Wood v. Holly Mfg. Co.

• Decision Date: 07 November 1893
• Citation: 13 So. 948,100 Ala. 326
• Court: Alabama Supreme Court
• Parties: WOOD ET AL. v. HOLLY MANUF'G CO.

13 So. 948

100 Ala. 326

WOOD ET AL. v. HOLLY MANUF'G CO.

Supreme Court of Alabama

November 7, 1893

Appeal from chancery court, Mobile county; W. H. Tayloe and Thomas W. Coleman, Chancellors.

Bill by the Holly Manufacturing Company against Richard D. Wood &amp Co., the Bienville Water Supply Company, and others, for an accounting, and the enforcement of a purchase-money lien on certain machinery. From a decree for complainant, defendants appeal. Affirmed.

On the 13th of December, 1886, a contract was entered into between the Bienville Water Supply Company, hereafter referred to as the Water Company, and Bullock & Co., by which the latter undertook to construct for the former a complete system of waterworks, including the furnishing of engines and pumps the former contracting to pay Bullock & Co., for the work to be done, in bonds and shares of its stock. To procure a site for the waterworks, Bullock & Co. purchased a tract of land and on the 13th of December, 1886, received from their grantor a conveyance thereof to themselves, and immediately took possession, and erected thereon an engine and pump house, in which they afterwards placed the engines and pumps for said works. In order to carry out its contract with Bullock & Co., and enable them to perform their contract in the building and completion of said waterworks, the Water Company, on the 1st of January, 1887, made and delivered to the Farmers' Loan & Trust Company of New York a mortgage on all its real and personal property then owned, or which might thereafter be acquired, in trust to secure bonds to be issued by said Water Company, for the purposes specified, in the sum of $750,000, and did also, thereupon, duly execute its bonds, in the aggregate, amounting to said sum, and deliver the same, together with certificates for the full amount of its capital stock, being the sum of $500,000 par value, to said Bullock & Co., to proceed with and complete said waterworks, to be in full payment to them therefor, when completed. Said mortgage was filed for record and duly recorded in the office of the probate court of Mobile county on the 24th day of February, 1887, and is still in force. The loan and trust company accepted the trust. On the 24th of February, 1887, Bullock & Co., for the purpose of complying with their contract with the Water Company, and while yet the owners of the legal title of said tract of land, purchased by them on the 13th of December, 1886, as a site for said waterworks, entered into an agreement with complainant, the Holly Manufacturing Company, by which it agreed to manufacture and set up, in working order, in said engine and pump house, two pump engines and connections, the same to be paid for by Bullock & Co. in installments specified in the contract. It was provided in said contract that "when said engines and connections are completed and ready for service, and on notice thereof to the party of the first part [Bullock & Co.] to that effect, the same shall be subjected to a fair trial of their capacity and efficiency, for not exceeding 24 hours, and on the successful testing thereof the liability of the party of the second part [complainant] shall cease and determine; but it is expressly understood and agreed that party of the second part shall have a lien on all of said engines and connections, and the said party of the second part may remain in and have full possession thereof until the whole amount of the purchase price of said engines and connections shall have been fully paid to the party of the second part or its assigns." Complainant constructed and erected such engines and pumps in said house prepared for their reception, in full and satisfactory compliance with their contract, so far as appears; the first engine, with its connections, having been so erected prior to 21st March 1888. It had commenced to erect the second prior to that date, was engaged in erecting it at that time, and finished its erection soon thereafter,-by about the middle of April, 1888. Each engine, with the pump and connections, is placed, as is averred and shown, upon a foundation prepared for it, and fastened thereto by bolts with taps, and can be removed therefrom, and from the building, without injury to the foundation, or to the pumping engine house. On the 21st March, 1888, Bullock & Co. executed to the Water Company a quitclaim deed to the land on which they had erected said structure, and which was conveyed to them on the 13th of December, 1886.

