Thomas v. B. Rosenberg & Sons, Inc.

• Citation: 153 Miss. 314,120 So. 732
• Decision Date: 18 February 1929
• Docket Number: 27717
• Parties: THOMAS et al. v. B. ROSENBERG & SONS, INC., et al. [*]
• Court: United States State Supreme Court of Mississippi

120 So. 732

153 Miss. 314

THOMAS et al. v. B. ROSENBERG & SONS, INC., et al. ^[*]

No. 27717

Supreme Court of Mississippi

February 18, 1929

Division B

1 MORTGAGES. Bills and notes. Presumption is that notes and trust deed were executed without fraud, and that valuable consideration passed.

Prima facie, presumption is that notes and deed of trust sought to be canceled were executed without fraud on part of defendant and that valuable consideration passed to complainants for their execution.

2. BILLS AND NOTES. Mortgages. Cancellation of notes and trust deed for fraud involves extraordinary power, not to be exercised except in clear case.

Cancellation of notes and deed of trust for fraud involves exercise by court of equity of an extraordinary power which should not be exercised except in a clear case upon strong and convincing evidence.

3. BILLS AND NOTES. Mortgages. In suit to cancel notes and trust deed for fraud, evidence justified decree dismissing bill and granting foreclosure under cross-bill.

In suit to cancel notes and deed of trust on ground that they were procured through false and fraudulent representations, in which defendant filed cross-bill praying for foreclosure of deed of trust and for payment of notes, evidence held sufficient to justify decree dismissing original bill an granting prayer of cross-bill.

4. EQUITY. Statutes requiring copy of writing to be annexed to declaration or bill before evidence of writing may be introduced applies to chancery courts as well as to circuit courts (Hemingway's Code 1927, sections 479, 531).

Hemingway's Code 1927, sections 479, 531 (Code 1906, sections 687, 734) requiring that in suits founded upon writing original or copy of writing shall be annexed to or filed with declaration or bill, otherwise evidence of writing shall not be given on trial, applies to chancery courts as well as to circuit courts.

5. EQUITY. Statute requiring copy of writings of which profert should be made by pleader to be exhibited with pleadings applies to chancery courts (Hemingway's Code 1927, section 532).

Hemingway's Code 1927, section 532 (Code 1906, section 735), requiring copy of any writings of which profert ought to be made by pleader to be exhibited with his pleadings, applies to chancery courts as well as to circuit courts.

6. APPEAL AND ERROR. Admitting evidence to establish notes without originals or copies having been made exhibits to pleading held harmless error.

In suit to cancel notes and deed of trust, in which defendant filed cross-bill praying for foreclosure, admitting evidence on behalf of defendant to establish notes without either original notes or copies thereof having been made exhibits to cross-bill held harmless error, where in original bill plaintiff set out deed, amounts and maturities of notes, and notes were described fully in defendant's cross-bill, and plaintiffs did not claim that notes contained any stipulation that they did not already know of.

7. MORTGAGES. Where notes contained stipulation there should be no personal liability beyond value of property covered by trust deed, personal decree was erroneous.

Where notes contained stipulation that there should be no personal liability on part of grantor under deed of trust beyond value of property covered by deed of trust, personal decree against grantor for amount of notes, interest, and attorney's fee was erroneous.

HON. V. J. STRICKER, Chancellor.

APPEAL from chancery court of Hinds county, First district, HON. V. J. STRICKER, Chancellor.

Suit to cancel notes and deed of trust by Nicholas R. Thomas and another against B. Rosenberg & Sons, Inc., and another, in which defendants filed a cross-bill. From a decree dismissing the original bill and granting the prayer of the cross-bill, complainants appeal. Reversed in part, affirmed in part, and rendered.

Decree reversed in part and affirmed in part.

Teat & Cox, for appellants.

