Horst v. Barret

• Court: Alabama Supreme Court
• Citation: Horst v. Barret, 213 Ala. 173, 104 So. 530 (Ala. 1925)
• Decision Date: 14 May 1925
• Docket Number: 1 Div. 358
• Parties: HORST v. BARRET.
• Writing for the Court: SAYRE, J.

104 So. 530

213 Ala. 173

HORST v. BARRET.

1 Div. 358

Supreme Court of Alabama

May 14, 1925

Appeal from Circuit Court, Mobile County; Saffold Berney, Judge.

Bill in equity by Kate W. Barret against Henry A. Horst, as trustee of the Lienkauf Banking Company. Decree for complainant, and respondent appeals. Affirmed.

Harry T. Smith & Caffey, of Mobile, for appellant.

George B. Cleveland, of Mobile, for appellee.

SAYRE J.

By her original bill in this cause, appellee sought to enjoin appellant's further prosecution in Mississippi of a bill for the partition, or sale in lieu of partition, of a large tract of timber lands in Jackson county, Miss. The averment was that appellee had been induced by her husband to execute a conveyance of her interest--one-fourth--in the lands to the Lienkauf Banking Company; that the Lienkauf Banking Company by a contemporaneous instrument in writing, agreed to reconvey the said lands to appellee upon the payment to it within one year of the amount of the recited consideration of the conveyance to it viz. $13,500 which was the amount of his indebtedness to the Lienkauf Company; that in truth the purpose and effect of the transaction was to make appellee a surety for her husband's debt; that in Mississippi the wife is not forbidden to become surety for her husband; that the contract of suretyship had been made in Alabama, and that the parties thereto all resided in this state, as did appellee. The bill also prayed that appellee's conveyance to the Lienkauf Banking Company be canceled and annulled as a cloud upon her title. There was also the general prayer for relief. The jurisdiction of the courts of this state, to decree relief according to the prayer of appellee's bill, was determined in Lamkin v. Lovell, 176 Ala. 334, 58 So 258, on considerations there stated, nor is the decision in that case now drawn into question.

The difficulties in appellee's case arise out of amendments of her bill, made necessary by the changed aspect of relevant affairs brought about by appellant acting in conjunction with other owners in common of the lands in question, subsequent to the filing of appellee's bill and the modification of the relief sought thereby made necessary. By the amendments it was shown that J.K. Glennon and A.L. Staples, both of Mobile, who owned the remaining interests in the lands, had transferred their interests to the National City Bank of Mobile and the People's Bank of Mobile, respectively; that the National City Bank had transferred, or pretended to transfer, its claim in the lands to one Pringle, a resident of the state of Mississippi; that Horst, who had filed his bill as trustee of the Lienkauf Company under an assignment for the benefit of its creditors, dismissed his bill for partition previously filed in the chancery court of Jackson county, Miss., whereupon Pringle filed his bill for partition in the same court, making appellant, Horst, as trustee, one of the defendants; and that--this by appellee's last amendment--while a demurrer to appellee's bill as thus amended was awaiting decision, the lands had been sold under a decree of the Mississippi court and the proceeds of the interest represented by Horst as trustee ordered paid to him; and that the trust created by the assignment of the Lienkauf Banking Company for the benefit of creditors was pending in the circuit court of Mobile, in equity. And upon these facts appellee amended her prayer for relief to the end that, upon final hearing, the trustee, defendant, Horst, be directed to pay the amount thus to be received by him to appellee in lieu of her interest in the lands, and for general relief. The court decreed accordingly.

There seems to have been an effort, on the cross-examination of B.T. Barret, appellee's husband and witness, to establish the fact that appellee's interest in the lands, which she had acquired from or through her husband, had been acquired in fraud of his creditors. But that was an effort, the only effect of which could have been to prejudice appellee's case without any true bearing upon its merits; it was foreign to any possible issue of merits; it was foreign to any possible issue of merit; nor was it proved. We have no doubt, and it is not seriously denied, that the transaction by which appellee conveyed her property to the Lienkauf Banking Company did constitute her a surety of her husband's debt in contravention of the statute.

