Graves & Gross v. Leach

• Decision Date: 22 April 1915
• Docket Number: 574
• Citation: 68 So. 297,192 Ala. 164
• Court: Alabama Supreme Court
• Parties: GRAVES & GROSS v. LEACH.

68 So. 297

192 Ala. 164

GRAVES & GROSS v. LEACH.

No. 574

Supreme Court of Alabama

April 22, 1915

Appeal from Circuit Court, Tallapoosa County; S.L. Brewer, Judge.

Detinue by W.A. Leach against R.L. Nix, who suggested Graves & Gross as claimants and owners of the property. After notice such claimants appeared and defended, and upon judgment for plaintiff, they appeal. Reversed and remanded.

Transferred from the Court of Appeals under section 6 of the act of April 18, 1911 (Acts 1911, p. 449).

George A. Sorrell, of Alexander City, for appellants.

Riddle Ellis & Riddle, of Goodwater, for appellee.

MAYFIELD J.

Appellee sued one R.L. Nix in detinue, to recover one small black mare mule. Nix suggested appellants as claimants and owners of the mule, and, after notice, they appeared and defended. Plaintiff and the substituted defendants both claimed title by virtue of mortgages executed by Nix, the original defendant. Appellants' mortgage was prior to one of appellee's mortgages, but subsequent to another. Appellants and Nix claimed that appellee's prior mortgage was satisfied by the taking of the subsequent one, while appellee claimed that the second mortgage was only additional to or collateral security for the first. This was one of the disputed facts, which, when correctly settled, would determine the rights of the parties except as to a question of estoppel, which, if established, might prevent the appellee from asserting his title against the appellants. The question of estoppel, if it exists, arises as follows Appellee had, for some time prior to the date of appellants' mortgage, furnished Nix with supplies, and had taken mortgages to secure the indebtedness. Nix being unable to meet the payments, and appellee being desirous of collecting the debt and closing out his mortgages, Nix applied to appellants for the loan or advance of money to pay and satisfy the debts due the appellee. Appellants instructed Nix to get from appellee a statement as to the amount which Nix was owing. Nix did this, and delivered the statement to appellants, who thereupon gave Nix a check, payable to appellee, for the amount shown to be due by the statement. This check had written in the corner thereof, "Balance due in full to date by R.L. Nix." Appellee accepted this check, collected the proceeds, and delivered to Nix some mortgages, accounts, etc. Nix then executed a mortgage to appellants for $600, including the money advanced for him to appellee, and that for other advances made and to be made. The mule in question was included in this mortgage. It appears, however, that there was an indebtedness, for the mule in question, due from Nix to appellee, which was not included in the statement rendered, and that this debt was secured by a separate mortgage on the mule, which mortgage was not surrendered. After Nix had executed the mortgage to appellants, he executed another mortgage to appellee, for the balance due on the mule. Nix claims that the last mortgage was in settlement and satisfaction of the first, so as to make appellants' mortgage the prior lien upon the mule.

Appellee contends that the last mortgage was only additional or collateral security, and not a mortgage in satisfaction of the first. If appellee knew that appellants were lending the money with which Nix was to pay his indebtedness due appellee, and then represented to appellants, or led them to believe, that the statement rendered covered all the indebtedness due him from Nix, and appellants relied on that statement, in advancing the money to Nix with which to discharge this debt, and appellee accepted the money knowing that appellants were so relying upon the statement as showing all that Nix owed him, then appellee would be estopped from setting up his prior mortgage on this mule, as against the appellants, who had been so deceived by the statement rendered by appellee to them. This court has spoken as follows on this subject:

"The estoppel relied upon is known as an equitable estoppel, or estoppel in pais, and the law on the subject is well settled. 'The vital principle [says Herman] is that he by his language or conduct induces another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both. This remedy is always so applied as to promote the ends of justice.' 2 Herman on

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