Case ID: ala_137/html/0171-01.html
Source: Caselaw Access Project
Author: {"author": "SHARPE, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hodge v. McMahan et al.
    
    
      Bill in Equity for an Injunction.
    
    1. Bill to cancel note and mortgage; injunction. — Where a note and mortgage are given for the purpose of obtaining advances and supplies during a year in order to make a crop, and after the execution of such note and mortgage the mortgagee assigns the same and fails to furnish the advances and supplies, and there is an absolute failure of consideration for the note, the mortgagor can maintain a bill for the purpose of having the said note and mortgage cancelled; and to the end of settling the whole controversy, a court of equity may issue an injunction to prevent the interference by the assignees with the mortgaged property. . .
    
      Appeal from the Chancery Court .of Jackson.
    Heard, before the 1-Ion. .William H. .Simpson..
    The bill in this case, urns filed- by the appellant, Willis Hodge, against W. J. McMahan and-Horton Mc-Mahan,. partners under the .firm .name of W. J. McMahan & Oo. The following facts were averred in the bill :■ • On December IB, 1901, the complainant executed and delivered a promissory note to one J. H. Dobbs, for $120 due in November, 1902, and to .secure the payment of said note-executed and delivered t!o said Dobbs a mortgage upon certain personal property, owned by the complainant. The consideration for the execution and delivery of the note and mortgage was an agreement and promise on the part of said Dobbs to furnish and advance -to the complainant, money and supplies to enable him to make a crop during the year 1902 on certain lands then occupied by the complainant. Within one month after the execution and delivery of said note and mortgage to the complainant Dobbs, he transferred and assigned said note and mortgage to the defendants, W. J. McMahan & Co., and within about a month after such transfer and assignment Dobbs removed from the 'State and Avent to Texas, where he has resided ever since. The consideration of said note wholly and totally failed in that said Dobbs never furnished any money or advances to the complainant, and it was necessary for the complainant to obtain his supplies and advances Avith which to make his crop, from other sources. Just before the filing of the present bill, the defendants, as assignees of said note and mortgage, sent the deputy sheriff of the county to the complainant’s house who demanded and Avas proceeding to take from the complainant possession of the personal property conveyed in said mortgage, for the purpose of selling it under the power of sale contained in said mortgage.
    The complainant declined and refused to surrender posession of said property, and to prevent the officer from forcibly taking and carrying it away, which he had threatened to- do, the complainant entered' into a forthcoming bond for the delivery of the property on a certain named day. :' There- was no- suit for the recovery of said property- pending, but the complainant avers that he fears and apprehends that he will be- put. to expensive and vexatious litigation.
    The prayer of the bill was for an injuction to. restrain the defendants from taking possession of the property conveyed in'said mortgage and from foreclosing said mortgage, or from in -any way transferring and assigning said note and mortgage, and that the defendants be required'to- surrender said note and mortgage and that the' same be cancelled. There was a preliminary injunction issued on the filing of the bill.
    The defendants moved,to dissolve the injunction for the want of equity in the bill; moved to dismiss the bill for the want of equity, -and demurred to tbe bill upon'the following grounds: 1. The bill seeks merely the cancellation of a mortgage for a failure of consideration therein, and fails to- show 'any facts denying, a complete and adequate remedy at law by prosecuting or defending an action of detinue, or any other legal action that may be brought thereon. 2. The bill shows that at the time of the filing of the bill the respondents were proceding by appropriate remedies to enforce their' mortgage security and so test the validity of the mortgage by appropriate- action,' at law. 3. The bill does not seek a redemption from the mortgage, but to enjoin proceedings thereunder which would test its validity at law. 4. The bill avers no -fraud, accident or mistakes as a ground of equitable intervention, but merely a failure of consideration, a defense available at law. 5. The bill shows no apprehended litigation which could not be defended at law or which furnishes any ground for an injunction. • ■
    On the submission of the cause upon the motion and the demurrer, the chancellor rendered a decree sustaining the demurrer and granting the motion to dissolve the injunction, and: ordered that the temporary injunction theretofore issued be dissolved. From this decree the complainant appeals, and assigns the rendition thereof as error. ■ ■ •
    W. H. Norwood, for appellant,
    cited 1 Story Eq. Juris. (11th ed.), §§ 700-701; 2 Story Eq. Juris. (11th ed.}, §§ 826, 862; High on Injunctions, 309r313; 2 Amer. & Eng. Ency. of Law, 258 eb seq.; Smith v. Pearson, 24 Ala. 355; Kelly v. Martin, 107 Ala.. 479; Glover v. Hembree, 82 Ala. 324; Vaughan v. Mar able, 64 Ala. 60.
    ' Virgil Bouldin, contra.
    A bill for cancellation must have some equitable ground to support it, some showing why there is not an adequate remedy at law. Williams v. Cooper, 107 Ala. 246; Rea v. Long street, 54 Ala. 291; Jones v. DeGraffenrcid, 60 Ala. 151; Norment v. Eureka Go., 98 Ala. 190; Merritt v. Ehrman, 116 Ala. 278 ■,Andrews v. Frierson, 33 So. Rep. 6; Kelly v. Martin, 107 Ala. 479; S'mith v. Cockrell, 66 Ala. 64.
    That the complainant had a plain add adequate remedy at law in defense of an action of detinue on the mortgage for failure of consideration is beyond doubt. Code of Alabama, § 1478; Hooper v. Burchfield, 115 Ala. 226; Powers v. Crawford, 110 Ala. 294; Lewis v. Simon, 101 Ala. 546.
   SHARPE, J.

In general where one holds in hostility to another a writing which on .its face imports a valid obligation, but which is invalid by reason of extrinsic facts the evidence of which is in danger of being lost by delay in the assertion of claims, a court of equity will interfere to prevent, what might otherwise prove irreparable .injustice, by cancelling the writing. — Smith v. Pearson, 24 Ala. 355; Merritt v. Ehrman, 116 Ala. 278; Story’s Eq. Jur., § 700; Field v. Holbrook, 14 How. Pr. (N. Y.) 103.

In such case the jurisdiction is not declined because the infirmity of the instrument is such as could be availed of in a suit at law, for the power to bring, or postpone such suit is usually with the party holding the instrument, and without equitable relief the other party would be subject to menace for a time indefinite and possibly until he is disabled by circumstances from effectually contesting.

In this case it appears from the bill'that defendants have taken steps to obtain possession of complainant’s property under the power contained in the alleged mortgage hut that proceeding will not necessary culminate in a suit tvherein complainant could he freed from embarrassment and apparent, liability on the note, mortgage and bondl held against him by defendants. Assuming that as alleged in the bill the consideration for the note and mortgage has Avholly failed, complainant was under no real obligation to surrender the, mortgaged property, and the bond given by him to lurve the property forthcoming at the sale Avas without consideration.

The bill states a case proper for relief under the principle to Avliich Ave haAre referred, and Avas not subject to the. demurrer. TO' the end of settling the whole controversy in the chancery court of preventing interference Avith the mortgaged property until the case is heard on its merits or on the coming in of the answer, the motion to dissolve, the injuction should have been overruled.

The decree sustaining the demurrer and the decree dissol vin g the injunction Avill be reversed and the cause will be remanded. An order Avill here he entered reinstating the injunction.

Reversed and remanded.