Court Opinion

ID: 7365712
Source: CourtListenerOpinion
Date Created: 2022-07-27 23:51:25.712187+00
Date Added: 2024-06-11T16:20:45.315935
License: Public Domain

ANDERSON, J.
The bill seeks to avoid the contract of subscription to stock and the cancellation of notes executed for the purchase of same, and sets up that complainant was fraudulently induced to- subscribe for said stock and execute said notes, by the false and fraudulent misrepresentation of material facts. A court of equity will entertain jurisdiction to cancel a fraudulent contract, at the instance of the injured party, notwithstanding he may sue at law upon the covenants of warranty or for deceit. — Perry v. Boyd, 126 Ala. 162, 28 South. 711, 85 Am. St. Rep. 17; Cullum v. Bank, 4 Ala. 21, 37 Am. Dec. 725; Baptiste v. Peters, 51 Ala. 158. The test is, not that he has a remedy at law, but whether or not the remedy will be adequate and complete, or that he will not be subjected to vexatious litigation at a distance of time. — Merritt v. Fhrman, 116 Ala. 278, 22 South. 51b.
*105The bill avers that the notes are held by the Bank of Wilmer. Therefore the matters set np in the bill would be no defense to the notes, if the bank is a bona Me holder of same. The result is, if the complainant does not pay them, he is subject to a suit in the future by the bank, and would then have to seek his redress against the respondent insurance company. On the other hand, if the bank is not a bona Me holder of the notes, the complainant will be put to the trouble and expense of defending a. suit on same. Although he may succeed, yet success on his part in a litigation with the bank would not necessarily cancel the contract of subscription; the respondent company not being a party. Moreover, the bill seeks in the alternative to make the respondent indemnify the complainant in case the notes cannot be delivered up and canceled. It is therefore apparent that the bill contains equity. The relief would no doubt- be more perfect and complete by making the bank, the holder of the notes, a party to this cause, in order that the chancery court could require the respondent, in case the complainant is entitled to relief, to reimburse the bank and procure the notes, and deliver or surrender them to this complainant or to the court for cancellation; or if the bank is not a bona Me holder of the notes, it, being the custodian of same, should be made a party to the bill, in order that the court may cancel same in the event the complainant is entitled to cancel his subscription to the stock. This omission of parties however is not essential to the equity of the bill, and the chancery court did not err in overruling the ground of demurrer proceeding upon that theory.
In so far as the bill seeks a cancellation of the notes, it was subject to grounds 4 and 6 of the demurrer, had they been directed at the bill in so far as it sought a restoration or cancellation of the notes, instead of as a *106whole. The bill has equity independent of the surrender or cancellation of the notes, as it seeks to cancel the issue of the stock and the alternative relief of reimbursing the complainant, in case the respondent cannot restore the notes now held by the bank. If a bill has equity independent of the point or defect set up in the demurrer, but the said demurrer is addressed to the whole bill, it should be overruled. — Nelson v. Wadsworth,, 11 Ala. 603, 55 South. 120; MacMahon v. MacMahon, 170 Ala. 338, 54 South. 165; Beall v. Lehman, Durr & Co., 110 Ala. 446, 18 South. 230.
The decree of the chancery court is affirmed.
Affirmed.
Dowdell, C. J., and Sayre and Somerville, JJ., concur.