The lower court erred in allowing the notes sued on by cross-complainant, appellee, to be introduced in evidence over the objection of the appellant without making profert of said notes in the cross-bill. This principle of law is well established in rules of procedure by the statutes of this state and needs no argument or further elaboration on the statute itself. The statute recites that a copy of any writing of which profert is made, or ought to be made, in any pleading, shall be annexed to or filed with the pleading, etc., and that evidence thereof shall not be given at the trial unless so annexed or filed. Sec. 532, Hemingway's Code of 1927, sec. 735, Code of 1906. The cross-bill is required to conform to the same strictness of pleading and to the same rule of evidence in this particular as if it were an original bill of complaint. Griffith's Mississippi Chancery Practice, secs. 380, 385.

The lower court erred in awarding a personal judgment against Mrs. Mamie Thomas. One provision of the notes was that the liability of Mrs. Mamie Thomas should be limited to and discharged by the net proceeds of the sale of the property. Therefore the personal judgment against Mrs. Mamie Thomas was in contravention of the express terms of their agreement.

The lower court committed manifest error in dismissing complainant's bill and denying the relief therein sought. The appellants contend that the notes and the deed of trust, which were sought to be cancelled by the original bill were executed by the appellants only on consideration that the appellee would extend a reasonable line of credit to the Merchants Dry Goods Company in the future and thereafter permit the Merchants Dry Goods Company to buy additional goods from the appellee on credit. The appellees, of course, disputed this contention in the lower court by their one and only witness, Mr. Pillsbury, who was secretary of the appellee company. Mr. Pillsbury said that the consideration for the execution of the notes and deed of trust was the extension of time from the date of execution thereof to its due date.

N. R. Thomas testified that Pillsbury's statement was untrue and that he told Pillsbury that he did not want further time but that he wanted more credit for his company, and more goods shipped immediately. Thomas further testified that the additional credit and goods was the true consideration for the execution of the notes and trust deed. Mrs. Mamie Thomas, is a Syrian woman who can neither read nor write English, nor read her own name when written but executes all of her papers by means of an "X." She stated in her testimony that she signed these papers on the strength of Mr. Pillsbury's promises for the appellee to ship the company of N. R. Thomas, more goods.

Mitchell Thomas testified for the appellants that two hundred dollars was given Mr. Pillsbury at the time of his said visit here and that Mr. Pillsbury told him that after the notes and trust deed were signed up that he was going to ship certain merchandise to them on request.

Immediately after signing the notes and trust deed, the Merchants Dry Goods Company ordered a shipment of slippers from the appellee on December 3, 1926, one day after the execution of the notes and trust deed sought to be cancelled, and on December 8, six days thereafter, the shipment was refused by the appellee. On the day of the receipt of the refusal of the appellee to ship the goods, Thomas wrote them to the effect that the deed of trust was given only upon the the condition that the goods would be shipped on open account to the Merchants Dry Goods Company.

Mrs. Thomas employed an attorney to write the appellees that she denied liability on the note and denied the validity of the trust deed because of the manner in which the same had been procured. It is our contention that the testimony of these witnesses, together with the implicit reliance upon the promise of the agent of the appellee, is very forcefully brought to the attention of the court by the candid and open manner in which the appellants called attention of the appellees to the breach of their agreement.

The appellees did not even so much as make a reply to the contentions of the appellants, but let the entire matter go by unnoticed until the notes became due and a foreclosure could be had thereon. It is inconsistent on the part of a reputable concern, that appellee claims to be, when so challenged on the integrity of their agreements, and so pointedly shown and charged with exercising bad faith in the performance or the failure of the performance of their agreements, that they remain silent and did not even attempt to adjust the differences with the appellants or seek to right the impression that they were to actually extend the credit to the Merchants Dry Goods Company as appellants contend. The appellees were notified immediately of their breach and are now estopped to say that if the extension of time was actually the real consideration for the execution of the notes, that upon being so early advised of the understanding of the appellants that credit was to be extended his company that they could not have immediately thereafter sought recourse against the Merchants Dry Goods Company for the amount of the indebtedness so secured. Only a short period of time had elapsed since the execution of these instruments and appellees were left open to assert their rights against the Dry Goods Company. If this was the only consideration of the execution of the notes, and appellants were dissatisfied, we say that the appellees are estopped to say that they jeopardized their rights or misunderstood the agreement to be exactly as appellants contend. Instead of showing their good faith with the appellants by making a reply thereto, they placed the notes and trust deed in the hands of their attorney to await the...