Rapier v. Gulf City Paper Co. , 64 Ala. 330 ( 1879 )

BRICEELL, C. J.

The rule of pleading in equity, as at law, can not be doubted, that the plaintiff must show an actual existing interest in the subject-matter of the suit, giving him the right to sue concerning it. The rule is stated with precision by Chilton, J., in McKinley v. Irvine, 13 Ala. 693 : “ The complainant must show, by his allegations in the bill, that he is entitled to the relief which he seeks; and if he fails to set forth every essential fact necessary to make out his title to maintain the bill, the defect will be fatal.” A bill which does not show that the complainant has an interest in the subject-matter of the suit, and a proper title to institute the particular suit concerning it, is subject to demurrer. — 1 Dan. Ch. Pr. 314.

A material purpose of the present bill is the redemption, from a mortgage to Mrs. Roper, of the real estate described, and averred to be the individual property of John L. Rapier, which has been and is used and occupied as the place of business, and on which the materials, presses and fixtures, of the printing establishment, known as the “ Mobile Register,” are situate. “No person can come into a court of equity, for a redemption of a mortgage, but he who is entitled to the legal estate of the mortgagor, or claims a subsisting interest under him.” — 2 Jones on Mort. § 1055; Grant v. Duane, 9 Johns. 591. It is as assignee that the complainant, now the appellee, claims to be let in to redeem ; and the instrument under which the right is deduced, is exhibited; and its terms, the circumstances surrounding the parties when it was executed, and all existing facts which may be looked to in construing them, it must be assumed, are fully stated, so far as reliance upon them is intended. Pleadings are construed most strongly against the pleader, and the only intendment made is, that he has stated the facts as favorably for himself as they will allow.

The instrument does not, in express terms, transfer any right or interest in or to the real estate, nor is it expressly referred to. All its words are of the transfer of personal property only — “ the property known and described as the Mobile Daily and Weekly Éegister newspaper, and all the property and materials in and belonging to the printing establishment thereof, and of the job-printing and book-binding establishment, and of the offices connected therewith, with the rights, contracts and privileges attaching thereto, and including and embracing the property mortgaged,” &c. The mortgages referred to were executed by Forsyth, and Rapier is not a party to them, nor is this real estate embraced in them. The theory of the bill is, not that the real estate was transferred, but that it had been appropriated to the use of the business of the “ Mobile Daily and Weekly Register,” and the use was one of the rights, privileges and contracts transferred. It is not averred that, by contract, Rapier had transferred the use to the firm of which he was a member; nor is it averred that there was any lease, for any definite term, to the firm. The building had been adapted to the use of this establishment, and when the establishment was transferred, the use passed as an incident to the transfer, is the idea which seems to underlie the proposition asserted by the appellee. If such be the result, it can scarcely be supposed to have been within the contemplation of Rapier,- when he devoted his individual property to the uses of a business conducted by a partnership of which he was a member. Promoting the interests of the partnership, was a promotion of his own interest; and so long as he could derive profit, he may have intended to appropriate his individual property to its uses. The limit of the term of the appropriation is, of necessity, no other being expressed, the existence of the partnership, and the application to its uses of the thing appropriated. "When the partnership ceases, the right to the use ceases with it; and there is no right, during the continuance of the partnership, to apply the thing to any other than to partnership uses. A lease to a partnership, during its existence, is terminated by its dissolution, and the lessor may reenter. “ The house,” said Lord Ellenborough, “ was to be used and occupied by the partners, during the partnership only, and when that was determined, there was an end of the tenancy.”,— Waitheman v. Miles, 1 Stark. 181. And where one partner let to the partnership a house for the carrying on of the business of the firm, on the dissolution of the partnership the lease terminated.— Colnaghi v. Black, 8 Carr. & Payne, 464. The lease could not be extended beyond the term necessary for the uses which entered into the consideration, and was the moving cause for making them,

The intention of the parties, when they keep within the pale of the law', guides and determines the construction of their contracts, express or implied, and fixes the character of their conduct. The devotion by a partner of his individual property to the uses of the partnership, may be intended to pass from him the entire title, or it may be intended as an appropriation of the mere usufruct— the right to the profit, utility and advantage, it may yield tlie partnership during its continuance, — the title remaining in him. The usufruct may be appropriated for a particular term, or it may be intended to continue only during the existence of the partnership. If it is not expressly transferred for a particular term — if it is in the nature of a contribution to the partnership — it stands upon the same ground of a contribution of the partner’s skill and industry, continuing only during the continuance of the partnership. Admitting the bill avers an appropriation of this property to the uses of the partnership, construing the averment according to its natural import, the use was for the advantage of the partnership, — continued and terminated with it, and is not a right, contract, or privilege, incident or attaching to the personal property transferred to the appellee. The terms of the instrument of assignment do not admit of, but are inconsistent with, a construction that it was intended to pass an interest in the real estate, or any other than the personal property, the materials, presses, and fixtures which made up the printing and publishing establishment, which were subject to execution, and which being sold under execution, the sale woqld be absolute, indefeasible, leaving to the defendants in execution no legal right of redemption. Such are its express terms; and they exclude any supposition, or construction, that it was intended to pass any interest in real estate, which, if vendible under execution, would be subject for two years to a legal right of redemption, by the defendant in execution, or any of his judgment creditors.

A judgment creditor of a mortgagor may be let in to redeem; but it is enough to say, if the appellee stands in that relation, the present bill is not so framed, and has not the necessary allegations to entitle it to that relief, in reference to the real estate. The whole right, as asserted by the bill, is deduced from the assignment.

