Thompson v. Hudgins

• Citation: 116 Ala. 93,22 So. 632
• Parties: THOMPSON ET AL. v. HUDGINS ET AL. HUDGINS ET AL. v. RISER ET AL.
• Decision Date: 22 June 1897
• Court: Supreme Court of Alabama

22 So. 632

116 Ala. 93

THOMPSON ET AL. v. HUDGINS ET AL.

HUDGINS ET AL. v. RISER ET AL.

Supreme Court of Alabama

June 22, 1897

Appeals from city court of Birmingham; H. A. Sharpe, Judge.

Separate bills by Thomas C. Thompson and Julia N. Thompson and by Adam O. Riser and his wife, Eula Riser, against Lucy P. Hudgins and others. The transactions in each were identical, and the facts of the two cases are set forth at length in the opinion. The appeal in the case of Thompson against Hudgins is from a decree sustaining the joint demurrers of the defendants to the complainants' bill; and the appeal in the Riser case is from a decree overruling the motion to dismiss the bill for the want of equity, and the demurrers interposed by the defendants to the complainants' bill. The rendition of each of these decrees is here assigned as error. In the case of Hudgins against Riser there had been a decree previously rendered by this court sustaining the demurrers interposed by the defendants to the complainants' bill, and the result of the application for rehearing in that case was announced at the same time of the rendition of the opinion in the Thompson case. The decree in the case of Thompson against Hudgins was reversed. In Hudgins against Riser the judgment theretofore rendered by the supreme court was set aside, and the decretal order of the city court affirmed.

Brickell C.J., dissenting.

Caboniss & Weakley, for appellants.

Walker Porter & Walker, for appellees.

HEAD J.

