Bank of Luverne v. Birmingham Fertilizer Co.

• Decision Date: 17 January 1905
• Citation: 143 Ala. 153,39 So. 126
• Parties: BANK OF LUVERNE ET AL. v. BIRMINGHAM FERTILIZER CO. a1
• Court: Alabama Supreme Court

39 So. 126

143 Ala. 153

BANK OF LUVERNE ET AL. v. BIRMINGHAM FERTILIZER CO. a1

Supreme Court of Alabama

January 17, 1905

Appeal from Chancery Court, Crenshaw County; W. L. Parks Chancellor.

Suit by the Birmingham Fertilizer Company against the Bank of Luverne and others. Decree for complainant. Defendants appeal. Reversed.

The Bank of Luverne moved to dismiss the bill for want of equity. That motion was overruled, and the only question involved in this appeal is the correctness of said ruling of said chancery court. The allegations of the bill of complaint are in substance: That complainant is a corporation, with its principal place of business in the city of Birmingham; the defendants Duke Beall and J. H. Beall are residents of Crenshaw county; and the Bank of Luverne is a corporation doing business at Luverne, in the said county of Crenshaw. That in the years 1901 and 1902 complainant was engaged in the fertilizer business, and Beall Bros. were merchants, and the Bank of Luverne was doing a banking business. That Beall Bros. made a contract with complainant, by which complainant agreed to furnish Beall Bros. a lot of fertilizer. That said agreement was in writing, and is attached as an exhibit to said bill. That by the said agreement it was provided "for all goods shipped, you [Beall Bros.] are to give your note or notes at the above-named prices, not later than May 1st, payable at Luverne, Alabama, Bank of Luverne. And is further agreed to pay a reasonable attorney's fee, etc and you further agree to secure your note or notes by pledging and lodging with said company as collateral security, not later than June 31st, 1902 (or this account becomes payable forth-with), notes of purchasers from you of the goods of said company, and you bind yourselves to hold these notes which are to be returned to you for collection in due time (and the accounts until the notes are taken and the goods on hand) in trust for said company until all your indebtedness is paid, remitting the money on these collateral notes and accounts as fast as collected. You agree to pay said company at once for any portion of these goods that you may sell for cash." The bill further alleges that the parts of the agreement above quoted was a controlling inducement to complainant to make the said agreement; that complainant shipped a lot of fertilizer to Beall Bros. under the said agreement to the total amount of $3,727.25, for which Beall Bros. executed their several promissory notes three in number, payable, respectively, November 1 and 15 and December 1, 1902--the first of said notes having been paid and canceled, but the other two, aggregating $2,484 being still unpaid; that Beall Bros. sold on a credit to their customers all of the said fertilizer and other goods not sold by said complainant to Beall Bros., and took notes and mortgages from said customers for the indebtedness for said other goods and for said fertilizer, all in one instrument, but no notes or mortgages for said fertilizer alone; that Beall Bros. neglected to send complainant any of said notes taken from their said customers, and complainant has a beneficial interest or trust estate in said notes, etc., taken by Beall Bros. from their customers to the extent of the fertilizer bought from complainant; and that Beall Bros. were the trustees of complainant, and held said notes, etc., received...