Peet & Co. v. Hatcher

112 Ala. 514
Supreme Court of Alabama·Decided November 15, 1895·Published·Cited by 35 cases

Opinion

HEAD, J.

This is a bill filed by the appellants to foreclose a mortgage executed by the appellee, B. T. [519] Hatcher, and his wife, to one G. P. Ellis, on the 26th day of June, 1885, on certain lands therein described, situate in Russell county, Ala., to secure a note executed by him to the said Ellis, in the sum of ten thousand dollars, payable on the first day of November, 1885. In the fall of 1883, the complainants, Peet & Co., were cotton brokers in the city of New Orleans, engaged in buying and selling cotton futures, for customers, on the New Orleans Cotton Exchange, of which they were members. They operated for stipulated commissions of so much per bale, and made advances for their customers, to keep up their contracts, when so agreed upon. Said C. P. Ellis was then the agent of Peet & Co. Respondent, B. T. Hatcher, was a cotton warehouseman, residing and doing business in the city of Columbus, Georgia. At the time mentioned, fall of 1883, Ellis and Hatcher met in Columbus and an arrangement was made between them, by which Peet & Co. were to buy cotton futures for Hatcher in New Orleans, and make advances for him when necessary to keep up his contracts. Accordingly, the purchases began, and continued until the latter part of 1885. When the note and mortgage in controversy were executed, June 26, 1885, if the then existing contracts had been closed, Hatcher was largely in arrrears to Peet & Co., for commissions and advances ; and he being about to depart for Europe, on an extended business trip, Peet & Co. desired security for the present arrearages, and to cover future losses which might develop during his absence in Europe — a continuation of the business of buying being contemplated. Ellis visited Columbus to attend to the matter, and, thereupon this note and mortgage were executed to afford the desired security. The note was at once endorsed by Ellis, and, with the mortgage, was delivered by him to Peet & Co., on his return to New Orleans. The business relations between the parties continued, as we have said, until the latter part of the year 1885, when it was ascertained that Hatcher’s indebtedness amounted to over $17,000.

It is attempted to be maintained, as a defense to the present bill, that the execution of the note and mortgage was a pxfivate transaction between Hatcher and Ellis, had upon consideration of a personal loan of ten thousand dollars then made by Ellis to the former, in [520] the shape of a check for that sum drawn by Ellis in Hatcher’s favor, on Peet & Co., which it was agreed by Ellis that Peet & Co. would honor and place the amount to his, Hatcher’s, credit on their books ; that the check was given and forwarded to Peet & Co., who failed to give credit for the amount; wherefore, ’ it is contended that the consideration of the note and mortgage failed. This defense finds no satisfactory support in the evidence. It is shown to our entire satisfaction, that the use of Ellis’ name in the papers, and the drawing of the check by him, were suggested, either by Ellis or Hatcher, (whose respective accounts of the matter are given in their depositions), and were observed as a mere form. Hatcher’s account is, substantially, that Ellis suggested it to conceal the gambling nature of the transaction. Ellis says Hatcher suggested it to prevent injury to his credit, he supposing that such injury might follow a general public knowledge that he was dealing so largely in cotton speculations, which fact would be indicated by the use of the names of New Orleans cotton brokers. It is immaterial to determine which of these versions is the correct one, for the result is the same under either. The evidence leaves no reasonable doubt that there was, at the time, no thought or intention, on the part of either, of a personal loan of $10,000, or any other sum, by Ellis to Hatcher, but that the securities were executed for the sole use and benefit of Peet & Co., upon the consideration we have stated. We would reach this conclusion upon the answers to the bill and testimony of Hatcher alone.

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Peet & Co. v. Hatcher, 112 Ala. 514 (Ala. 1895).

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