Appeal
from chancery court, Jefferson county; Thomas Cobbs
Chancellor.
Bill by
Mary L. B. Ensley, as executrix of Enoch Ensley, against
Walter Moore and others. From a decree for complainant
defendant Moore appeals. Affirmed.
The
prayer of the bill was that, "on the final hearing of
the cause, complainant prays that the entry of satisfaction
and payment of said mortgage deed of trust, as made and
executed by said Central Trust Company, for $1,500,000, on
the records of the probate offices of the counties of
Colbert, Franklin, Marion, Fayette, Walker, and Jefferson, be
set aside and canceled, and decreed to be void and of no
effect; that the said mortgage deed of trust be reinstated
and decreed to be in force, and an existing lien on said
property of said defendant Lady Ensley Coal, Iron & Railroad
Company embraced in said mortgage, to the extent of the
amount of bonds or money which may be found to be due to the
estate of said Enoch Ensley; that said bonds be considered by
the court as an existing liability or evidence of
indebtedness of said company, as they were intended to be, as
though the same had not been destroyed; and that said new
bonds since issued, for $500,000, secured by a second
mortgage on said property, and said second mortgage, shall be
decreed to be subordinate to the lien of the said first bonds
and mortgage; and that said first mortgage deed of trust
shall be declared and decreed to be a first lien on the
property embraced therein; and that an account be taken by
the register of this court to ascertain the amount due to
complainant, as the executrix of the estate of said Enoch
Ensley, and a decree in favor of complainant, as such
executrix, shall be duly rendered for such amount; and that
said mortgage deed of trust securing the same may be
foreclosed, and a sale of said property be ordered to satisfy
said decree; and that said Central Trust Company, of New
York, and said defendants the Merchants' National Bank
Union & Planters' Bank, Continental National Bank, and
Memphis National Bank, R. B. Snowden, Walter Moore, and
Napoleon Hill, who now hold said bonds in pledge as
collateral security for debts claimed to be due them, may be
enjoined from foreclosing, and from attempting or taking any
steps to foreclose, the said second mortgage of May 25, 1892
securing said issue of $500,000 of bonds, either by sale
under any power in said mortgage, or by a suit in equity, and
from taking any steps, as such bondholders or trustees, to
obtain possession of the property embraced in said mortgage;
and that said defendant and bondholders be enjoined from
transferring, assigning, delivering, selling, or otherwise
disposing of said bonds, or any of them, or in any manner
modifying or changing or affecting their status so as to
allow or permit the intervention of any other persons
claiming to be innocent holders or purchasers of said bonds
for value, and without notice of the equity asserted in this
bill of complaint. And complainant further prays that if she
is mistaken in praying for the relief hereinbefore prayed for
as to a foreclosure of said mortgage deed of trust as an
existing trust deed, and as to having said bonds considered
and treated as though the same had not been canceled and
destroyed, then complainant prays that either said mortgage
deed of trust, or the proceedings and resolutions of said
stockholders authorizing the execution and delivery of a
mortgage to secure the payment of said bonds, shall be
treated and considered as, and decreed to be, an equitable
mortgage on the property embraced in said canceled mortgage,
as an equitable lien upon said property, to secure the
payment of the balance of the purchase price of said
property; and that said equitable mortgage may be foreclosed,
and said property sold to discharge the same. And complainant
also prays that inasmuch as many suits are pending in this
court against the said Lady Ensley Company, affecting the
said property, and claiming various rights, demands, liens,
and equities, and also the suits of Horse Creek Coal & Coke
Company against said Lady Ensley Company, and Mag-Ellen Coal
& Mining Company against said company, in the chancery court
of Walker county, Alabama (each of said last-named suits
claiming a lien of some kind on part of said property), and
many creditors of said Lady Ensley Company have intervened in
said suits, and all of said property is in custody of this
court through its receivers heretofore appointed, your honor
will consolidate all said suits with this suit of your
complainant, so that the conflicting rights and equities of
all persons may be properly adjusted. And your complainant
also prays for such other, further, or general relief as she
may be entitled to, and as to you may seem right and
proper."
