Hall & Brown Wood Working Mach. Co. v. Haley Furniture & Mfg. Co.

• Decision Date: 23 November 1911
• Citation: 174 Ala. 190,56 So. 726
• Parties: HALL & BROWN WOOD WORKING MACH. CO. v. HALEY FURNITURE & MFG. CO. ET AL.
• Court: Alabama Supreme Court

56 So. 726

174 Ala. 190

HALL & BROWN WOOD WORKING MACH. CO. v. HALEY FURNITURE & MFG. CO. ET AL.

Supreme Court of Alabama

November 23, 1911

Appeal from Circuit Court, Colbert County; C. P. Almon, Judge.

Detinue by the Hall & Brown Wood Working Machine Company against the Haley Furniture & Manufacturing Company and another, in which the Sheffield Trust Company intervened as claimant. From a judgment for claimant, plaintiff appeals. Reversed and remanded.

Emmett O'Neal and Kirk, Carmichael & Rather, for appellant.

Almon &amp Andrews, for appellees.

SOMERVILLE J.

This is an action of detinue by the appellant against the Haley Furniture & Manufacturing Company, and W. T. Archer assignee. The appellee duly intervened as claimant of the property sued for, filing his affidavit of claim, and the appropriate issue was made up, and the trial proceeded thereon. The affidavit did not state the nature of the right of the claimant as required by Code, § 6043.

The bill of exceptions sets out all the evidence, but we here state only such portions thereof as are necessary to illustrate the material questions which we are called upon to consider.

The subject-matter of the suit is a lot of machinery sold by the plaintiff to said Haley Company in February, 1906, and delivered in April following, except one item which reached the consignee as late as about June 12th. Only about one-third of the purchase money was to be paid on delivery and to secure the payment of the balance the vendor retained the title and possessory right in itself until the price of the machinery was fully paid, as shown by the written contract and notes in evidence. This written contract was filed for record on August 3, 1906, and in the meantime, on June 18, 1906, the claimant Sheffield Company (now appellee) loaned to the defendant Haley Company $6,000, the latter executing to the former as security therefor a mortgage deed conveying certain property in the city of Sheffield described as "all of block numbered four hundred and forty-eight (448) together with all buildings and improvements thereon, and all machinery and appliances thereat, together with the appurtenances." It does not appear that this mortgage has ever been foreclosed.

The tendency of the testimony of the two witnesses, C. L. Haley and J. J. Challen, introduced by the plaintiff, was to show that in the loan transaction of June 18th, in which the Haley Company secured the loan of $6,000 from the Sheffield Trust Company, the Trust Company was represented by one J. W. Worthington, who was a director and stockholder, but not an officer, in said Trust Company; that said Worthington was at the same time president of the Sheffield National Bank; that said witnesses, who were respectively president and secretary and treasurer of the Haley Company, negotiated with said Worthington in the months of January, February, March, and April, 1906, for the purpose of getting a loan for the Haley Company; that Worthington promised to get such a loan for them, and stated that he would secure it from a trust company about to be organized; that during these negotiations in January and February it was explained to Worthington that the loan was to be used in the purchase of the machinery in controversy; that the contract of sale between the plaintiff and said Haley Company, one of the terms of which provided for the reservation of the title and right of possession until the purchase money was paid, was exhibited to Worthington and its terms gone over with him, and then left with him for several days for his inspection; that the Sheffield Trust Company was not organized and had no existence until May 26, 1906; and that no conversations with Worthington, nor information to him as to the status of the title to the machnery occurred on or after May 26, nor any later than March, 1906. For the claimant, all of the testimony as to information given him concerning plaintiff's claim to the machinery is vigorously denied by Worthington, as well as any knowledge whatever on his part of such a claim, either before or during his agency.

With respect to statutory claim suits, it has long been the settled law in Alabama that the affidavit and bond required of the claimant are jurisdictional, and cannot be dispensed with even by consent of parties, express or implied. Mobile Life Insurance Co. v. Teague, 78 Ala. 147; House v. West, 108 Ala. 355, 19 So. 913.

When the claim interposed is based on a mortgage or lien, the statute (section 6043, Code 1907) expressly requires that "the claimant must state in his affidavit the nature of the right which he claims," and the same section further requires that, in case the claim is sustained, the amount of it, whether due or not, must be ascertained, and the plaintiff may pay to the claimant the amount so ascertained, and of course eliminate him from any "further participation or interest in the proceedings."

