Court Opinion

ID: 7365888
Source: CourtListenerOpinion
Date Created: 2022-07-27 23:51:35.647537+00
Date Added: 2024-06-11T16:20:45.663744
License: Public Domain

ANDERSON, J.-
The bond, as set out in the complaint, not being a negotiable instrument, a suit thereupon might, under section 2489 of the Code of 1907, be brought by the beneficial owner; but, where the instrument is set out in the complaint and is made payable to another,, the plaintiff who sues as the beneficial owner should aver that he is such owner, and good pleading should suggest that he aver how or in what manner he was or became the beneficial owner.
Count 1 does not aver that CoAvan is the beneficial OAvner, or that the bond Avas made for the benefit of the estate, and the only theory upon Avhich he can maintain the suit on the bond is by draAving the inference that the bond Avas made for the benefit of the estate and not the obligees therein named, and complainants, on demurrer, must be plain, positive, and specific, and not dependent upon mere inferences in order to ascertain the plaintiff’s right to recover.
Count 1 Avas subject to the defendants’ demurrer No. 2.
Count 2, Avhile in the name of the obligees, is .for the use or benefit of CoAvan, the trustee of the estate, and Avho must be considered, under section 2490 of the Code, the sole party on the record. This count is no better as. to an averment of interest or OAvnership than the first, one. There is no averment that the estate is the beneficial OAvner, and to determine that fact we must draw legal inferences, from the status set out, that the bond *495was made for the use or benefit of the estate, which we cannot do in order to sustain a complaint on demurrer. There is nothing in the count to indicate that the bond was made to the creditors for the use or benefit of the 'estate, and, construing the same most strongly against the pleader, the bond was made to the obligees for their own use and benefit, and not as indemnity to the estate. The caption of the complaint does say that the suit is brought for the use and benefit of Cowan as trustee, but there is not a word or syllable in the body of the complaint claiming that Cowan is the beneficial owner, and we are put to legal inferences in order to read such an averment into the complaint, which cannot be resorted to in order to uphold the same against demurrer. The ownership may be averred in general terms (Burns v. George, 119 Ala. 504, 24 South. 718) ; but the ownership of Cowan as trustee, or that he or the estate is the beneficial owner, is not specifically averred in either count of the complaint.
The second count was subject to ground 5 of the demurrer, if not others.
On the other hand, if we should read the bankrupt act into the complaint, and hold that the petitioning creditors would be entitled to attorney’s fees from the estate, incurred in having the debtor adjudicated a bankrupt (section 64, subd. 3, Bankruptcy Act [Act July 1, 1898, c. 541, 30 Stat. 562, U. S. Comp. St. 1901, p. 3447]; Collier on Bankruptcy, 687; Smith v. Cooper, 120 Fed. 230, 56 C. C. A. 578, 9 Am. Bankr. Rep. 755; In re So. Steel Co., [D. C.] 169 Fed. 02, 22 Am. Bankr. Rep. 476), yet, it would not necessarily follow that the bond in question Avas taken for the benefit of the estate, or that the obligees did not rely upon the bond for their attorney’s fees and protection rather than the esiate. They might be able to get said fees from the estate, but may prefer getting them on the bond and not looking to *496the estate for same. And if they got them on the bond, the estate might resist the payment of said fees a second time; but that is a matter between the petitioning creditors and the estate, and the estate cannot be declared the beneficial owner of the bond, as matter of law, sim-' ply because -it might be liable to the petitioning creditors for attorney’s fees in having the debtor adjudged a bankrupt.
We are also aware of the rule that, where the complaint shows a right to recover, if only for nominal damages, and contains claims for nonrecoverable damages, the defect should be reached by a motion to strike, rather than by a demurrer; but that rule applies where the party who sues is entitled to recover for the breach and the nominal damages, and not to cases , where the suit is brought by one who is not the obligee in the contract, or who has no right .to sue as for a general breach, and who grounds his whole claim or cause of action upon a certain element of damages growing out of a breach of the bond. Here, the plaintiff Cowan shows no recoverable right as for a breach of the bond, but bases his entire claim or cause of action upon costs and attorney’s fees which may be incurred by the estate, and fails to aver that the bond was made as an indemnity to the estate as against this element of damages, or any other facts showing that said estate is entitled to recover said damages so claimed as against these defendants. In other words, the complaint shows no right to recover anything on the bond, by the plaintiff Cowan, nominal or any other damages, and was, of course, subject to demurrer.
The judgment of the city court must be affirmed.
Affirmed.
Dowdell, C. J., and Sayre and Somerville, JJ., concur.