ALABAMA IRON & RY. CQ; V; ANNISTON LOAN & TRUST CO.
They deny that said Chamberlain, receiver, ever engaged Woodson, th<.> president of the First National Bank of E;heffield,Ala., to act as his agent in the· negotiation and·· sale of said receiver's certificates, and allege that Woodson disposed of the same without warrant Ot· authority frOID Chamberlain. receiver, and contrary to the direct instrdctions and request (If said rect>iver; that said certificates were not disposed of by Woodson, as alleged in the intervention, on the 10th October, to one Duncan T. Parker, or any otie else, nor were they disposed of for the sum of $5,000 each. And aver that said five certificates were n.yt; disposed of by Woodson until after the 13th October, 1889, and that they were then sold, or otherwise disposed of, by Woodson, without authority, and against the express instructions of the receiver, to some pereon or persons unknown to respondents, and for a price not greater than 75 cents on the dollar, and also call for strict proof that said Duncan T. Parker, or anyone in his behalf, ever paid to Oharles D. Woodson $5,000 for each of said certificates. And respondents aver that, if the said Parker ever bought the certificates at all from said Woodson, they were bought for a less sum than they were directed by the conrt to be sold for, and that the purchase of the same was against the order of the court, and against the instructions of the receiver. They further allege that the price paid for said certificates by said Parker, whatever the price may have been, was never turued over or transferred by Parker, or anyone for him, to said Woodson ner to said Chamberlain, as receiver. They aver that they were not informed as to what said Parker may have done with said certificates, but deny that Parker sold and transferred Said certificates to the Inter\'cner for $5,000 each. They also deny that it was the duty of Chamberla1n to pay the interest upon said certificates, or that said ChamberllUn reported the sale of said certificates, Nos. 1, 2, and 3, and also Nos. 8, 9, 10, 11, and 12, for him, by said Woodson, or thllit the proceeds were placed to his credit in the First National Bank of Sheffield. Respondents admit, however, that sald Chamberlain did report to the court that the proceeds cf tIle five certificates in litlgn,tion had been placed by Woodson to the receiver's credit in the Il'irst Nat!onlll Bank of Sheffield, less commission for selling same: but respondents aver and show to the court that such statemellt, made by said receiYer, was made through misinformation, and brought about by misrepresentation and misconduct of said 'Voodson; and that said proceeded to correct said statement m said report so soon as be became aware of the error into which he had been led. Respondents admit that a decree had been taken on the 3d December, lAA9, as alleged in the intervention, and that it was ordered in said decree that the purchaser of the property 8hould pay for said certificates, m addition to the amount bId at the sale of property. And they further admit the court did on the 4th day of ,January, 1890, make another decree, modifying and changlng the one of December 3, 1889, so as to authorize the purchaser of the property to test the validity of the said five certificates, hut deny that Woodson was the agent for the receiver, or that his sale of said certilkates was binding npon the purchaser of the prop· erty. They also admit the Fale of the mortgaged property on the 21st April, 1890, under the decree, as modified, authorizing the purchaser of the property to contl'St the validity of the five certifieates. In answer to the amended petition, substantially the same admissions and denials were made as in the answers to the original petition of intervener. On the 6th March, 1891, an order was entered, by consent, referring the cause to a special master, who on the 3d of August, 1892, filed an extended report upon matters of fact, in substance finding as follows: That Chamberlain, the receiver, by an order of the court, duly and regularly made, issued receiver's certificates for an amount, in the aggregate, of $150.000. Of these certificates, five, for $5,000 each,-Nos. 8, 9, 10, 11, and 12, inclusive,-the receiver placed in the hands of C. D. Woodson, who was at the time president of the First National Bank of Sheffield, to sell. That thesetlvecertificates are the subject of controversy in tWs suit, and the re-
