Crawford v. Jackson

• Decision Date: 29 February 1904
• Citation: 83 Miss. 708,36 So. 82
• Court: Mississippi Supreme Court
• Parties: HIGHTOWER CRAWFORD ET AL. v. MOBILE, JACKSON AND KANSAS CITY RAILROAD COMPANY ET AL

36 So. 82

83 Miss. 708

HIGHTOWER CRAWFORD ET AL. v. MOBILE, JACKSON AND KANSAS CITY RAILROAD COMPANY ET AL

Supreme Court of Mississippi

February 29, 1904

FROM the chancery court of, second district, Perry county. HON STONE DEAVOURS, Judge.

Hightower Crawford and fifty-six other persons, appellants, were complainants in the court below; the railroad company and another, appellees, were defendants there. From a decree in defendants' favor dissolving an injunction, the complainants appealed to the supreme court.

The bill alleges that the city of Hattiesburg is situated on the line of the New Orleans and Northeastern Railroad, and is in the center of a large territory; that the towns of Ellisville and Laurel lie northeast of Hattiesburg, and are competitors for the trade in the territory east and southeast of Hattiesburg; that the defendant railroad company had a charter to build a railroad from Mobile, Ala., to Jackson Miss. Hattiesburg being near a direct line between the two cities, and that the building of said line was desired on the part of the people of Hattiesburg; that it had been built to within 40 miles of Hattiesburg from Mobile; that in 1901 defendant announced its purpose to extend this line of road northward, but stated it was uncertain as to whether it would be built via Hattiesburg or whether it should be deflected to the right and pass some fifteen or twenty miles from Hattiesburg and run into Ellisville or Laurel, and that the people of Hattiesburg were anxious to get the road built to that place, and were specially anxious that it should not be built to Ellisville or Laurel; that defendant railroad company was fully informed of all these matters, and, for the purpose of getting a donation from Hattiesburg citizens, the agent and attorney of said railroad company had a mass meeting called in Hattiesburg for the purpose of soliciting aid from them for an extension of said road, and that in said meeting he stated that he was authorized by the company to inform the people of Hattiesburg that defendant contemplated extending its road northward, and that it was undecided whether it would build by way of Hattiesburg, or whether it would deflect the road to the east by way of Ellisville or Laurel; that the people of both Ellisville and Laurel were anxious to secure the road, and had offered large donations if the road should be built to their totem instead of to Hattiesburg; that the company was anxious to build the road to Hattiesburg, and that it would be built to Hattiesburg if the citizens would subscribe $ 35,000 in aid thereof; that it would not be built if said subscriptions were not made, but would be built to Ellisville or Laurel. The bill charges that this agent was specially asked whether the road would be built to Ellisville or Laurel in the event Hattiesburg subscribed the $ 35,000 demanded, and that he had emphatically replied that it would not be built to either if the sum of $ 35,000 was subscribed by Hattiesburg, and that the purpose to build by way of Ellisville or Laurel would be abandoned. The bill further alleges that, but for the statements of defendant's agent in procuring said subscriptions, they never would have subscribed one cent to it, but, acting upon the representations of said agent, they agreed to sign and did sign notes aggregating $ 35,000, which were placed with defendant bank in escrow. The bill further avers that it was not true, as represented to complainants that the road would not be built northward to Hattiesburg unless $ 35,000 were subscribed by Hattiesburg citizens, but the fact was that the contract for the building and completion of a branch of said road to Hattiesburg had already been let, before said statement was made, and that it would have been built to Hattiesburg whether said subscription was made or not; that said railroad company never abandoned its project to build its road southeast of Hattiesburg via Laurel, as it had agreed to do when complainants signed the notes, but that it intended at that time, and continued to carry out its said intention of building the main line of its railroad byway of Laurel. Complainants alleged that the representations upon the faith of which the notes were executed were untrue, and that defendant knew them to be untrue when they were made, and that complainants, relying on the truthfulness thereof executed said notes, which they would not have done if said misrepresentations had not been made by defendant, and averred that the notes were obtained by fraud, as therein set forth, and prayed that the notes given by them, which were in the hands of the defendant Bank of Commerce of Hattiesburg, be canceled, and that the bank be enjoined from delivering them to defendant railroad company, and that the defendant railroad company be enjoined from transferring them to any one else. Defendant railroad company demurred to this bill, without first filing any answer denying the charges of fraud contained in the bill, and made a motion to dissolve the injunction. The motion to dissolve the injunction was sustained. The complainants were taxed with costs and attorneys' fees.