From its very nature this requirement is not jurisdictional, but there can be no possible doubt that it is restrictive in its character and purpose, and that a claimant who fails to thus propound the nature of his claim cannot be allowed to support it by evidence of either mortgage or lien. This conclusion was announced by this court in the case of Ivey v. Coston, 134 Ala. 259, 32 So. 664, cited with approval in Bennett v. McKee, 144 Ala. 601, 38 So. 129.

The introduction in evidence of the mortgage in support of the claimant's claim was objected to on the ground of its irrelevancy to the issue, and, no foreclosure being shown, the objection should have been sustained. And it necessarily follows from this that the court should have given the general affirmative charge for the plaintiffs as requested.

It is a mistake to assume, as do counsel for appellee in their brief, that by "a claim based on a mortgage" the statute means only a mortgage not overdue. It cannot be thus restricted. On the contrary, the statute plainly applies to any mortgage under which there remains to the mortgagor the right of redemption; the intent being to give the plaintiff the benefit of such right if it has not been foreclosed. And, even in a court of law, a tender of the debt by the mortgagor after the law day, if made before seizure of or demand for the chattels, revests the legal title in the mortgagor. Maxwell v. Moore, 95 Ala. 166, 10 So. 444, 36 Am. St. Rep. 190.

The claimant's affidavit did not state the nature of his claim, and by the omission he renounced the right to prove any claim based upon a mortgage. The plaintiff met the omission in the only ways open to him, viz., by objection to the introduction of the mortgage, and by request for the affirmative charge. The record presents not merely a defect in the affidavit, but a variance between pleading and proof.

2. On motion of the claimant, the trial court excluded all the testimony of the two witnesses Haley and Challen as to conversations and transactions between them and J. W. Worthington relative to the property sued for, and relative to their negotiations with him for a loan from the claimant company; the ground of objection being, substantially, that any notice to Worthington of plaintiff's claim, before the organization of the claimant company, and hence before his agency for it began, was not notice to the claimant, nor binding on it. The question presented by this ruling is the vital question in the case.

By a long line of decisions, this court is thoroughly committed to the rule that knowledge acquired by an agent prior to his agency, or in regard to matters outside the line of his duty, or while pursuing his own or some other person's business, is not notice to his principal of such fact or facts, and is not binding upon him. Mundine v. Pitts, 14 Ala. 84; Pepper v. George, 51 Ala. 195; Reid v. Bank of Mobile, 70 Ala. 211; McCormick v. Joseph, 83 Ala. 403, 3 So. 796; Wheeler v. McGuire, 86 Ala. 398, 5 So. 190, 2 L. R. A. 808; Goodbar v. Daniel, 88 Ala. 590, 7 So. 254, 16 Am. St. Rep. 76; Bessemer L. & I. Co. v. Jenkins, 111 Ala. 135, 149, 18 So. 565, 56 Am. St. Rep. 26; Central of Ga. Ry. Co. v. Joseph, 125 Ala. 313, 28 So. 35; Pearce v. Smith, 126 Ala. 116, 28 So. 37; Scotch Lumber Co. v. Sage, 132 Ala. 598, 32 So. 607, 90 Am. St. Rep. 932; Patterson v. Irvin, 142 Ala. 401, 38 So. 121; Traders' Ins. Co. v. Letcher, 143 Ala. 410, 39 So. 271.

The fundamental requirement is that such knowledge on the part of an agent to bind his principal "must be limited to such knowledge or information as comes to the agent in transacting the business of his principal." Central of Ga. Ry. Co. v. Joseph, 125 Ala. 319, 28 So. 37. This is a simple rule, easy of application, and just in its results.

Where the agent's knowledge is of this character, it is constructive notice to the principal entirely regardless of the principal's actual knowledge. Wiley v. Knight, 27 Ala. 346. This is usually explained by saying that the law conclusively presumes that the agent has in fact communicated his knowledge to his principal. We think, however, that the better and more logical explanation is that with respect to the given transaction the agent is in law identified with his principal; that knowledge that comes to the agent, while acting in such matter for his principal, would have come to the principal had he been acting for himself; and that, as a rule of policy and justice, he must be equally charged therewith. Sooy v. State, 41 N. J. Law, 395; Houseman v. Girard Ass'n, 81 Pa. 256-262.

But on either theory, the rule is not a rule of evidence merely, as is sometimes declared, but a rule of substantive law.

The Alabama rule, as above defined, is not in accord with the weight of authority in other jurisdictions, as pointed out by Mr. Freeman in his valuable...