in! itrcontroversy, declaring' at with trust funds. and for his said wards, taking the title in his own name, to hol4 until said wards should arrive at majority. , It further appears that before the levy of the execution issued' on judgIBE'nt atlaw, by proper deed, he declared the said trust, and that the said landsih controversy had been purchased with trust funds as a part of the tl'us1Hlatate, and belonged,Hi fact, to the cestui8 quetmstent. This declaration of trust, regularly witnessed, ackno,wledged, and recorded, and fixed the property as trust property, even if it was not, in fact, ,a conveyance of the property. I t is contended by the defendants iii this case that said deed was fraudulent, as made without considerntionj and ,the declarations therein 110t true in fact; but this defense is not sustained. There can 'be no doubt under the evidence that at the time of the declll.ratioii of trust the said Thomas R. Mills, Sr., was indebted to his said wards for a sum 6f'money exceeding largely the value oithe'lands declared to be trust property. He had the right, even if it was not his duty, to payor secure the said indebtedness, and to accomplish such result he had the right to c6nvey, in satisfa'ction of or to secUre suchqlaim, any property that he possessed; and the giving in pay11lent ora declaration of trust, under such circumstances, cannot be declared frauduient in a court of It seems to me to be clear that the oorn.'I>lainants'bill should, be rnaintained, and the injunction herein perpetuated. A decree to that effect will be enterEd. issued
GlLMER t1.' MOBIUS et
, (Oif'cuit Oourt, M. D. Alabama. June 24, 1890.)
, 2. ,
Where apl,edge made to secure future advances Is relludiated by the pledgee, the statute of limitations will begin to run against the pledgeor's right to recover the ,pledged, property from the time, such repudiationtaK8s place. A delay of'tnoi'e than five years in bringiIil<suit to redeem pledged property does not constitute where appears t,hat the pledgee has been gUilty of breach of ,trust, that he still holds the pledged property, which has increased in value, and that complainant had preViously brought suit. 1;0 redeem, which had been decided alfaiulit. him.
In Equity. ,On demurrer to the bill. W. A. Gunter, for complainant. H. o. Tompkins, for defendants.
'" PARDEE, J, The bill alleges, in substance, that complainant, Gilmer, about the year 1870, being a subscri'ber to the capital stock of theEIyton Land Company; a corporation under the law'sof Alabama, for 120 shareS; tlf the par or nominal value of $100 per share, but issued at 50 centS
GILMER V. MORRIS.
on the dollar, an with the defendant Morris that he should advance the money (86,000) necessary to pay for said stock as required by said company, and wait upon complainant for re-payment, and hold said stock as a pledge for said repayment; that defendant Morris did pay for said stock the sum of 86,000, and the same, in suance of saill agreement, was placed by complainant with said Morris as a pledge for the repayment of said advance, and was, to make said pledge effectual, transferred by indorsement of the certificate of stock, issued in complainant's name; to the said Morris; that shortly afterwards defendant Morris, under the direction of complainant, sold 60 shares of said stock for $6,000, which sum was paid to ant Morrison the amount due him for money advanced as above stated'; that the certificate for 120 shares was surrendered, and two certificates Were issued, one for 60 shares, to the purchaser, and the remaining ODe, for eo shares, to the complainant Gilmer; that the latter was transferred by indorsement to Morris, and placed with him, in pursuance of the 'original agreement, as a pledge to secure the payment of the baJanceof the original purchase money; that matters remained in this situation 'until Maroh, 1875, up to which time defendant Morns had never trans;. ferred the stock on the books of the 'company to himself, when said stock was levied on as complainant's property by the sheriff to satisfy al'l. execution against complainant on a judgment amounting 10$233.60, that, upon the levy being made, he made an agreement with said Morris that he (Morris) should pay the debt and discharge the levy, and that thereupon the stock should be transferred to him on the books of the company;. and he should hold the same as a pledge for payment of anoe due on the original purchase, the snm to be paid to discharge the levy and llU indebtedness which 'Gilmer or any other of the firms with which he was connected in business might incur in the future either to Morris or to the banking house of Josiah Morris & Co., of which said Morris was a member; that Morris consented to this agreement, andpailil the judgment, and the 12th of July, 1885, the amount was paid to the firm of Gilmer & Donaldson, of which Gilmer was a member; that the stock was transferred on the books of the company to Morris' name prior to that date, but after said agreement was made; that prior to 1875 Gilmer had kept a bank account with the firm of Josiah Morris & Co., and in the early part of 1877 he and one Donaldson