The
defendant Walter Moore, who is the appellant on this appeal
filed a separate demurrer to the bill, and for grounds of
said demurrer assigned the following: "(1) That it
appears from the said bill that Enoch Ensley subscribed for
certain stock and bonds in the Lady Ensley Coal, Iron &
Railroad Company, to be paid for in certain designated and
described property. And it also appears from the said bill
that the said Enoch Ensley, during his lifetime, never
complied with the said contract of subscription. On the
contrary, it appears that the title to a part of the property
wholly failed, and that as to another part of the property
the same was never delivered; and the bill contains no offer
on the part of the complainant to have delivered or have made
good to the Lady Ensley Coal, Iron & Railroad Company the
amounts which it appears it has lost by reason of the failure
of the said Ensley to comply with the contract on his part.
(2) That the contract of subscription on the part of Enoch
Ensley is shown by the bill never to have been complied with,
and complainant fails to offer to comply with the same. (3)
That until the said Enoch Ensley, or complainant, as his
executrix, has complied with the contract of subscription
made by him, she is not entitled to any stock or bonds in the
said Lady Ensley Coal, Iron and Railroad Company, who fully
complied with the terms of his subscription. (4) That it is
shown by said bill that this defendant was a subscriber to
the capital stock of the Lady Ensley Coal, Iron & Railroad
Company; and it appears by said bill that this defendant has
in all things complied with his contract of subscription, and
that the said Enoch Ensley has wholly failed to comply with
the contract of subscription made by him; and the bill does
not show that the estate of Enoch Ensley is able or willing
to do equity by making good the contract of subscription made
by the said Enoch Ensley. (5) That it appears from the bill
that the complainant is, in effect, seeking to reinstate and
enforce the mortgage for $1,500,000, pursuant to the terms of
the original contract of subscription made by her testator;
that the estate of her testator owns and holds a majority of
all of the capital stock of the corporation; that the
original contract of subscription was never carried out or
performed by her testator, and that thereafter the
stockholders of the Lady Ensley Coal, Iron & Railroad
Company, with the consent of the agent of the complainant,
canceled that part of the original contract of subscription
which authorized the issue of the bonds, and authorized the
issue of the bonds under the $500,000 mortgage; that the
complainant accepted the bonds under the last-mentioned
mortgage, and, with full knowledge of the fact that this
first mortgage had been canceled of record, retained, and
still retains, the said bonds so received by her, and makes
no offer to surrender the same, except upon condition. (6)
That it appears from the said bill that the complainant has
accepted a part of the fruits of the transaction alleged to
have been illegal and wrongful, and that she continues to
hold and retain these fruits with knowledge of all the facts.
(7) That it is not averred in said bill that the complainant
did not have the benefit of the advice of counsel; nor is it
shown why she was ignorant of the facts of which she avers
she was ignorant; nor is it shown why she could not have
discovered them; nor is it shown how, or by what means, or
when, she discovered them. (8) For aught that appears in the
bill, complainant was fully advised by counsel learned in the
law as to every step that was taken in connection with the
Lady Ensley Company. (9) That it appears from said bill that,
at and before the same was filed, complainant knew all the
facts therein alleged, and, with full knowledge, she has held
and retained eighty of the bonds secured by the mortgage made
May 25, 1892, which purports on their face to be first
mortgage bonds, and secured by a first lien on the property
of the Lady Ensley Company. (10) That, upon discovering the
facts alleged in the bill, complainant was bound to elect to
affirm or repudiate the said mortgage for $500,000 in its
entirety, and by her said bill she has elected to affirm said
mortgage. (11) That said bill is wholly inconsistent, in
this: that complainant seeks to affirm said mortgage for
$500,000 so far as the same is advantageous to the estate of
her testator, and repudiate it in part. (12) That it appears
from said bill that complainant, since the death of her
testator, has been in control of almost the entire capital
stock of the Lady Ensley Company, with full power to elect
directors and agents of her own selection; and, for aught
that appears in said bill, complainant did select and elect
directors and agents of said corporation since the death of
her testator, and such directors and agents to selected by
her had full knowledge...
