O'Neill v. Perryman , 102 Ala. 522 ( 1893 )

HARALSON, J.

1. Although the mere existence of mutual and independent demands, does not authorize the interposition of a court of equity to set them off against each other, yet, where there is some intervening equity which renders it necessary for the protection of the demand sought to be set off, that court will interpose to see that justice is done. ' In this case, the bill sets up the insolvency of the plaintiff in the judgment, and that complainant’s demand against him would be lost, if he is allowed to enforce said judgment. This is recognized as a distinct equitable ground, entitling the conqilainant, the defendant in the judgment, to relief.— Tate v. Evans, 54 Ala. 17; Martin v. Mohr, 56 Ala. 223; Wood v. Steele, 65 Ala. 436; Watts & Son v. Sayre, 76 Ala. 399; Glover v. Hembree, 82 Ala. 324; 1 Pom. Eq., 189; High on Injunctions, § 245. It is also held, that when a cross demand, rightfully held, can not be made available as a set-off at law, it may be established as such in equity, on allegation and proof of the insolvency of the plaintiff in the judgment. — Campbell v. Conner, 78 Ala. 211; Farris & McCurdy v. Houston, 78 Ala. 257.

When the appellant, defendant at the suit of complainant in the law court, interposed his plea of recoupment or set-off against plaintiff’s demand, the plaintiff could not reply against that plea a set-off of the claims he files this bill to protect. A set-off against a set-off can not be pleaded at law. — Hill v. Roberts, 86 Ala. 526-7; Whitworth v. Thomas, 83 Ala. 310. The bill was well filed, and the demurrer to it was properly overruled.

2. The defendant filed an answer in the nature of a cross-bill, the relief sought being the settlement of a co-partnership which was alleged to have formerly existed between defendant and complainant, on the settlement of which, it was alleged, complainant would owe something to defendant. The cross-bill was demurred to, on the ground that it sought to bring into the litigation new, distinct and independent matter from that of the original suit. The demurrer was sustained, and the defendant amended his answer, by striking out, so as to change the answer and cross-bill to a simple answer.

A cross-bill loses its character as such, if it seeks to bring before the court other matters and rights distinct from those embraced in the original suit. Without this restriction, new matters without end might be introduced into litigation by cross-suits. In this instance it does not appear that the proposed cross-bill was necessary to do complete justice between the parties, and to administer the equities between them as connected' with the subject matter of the original bill. There is no allegation in it that complainant is insolvent and unwilling to settle the alleged copartnership between him and dedefendant, if any existed, and was unable to pay any sum that might be found to be due and owing by him to defendant, on settlement thereof. The demurrer to it was properly sustained. — Story’s Eq. Pl., §§ 630, 631, Com. L. Ins. Co. v. Webb, 54 Ala. 688; Davis v. Cook, 65 Ala. 617; Whitfield v. Riddle, 78 Ala. 104.

3. Coming to the proofs of the allegations of the bill: The complainant testified, that he had known defendant for several years, had had many transactions with him ; that he owned no property of which complainant was aware, and he had endeavored to ascertain if he did own any; that he had no money, and so stated, when he went into the business of manufacturing refrigerators with complainant; that he had been sued on his obligations, judgments obtained against him and executions thereon returned no property found. This proof made a prima facie case of insolvency against him, which it became the defendant to overcome. — Abbott v. Gillespy, 75 Ala. 180. He attempted to do this but failed. He commenced by stating that he was solvent and paid all his debts, and yet admitted that there were unsatisfied judgments and outstanding claims against him in the hands of attorneys for collection; that the property he owned was in Shelby county; that he owned 410 acres of land in that county, worth from two to three thousand dollars, and, perhaps, more. If he had stopped here, it would have appeared he was abundantly able to respond to complainant’s demands ; but, on the cross-examination, he admitted that he had not "quite paid for the land in Shelby,” but had paid for a.part of it; that he had bought 210 acres from one Wideman, for which he had a bond for titles only, and on which he had not.paid a dollar; that he had 160 acres clear, which he called his homestead, and this he got from a man by the name of Mansfield from Chicago, with whom he swapped some lots in that city for this piece of land; that Mansfield came into defendant’s store and said he had some 1an¿l in Shelby, and if he could sell it he would return to Chicago ; that defendant went and examined the land, returned, consummated a trade with him for it, and they interchanged deeds, drawn up by themselves; that he had never seen Mansfield before and did not know his first name, but was informed that he was a mechanic who had been working in a machine shop. He did not remember who were the witnesses to his deed received from Mansfield, nor from whom he, Mansfield, purchased the land ; that he made no inquiry about the title but took his vendor’s word for it; that he sent his deed to the land, by his nephew, Shaw, to Columbiana, to be recorded, but Shaw had gone to Texas, and had neither delivered the deed for record nor returned it; that he had never paid any taxes on the land, and did not know how much was due on it. On this statement, one’s credulity would be sorely taxed to believe he owned and had a title to the Shelby land. Besides, Perryman swears that defendant told him, that his wife owned some lots in Chicago, given to her by an old lady, whom she had taken care of, and that she had traded two of those lots for 'some land in Shelby county. It may be, if the deed had been produced, the title to the land would have appeared to be in Mrs. O’Neill. On this and other evidence we find in the record, to which we have not referred, the insolvency of defendant is regarded as satisfactorily established.

