Hooper v. Armstrong , 69 Ala. 343 ( 1881 )

BRICKELL, C. J.

The contract between Hooper and Bogia stipulates that the notes given by Hooper payable to the appellee, should “be bound for the performance on the part of the said Bogia of his part of the agreement.” There was in the contract but two executory promises or covenants on the part of Bogia; the one is, that he would pay certain costs in a reasonable time, and this is accompanied with a stipulation that if he failed, Hooper, on paying them, should be entitled to a credit on the notes for the amount paid. The other stipulation is,that Bogia “should execute and deliver to said Hooper a full deed, with warranty, to said land, conveying and warranting full legal and equitable title, free from all incumbrances, and he agrees further to furnish said Hooper, within a reasonable time, with a complete chain of title to said land deeded, so as to show purchasers the clear right of said Bogia to make such conveyance.” It is for the performance of this promise, by the terms of the contract executed cotemporaneously with the execution of the notes, the notes are to be bound. Whether the "damages resulting from the non-performance of the promise, may be regarded as liquidated or unliquidated, is not material, the parties having by the contract, in effect, stipulated that" they should be set off against, recouped, or deducted from the-notes. The stipulation is binding on the appellee, to whom the notes were made payable at the request of Bogia, and who takes them as a mere volunteer.

The breach of the stipulation for which compensation is-claimed by the cross-bill, is the failure of Bogia to furnish the chain of title, and it is averred that the failure “ has damaged the defendant up to this time more than two thousand dollars,, and this defendant’s damage from that failure is continuous.” There'’is no averment that there was any defect in the title of Bogia to the premises, nor that he has failed to execute a conveyance with the proper covenants of warranty. A bill in equity, whether it be an original bill or a cross-bill,’ must state-with clearness and certainty the facts upon which the right to relief is founded; for no facts are properly in issue unless stated, and no evidence can be received, and no relief granted,, upon facts not stated. A cross-bill, claiming a set-off, must disclose a state of facts showing that the complainant, or the demand he seeks to enforce, is subject to a set-off, and the facts from which the amount of the set-off can be ascertained. It may be that from the mere failure of Bogia to furnish the-chain of title, the law would imply or presume nominal damages, “ some very small sum, as a farthing, a penny or a sixpence,” but these are too insignificant to fall within the jurisdiction of a court' of equity. It is not mere nominal damages the bill proposes to set-off against the notes, but special damages it is intended to claim; and yet not a fact is stated, from which the court can pronounce that any such damage has accrued ;»not a fact the complainant can controvert. The averment that damages to the amount of two thousand dollars have resulted, is the conclusion of the pleader from facts which may be known to him, but which are not stated so that the complainant can controvert them, .if the court was of opinion they justified the conclusion. In actions at law for the recovery of’ damages, if they are special, as contradistinguished from general damages; if they are not such as may be presumed necessarily to result from the breach of the contract, it is necessary to state them specially and circumstantially, that the party from whom they are claimed may be apprised of the facts intended to be proved, and that the court may ascertain, whether, upon the facts, there is a right to compensation.- — 1 Chit. Plead. 371.. The same rule is necessarily applicable to a pleading in equity, asserting a claim to such damages.

A bill in equity for the foreclosure of a mortgage, or a bill to enforce the equitable lien of a vendor of lands for the payment of the purchase-money, is not a proceeding in rem. It is strictly a proceeding in pers'onam for tlie enforcement of a. debt or demand, to which the lien or mortgage is an incident, and the decree rendered binds only parties and privies. — Boylam v. Rain, 28 Ala. 332. In reduction or extinguishment of the mortgage debt, the mortgagor or the purchaser, whose personal liability is sought to be enforced, may set off any debt or demand, which would be the proper subject of set-off, if he were sued for the debt or demand in an action at law. And if' the bill is filed by an assignee, or by any person other than the-real owner of the debt, he may have the benefit of séts-off acquired and held against the assignor before notice of the assignment, or the benefit of the defense in the other case, he could have had against the real owner of the debt. — 2 Jones on Mort. §§ 1496-97; Waterman on Set-off, § 97.

The several claims against Bogia, it is averred the appellant-holds, are legal demands and were acquired and held by him prior to the making of the notes payable to the appellee, and prior to the making of the agreement by which the appellant expressly stipulated the lands should be bound for the payment of the notes, excepting such parts thereof as had been, or might thereafter be sold by the appellant. It is a little difficult to conceive what good reason there could have been for the execution of the notes, payable to a stranger, accompanied with a charge or lien bn lands for their payment, while Bogia, from whom the consideration moved, was indebted to the appellant-in a sum equal to the amount of the notes. Why, if these claims existed and were intended to be set'off, was there not at. once a settlement, instead of the giving of notes and the creation of a lien for their payment? If it were not for the averments of the cross-bill, that the appellee subsequently endorsed the notes to Bogia and that he is now the real holder and owner of them, we would incline to the opinion that by his own voluntary act, the appellant had waived the right to setoff against these notes any claim or demand he had against Bogia. The making of the notes payable to the appellee was an admission that the money was rightfully owing to her, and not to Bogia. In her own right,, an original, not derivative right, she-could have demanded payment — not as the assignee or transferee of Bogia, but because of the direct promise to her.

To make a set-off available, the plea must show that the plaintiff is liable for its payment, or that he claims as indorsee or assignee, through and from some party on whom such liability rests. — Holmes v. Bullock, 4 Ala. 228. The cross-bill,, however, contains averments that the notes have been endorsed, to Bogia, and are now held and owned by him. Assuming the truth of these averments, as must be assumed on demurrer, the sets-off were properly pleaded. Against the party having the real beneficial interest in the debt, though not a party to the record, a set-off is pleadable. — Bowen v. Snell, 9 Ala. 481. The demurrer to so much and such parts of the cross-bill as pleaded these sets-off, ought not to have been sustained.

Let the decree be reversed and the cause remanded for further proceedings in conformity to this opionion.