Court Opinion

ID: 6510355
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:48.575003+00
Date Added: 2024-06-11T15:54:51.542695
License: Public Domain

MANNING, J.
Plaintiffs are described in the introductory part of their bill as follows : “Your orators, Robert A. Lancaster and John F. Tanner, as trustees for divers parties holding and owning certain bonds and past due coupons thereof, of the Savannah and Memphis Eailroad Company, under and by virtue of a deed of trust executed and delivered to them by said railroad company for the trusts and purposes therein mentioned; and Abby Harrington, Mason Young,” and others named, “ certain holders of said coupon bonds and past due coupons thereof, and cestui que trusts of the trustees aforesaid . . . who join in said bill of complaint for the equal benefit of themselves, and of all the holders of the first mortgage bonds,” aver, allege, &c. And appellants (who were defendants below), assuming that there is nothing more in the bill showing title in the plaintiffs to the subject in controversy, insist by demurrer, that this is not a sufficient statement of title or interest in plaintiffs to enable them to maintain the suit.
Description is not, in pleading, equivalent to averment. And it was not necessary, in setting forth in the beginning of the bill who the plaintiffs were, to explain in the same breath their connection with or relation to the matters in respect of which the suit was brought. — 1 Dan. Ch. PI. & Pr. (4th Amer. *562Ed.) 359. That is the office of the stating part, or premises, of the bill, (Sto. Eq. Pl. § 27,) which should “ contain a clear and orderly statement of the facts on which the suit is founded, without prolixity or repetition.” — Code of 1876, § 3761. Says Judge Story : “Every material fact to which the plaintiff means to offer evidence ought to be distinctly stated in the premises. ... A general charge or statement, however, of the matter of fact is sufficient; and it is not necessary to charge minutely all the circumstances which may conduce to prove the general charge.” — Sto. Eq. § 28. “The rules of pleading require,” says the Supreme Judicial Court of Massachusetts, “ that every material averment that is necessary to entitle the plaintiff to the relief prayed for, must be contained in the stating part of the bill, and this is a useful rule for the preservation of form and order in the pleadings. This part of the bill must contain the plaintiff’s case and his title to relief, and every necessary fact must be distinctly and expressly averred, and not in a loose and indeterminate manner to be explained by inference; or by reference to other parts of the bill. The defendants are not bound to answer any averment not contained in the stating part of the bill.”1 This- was- delivered in answer to the argument “ that the defect may be supplied, or the meaning of the stating part of the bill be explained lay the averments in the charging part of th’e' bill.' — Wright v. Dame, 22 Pick. 59. This strictness is, perhaps, extreme. We should not feel bound to refuse, though we ought not to be required to seek, explanation of a defective allegation in the stating part by reference to a clear averment of the same matter .in a subsequent part of the bill. — —Houghton v. Reynolds, 2 Hare, 264. But when no allegation.at all is made in the stating-or any other part of the bill,* of material facts or transactions on which the title of those bringing suit depends, it would be too great a relaxation of the wholesome and too little heeded rules of the pleading, to take as a substitute the mere description or designation of plaintiffs “ as trustees,” ox- as “ certain holders of bonds and coupons,” or by other additions which imply that such facts or transactions had occurred. “ It is a geueral rule that whatever is essential to the rights of the plaintiff, and is necessarily within his knowledge, ought to be alleged positively and with- precision.”- — Sto. Eq. Pl. § 255. And this court has emphatically said: “ The matters essential to complainant’s right to relief, must appear not by inference, but by clear and unambiguous averment.” Duckworth v. Duckworth, Ex’r. 35 Ala. 70. Indeed, the more direct and clear the allegations of such a pleading are, the freer-it is, generally, from prolixity and repetition.
*563Upon examination of the bill before us, we find that it distinctly alleges in the stating part the execution by the railroad company of the deed mentioned as the first mortgage, to Lancaster and Tanner, by which they were (it is alleged) constituted trustees of the property described in it. Their trusteeship, therefore, is sufficiently averred.
And they, the trustees, were the only necessary parties plaintiff to the suit. Though any of the bondholders might pro interesse suo, become parties thereto, it was not essential that they should. — McElrath v. P. & S. R. R. Co., 68 Penn. St. 37; Shaw v. Norfolk, &c. R. R. Co., 5 Gray, 162; Swift v. Stebbins, 4 Stew. & P. 447. And since the bill avers that the bonds, each for the sum of $1,000, which the trust deed was executed to secure, were issued to the extent of more than $4,000,000, and the. other complainants, who need not have made themselves co-plaintiffs, come in as “ certain holders of said coupon bonds and past due coupons thereof, and cestui que trusts of the trustees aforesaid,” and on behalf of the other bondholders as well as of themselves, we think the demurrer, so far as it objects to the right of plaintiffs to maintain the suit, upon the allegations of the bill, was properly overruled.