4. Against the 1st and 2d items in the register’s account, those of the two judgments against defendant, he makes no further defense, than that of the''unsettled partnership between him and the complainant. This, under the proper rulings of the court, he was not permitted to go into. These two items were, therefore, propely chargeable against him.

5. The 3d and 5th in the report are approved. That the defendant occupied the house, under the written lease, for the time alleged, is shown, and not denied. To the balances.due on these accounts, the complainant testified, and lie appears to have been careful in keeping his books. The defendant kept none himself, and his evidence is unsatisfactory. The defense he relies on is, that he made repairs on the leased building, in consideration of which, he testifies, complainant agreed to remit the rent that was owing, but this, the complainant denies. The character for truth of the two witnesses, on whose evidence, besides his own, the defendant relies to establish this fact, was impeached by complainant, and no attempt was made by defendant to sustain them. The evidence tends to show, that complainant paid for repairs on the building, such as he authorized, and on the whole, is satisfactory to sustain the findings of the register on these two items.

6. The evidence to sustain the 4th item, — that of $92.14, on account of rent by D. Kennedy & Co. — is not sufficient. The complainant, in his bill, stated that this item of indebtedness of defendant to him, was $209.05, as the balance remaining unpaid, on account of rent, at the rate of $150 per month, from July 1st, 1888, to 26th March, 1889, — the date he testified Kennedy & Co. left his house, on his demand. In his deposition taken in the cause, he testified as follows : “I rented a house on July 1st, 1888, to D. Kennedy & Co. The Co. was John O’Neill. I rented the house for $150, and it was occupied by them from July 1st, 1888, to March 26th, 1889. * * The amount due on this lease is $209.05, with interest from March 26th, 1889.” In his examination before the register, complainant testified : “I gave D. Kennedy & Co. orders to vacate the house, for the reason that they were behind with their rent. * * I don’t remember exactly when they vacated the house. They vacated it sometime about the 15th of January, 1889. I don’t remember'how much rent was due on the building at that time, but I think they owed about $180, as near as I can remember. They may have owed as much as $225 — I don’t remember. I knew somebody paid me during the month of January. I see that D. Kennedy (examining book) paid me, January 9th, $115, January 10th, $148.45, January 12th, $18.45, January 21st, $25., * * February 1st, $6.55, February 5th, $25.00. * * They owed me at the time they moved out $210.05.”

The difference in these statements is confusing. If the first is correct, the defendant would owe complainants the full amount claimed by him ; but, if the latter statement be the correct one, defendant would owe nothing on account of the Kennedy & Co. rent, but complainant would have been a little overpaid. All that defendant claims in respect to this item is, that it was fully paid. Upon the whole evidence, without reviewing it, we hold that the last statement of complainant, as to the time when Kennedy & Co. vacated the premises, is to be taken as the correct one, and that complainant is not entitled to any credit on this item. Deducting this from the credits allowed him, and the balance remaining due by him on his judgment to defendant, is $287.79 as of March 29th, 1893 — the date of the register’s report— instead of $195.65, as found and reported by the register. As thus corrected, the decree is affirmed.

7. The register in the statement of the account in this case, gives results without processes by which they were ascertained. This is an improper manner of stating such an account, and one so rendered ought to be rejected by the court ex mero motu, or on an objection made to it by either party. Such accounts should be so fully stated, under rules 90 and 90a., accompanied, if necessary for a proper understanding of the account, by such explanations in the report of the register, as that the chancellor, in case exceptions are taken to them, may be enabled readily to understand and pass on them, and so, in case of appeal, to this court, we may be enabled to do the same thing. Otherwise, we must be involved in confusion and very unnecessary labor, which we may, if these rulos are not observed, decline to undertake.

Corrected and affirmed.