Zimmern v. People's Bank of Mobile
| Citation | 81 So. 811,203 Ala. 21 |
| Decision Date | 01 May 1919 |
| Docket Number | 1 Div. 69 |
| Parties | ZIMMERN v. PEOPLE'S BANK OF MOBILE et al. |
| Court | Supreme Court of Alabama |
Appeal from Circuit Court in Equity, Mobile County; Norville R Leigh, Jr., Judge.
Bill by Samuel Zimmern against the People's Bank of Mobile and others. From a judgment denying relief on the amended original bill and awarding relief to the cross-complainants complainant appeals. Affirmed.
Harry T. Smith & Caffey, of Mobile, for appellant.
Stevens McCorvey & McLeod, of Mobile, for appellees.
The original bill, filed December 8, 1917, by appellant against appellees, sought the establishment and enforcement of an alleged lien, resulting from a recorded judgment. Subsequently, the bill was amended, to assert that different character, if not right, of relief to be later stated. The circumstances out of which the contest arises will be recited with due regard to their chronological order.
On January 3, 1914, the Southern Dredging Company was indebted to the McPhillips Grocery Company and to the American Supply Company in the respective sums of $4,126.23, and $3,613.20, to secure which the debtor executed a trust deed to James McPhillips, trustee, describing, with other property, the dredge Herndon and two scows, numbered 1 and 2. The debts so secured were to be paid in periodically maturing installments, the last in 12 months after date. This instrument was duly recorded in Mobile county on January 8, 1914. During the year 1914, the notes, thus secured, to the American Supply Company, were transferred to the People's Bank. Four of the notes secured by the trust deed--those maturing in 9 and 12 months, respectively--are unpaid. On October 25, 1916, the dredge was sold by an admiralty court at New Orleans to satisfy charges other than any here involved; and was bought, indirectly, by the People's Bank at the price of $5,000. The effect of this sale was to vest in the People's Bank (for all present purposes) the unincumbered title to the dredge. On April 5, 1917, the appellant (complainant) was accorded a judgment in the sum of $2,818.26 and $6.35 costs, against the Southern Dredging Company, the corporation that had, in 1914, executed the deed of trust before mentioned. This judgment was registered in the probate office of Mobile county on April 19, 1917, thereby subjecting the property of the judgment debtor in Mobile county to the lien of the statute. Code, §§ 4156, 4157. In view of the previous (in 1914) subjection of these two scows to the trust deed--the law day of which had passed--the subject of this judgment creditor's lien was, so far as these scows were concerned, the judgment debtor's equity of redemption therein. On May 31, 1917, the People's Bank made an agreement of sale of the dredge and the two scows in question to Ollinger and Perry, for $18,000, reserving the title until the purchase price, through deferred payments, was paid and warranting that the property was "free from all liens and claims of every kind and character."
Ollinger and Perry expended, up to December, 1917, $3,461.84 in floating and repairing these scows. No foreclosure of the trust deed, under the powers to that end, appears to have been even undertaken until after the appellant's bill in this cause was filed.
Within the limit of the matters on which the submission of the cause was had, it is impossible to affirm, as upon the evidence in what right the People's Bank took possession of or assumed control over the scows at or before the date of the agreement to sell to Ollinger and Perry.
It appears with fair certainty that the balance due on the debts secured by the deed of trust to McPhillips, trustee, is upwards of $5,000. The theory of the bill, after the amendment to be presently stated, did not seek remuneration of the complainant because of the destruction of complainant's lien upon the equity of redemption.
There is no evidence of the value of the scows at the time of the agreement of sale by the People's Bank to Ollinger and Perry, or at any other time, though the record does disclose that Ollinger and Perry have, since the agreement, expended upon these scows the sum previously stated.
Through amendment effected in April, 1918, the prayer of the bill was made to read as follows:
"And your orator does further pray that upon the hearing of this cause this honorable court will decree in favor of your orator's said judgment lien upon the said dredge 'Thos. H. Herndon' and upon the said scows, and that the People's Bank and the said James McPhillips may be held to be responsible to your orator for the proceeds realized from the sale of said dredge, and also from the sale of said scows, and that they may be held to have received said proceeds as trustees for the benefit of your orator to the extent of his said lien, and that a decree may be granted against them in favor of your orator to said extent, and that your orator may have such other and further relief as he may be entitled to receive the premises considered, as in duty bound he will ever pray."
This amendment was regarded as evincing the complainant's purpose, "election" to affirm the assertedly wrongful sale of the dredge and scows, and to invoke relief upon the theory that the People's Bank became a trustee in invitum of the proceeds of their sale for the benefit of the complainant "to the extent of his lien," as a judgment creditor who had registered his judgment.
The defendants answered the bill and constituted their answer a cross-bill, wherein a foreclosure of the trust deed or mortgage was prayed.
The court denied relief on the amended original bill, and awarded relief to the cross-complainants consistent with the prayer of their cross-bill.
The principles to which the amended prayer refers the bill may be found stated in 3 Story's Equity Jurisprudence (14th Ed.) §§ 1663-1666, and which have been illustrated in readily accessible decisions of this court, among which may be noted Dickinson v. Bank, 98 Ala. 546, 14 So. 550, and Bellinger v. Lehman, 103 Ala. 385, 15 So. 600. The doctrine of Story's text is that the law will imply a trust, and a trustee in invitum, "where a party has received money which he cannot conscientiously withhold from another party"; the text proceeding with the approval of the expression in some of the cases "that the receiving of money which consistently with conscience cannot be retained is in equity sufficient to raise a trust in favor of the party for whom or on whose account it was received"; and concluding that the true question, in such cases, is "not whether money has been received by a party of which he could not have compelled the payment, but whether he can now, with a safe conscience ex aequo et bono retain it." The text in Story, § 1666, describes the effect of the application of the same principle in this form:
"*** Wherever the property of...
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