The bonds were designed to be put in circulation and pass from hand to hand, by delivery merely, for which reason they were made payable to no person by name, but to “ bearer.” No rule of law requires it to be shown by averment to whom such bonds, or any of them, were negotiated in the first instance ; and it would rarely be possible for subsequent holders, who received them in the course of business, after they were put in circulation, to know to whom they were first delivered. The provision that the bonds might be “ registered and made payable by transfer only on the books of the company,” did not itself make them non-negotiable by mere manual transfer; it was only a promise which entitled those who should become holders of them at any time to have them changed from that character, and converted into registered bonds, transferable only upon the books of the company. Neither the clause referred to, nor any thing else in them, made it necessary to show who purchased or became bearers of them in the first instance.
The objections that it is not shown how much was paid for the bonds, or when they were issued, is equally, and for like reasons, without foundation. — Jones on Railroad Securities, § 210. The case is not at all like that of Reel v. Overall, 39 Ala. 138. If there was any thing irregular or illegal in those particulars, it devolved on the defendant to set it up and show it.
*564Nor need the averment that the company had failed for more than six months to pay the interest, also show further, that presentation had been made of the coupons for payment at the office or agency of the company where they were made payable. In regard to past due promissory notes, payable at a particular place, the law is well settled that if the defendant has suffered any loss by a failure to present them there, he must establish it in defense. And the Supreme Court of Pennsylvania has held that the same rule is applicable in an action for the whole amount of certain railroad bonds that should regularly have matured at a long future day, with interest to be paid semi-annually in the meantime, at a place designated, but subject to an agreement that if default be made three times, successively, in the payment of such interest, the principal also should then be presently due. — Philada. & B. R. R. Co. v. Johnson, 54 Penn. St. 127.
The sections of the Code which require conveyances to be “ signed at their foot by the contracting party or his agent having a written authority,” and dispense with seals to them, cannot have been intended to embrace conveyances by corporations, which, being unable to write and have signatures of their own, have always executed such instruments by causing their seals to be affixed to them. To have a seal for such purposes has not only been the uniform usage of these bodies politic, but the right “ to use a common seal, and to alter the same at pleasure,” is expressly conceded to them by our statutes. — Code of 1876, § 2019 (1767). And the act “ to provide for the creation and regulation of railroad companies in the State of Alabama,” approved December 29, 1868, under which the defendant company in this cause was, we presume, organized, provides that “ all deeds made by such company shall be signed by the president, under the seal of the company.” — Acts of 1868, p. 467, § 15» It cannot impair the validity of the deed that the name of the secretary was also subscribed to it, apparently in attestation of the affixing of the seal.
The objection that in this transaction of raising money and executing bonds and a mortgage to secure repayment of it, the railroad company acted ultra vires, and that, therefore, payment of the bonds and foreclosure, or sale of the mortgaged property, will not be enforced, cannot be sustained. The authorities referred to, which hold that corporations created for other and different purposes, may not lend money and do business after the manner of a bank, are not applicable to a case in which the corporation borrows money needed for its legitimate purposes, and gives securities therefor to the lender. To do this is one of the implied powers of such *565bodies. — In re Patent File Co., L. R. 6 Ch. 83 ; Curtis v. Leavitt, 15 N. Y. 9; Monu'l N'l Bank v. Globe Works, 101 Mass. 57; Hays v. Galion Gas Light Co. 29 Ohio St. 330; Jones on Railroad Securities, § 5 ; Kelly et al. v. Barnes et al., 58 Ala. 489.
. If in agreeing to pay eight per cent, per annum interest, the lawful regular rate between individuals, upon the sum lent, instead of seven per cent., there was an usurious intent to violate the law concerning that matter, the contention thereupon is not to be raised by a demurrer to the bill.
We cannot concur in the proposition that the bonds and mortgage, or either of them, were not executed in conformity with the intention of the company, and are, therefore, invalid. Apart from the question whether they are not, indeed, the acts of the company itself, performed in the only manner in which it could execute such instruments, the resolution of the board of directors, prescribed only the denomination and amount of the bonds, what date and rate of interest they should bear, and that they should be made payable in American gold coin, free from government taxes in New York. It did not specify any time or event when they should mature. And in providing for securing their payment, by a deed of trust, “ covering the road, franchise and property of the company from Girard to Tuscumbia, Alabama,” it did not prescribe any of the other terms the deed should contain. All of the conditions specified were observed. And the additional provision in the deed, that a foreclosure sale of the property might be made to pay the entire debt, whenever the semi-annual interest thereon should remain six months unpaid, is no more at variance with the resolution than is the clause which makes the bonds otherwise mature on the 1st day of May, 1890, twenty years after their date. The presumption would consequently be, that the trust deed was to be completed in such form and with such stipulations as instruments of that kind ordinarily contain. And a “ mortgage is usually so drawn that it may be foreclosed as soon as there is any default in the payment of any installment, either of principal or interest,” secured thereby, and such a provision it is not considered a penalty, but an agreement as to the time when the debt shall become due.” — 2 Jones on Mort. § 1181, and cases there cited. It does not, therefore, appear that the mortgage was executed contrary to directions, or without sufficient authority. — Skinner v. Dunn, 9 Porter, 305; Vanada v. Hopkins, 1 J. J. M. 203 ; Peter v. Farnsworth, 15 Vermont, 155 ; Rawle on Cov. of Title.
We find no error in the decision of the Chancellor over* ruling the demurrer, and his order thereupon is affirmed,