowledge as to the goods, fixtures, moneys, and accounts, in their possession or control, covered by the lien given by said contract of sale. The bill prays a discovery of the respondent, and propounds interrogatories to that end.

The contract of the parties provides no method of enforcing or foreclosing this lien. When such is the case, a court of equity, exercising its original jurisdiction, may protect and foreclose such lien. 1 Pom.Eq.Jur., §§ 165-167. Our court has often held that where a lien is given and no method of enforcement or foreclosure is provided, a court of equity, in virtue of its general jurisdiction over liens and trusts, will take jurisdiction to protect the lien. Montandon & Co. v. Deas, 14 Ala. 33, 48 Am.Dec. 84; Westmoreland v. Foster, 60 Ala. 448; Tutwilder v. Tuscaloosa Land Co., 89 Ala. 391, 7 So. 398; Bingham v. Vandegrift, 93 Ala. 283, 9 So. 280; Crass v. Memphis R.R. Co., 96 Ala. 447, 11 So. 480; Enslen v. Wheeler, 98 Ala. 200, 13 So. 473; Evans' Adm'r v. Silvey & Co., 144 Ala. 398, 42 So. 62; Greil Bros. Co. v. City of Montgomery, 182 Ala. 291, 62 So. 692; Hicks v. Meadows, 69 So. 432.

The fact that appellant vendee had counterclaims will not deprive a court of equity of jurisdiction, nor prevent full and adequate relief to all parties to the...