This is a bill by the appellants for the cancellation and surrender of three promissory notes and a mortgage given to secure the same, executed by them to appellee Lucy P. Hudgins, executrix of T. L. Hudgins, deceased. The facts are that on the 26th day of August, 1884, T. L. Hudgins, the grandfather of the complainant Julia N. Thompson, executed and delivered to the latter his deed, under seal, duly witnessed and acknowledged by which, in consideration of love and affection, he "gave, granted, bargained, sold, and conveyed" to her 200 shares of the capital stock of the First National Bank of Birmingham, an incorporated company, each of said shares being of the par value of $100, but therein expressly reserved to himself an estate in said shares of stock, for and during his natural life. There were, in the deed, certain contingent limitations over of this stock, not material to any question raised by the record. On the 26th day of June 1886, the said Thomas C. Thompson and his said wife, Julia N., and said T. L. Hudgins entered into a written agreement, under their hands and seals, by which, in consideration of certain premises, hereafter to be specially noticed, it was stipulated that "the undersigned, Thomas C. Thompson and Julia N. Thompson, do now contract, promise, and agree to and with the said Tarlton L. Hudgins that, after his death, they will pay to his personal representatives the full amount of such surplus fund as shall have been earned at the time of his death by said two hundred shares of said capital stock; and such surplus fund so earned, as aforesaid, shall be paid to said personal representative, out of the five semiannual dividends that shall, after the death of said Tarlton L. Hudgins, be first paid to said Thomas C. Thompson and Julia N. Thompson on said two hundred shares of said capital stock, one-fifth of such surplus fund so earned, as aforesaid, to be paid out of each of such dividends; and each of such payments shall be made by First National Bank of Birmingham directly to said personal representative, and the receipt of said personal representative to said bank, for such payments, shall discharge and exonerate said bank for the amount of such dividends so paid to said personal representative." on the 24th day of December, 1888, the said Thomas C. Thompson and wife executed to said Lucy P. Hudgins, as executrix of said T. L. Hudgins (the latter having died in June preceding), a mortgage on lands, to secure the promissory notes therein described, as will be presently shown, reciting the said deed of gift of the shares of stock, aforesaid, and the said subsequent agreement of June 26, 1886, and reciting, further, as follows: "And whereas, the said T. L. Hudgins departed this life on or about the 28th day of June, 1888, and at the time of his death the said 'surplus fund' that had been theretofore set apart from time to time out of the net profits and earnings of said bank amounted to the sum of one hundred and twenty-five thousand dollars; and whereas, of said surplus fund of said bank, so earned and set apart, as aforesaid, the said two hundred shares of said capital stock, at the time of the death of said T. L. Hudgins, had earned the sum of ten thousand dollars; and whereas, on the 30th day of June, 1888, and after the death of said T. L. Hudgins, the said bank declared a dividend of six per cent. on its capital stock, payable to its stockholders on and after the first day of July, 1888; and whereas, the undersigned, Thomas C. Thompson and Julia N. Thompson, claim that the said Julia N. Thompson is entitled to such dividend, but Lucy P. Hudgins, the executrix of the last will and testament of said T. L. Hudgins, deceased, claims that she, as such executrix, is entitled to such dividend; and whereas, the undersigned, Thomas C. Thompson and Julia N. Thompson, claim that there is no legal or equitable obligation resting upon them to pay to said executrix the said sum of ten thousand dollars, the amount of the said surplus fund, earned, as aforesaid, by the said two hundred shares of stock of said bank during the lifetime of the said Hudgins, but the said Lucy P. Hudgins, as executrix, as aforesaid, claims that the said Thomas C. Thompson and Julia N. Thompson are both bound, legally and equitably, to pay to her as such executrix the said sum of ten thousand dollars; and whereas, in full settlement and compromise of said matters in controversy and dispute between the said Thomas C. Thompson and Julia N. Thompson and the said Lucy P. Hudgins, as such executrix, the said Thomas C. Thompson and Julia N. Thompson do now hereby surrender to Lucy P. Hudgins, as such executrix, all claim they may or can have to said dividend, and, in further consideration of such final settlement and compromise, the said Thomas C. Thompson and Julia N. Thompson have executed their eight joint promissory notes, payable to the order of the said Lucy P. Hudgins, as such executrix, all of even date herewith, each for the sum of eleven hundred dollars, and due and payable as follows, to wit: One on the 20th day of January, 1889; one on the 20th day of July, 1889; one on the 20th day of January, 1890; one on the 20th day of July, 1890; one on the 20th day of January, 1891; one on the 20th day of July, 1891; one on the 20th day of January, 1892; one on the 20th day of July, 1892,-and the said Thomas C. Thompson and Julia N. Thompson have agreed to execute a mortgage upon the real estate hereinafter described to secure the said promissory notes, and the said Lucy P. Hudgins, as such executrix, has agreed to transfer upon the books of said bank the said two hundred shares of said stock to said Julia N. Thompson: Now, therefore," etc.; proceeding to a conveyance of the land to secure said notes, with power of sale, etc. On the 20th day of March, 1892, the said Thompson and wife executed another mortgage, on the same lands, to said Lucy P., as such executrix, reciting the previous mortgage, and that six of the said eight promissory notes still remained unpaid, the first five of which were past due; and reciting, further, as follows: "And whereas, the said Lucy P. Hudgins, executrix, as aforesaid, has agreed with the said Thomas C. Thompson and Julia N. Thompson to extend the time for the payment of said indebtedness, now past due, including the interest accrued thereon, to the date of this mortgage, as hereinafter set out, said indebtedness to be evidenced by five promissory notes, each for the sum of $1,188, each bearing date January 20, 1892, each bearing interest from the date thereof, and payable to the grantee herein, respectively, 12, 18, 24, 30, and 36 months from the date thereof, at the First National Bank of Birmingham, Ala., the consideration for each of said notes being the same consideration as is recited in the mortgage hereinabove referred to as securing the eight original promissory notes, and, in addition thereto, the agreement of the grantee herein to extend the time for the payment of said past due indebtedness, as hereinabove recited, and the accrued interest on each of said five original promissory notes to the date of this mortgage; and whereas, the eighth original promissory note, made and executed by said Thomas C. Thompson and Julia N. Thompson, bearing date December 24, 1888, for the sum of eleven hundred dollars, due and payable on the 20th day of July, 1892, to the order of Lucy P. Hudgins, as executrix, as aforesaid, at the First National Bank of Birmingham, Ala., is not yet due, said note having been given by the said Thomas C. Thompson and Julia N. Thompson for the consideration recited in said mortgage, given to secure the same, and hereinabove referred to: Now, therefore," etc.; proceeding to a conveyance of the land to secure the five notes, with power of sale, etc. Briefly stated, the bill avers, substantially that said agreement of June 26, 1886, was entered into by complainants upon the representation of said T. L. Hudgins to them that the facts and conclusions therein recited, and which will hereafter be stated, were true, and that relying upon the said representation, and being in ignorance of their rights in the premises, they entered into the agreement. And they aver that there was no consideration whatever for said agreement;...