eetver Wll8 authorized and empowered to sen them at not less than par, less. a reasonable amount to be paid for the negotiation of the same, and the proceeds to be applled to the purposes named in the decree. On October 13, 1889, Chamberlain, the' receiver, sent a telegram from Atlanta, Ga., to Woodson, at Fifth Avenue Henel, New York, in the following language: "Do not place receiver's cert11l.cates, under any circumstances, as I have given option for their sale. Also, return acceptance of ten thousand dollars to me, at Sheffield, at once. Allswer here. J. G. Ohamberlain." On the same day, Woodson repllel1 to this ,telegram as follows: "Telegram received. Will return yl)U the papers as O. D. Woodson." In violation of the instructions con· tained in. this telegram to him, Woodson, on October 14, 1889, sold in New York these five certificates to H.E. Garth, for D. T. Parker,-said Garth, in his testimony,says,-"either fl)r $17,000, or seventy cents on the dollar." And D. T. Parker, on the 21st and 220. of October, 1889, sold them to O. H. Parker. president of the APniston Loan & Trust Company, fl)r said company, for $22,500; being ninety cents on the dollar. That D. T. Parker purchased frl)m and .paid him for, the certificates, after the receipt by Woodson of the telegram from the receiver to Woodson, directing him not to dispose of the cert11l.cates, and, in effect, countermanding any authority. which might previously have been given to him to sell the certificates, but that Parker purchased and paid for thecert11l.ootes in perfect good faith, relying upon Woodson's reputation for probity and honor. D. T. Parker, it appears. i8 dead, and also Woodson. The testimony of Garth as to the sale by Woodson to Parker is: "I have been engaged in the banking business for'many years, and am now president of the Mechanics' National Bank of this city. I knew O. D. Woodson and D. T. Parker. I purchased of Mr. Woodson three certificates of the Sheffield & Birmingham Coal, Iron & Railway Company, of $5,000 each,-Nos. 1, 2, and 3,-and shortly afterwards bought for Mr. D. T. Parker five certificates, of $5,000 each, from Mr. Woodson. As well as I can remember, they were numbers 8, 9,10,.11, and 12. Mr. Woodson called at my office with Nos. 1, 2, and 3, and I bought them, paying him 80 cents on the dollar· for them; and in about two or three weeks afterwards he called to see me again, and I bought the five for Mr. D. T. Parker, at his (parker's) request. I believe their numbers were 8,9,10,11, and 12. I paid Mr.WoodsoD either 70 cents on the dollar, or $17,000, for the five certificates of $5.000 ea,ch. Mr. Woodson told me that· the receiver of the Sheffield & Birmingham Coal, Iron & Railway Company owed his bank, and gave the certificates to him to sell. I do not know what capacity he was acting in, further than that I knew he was president of the First National Bank of Sheffield, and that he had stated that the receiver was indebted to hls bank. I sold the certificates Nos. 1, 2, and 3, that I bought. Those bought for Mr. Parker were handed to him. So far as I know, the legality of the purchase of certificates Nos. 1, 2, and 3 has never been doubted or questioned. I have already stated the plice, and abl)ut the time when thecertiftcates were purchased. As nearly as I can remember, the first were bought the last of September, and the others the middle o·f October, 1889. So far as I know, the interest on Nos. 1, 2, and 3 has been paid regularly. I never heard to the contrary. I cannot say ho'w long I knew Mr. Woodson before the purchase of the certificates; probably It year. He was engaged in the banking business. I heard that he had been in the banking business a number of years in A.tlanta, Ga., and Sheffield, Ala. I cannot say what his standing was in banking and financial circles in the city of New York. He informed me that his bank was l!;ard up, but was perfectly good. So far as I know, everybody regarded him as thoroughly honest and reliable." The evidence shl)Ws that the certificates were regularly sold to the Anniston Loan & Trust Company at 90 cents, and that they still own them. The first notice they had I)f any question as to them was when they were presented at the bank where interest was payable. It is thus shown that the intervener is a bona fide holder for value, and that the first purchase was, in like good faith, for value. Upon the question as to whether the receiver rat11l.ed the sale by receiving the purchase plice, the intervener offered the testiml)ny of the witnesses T. L. Benham. J. R. Jones, and R. W. Austin, and the documentaq evidence ot.