The fifth ground of demurrer was properly overruled. It is founded in a misconception of the statute (Code of 1876, § 2126). A general assignment by a debtor is not prohibited— it is not declared void. The only effect of the statute is in its operation, depriving it of the character of a particular security for a particular creditor, and converting it into a general security for the equal benefit of all creditors who come in and claim under it. As between the parties, it operates according to its terms. Creditors not named in it, or those who have not assented to it, alone have the right to claim that it shall enure to the benefit o.f all the creditors. Holt v. Bancroft, 30 Ala. 193; Price v. Mazange, 31 Ala. 701, The assignee may enforce any and every right which springs out of it, against the assignor and all claiming under him. He will, however, stand, at the election of creditors, a trustee for their benefit, bound to appropriate whatever he may realize to the payment of all the just debts of the assignor. The instruments on which the statute operates, are transfers for the security of one or more creditors, to the exclusion of, or in preference to the remaining creditors; and an indispensable element is, that substantially all the property of the grantor, subject to the payment of debts, is thereby conveyed. Warren v. Lee, 32 Ala. 440; Stetson v. Miller, 36 Ala. 642; Longmire v. Goode, 38 Ala. 577. Whether this instrument covers substantially all the property of the makers, depends on facts not shown in the present bill, and the existence of which we are not authorized to presume. Whether it can, under an]'- state of facts, be declared a general assignment, is not a question Bapier can raise. The creditors who are excluded, alone have rights or interests affected by it, if that is its character,, and they only can ask the interference of the court so to declare it.

When personal property is seized under legal process, and a third person interposes a claim to it, giving bond for its forthcoming, the property is regarded as in the custody of the law, until the claim suit is determined. — McLemore v. Benbow, 19 Ala. 76; Kemp v. Buckey, 7 Ala. 138; Rives v. Welborn, 6 Ala. 45. There can scarcely arise a necessity for the appointment of a receiver by the Court of Chancery, at the instance of the party issuing the process under which the property is seized. ’ The bond the claimant is required to execute, is, in penalty, double the value of the property. On the trial, the value of the property is ascertained by the verdict of the jury, if the claimant is unsuccessful; and execution may issue against all the obligors, for the value thus ascertained, or the amount of the plaintiff’s judgment, if it does not equal the value. The insufficiency of the bond, in penalty, or in surety, may be at any time corrected, on motion to the court in which the claim suit is pending. It is difficult, therefore, to conceive of the existence of a necessity for the appointment of a receiver, withdrawing the property from th® custody of a court of competent jurisdiction, and transmitting it to another court.

Not only is this property shown to have been in the custody of another court of competent jurisdiction, drawn there by the levy of the execution of the appellee; but there is no averment that any right of the appellee, as a judgment creditor, is imperilled. The solvency of the claimants, or that of their sureties, is not disputed, nor is the sufficiency of the bond which they have given. The claimants were prior mortgagees. The amount of the debt secured by the mortgage is, it appears from the bill, controverted, but not the fact that there is an unpaid balance of it. The lien of the execution, and the assignment to the appellee, are subsequent in point of time, and subordinate to the mortgage. The assignment is expressly made in subordination to it. Having given the bond for the forthcoming of the property in the claim suit, the mortgagees have, in legal contemplation, the possession, which should not be disturbed by the appointment of a receiver. — High on Receivers, §§ 679-80. There is nothing in the nature of this property, nor in the supposed necessity of making sale of it as a “ going concern ” (as it is expressed in the bill), which can withdraw the case from the general principle, that a mortgagee in possession will not be dispossessed by the appointment of a receiver. The sixth ground of demurrer, addressed to so much of the bill as seeks the appointment of a receiver, was well taken.

The object of the bill, when separated from a redemption of the real estate, is the adjustment of the liens on the personal property, and a sale of it as an entirety, to satisfy them. The priority of the mortgage to Brewer and others, to the claim of the appellee, whether the appellee stands in the relation of an execution creditor, or of a subsequent mortgagee, or of a purchaser from the mortgagors, is admitted. That a court of law cannot make the adjustment and order a sale, transferring the several liens and claims from the property to the proceeds of sale, determining the respective rights and liabilities of the parties, is manifest. Whether the appellee can, in consequence of the transactions with the mortgagors, retain its relation as a judgment creditor, or whether it must stand as a purchaser, or a subsequent mortgagee, is not, in the present aspect of the case, material to determine. Its rights as against Rapier (and it is the demurrer interposed by him, to which we are confined on this appeal), are not materially variant, whether viewed as-a judgment creditor, a subsequent mortgagee, or a purchaser. The argument in support of the demurrer is, however, that the complainant has averred that it stands as a purchaser, while its real relation is that of a mortgagee; the transaction with the mortgagors, in the light of the facts stated, though in form a sale, being, in the contemplation of a court of equity, a mortgage. The appellee does claim as a purchaser; but the facts are all stated in the bill, and if his real relation is that of a mortgagee, he is mistaken only in the conclusion he has drawn from the facts. The mistake cannot vary the relief to which he is entitled, and does not render the bill demurrable. The seventh, eighth, and ninth grounds of demurrer were not well taken.

The plea was properly overruled. The appellee could not, in the former suit, have obtained any relief, without the exhibition of a cross-bill. If that had been exhibited, the complainants could have dismissed the original bill; the cross-bill would have fallen with the dismissal, and the appellee be driven to the institution of am original suit. The former suit is by different complainants, founded on different rights, antagonistic to that of the appellee; was in its nature incapable of affording the appellee the full relief to which it may be entitled, and could not operate as a bar to the present bill.

For the errors noticed, the decree must be reversed, and the cause remanded.