v. MORRIS et aU
(Oircuit Oourt. M. D. Alabama. June 25,1888.)
LIMITATION OF ACTIONS-RUNNING OF THE STATUTE-PLEPGE.
Where certificates ,of stock are pledged to secure an existing indebtedness, and to remain a continuing pledge for advances in the future, the pledgee holds by virtue of the title of the pledgeor, and no adverse holding can begin, so as to allow the st'atute of limitations to run, until the pledgee repudiates the trust, and gives notice that, in default of payment, he will sell the property.2 '
2. ESTOPPEL--lN PAIS-PLEDGE.
Where a vendor of stock holds, the certificates asa pledge to secure certain debts of the vendee, including a balance of interest due thereon, and any advances that may be made in the future, he holds thereafter under the title of the vendee, and cannot claim the property as his own, on the ground that the purchase money was not all paid.
JUDGMENT-RES ADJUDICATA-IDENTITY OF ISSUE.
The dismissal of a bill to redeem pledged property on the ground of staleness and the statute of limitations, 18 not a bar to another bill seeking to reo deem the same property, under a pledgoe made four years after the first one, the Cause of action being different, though the same relief be asked.
In Equity. Bill to redeem, and for an account of, certain stocks pledged, and the dividends received· . On SeptembC'r 20, 1886, James N. Gilmer filed his bill against Josiah Morris and others, doing business as Josiah Morris & Co., charging that in 1871 he pledged 120 shareS:ofStock in the Elyton Land Company to said Morris to secure to him $6,000 which the latter had advanced on the purchase money ; that soon thereafter one-half of the stock was sold 'for 86 j OOO, which only lefta balarice ofinterest due Morris; that in 1875 another cOlitract was made by which the stock was to be held for the existing indebtedness. and for such loans and advances as might be made in: 'the future, which continued to 1884. The bill prays that Morris be required to account for and pay over all dividends received on the stock 'after deducting any indebtedness of complainant, and for general relief. Defendants pleaded in bar a decree in a former suit brought in 1884, in the state bourt, dismissing a bill filed by plaintiff against them for' the same relief. It that the bill was based on the pledge of 1871. and was dismissed on demurrer on the ground of staleness and the statute of limitations, but after ail answet: had also been filed. 'l'he statute of limitations was also relied on as a defense to the present suit. R. a. BrickeU. H. a. Semple,andW A. Gunter, for complainant. D. S.'lhiy, H.O. Tompki'fls,A.. T. London, arid S. F. Rice, for respond,. , 'The statute of limitations begins to run against a trust only from the time it. is openly and unequivocally disavowed by the trustee. Thomas v. Merry, (Ind.) 15 N. E. Rep. 244. See, also, Price v. Mulford, (N. Y.) 14 N. E. Rep. 298, and note. So long as the pledgee of stock holds it as collateral security for a debt, and has a right to so hold it, he cannot assert that he holds it adversely to the pledgeor, and thus show title under the statute of limitations. Cross v. Reid, (Cal.) 14 Pac. Rep. 885. A pledgee, in an action against a sheriff who has 18vied on the pledge as the property of the pledgeor. cannot Bet up title adverse to th. pledgeor acquired after the levy. Barnhart v: FUlkerth, (Cal.) 15 Pac. Rep. 89.
/1 See SO,.Fed. Rep. 476, for hearing on plea.
GILMER 11. MORRIS.
