McQuagge Bros. v. Thrower , 214 Ala. 582 ( 1926 )

The bill is filed to redeem personal property held under a conditional sale contract, and to enjoin a suit in detinue for the property. In effecting redemption, it is sought to set off certain demands held by the plaintiff. Complainant offers to do equity. The demurrer raises the point that there is no averment of insolvency of respondents; hence, no want of an adequate remedy at law to recover the demands complainant seeks to set off in this suit.

Where the purchaser of a chattel pays a large portion of the purchase price, the balance to be paid by installments, secured by a contract retaining title with right to reclaim the property upon default in any installment, and in such event all prior payments to be treated as rents for the use of the property, the transaction is regarded in equity as a mortgage, a form of security for the debt. The vendee, offering to do equity, will be relieved of the condition, regarded in equity as in the nature of a forfeiture, and redemption be allowed. Barton v. W. O. Broyles Stove Furniture Co., 212 Ala. 658,103 So. 854. We note that sections 7400, 7401, and 7402, Code of 1923, recognize this right at law, at the election of the vendee, when sued in detinue. These statutes are written into such contracts.

Incident to this equity, the court may adjust and allow a set-off in reduction or satisfaction of the debt; and this without regard to the solvency or insolvency of the respondent.

The further point is raised that an adequate remedy is provided in the detinue suit by Code, § 7402. By this section, in actions of detinue by mortgagees or vendors in conditional sales, or their assignees, "the defendant may plead any matter of defense, including usury, that he might have pleaded if the action had been on the debt, except the statute of limitation."

This brings to view averments of the bill designed to meet the objection raised by demurrer. It appears complainant, Thrower, bought a tractor from respondent McQuagge Bros., Inc., paying part cash, and for the balance gave notes secured by the conditional sale contract. On the same date the notes and contract were transferred in writing in the form of a "dealer's assignment" to respondent Southern Securities Company. This with the knowledge and consent of Thrower, evidenced by a "buyer's receipt," as part of the transaction. Upon default in payment of one or more of the notes, Southern Securities Company brought suit in detinue for the tractor. On the trial of that suit, both respondents participating, defendant Thrower offered to prove that McQuagge Bros., Inc., had, pursuant to contract, paid to Southern Securities Company the several notes as they matured. This was then admitted by counsel to be true, but objection was made to the evidence upon the ground that the legal title to the tractor was still in Southern Securities Company. This objection was sustained, and the court announced he would give the affirmative charge for plaintiff in the detinue suit. Thereupon the defendant Thrower moved the court to suspend the trial and give him an opportunity to file a bill in equity. This was granted upon condition that he pay the accrued costs in the detinue suit.

The bill avers that by the ruling of the court, invoked by these respondents, the complainant was denied the opportunity to present his set-off held against McQuagge Bros., Inc., and that respondents are now estopped to say he had an adequate remedy under section 7402 of the Code.

"A party is estopped to make a defense or objection inconsistent with a position previously asserted by him, which position was successfully maintained." 21 C. J. 1226, § 229.

He is estopped to assert the ruling was erroneous as to the party against whom he thus obtained an advantage. Woodruff v. Stough, 107 Ala. 314, 327, 18 So. 258; Harrison v. Harrison,200 Ala. 379, 76 So. 295; Hodges v. Winston, 95 Ala. 514,11 So. 200, 36 Am. St. Rep. 241; Caldwell v. Smith, 77 Ala. 157,165; Hill v. Huckabee, 70 Ala. 183.

This principle is applicable to the case made by the bill; and it is unnecessary to consider whether the vendee was entitled to maintain his set-off in the detinue suit under the broad terms of section 7402 and associated provisions.

The decree overruling the demurrer is affirmed.

Affirmed.

SOMERVILLE, THOMAS, and MILLER, JJ., concur.

On Rehearing.