Callahan v. Auburn Production Credit Ass'n

This bill, filed July 31, 1939, by a mortgagee against three separate purchasers from the mortgagor of different chattels alleged to be covered by the mortgage in several separate and distinct transactions on different dates, seeks to recover a money decree for damages suffered by the complainant in consequence of the destruction of the complainant's title, when it had acquired the legal title by the mortgage or otherwise, and the destruction of alleged equitable liens to property in which the bill conceded the complainant did not have the legal title.

The several defendants named are F. H. Callahan, the appellant here, A. H. Singer and Bragg-Compton, Incorporated, and the officers of said corporation, none of whom are parties to this appeal.

The appeal is from a decretal order overruling Callahan's demurrer to the bill, taking the points that the bill is without equity, is multifarious, and as to the after acquired property the mortgage conferred on the mortgagee no right, title or interest.

The mortgage was executed by Russell Walker, not made a party to the bill, on the 11th of July, 1938, to the complainant to secure an indebtedness created by a loan of money, made contemporaneously with the execution of the mortgage, and "any other indebtedness of the mortgagor to the mortgagee or its assigns, incurred within twelve months from the date thereof."

The bill alleges that "said mortgage included forty-three (43) specifically described head of livestock located on 120 acres owned by the mortgagor and on 1000 acres rented by him from the Alabama Power Company, both tracts being in Tallapoosa County, Alabama and being in fact adjoining places." The mortgage also recites that "Intending to convey and hereby conveying all livestock and other property of like kind or class owned by mortgagor as that hereinabove described, located on or used in connection with the aforesaid land, whether specifically described or not, and also all increase thereofand additions thereto within twelve months from the datethereof." [Italics supplied.]

The chattels alleged to have been purchased by Callahan consisted of fifty-eight head of cattle of the value of not less than $969, and purchased during the months of August, September and November of the year 1938, for which he gave his check, in some instances indicating thereon the number of cattle so purchased, and in others not so designating.

In addition to the livestock on the eleven hundred and twenty acres at the time the mortgage was given, the bill shows that Walker purchased others, for some of which he gave a bill of sale to the mortgagee purporting to convey to it the legal title, and others so purchased no bill of sale was given, but they were purchased and turned on to said lands with others.

The bill expressly avers that the only notice the said Callahan had, was constructive notice arising from the recordation of the mortgage in the office of the Judge of Probate of Tallapoosa County, Alabama.

The bill alleges: "All of the cattle purchased by F. H. Callahan from Russell Walker were subject to said mortgage. Part of the same were subject to legal mortgage and part to equitable mortgage, but the complainant is unable to allege with particularity which were subject to legal mortgage and which were subject to equitable mortgage and the aid of this court of equity is needed to discover the full facts in this connection. All of said cattle bought by F. H. Callahan from Russell Walker were on said 120 acres owned by Russell Walker or on the 1000 acres rented by the said Russell Walker, in Tallapoosa County, Alabama, or had been on said premises immediately prior to their removal therefrom for sale to F. H. Callahan. The complainant has been informed and believes and on such information and belief avers that part of said cattle, to-wit, those acquired by F. H. Callahan on August 10, 1938 and on November 1, 1938, were delivered to F. H. Callahan on said premises in Tallapoosa County, and that the other cattle were delivered to him at his place of business in LaFayette, Chambers County, Alabama, but if complainant is mistaken in this averment, it alleges that the aid of this court of equity is necessary to discover the full facts as to where the said cattle were delivered to F. H. Callahan. Complainant further alleges that it has been informed and believes and on such information and belief avers that among the cattle so acquired by F. H. Callahan were the following, on which said mortgage operated as a legal mortgage, to-wit: Three of the Lizzie H. Nolen cattle, the J. M. Campbell Jersey cow, the Queen Berry bull; that among the cattle so acquired by F. H. Callahan were the following, on which said mortgage operated as an equitable mortgage, to-wit, two Mask cows, one Mallory cow, two C. F. Jackson cows and a bull bought by Russell Walker from Ray Bairn and a cow bought of Banks, which have not heretofore been mentioned; that said cattle also included one of the C. G. Milner cows, but complainant has not been informed and is not able to aver whether the Milner cow was one of those included in the bill of sale to it or whether it was the cow acquired from Milner on August 2, 1938, to which no bill of sale was made to the complainant. Complainant is informed and believes and on such information and belief avers that F. H. Callahan has sold said cattle acquired by him from Russell Walker and that he has received therefor amounts equal to or in excess of the amount paid by him therefor to Russell Walker; that said cattle have been slaughtered or otherwise disposed of and are beyond the jurisdiction of this court and complainant's lien and claim on said cattle has been totally destroyed. If complainant is mistaken in its averment that its lien on said cattle has been destroyed, then complainant avers that the aid of this court of equity is necessary for the discovery of said cattle in order that complainant may enforce its claim against the same."