formed a partnership, and desiring to continue his banking account with Morris & Co., and to obtain from them accommodations, he arranged and agreed with Morris that the said stock should he held by him to secure the indebtedness ,which the firm of Gilmer & Donaldson might incur to him (Morris) or to his· banking firm; that under said agreement, and up to the death of Donaldson, in 1876, the banking account of said firm was continued with the banking firm of Morris & Co., and loans and discounts were made to Gilmer & Donaldson, and at the death of Donaldson there was due to Morris & Co., and to the firm, the sum of $2,308.03; that this bala.nce was sec.ured, not only by the pledge ofthe stock, but by other security and stock deposited by Donaldson for thatpurposej tbatl,
the sum o£ ,3975, ou the I1th.oLM(lircil', ,1880, which ,wasplace$l: to the
Ul'lS\l,i in ;the.uaWeQ(
stockso:depositect.by.DonJlldsQJl; Morris vealized is $Q,U due:anduu-
. :&00., with, said, Morrls, until the 1,87:9,.,wheu, be fo:rmeda partnership witn<meClantonj :tl1at qQlJing, !the tim,,e·hecal'riedon bu..'liness in the :Diameof .Gilmer & Cp.,: Oll,.tbe,flloith and credit of the stock held as .a by Morris, small advaJ;lcl.js,and, At the ,time of the forma,& Clantou, ,there wa,sdutUtQtbe firm of JoCo,by;Gilrner the sur,nof$222.43,whioh wasafterwarda ,paidjAi,.,follows; ,$230 'by de,poaitJune 8, 1881, and. $52.33 by a note ,giverlIl9n,,31st May, 1883, a:ndpaid on the3d,of,Octobel',J 1883; do ,bWlinesswitb: Morris & Co., the name of cr.:N;I.Gi.1a:ner&Co., the fil'lll of GUmer, & a newbusi:1le.ssand>:Qaoking accQuntiwith Mords'ithat afterwards 0180ton sold out his, one Met.'ritt, a.udanewtirm, underthe';I)am-eof Gilmer ..,aaid. bu&ines8, until the same ,wQ,dissolved, some timeJn tbeyear'1884;. thRt,dtlring the course ,of dealings jIithe names of ,Gilmer & Clanton and GiliDer & credj,ts ,ioaaid:Jlrms,lI.ndmad,e to them. [romi time 1<> timet ,fl:/.ith and,credit.of the stock belonging.to ,Gilmer, which had .pled.ged as ueithar.. of said, firms owed, Morris. any on, the at the time they. closed thejr said business; tbatl,iI!the lady partoU872, and up to the mouth ofJune, 1884, saill Morris ·did:not, directlY9r indireetly, ,notify GilmerQf tbe;amount of the due ,him in said account, .or require bim to· pay such· balauCEls;, ,that he did not.p;ive notice.to flilmer that. the stock must beredeEjlllied, or that hehad;or would sell it,Qr was holding it otherwise than as 0., pledge.;c ··that said Morl'i$eontilluously,.from the month'df March, 1875, to tpe of June, 1884, held and, acknowledged that be held the swelt 11$ pledge, and that in June', 1884; complainant, Hilmer, for the time learned tha,Uhe stook had, commenced paying dividends, and when hecal1l:d upon Morris to inquire about it was then for the first time inforlXled that Mord& denied holding the stock M:.a pledge at all:, and :was (urther.· inform.ed·thatit had' been sold by ·Morris in the year ,1881;· but the bill avers that the alleged sale never was in fact made, and .thatdef-endl1nt Morris has continued to hold the said stock. The ,bill prays ,for the recovery- of the stock, and an accounting of the divithereof fl'omthe time of the alleged pledge. iThedefendants de.mur to the,bill for want o£equity, and as a stahl demand; and that the ,complainaJ;l.t;'s suit is barred by the. stl1tueof limitation in the state of statute, it is alleged, applies to;suUsjnequity.as well ' ;;, ' ;.; 1:h.f'I ibill :Illa,k!es .a: ca:se lQf pledge:fof futl'lre advanc(ls,: which were con,tinuously\made, over' a term;ofyears from ,18,75; to ,1884, at which a balanceiwas due to defendant. Morrili, 'which said pledge. 'TlJieidefendantMorris fOl',thefirst time
,after, the dea.th of Donalrlson, Gilmel' cOIltiuu,ed.to do busi-
alleged of ,the pledged and nied his lhtbility in June, 1884. a pledge is made to secure future and :which advances are z;n.ade, the pledgeor's right of to. recover the pledged accrues when all the. advances secured by the pledge are,paid, or when the pledgee, by positive act, repudiates the pledge, or iqlproperly disposes oLthe pledged property. Under the facts stated in, the bill, the complainant's right of action,therefore, accrued in June, 1884. : It, seems unnecessary, therefore, to consider in this case the statute of limitation of six years under the laws of Alabama, or to determine whetbe.r such statute has any tion in a suit of equity iI} the courts of the United States. Staleness of demand, by reason oflaches, however" is a more serious objection, and as to time rests upon a different footing. "The growing iOlPOr!a9G6 of tracie commerce, with the increase of the means·of rapid tl'a,llsit and speedy commuQicatioo, have tended in modern times to shorten the period allowed by,courts of ,equity beyond which a deOland is. coqsidered stale on the ground of laches. * * * What be rendering a pledgeor's right of redemplapse qf tion stale cannot, of course, be formulated into any fixed rule applicable depend upunits own circumto al1cases. Each case must stancEC\s" regard, .not alone to the mere question of time, but a,lso to rellltive !lituationof the parties, the nature of pledged, wpether stationanyor fluctuating in value, and the other lacta affecting the justness or equity of the right asserted. 