Eastern Bank v. Taylor

41 Ala. 93

• Court: Supreme Court of Alabama
• Decided: June 15, 1867
• Status: Published

Opinion

A. J. WALKER, C. J.

In the court below, the plaintiff’s judgment was adjudged to be satisfied. The bill of exceptions sets forth the entire evidence in the case, together with the charges, upon which the verdict, that the judgment was satisfied, is predicated. One Williams was, in 1863, the agent of the plaintiff, having authority to collect the judgment, or to transfer it, provided the plaintiff should incur no liability by such transfer. Williams, the agent, transmitted the amount due upon the judgment, to the plaintiff, and endorsed upon the execution docket a written transfer, without recourse, to himself; which was signed by himself, as the agent of the plaintiff. The transfer purports to be upon a valuable consideration, the receipt of which is acknowledged by Williams, as the plaintiff’s agent,

[1.] It is contended in argument, that a sale by an agent, to himself, although he has authority to sell, is absolutely void. Such is not the law. A purchase by an agent, or trustee, at his own sale, is valid, except as to the principal, or cestui que trust, and is not absolutely void, but void at the election of such principal or cestui que trust, seasonably expressed ; and is capable of confirmation, so that it can not be avoided. The points involved in this proposition have been so frequently ruled, and so thoroughly elucidated, that it is only necessary for us to refer to the different decisions on the subject, for they preclude any further investigation of it.—Charles v. Dubose, 29 Ala. 367; Payne v. Turner, 36 Ala. 623; Andrews v. Hobson, 23 Ala. 219, 235-236; Bott v. McCoy & Johnson, 20 Ala. 578; Gunn v. Brantley, 21 Ala. 633 ; Creagh & Forward v. Savage, 9 Ala. 959; McLane v. Spence, 6 Ala. 894.

A remark made in Walker v. Palmer, (24 Ala. 358,) might be regarded as opposing the proposition above laid down, if considered without reference to the point involved ; but, when the question of the case is observed, the decision harmonizes with our proposition. Although some of our own decisions, above cited, restrict the right of avoiding the sale to the principal, or trustee, we fortify our proposition in that regard by reference to the following cases : Davone v. Fanning, 2 Johns. Ch. R. 268; Hawley v. Cramer, 4 Cowen, 744; Jackson v. Walsh, 4 Johns. 415; Jackson v. Van Dalisen, 5 Johns. 47. We have found no case, English or American, which is opposed to our proposition. In New Jersey it has been held, that the cestui que trust may avoid a sale by a trustee to himself, by an ejectment; and therein is a difference from the other decisions; but the question as to the rights of the respective parties is adjudged in that State conformably to our proposition.—Scott v. Gamble and Wife, 1 Stockton, 218. See an able review of the authorities on the subject, in the notes to Fox v. Mackreth, 1 White & Tudor’s Lead. Cas. in Eq., m. pp.92, 217.

The sale of the judgment by the plaintiff’s agent, to himself, was valid, in the absence of the dissent of the principal. It did not need the ratification of the principal to give it a standing, until objected to, but a ratification would retroact, and place it beyond assault, even by the principal, from the date of the sale.—See the authorities supra; also, 1 White and Tudor’s Leading Cases, m. pp. 140, 141. The doctrine, that an illegal or void contract is incapable of ratification, has no application to this case; for the transaction is neither illegal, in the sense in which the word is used in the rule upon that subject, nor is it void. The transaction held to be void in the case of McGehee v. Lindsay, (6 Ala. 16,) was not a purchase by a trustee, or agent, at his own sale; and while the court, arguendo, mentions with not very guarded phraseology the doctrine as to purchases by trustees at their own sales, it is obvious that the decisions, was not put upon those remarks, and that the case has no analogy to this.

[2.] The question of this case is, whether Williams bought the judgment, or whether he paid it off. This question is not to be decided upon any inconsiderate and loose use o£ the word payment in reference to the transaction. If the transfer, written on the execution docket, correctly represents the transaction, then the judgment was sold to Williams, and not paid off by him. In this case, he stands as if he had a right to buy from himself, as the agent of the plaintiff in the judgment, and as such agent to transfer it to himself; and if he did, in fact, purchase the judgment, and transfer it *o himself, no other person than the plaintiff could object. In the absence of objection by the plaintiff, it stands good, and no entry upon the books of the plaintiff, that the judgment was paid, upon representation of the defendant that it was paid, would convert the sale into a payment. Neither the representation of Williams that the judgment was paid, nor the belief of the plaintiff that such payment was made, would constitute a payment. It would be evidence showing that a payment was made; but it would not be conclusive evidence, and might be rebutted.

[3.] The declarations of a party are not conclusive upon him, unless they amount to an estoppel. The evidence does not show that Williams wrote to the plaintiff a proposition to discharge the judgment with the money which he transmitted, and that the proposition was accepted. It does not show that the communication of Williams to the plaintiff, and the action thereupon by the bank, had the form or substance of a contract for the discharge of the judgment. The witness McNab proves nothing more than that Williams represented, as a fact, that the judgment was paid. If this representation was incorrect, we think the plaintiff is not estopped from showing the truth. Because a party may argue an ability to maintain a suit from a declaration of his adversary, and ventures to sue upon the strength of such declaration, an estoppel does not result from proving the truth. We know of no case, in which the doctrine of estoppel has ever been carried to such an extent. An estoppel does not result from a statement to a third person, made without any intent to influence the other party, if there is no breach of faith in denying the representation.—Welland Canal Co. v. Hathaway, 8 Wend. 483; Tufts v. Hayes, 5 N. H. 453 ; Kingsley v. Vernon, 4 Sand. 351.

If Williams in fact paid the amount of the judgment to the plaintiff, as a payment and discharge thereof, it would be discharged; and a false entry upon the execution docket, of a transfer to him, would not change the case. Whether this was the case or not, was a question for the jury.

Under a recent act of the legislature, Williams will be a competent witness, and the question of his competency on the previous trial is unimportant.

Reversed and remanded.