Subsequent to the making of said contract between complainant and Bullock & Co. for the construction of said engines, pumps and connections, and prior to the 1st of January, 1888, the said Bullock & Co., in order to raise the money to carry on the construction of said waterwords, and several other like water company systems which they were then engaged in constructing, and to pay, among other things, for said engines and pumps so contracted for with complainant, made an arrangement with defendants Hooper & Co. by which the latter were to loan and advance, or procure to be loaned and advanced, to them, the said Bullock & Co., large sums of money, upon the pledge and collateral security of said bonds and stocks so issued by said Water Company, and other like bonds and stock issued by other water companies; and in accordance with said arrangement said Bullock & Co. did pledge and deliver to said Hooper & Co. the said bonds and stocks of the Water Company, and other water companies, and the said Hooper & Co. did loan or advance, or procured it to be done, from time to time, to said Bullock & Co., large sums of money, aggregating over $1,000,000; and afterwards, learning that the money they had advanced upon the faith of said bonds and stocks was not sufficient to complete the same, they declined to make any further advances on account thereof. Before the refusal of said Hooper & Co. to make such further advances, the defendants R. D. Wood & Co. had furnished to said Bullock & Co. large quantities of iron pipe and other materials to be used in the construction of said several waterworks, and were under contract to deliver certain other large amounts of such iron pipe and materials to be used in the completion of said waterworks, for and on account of which said Bullock and Co. were indebted to said Wood & Co. in a large sum of money; and in consideration and on account thereof, and in view of the fact that said Hooper & Co. had declined to make such further advances, and for the purpose of completing the construction of said waterworks in accordance with the contracts of said Bullock & Co. with the waterworks companies, respectively, and for the purpose of obtaining payment for the money and pipe which they had already furnished and might thereafter furnish, the said Wood & Co. and Hooper & Co., on the 26th day of October, 1887, entered into an agreement in writing with Bullock & Co. and each other, found attached to the bill as Exhibit B, and known and called in the proceedings as the "Tripartite Agreement." In and by the second clause of said agreement, it was provided that Wood & Co. should from time to time present to Hooper & Co. the detailed applications for money needed for the purposes aforesaid by said Bullock & Co. to pay for labor and materials, to an aggregate amount not to exceed $200,000, in the proportions hereinbefore (hereinafter) named, at Chester, Greencastle, and Mobile, to which application should be attached the four-months note of Bullock & Co., for the amount therein specified, with discount added, whereupon the said Hooper & Co. should pay the said Wood & Co. the amounts so called for, in all not exceeding said sum of $200,000; and the said Wood & Co. were then, immediately, to give their checks for the same to said Bullock & Co., who were to disburse the same for the purposes specified, and give said Wood & Co. the proper certification and vouchers therefor. The third clause in said contract provided that, in consideration of said advances of $200,000 to Bullock & Co., and of one dollar to them paid, the said Wood & Co. agreed to procure the completion of said waterworks at Chester, Mobile, and Greencastle according to the specifications, and clear of all liens ahead of the securities held by William G. Hooper & Co., with the utmost diligence, and without delay. According to the agreement, also, it was provided that, of the $200,000 to be advanced by Wood & Co., $60,000 was to be applied to the Mobile works. It ought to be stated in this connection, for the better understanding of the case, not as a part of the pleadings, but as uncontradicted proof, in connection with the said tripartite agreement, of the considerations for its execution, and the obligation of the parties under it, that there was another agreement between Bullock & Co. and Wood & Co. on the 2d day of October, 1887, as Wood himself testifies, furnishing a copy of it, in answer to the cross interrogatories propounded to him by complainant, providing that "whereas, Walter Wood has undertaken to procure the completion of the waterworks of Chester, Mobile, and Greencastle, and to secure such sums of money necessary for the completion thereof as may be required to be expended upon them: Now, this agreement witnesseth that, in consideration of the said undertaking of Walter Wood, S. R. Bullock & Co. do agree to give to the said Walter Wood the controlling interest in the construction of the New Chester Waterworks, the Bienville Water Supply Company, and the Greencastle Water Company, and to divide in equal portions (half and half) with the said Walter Wood such portion of the bonds of these companies as may revert to S. R. Bullock & Co. under the contract with William G. Hooper & Co., after the moneys for which such bonds are specifically...