Thompson v. Maddux

• Decision Date: 05 February 1898
• Citation: 117 Ala. 468,23 So. 157
• Parties: THOMPSON ET AL. v. MADDUX. JORDAN ET AL. v. THOMPSON.
• Court: Alabama Supreme Court

23 So. 157

117 Ala. 468

THOMPSON ET AL. v. MADDUX.

JORDAN ET AL. v. THOMPSON.

Supreme Court of Alabama

February 5, 1898

Appeal from chancery court, Bullock county; Jere N. Williams Chancellor.

Suit in equity by T. J. Maddux against W. I. R. Thompson, Alley Jordan, and Watt Jordan to enjoin a foreclosure of a mortgage by defendant Thompson. Defendants Jordan & Sons filed an answer, which they prayed should be taken as a cross bill. From a decree in favor of plaintiff against defendant Thompson, said defendant appeals. From a decree that the cross bill of Jordan & Sons be dismissed, Jordan & Sons bring a cross appeal. Affirmed.

On the 18th of March, 1893, T. J. Maddux, filed his original bill in the chancery court of Bullock county against W. I. R Thompson, Alley Jordan and Watt Jordan. The object of the bill was to enjoin the foreclosure, under the power therein of a mortgage made by said Thomas J. Maddux to Jordan & Sons a partnership composed of Alley Jordan and Watt Jordan, to secure a note of $3,000; which note and mortgage had been transferred by said Jordan & Sons to said W. I. R. Thompson surviving partner of Robinson & Thompson. The complainant's bill alleged that complainant had been trading with Jordan & Sons, merchants, for a number of years, giving notes and mortgage to secure balances carried over and new advances to be made; that usurious interest was charged him on said balances carried over, viz. 10 per cent. per annum. That about the middle of January, 1892, complainant executed his promissory note for $3,000, which covered the amount of these balances, and the sum estimated to be required by him to carry on his farming operations for the year 1892, the new advance to be about $1,000. It is further averred in the bill, that said $3,000 note was assigned or deposited as collateral security with Robinson & Thompson, cotton factors and warehousemen, to secure a debt then owed by Jordan & Sons to them, or to indemnify said Robinson & Thompson for holding a large amount of cotton in their hands belonging to Jordan & Sons. That a few days after this, said Jordan & Sons failed in business and made an assignment of all their property for the benefit of their creditors, and thus were unable to advance to complainant as they had agreed to do, to the damage of complainant. The bill then charges, upon information, that the debt from Jordan & Sons to Robinson & Thompson, or Thompson, surviving partner, was for money advanced at usurious interest by Robinson & Thompson to Jordan & Sons upon cotton actually in store, owned by Jordan & Sons, or that it was a debt created by Jordan & Sons with said Robinson & Thompson in reference to the purchase of cotton futures. In either event, it was charged that Thompson was a mala fide holder of said note and mortgage. It is averred in the bill that Thompson was proceeding to sell under the power in the mortgage unless restrained, and complainant offered to pay what was really due.

The prayer of the bill is for an injunction against the foreclosure of the mortgage by Thompson, and all other attempts to get possession of the mortgaged property until all matters in controversy between them should be settled, and asks for an accounting, etc.

The defendant, W. I. R. Thompson, filed his answer to the complainant's bill, and therein avers that he had no knowledge of the character of the transactions between plaintiff and said Jordan & Sons, nor whether said transactions were or were not affected with usury; that he had no notice or intimation of any usury in said $3,000 note, at or before the time it was transferred and assigned, and came into the possession of this defendant, and does not now admit or deny that there was usury in the dealings with each other; that at and before the time of the transfer to him, or to Robinson & Thompson, of said $3,000 note and mortgage he had no knowledge, information or notice that said note was to cover future advances to be made by said Jordan & Sons to plaintiff; or, that there were any conditions or qualifications attaching to said indebtedness; but, on the contrary, that this respondent received the same in good faith, believing that said note was in truth what it represented on its face to be, a real bona fide indebtedness of $3,000, unconditionally due and payable as therein shown, secured by the accompanying mortgage, which was at the same time transferred by indorsement to respondent as a security for said note.

This respondent further avers that shortly after the note and mortgage had been made to Jordan & Sons, they were assigned by the latter to this respondent by indorsement, as collateral security to secure an indebtedness from said Jordan & Sons to this respondent's firm, as had been previously agreed to be done between said parties, and for future accommodations to be extended to said Jordan & Sons by this respondent's firm; and admits that he is the holder and owner of said note and mortgage. The respondent further denies that he had any notice of any agreement by Jordan &amp Sons to make any advances to plaintiff, further than is shown in the face of said mortgage, and further denies that the debt from Jordan & Sons to respondent, on Robinson & Thompson, was for money advanced at usurious interest, or for the purchase of cotton futures bought and sold in the state of Alabama, or that said note and mortgage were illegal for any cause, and denies that he is a mala fide holder thereof. The respondent further sets out in his answer, his defense, which is as follows: That for several years prior to the transfer by Jordan & Sons of this note and mortgage to them, Robinson & Thompson had been engaged as warehousemen and cotton factors in the city of Montgomery; that during that time Jordan & Sons were cotton planters and merchants engaged in the general merchandise business at Midway, Bullock county, Ala., and the latter had become largely indebted to said Robinson & Thompson for money advanced and paid out for them by said Robinson & Thompson; that Jordan & Sons shipped annually to Robinson & Thompson a large number of bales of cotton for storage and sale on commission, and from time to time drew heavily against said cotton; that during the time of these dealings said Jordan & Sons at various times requested Robinson & Thompson to purchase and sell for them in the city of New York cotton contracts, known as "cotton futures" and to remit for them sums of money as margins; that these orders of Jordan & Sons were transmitted by Robinson & Thompson to cotton brokers in the city of New York, and money remitted there, as requested by Jordan & Sons, and required in the city of New York under the rules of the New York cotton exchange, for and on account of Jordan & Sons; that said Robinson & Thompson, nor either member of said firm, had no interest whatever in said dealings in cotton futures, nor were they or either of them in any way interested in the result thereof; that they regarded Jordan & Sons good for their account, or that they would make their account secure, and that they, therefore, executed their orders for the remittance of margins just as they honored their orders for money, generally; that the account of Jordan & Sons for future cotton dealings was kept at their request in the name of Jordan & Bro., and so rendered to them; that in all the dealings between Robinson & Thompson, or their successor, Thompson, with said Jordan & Sons, the latter were never charged more than 8 per cent. per annum for money loaned or advanced, 50 cents per bale for selling cotton, and the usual and customary rate for storage. As a part of his answer, respondent, Thompson, attaches a full, complete and correct account and statement from the beginning to the close of all the transactions and dealings between the said Robinson & Thompson or Thompson as their successor, and the said Jordan & Sons, as Exhibit A, and verified by the affidavit of said Thompson. This respondent avers that he is the owner of said note and mortgage, transferred to his house or firm under the following circumstances and conditions; that said $3,000 note and mortgage were indorsed by Jordan & Sons and transferred to Robinson & Thompson in January, 1892, in compliance with an arrangement previously made by and between said parties by which Robinson & Thompson were to make advances to and pay the orders of Jordan & Sons, and that Jordan & Sons were to keep their account secured by the deposit of collateral from time to time as requested by Robinson & Thompson; that at the time of...