The main contention on the part of appellant is that appellee had relief that could not have been decreed on her bill in its original shape; that for the relief decreed appellee had an adequate remedy at law. It is said that, where the only substantial relief sought by the bill and granted is a decree for a sum of money representing the damages sustained as a consequence of fraud, it is error for the court of equity to render a decree for such money, the remedy at law being complete and adequate, and that, if upon final hearing the equity stated in the bill is not established, the bill cannot be retained for the award of damages, purchase money, but will be dismissed. Brown v. Sheridan, 185 Ala. 122, 64 So. 68; Hunt v. Jones, 203 Ala. 541, 84 So. 718; Farmers' Bank v. Murphree, 200 Ala. 574, 76 So. 932; and other cases of earlier date are cited. The authority of none of these cases in their appropriate environment of fact is denied. It is freely conceded that, to use the language of the court in Bryan v. Cowart, 21 Ala. 92:

"When the complainant fails to make out the only ground for relief which gives a court of equity jurisdiction of his case, his bill cannot be retained on account of other grounds of relief, even if the proof sustains them."

But this, we conceive, is not a case in which the rule appealed to can have proper operation. It may be that, in the peculiar circumstances of this case, a decree of cancellation after the Mississippi court had decreed a sale of the land in Mississippi would have been futile. We may concede this for the argument only. But cancellation is merely one of the peculiar remedies by which equity administers relief--gives effect to equitable rights. The equitable right sought in appellee's original bill was restoration to the unclouded ownership of that interest in the land which in equity belonged to her. It was not a matter of great difficulty, by transposing the parties to a bill for partition, to divest appellee's complaint against the trustee's action in Mississippi of its equity as for an injunction. But it does not follow that her equitable remedy by cancellation was thereby destroyed or made futile, nor do we think that she put herself without the pale of equity when she elected to accept her share of the fruits of that litigation in lieu of the relief originally sought. It is not necessary to deny appellant's contention that if appellee would now accept the conversion into money of her interest in the lands and have a judgment for it she might proceed at law, but it does not follow that she may not have the same relief by a monied decree in equity. Her primary right against the trustee was equitable. Its assertion involved the necessity of resort to a remedy purely equitable. The essential nature of appellee's right was the same in the end as in the beginning of her cause.

We cannot agree that the change in the form of her property pending litigation, though she may be willing to accept her interest in its new form, should be a sufficient reason for turning her out of the forum of equity where relief by monied decree is common. In the peculiar circumstances of this case that would have too much the appearance of permitting appellant to take advantage of his own wrong to harass and perhaps defeat appellee's clear equitable right. It is too well settled to admit of doubt, as appellant suggests, that one who has no cause of action at the filing of his suit cannot recover on a cause of action occurring at a subsequent time; but that ruling is without application here, for the reason already stated, viz. appellee's essential equity in the end was just what it was in the beginning. The only change in the situation of the parties was a change which, if acquiesced in by appellee, removed the necessity for the remedy of external form peculiar to equity, viz. cancellation. The legal title to the land had been transferred by operation of the decree in Mississippi, but appellee's equity was unimpaired so long as the property remained in the hands of persons charged with notice of her rights, and that equity, substantially unchanged, she might follow and assert against any property into which her title was converted. Her original and amended bills based her right to relief on titles entirely consistent, the same character of relief was appropriate in both cases, and the same defenses were available in both. Winston v. Mitchell, 93 Ala. 554, 9 So. 551.

Always the question was whether the property in dispute, whatever its form, whether land or money, was in equity the property of complainant, defendant's legal title to the contrary notwithstanding. Herein the case differs from all those adjudications cited by appellant, in which the right to relief in any sort depended on facts occurring subsequent to suit brought. Scheerer v. Agee, 106 Ala. 139, 17 So 610, and Id., 113 Ala. 383, 21 So. 81, is an instructive case in this connection. A statement of the case in full is hardly possible within permissible limits but we may point out that so far as complainant's abstract rights were concerned, his original bill sought a decree declaring his equitable ownership, pro tanto, of the fruits of a foreclosure suit then being prosecuted by bond-holders other than complainant's debtor, but, pending complainant's suit, complaints in the other suit,...