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Donelson's Adm'rs v. Posey, et al.

paid by her, amounted to $302 96 besides cost, amounting to some $85.

Complainant avers several other judgments rendered against her, upon demands, as she alledges, after the dissolution of the firm of Pearson & Donelson, and properly chargeable to Pearson & Coffee-one to B. & N. Harris, which she has paid, amounting to $2,021 40. Also, a judgment in favor of Ann Key, for $1,719 14, which she has not yet, but will shortly have to pay.

The bill insists, that complainant's equity, which is that of the creditor, whose debts complainant has paid, is a superior equity for satisfaction out of the effects of the partnership, to the equity of Pearson's assignees. The amendment prays perpetuation of the injunction granted on the original bill, &c.

The defendants answer this amendment, and admit the intemperate habits of Pearson, but aver he was sober when the trust deeds were made. Also, deny the allegations that the demands paid by complainant, were the proper debts of Pearson & Coffee, but say the firm of P. F. Pearson & Co. continued up to 1837, for the purpose of settling the old business, borrowing money, &c.

The defendants also demur to the bill-1. Because there is no equity shown upon its face. 2. Because, they alledge, it is multifarious. The chancellor overruled the demurrer.

Various depositions were taken on both sides, which, so far as material, will be noticed in the opinion. The chancellor, on the final trial, dismissed the complainant's bill, and adjudged the cost to be levied of the effects of Donelson. This decree is assigned for error.

HOPKINS, with whom was NooE, for the plaintiff in error, made the following points:

1. The deeds of assignment executed by Pearson, when from intoxication he was incapable of making a valid contract are void. Swift v. Fitzhugh, 9 Porter, 63; Mordecai v. Tankersly, 1 Ala. 102; Prentice v. Achorn, 2 Paige, 30; Cook v. Clayworth, 18 Vesey, 12.

2. Whatever sum Pearson owed Donelson for the capital and profits of the latter, in the firm-or for the share of Don

Donelson's Adm'rs v. Posey, et al.

elson in the speculation in cotton, was in the nature of an equitable debt, due to Donelson at the dissolution of the firm, for which he had no remedy but in a court of equity. 1 Ala. Rep. 521; 7 Id. 217. This equity of Donelson is older than that of Pope, which arises from the transfer to him of Donelson's debt to Pearson, created subsequently, and must be preferred to it, whether Pearson was solvent or not, when he transferred it to Pope as trustee, and as collateral security. 6 Dana's Rep. 306; 10 Peters's Rep. 179, 210; 8 Ala. Rep. 224.

3. As Donelson was compelled to pay three notes of the firm of Pearson & Coffee, from his failure to give notice of the dissolution of the firm of Pearson & Donelson, as a surety for the money thus paid, this claim did not accrue until he was compelled to pay, since the commencement of the suit at law, by Posey against him, and being a creditor of the firm of Pearson & Coffee, is equitably entitled to a preference over their individual creditors. Lucas v. Atwood, 2 Stew. 378; Winston v. Ewing, 1 Ala. 129; Story on Part. 513-19-20, 458.

4. The conveyance in trust, being for the benefit of the individual creditors of Pearson, Donelson, as a creditor of the firm, is entitled to a preference out of the assets of the firm, and of this right a court of equity only has cognizance. To show that Brahan, for whose benefit the assignment was made, was an individual creditor of Pearson, and that Coffee was discharged, they cited Tom v. Goodrich, 2 Johns. Rep. 213; Story on Part. 525.

5. A court of equity has jurisdiction in this case, because none of the claims of Donelson could be set off in the action at law. 8 Ala. 222; 3 Leigh, 698; 5 Id. 34; 2 Paige, 582; 6 Dana, 32, 305. So, upon the authority of these cases, the note made to Oliver before the dissolution of the firm of Pearson & Donelson, is an equitable set-off, as he was compelled to pay it, after the suit at common law commenced against him by Pearson, especially as Pearson was insolvent, when he made the conveyances in trust, which is the source of a new equity, ample to sustain the bill. See the authorities cited under this head. This fund under the control of the trustee, cannot be reached without making Posey a par

Donelson's Adm'rs v. Posey, et al.

ty, as well as Pope, as the former has an interest in the funds in the hands of the latter-the bill is not therefore multifarious for this cause. 2 Howard U. S. 642; 2 Ala. 573.