'It is said by Mr. S(Jhouler. 'largely a matter of judicial discretion.' .Schouler, Bailm .. 22'.5, note 2. * * * It is well settled that a much, Shorter time will be allowed the, pledgeor within which cise thenght of redemption, where he seeks to make a profit ont,.Qf the unexpected ris13 in the vplueof pledged stOl:iks,than where he seeks account for a sur,plusreceived by him merely to (JQmpel the from the sale of the stoc;ksjn lim,linary CUSE/i!. Schouler, Railm. 225; Oil 00. v:. Marbury, u. Gilmervdlwris, 80 Ala. 78. ;"The right ora corporation to ay,oid the sale pf its property by reason of the fiduciary relations of the purchaser mtlst·,beexercised within a reasonable time ll-lter the fiwts cl;mnected therewith are made known, or ran, by due diljgcnGE1, be ascertained. A':J the courts have. never prescribed any specific applieahle to every case, like the statute of limitation, the deterniination as to what constitutes a reasonable time in any particu,. lar ClIse must be arrived at by, a consideration of all its elements which thatquestion. * * * These are generally thepnesence or absence of .the partiE111at:the place of the tranSll!ltion; their. knowledge or ignorance the Bale, and of tlW facts which. reQder it voidable; the or, fluctuating phara()ter;Qf the subject-matter of the' transaction as lind actual rise or fall of the. property. in value affecting its duringtheperioq, within Which this option might have been exercised." Oil.Co. v. Marbltry,.91 U.S,.,587. "Courtsofequity.often-treatalapse than by, the s-tatute of limitatiuu as &> prcr ot. tilne I ofdisc;:ouraging, stale <;laims or gross laches . or"unexplliitied acquiescence in the assertion of an adverse right." ".2>'.
Stort"Eq. Jur'.§ 1520. InSmithv.Olay, A.mb.645,LordCAlIDEN said: 'A:caurt of equity, which is never active in relief against conscience or p,ublio convenience, has always refused its aid to stale demands when the party has slept upon his rights, or acquiesced for a great length of time. Nothing can call forth this court into activity but conscience, good, faith, and reasonable diligence. When these are wanting, the court is passive, and does nothing, and laches and neglect are always discountenanced.' These doctrines have received the approval of this court in numerous cases. Oil Co. v. Marbury, 91 U. 8.587; Badger v. Badger, 2 Wall. 87; Marsh 'I.' Whitmore, 21 Wall. 178; Harwood v. Railroad Co., 17 Wall. 79." Haywardv. Bank, 96 U. S. 611. To the.same effect, see Indiimapolis Rolling-Mill Co. v. St. Louis, etc., R. Co., 120 U. S. 256,7 Sup. Ct., Rep; 542. '"By:the bill it appears that five years and seven months elapseq after the; defendant Morris alleged' a sale of 'the pledged property, and diated all-liability on account of the pledge before 'suit was broughttO teeQWr tile pledged property. t,he demurrer ih'fact, Morris made no sale or'the sW6k"but still hoUls and pdsaeSBell:it, drawing The bill further'shows thaUhestockwhichisthesubJect oithe suit for a longtime waS below parii' but;since about the time of thell.lleged sale 'lHlsrisen rapidly in: vlUue,iahd paid large dividends, so that the claim, which in 1884 would: llatV8 peen for about,the par value onhe stock, is now alleged to amount' to: o'Ve'r $150,000. In the :bill there is no explanation for the delay in' bringing'suit, but, as smatter of it is t.o my personal knowle,dge,' audhas been brought'lo my attention in argument in this case by 1,oth: sides in cases of Gilmt-'1' v. Morri8, 80 Ala. 78,' and Gilmer, 129U. S. 315, 9 Sup. Ct. Rep. 289, that the complainant did institute a suit in onaofihe chancery courts in the state of AlabamiL against these same parties defendant for the recove'ry of this tpat on anlidv>al'se decisiol1' in the said' chancety court,.afterwards af.; by the the o,nthe 27th of iii smtwas brought 1D thliScourt on Septeulber 20,1886, for the same stock, which' suit was ,pending and undisposed of u,ntil the 28th day of JariqarY',1889, when the supreme courtof the United States rendered a decision adverseta thecomplainallt, this time, however, conceded not t<;> be upon the merits of the case. How far these conceded, facts out- , side of hill should be considered in ruling on thedemurtet is not conclear, but I think they should have some weight. Taking them nection with the fact thaHhe alleged sale of the stock sued lor is a pretense, and,that; infact,dUring the delay in bringing'snit no change injurious,to parties has occurred, and the further fact that complainant's bill, confessed; by- the demurrer, shows s breach of trust, I am of the opinion;giyingfnll force 'to, the authorities above quoted, thatthe chatge of iltaleness'ofdemand should not be sustained. If a sale of the pledged ' property was1actually made, so that complainant had an option to or or if defendants have been inJured or prejudiceq. by any' laches bfcor:nplainant,'8uoh' state of the case can be shown in the answer' and eYlid"ence. ',' .',' , ,'; " , , 1 , . " I ':,
.. FITZBtlGB ".M'KINNEY.