BRUCE, J. The fair conclusion from the evidence in this cause is that' on March 30, 1875, Josiah Morris agreed with F. M. Gilmer, who was at the time acting for his son, J. N. Gilmer, the complainant, tbat the stock which is the subject-matter of this suit, to-wit, 60 shares of the capital stock of the Elyton Land Company, should be held by him, Morris, or by his banking firm of Josiah Morris & Co., as collateral security' for the payment of an interest account of about $500, and for about $230, which sum Morris about that time paid in discharge of an execution which had been levied upon the stock, which stock at that time stood in tlie name of J. N. Gilmer upon the books of the company. The execution was in favor of a creditor of the firm of Gilmer, Browder & Co;, of whieh firm J. N. Gilmer was a member, and, when paid, the stock ferred by J. N. Gilmer to' Josiah Morris on the books of the company. of Josiah The certificate of the stock was at the time in the Morris & Co., and had been in their possession since its issue in 1871, when it was pledged for the payment of the purchase money of the stock, ' which some time thereafter was paid by a sale of one-half of the original 120 shares, which left 60 shares of the stock in pledge for a balimce of interest of about $500 due from complainant to Morris & Co. It also appears from the evidence, as a fair conclusion therefrom, that the stock in question was not only to be held by Morris & Co. as collateral security for the payment of the indebtedness which J. N. Gilnier then ae,tually owed Morris & Co., but the stock was to be a basis of credit 'for he (meaning Morfuture liabilities. In the language of F. M. ris) " was to hold the stock for that advance," (meaning the amount paid to settle the execution had been levied upon the stock,) and "for all future liabilities of the said J. N. Gilmer." At the time mentidrted, March, 1875, there was in existence the firm of Gilmer &'Donaldson. ' Donaldson died in the year 1876, and the firm was succeeded by the firm of J. N. Gilmer & Co., and that firm by the firm of Gilmer & Clanton, and that again by the firm of Gilmer & Merritt. J. N.Gil·' mer was a member of all these firms, all of which did business in Mo'ntgomery, Ala;, and had bank accoUlits with the house of Josiah Morris' & Co. It does not very cleadi appear from the evidence the precise periods of time that these firms did business with Morris & Co;, but that they all did business with, and had accounts with, Morris & Co. ' in the order named is not questioned, and the last firm of Gilmer & Merritt seems to have carried their business to the year 1884, when a con-' tention arose about a draft of $100, drawn by Gilmer & Merritt, which' Morris & Co. refused to pay. Tha evidence shows that F. M. Gilmer, on and after the 30th day of March, 1875, did make arrangements with' Morris & Co. for advances and credit to his son, J. N. Gilmer, and some' of the firms with which he subsequently became connected. 'Thetestimany is not clear as to the times when these arrangements were 'made, or when the last time was that the stock in question was aHudedtb' between the parties as a security and basis of credit; but ,F. M. Giltl).,er says: "These interviews and cOIlversations extended down to the time that Clanton became a partner in the business, and, indeed; I think:: during
Clanton's partnership; but after Merritt became a partner I never ac'. verted to that stock as a security." And to the question, "Why?" he answers, "Because Merritt was a very responsible man." The testimony of respondent Morris is not consistent with these conclusions, nor with the testimony ofF. M. Gilmer and J. N. Gilmer, whosetestimonyis in substantial accord, and does not seem to be strained or improbable. As to the interviews und negotiatiolJ,s which F. M. Gilmer testifies he had and made with Morris & Co. for advances and credit to bis son and the firms with which he was connected, the testimony is very much that of Gilmer against Morris; but J. N. Gilmer's testimony is in support of that of his father, and the testimony of Morris is not sufficient to disprove it. Not only so, but the testimony of Josiah Morris is not in all points entirely clear; as, for example, where he says: "No, sir; there was no special arrangements. I frequently told Mr. Gilmer he should not have the stock unless he paid me what he owed me; but there was not a time tip to 1881.that 1 would not have readily give11 him the stock if he and all of them had paid me what they owed me. The stock was not worth as much as the amount they owed me, and was not, up to 1881, worth near the amount they owed me." And in answer to question, "You mean F. M. Gilmer and the accounts of the several firms in which J. N. Gilmer was engaged after the original transaction?" he say'l, "In which J. N. Gilmer was concerned. I was considering the whole of them." But without quoting further from the testimony, it seems pretty clear that we have here the pledge ofthe stock as collateral security for debts and to be created, and to become due after the 30th day of March, 1875. We have here, then, not merely the exifltence of a pledge, but we have the nature and character of the pledge, for it was not simply the pledge of the stock to secure the payment of a debt of a specified amount maturing at a definite time in the future, but it was in the nature of a continuing pledge or security; andso long as such relation and understanding existed between the parties in re;erence to the pledge, it must be admitted that the pledgee (Morris, in this case) was holding in virtue oithe title and right of the pledgeor, Gilmer. and could not be considered as holding adversely to such title and right, for there is perhaps no principle of law settled than that posseSSIOn, to give title, lIllist be adversary. Whatever difficulty there may be from the evidence to fix the time or times after the 30th of March, 1875, when F. M. Gilmer negotiated with Mords for advances of money and credit to.J.N. Gilmer, or to the firms with which he became connected, upon the faith of as collateral security, it is certainly clear that Morris & Co., this on and after the 30th day of March, 1875, did hold the stock in quest,onas collateral security, and did have accounts and do business with t4fl difi'l;lrent firms with which J. N. Gilmer became connected, and did adv:ance .molley to some of them by paying their checks when they ,had ()u.deposit with Morris & Co. at the time the che.<:ks were dra\yn and paid. ;The de'rc:lllse here is staleness of the demand, and laches on the part· complainant, and the statute of liu}itations .of six years Qfthe