As an incident to and in support of the relief, the complainant seeks discovery of evidence and an accounting.

There is an absence of averments showing confidential relations between the complainant and the defendant Callahan, or that the facts essential to the support of the complainant's claim are peculiarly within Callahan's knowledge, and therefore the equity of the bill can not be sustained on the ground that it seeks discovery. Dorrough et al. v. Mt. Pleasant Fertilizer Co., 210 Ala. 530, 98 So. 735; H. H. Hitt Lumber Co. et al. v. Cullman Property Co., 189 Ala. 13, 66 So. 720.

As to cattle owned and in the possession of Walker on the eleven hundred and twenty acre tract of land, at the time of the execution of the mortgage and their accretion by the processes of nature, and cattle subsequently purchased, the legal title to which was vested in the complainant by bill of sale executed by Walker or his vendor, the complainant had the legal title, and in the absence of averments showing that the property or some part thereof was in existence in the defendant's possession and subject to the processes of the court for foreclosure of the mortgage, the bill was without equity. Leeth Nat. Bank v. Elrod et al., 233 Ala. 340,172 So. 104; Meyer Brothers v. Cook, 85 Ala. 417, 5 So. 147.

Cattle purchased by Walker after the execution of the mortgage and in which he had no interest at the time he executed the mortgage, was not covered by the mortgage. Mayer Co. v. Taylor Co., 69 Ala. 403, 44 Am.Rep. 522.

In the last cited case it was observed: "It is commonly said that a man may sell the wool to be clipped from his sheep at a future time, or the milk his cows may yield in the coming month or year, and the sale is valid; but not so as to the wool of any sheep, or the milk of any cow which he may acquire at any time in the future, even though it be but the next hour. — Benjamin on Sales, § 78." Mayer Co. v. Taylor Co., supra.

This doctrine has been repeatedly reaffirmed by this court. Paden Co. v. Bellenger Rales, 87 Ala. 575, 6 So. 351; Shaw et al. v. Kinney, 227 Ala. 170, 149 So. 227.

Therefore if the language of the mortgage "also all increase thereof and additions thereto within twelve months from the date thereof" should be construed as intending to embrace cattle purchased by the mortgagor after the execution of the mortgage, it to that extent failed of its purpose.

The other defendants, so far as appears from the averments of the bill, were in no way connected with the alleged purchases of cattle by Callahan and in no way interested therein, nor was Callahan interested in or connected with the transactions between Walker and the other defendants. The bill, therefore, was subject to the objection that it is multifarious. Lee et al. v. City of Birmingham, 223 Ala. 196, 135 So. 314. The averments of the bill do not bring it within the liberal provision of the statute. — Code 1923, § 6526.

The circuit court erred in overruling the demurrer of Callahan to the bill.

Reversed and remanded.

THOMAS, FOSTER, and LIVINGSTON, JJ., concur.

On Rehearing.