(Cf.rewtt Court, N. D. Texas. May 26, 1890.)
EQUITY-JURISDIOTION-REMEDY AT LAW-SET-O!!'!!'.
Rev. St. Tex. art. 649, provides that if the plaintilf's cause of action be a claim for unliquidated damages founded on tort.hthe .d ..efend.ant. Sh.all not be permi.tted to set·. oft' any debt due him by plaintift'j and ift esuit be founded on a certain dellland, the defendant shall not be permitted to set off unliquidated damages founded on tort. Article 650 p"ovides that defendant may' set olf any counter-claim arising out of, or incident to, plaintiff's cause of action. Held, that these Ilrovisions do not require the pleading of a set-off, so as to defeat a suit in equity to enforce it, on the ground that the party pleading it has an adequate remedy' at law. . Attorneys, under the laws..of Texas, have no suell 11811 on judgments re<l9vel1ld by them Bstliat an assignment to'plaintift"s attorney of apart of a judgmehtas' compensation will defeat a suit in by defenliant injforce a eet·oft' .against Buoh, judgment. '.
ATTOIj.NEYs....LIEN ON JUDGMENT.
' . , .'
In Equity. Bill for injunction. M. L. 'Orawford, for bOlll.plainant.. ., J. M. McCoy and .John R. Hayter; fbi" respondent.
; ", ,. . '. . I'. ',.'.,
14th clay the W ·lI.juc).gment:.a.tlaw,jll this court against, tblHlomplainant, for thesum:of $4,050, besidesc08ts\ in an actionoriginallyinstiiu1Mon the 4thdayof.N?v,ember, 1887. It pt>ar,inthebilland answer, but it'was admitted on the hearing that was for damages for.wrongfuUysuilJ.gQut' aIld, eXecuting, of seqtHistration ih a litigation 'between the same ,inl the courts for Lamar. county, which ,litigation, in Lamar C9uIlty .reSu,ltedin the two judgments in favor of complaimtht set out in this suit.' " On the 15th dayof June, 1889., the complaillltIlf his, bill herein to this collrt, showiJig t,he :recovery of saiq jqdginent against· him for $4,050, besides costs,anrl shbwing that he a judgment against respondentontheHth, day of October, '1886, for costs,ll.nd on the 15th day of MaY; 1888, baa 'recovered a judguwnt against respondent for $2,343.69,: the first judgment <l.raW'iug .interest ,at the rate 'of 8 .per cent. per 'annum, nnd the other. at .the rate of 12 per cent. per annum, both in full force; and, tliattqese, with the interest thereon, the ar:nountpf '$3,400.61; nQpiiri oJ, whichbad been paid, or in any manner discharged; thatsaidqharles, w. McKinney is notoriously insolvent; that complainanthadpai,Qto, the clerk of this court all the costs adjIldged .ag!l:ins,t respondent against him; and had tendered tqtherespondentafrillarr, quittimce and. discharge of b?t.h of said ,j udgm,epta against. and. the SUnlaf. agall1stqomplamant and. the two spondetIt, which respondent had refused to and. comp1a,lpipt had sum of pjoney, to-wit,$649.40;!pto theregistry 001#6 court' fOr' the respoJ)dent,aiid' attached to. his bill the in discharging COil). p1'ainant's' j'udgmentsagainst· .and
l" . ,