Decree reversed.

Green & Green. N. C. Hill. and S. E. Travis. for appellants.

The bill avers that the notes were in the hands of a single depository delivered in escrow, and are not binding upon the several appellants, because of:

1. Actual fraud, consisting in false, fraudulent misrepresentations of most material facts.

2. Want of consideration, as well as failure thereof.

Because of the fraud practiced each of the notes are voidable at the election of the several makers, and could be avoided, and each appellant, upon discovery of the fraud, selected to avoid his note, and thereby each became of no force or effect, by an election, exercised under facts dehors the face of the note, to be shown by evidence aliunde. These notes are in fact, as admitted by the demurrer, void under the actual facts, but upon their faces they are perfectly valid, binding and legal obligations, maturing at a time to be shown by matter of fact aliunde. These obligations, void in fact, by this subsequent election, but valid upon their faces, are now all outstanding in escrow, in the hands of a single individual, a party of whom the court has full jurisdiction.

Let it be carefully noted that the notes have never been delivered to the appellee railroad company, have never passed into its possession. Delivery is an essential element to the validity of a note; until delivery it has no life. Bigelow Bills and Notes, 174 et seq.

We have the case then of appellee railroad company, who has most wrongfully by fraud in fact enticed each appellant to execute his note and to make this deposit in escrow of notes which are now absolutely void, by matters apparent aliunde, and all the fraudulent and void instruments are now in the hand of the bank, undelivered and in such condition that said appellee, guilty of the gross acts of fraud as charged, has no right to them, and has no right to recover them of the depository and have them delivered to it for the purpose of vexatious litigation.

Has not this court jurisdiction at the suit of a single maker to enjoin delivery and to order a surrender and a cancellation and especially where the questions of law and fact are common to 57 different parties complainant? Is the remedy solely at law, and is it plain and adequate and complete? But is it not also in equity? What form of action at law would determine this controversy?

Each appellant has the right to come into equity to have his note undelivered ordered to be surrendered and canceled because of fraud. This is an inherent jurisdiction in equity entirely independent of the remedy at law, a concurrent remedy where fraud is the ground of relief. Waterworks. v. Mark's, 16 So. 167; Sessions v. Jones, 6 How., 125; Jackson v. Mitchell, 13 Ib., 581.

Let it be noted here that there is no objection on the ground of misjoinder, only a jurisdictional question. The case at bar falls clearly within Garrett v. Railroad Co., 1 Freeman Ch., 75.

The courts of equity have nearly always assumed concurrent jurisdiction of cases of fraud with courts of law, and have, when procured by fraud, ordered the evidence of the obligation to be surrendered and canceled. Garrett v. Railroad Co., 1 Freeman Ch., 75; Sessions v. Jones, 6 How. (Miss.), 125; Hooker v. Hester, 7 Smed. & M., 779; Griffin v. Shetoe, 30 Ga. 300; Hamilton v. Cummings, 1 Johnson Ch., 519.

The jurisdiction in equity has existed since Whittingham v. Thomburg, 2 Vern., 206; Goddard v. Garrett, 2 Vern., 269; Law v. Law, 3 P. Williams, 392.

Thompson v. Graham, 1 Paige Ch. (N. Y.), 284, holds that equity has concurrent jurisdiction with courts of common law to order the cancellation and other instruments obtained by fraud. Buxtor v. Broadway, 45 Conn. 541: Brittin, v. Crabtree, 20 Ark. 313; Fuller v. Percival, 126 Mass. 382; Insurance Co. v. McLoom, 14 Allen, 353; Insurance Co. v. Dicks, 114 Mich. 340.

"That it is not unwholesome, that an instrument should be delivered up upon which a demand may be vexatiously made as often as the purpose of vexation may urge the party to make it." Why should the appellee wish to retain these notes unless for some unlawful purpose, they being admitted by the demurrer to be void? Jackman v. Mitchell, 13 Vern., 583; Glastonbury v. McDonals, 44 Vt. 454; Johnson v. Henley, 5 Munf. (Va.), 219; Barney v. Warren, 13 Hun. (N. Y.), 12.

The chancery court also has jurisdiction because the bill is one in the nature of an interpleader. The appellee, National Bank of Commerce, has these notes in possession, not claiming or asserting any right, title, or interest whatever in the notes in possession, but is a stakeholder pure and simple....