6. It was the duty of Pearson, the acting partner, to keep correct accounts; his omission to do so, rendered the proof offered competent. Story on Part. 278.

7. The improper commissions secured to the trustee in the deed, made it fraudulent on its face. 1 Fonb. Eq. 117, note 13; Ib. 118, note 2; Chesterfield v. Janssen, 2 Vesey, 155.

E. W. PECK and L. P. WALKER, contra.

The object of the bill is two fold-to set aside the deeds of assignment from the drunkenness of the grantor, Pearson, and to establish certain alledged claims as equitable off-sets.

1. The deeds cannot be set aside for the cause alledged, because drunkenness, like lunacy, or infancy, is a personal privilege, which is only available to the party himself, or those in privity with him. 13 Mass. 375; 2 Cowen, 552; 20 Johns. 478; 2 Hill on Real Property, 421, note a; 1 Eq. Dig. 401-2-3. Secondly, it should have been shown, that the drunkenness was excessive, and that the grantor was utterly deprived of his reason and understanding-1 Story's Eq. § 231; 4 Eq. Dig. 150, § 1; 1 Kinne's L. C. 333-and that the drunkenness was procured, and superinduced, by the party claiming under the deed-1 Vesey, 19; Fonb. Eq. 75; 1 Bibb, 406; 1 Powell on Cont. 18; 1 Madd. Chan. 239; 10 Yerger's R. 121; 18 Vesey, 12; 1 Story's Eq. 242-4and the proof is wholly wanting in all these particulars.

2. The claims attempted to be set up as equitable sets off, are not mutual, or due to, and from the same persons, in the same right, which is essential to a set off, either at law, or in equity. 1 Porter, 232; 9 Id. 452; 5 Ala. 110; 3 Johns. C. 573; Id. 351; 4 Id. 11; 1 Cond. R. S. U. S. 417; 7 Porter, 549; Burge on Suretyship, 462; 10 Vesey, 105; Ex parte Toogood, 11 Vesey, 517. Equity does not allow a set-off, of a joint debt, against a separate one, or the converse, cept under peculiar circumstances, which do not exist in this case. 2 Story's Eq. § 1437, note 3; 5 Cranch, 34; Burge on Suretyship, 463; 10 Vesey, 105.

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3. There is no sufficient proof, that the note of Oliver,

Donelson's Adm'rs v. Posey, et al.

was given by Pearson & Coffee for goods, purchased by them, but conceding such to be the fact, as it was not paid by Donelson, at the time the deeds of assignment were executed by Pearson, there was no subsisting liability to create an equity in favor of Donelson, and against the assignee. 7 Porter, 110; 8 Ala. 223. But conceding that all the notes paid by Donelson were the debts of Pearson & Coffee, yet that would not invest him with an equity, equal to that of the creditors represented by Posey & Pope, as the liability of Donelson was the result of his own laches, in failing to give notice of the dissolution of the partnership, and the omission of the administrator to defend at law.

4. As to the case of the Rail Road Co. v. Rhodes, 8 Ala. Rep. 206, it is respectfully submitted, that the law of the case is correctly expounded by Ormond, J. and in confirmation of his opinion, beg to refer to the following cases, showing that the determination of the majority of the court, was founded upon the liberal construction put upon the term "mutual credit" in the bankrupt law of England. Burge on Suretyship, 455-7, 462-3-4-7; Smith v. Hodson, 4 Term, 211; Atkinson v. Elliott, 7 Id. 378; Hankey v. Smith, 3 Id. 508; Rose v. Hart, 8 Taunton, 499; 8 Id. 156; Glennie v. Edwards, 4 Id. 775; Ex parte Wagstaffe, 13 Vesey, 65; Lanesborough v. Jones, 1 P. Wms. 325; Davies v. Wilkinson, 4 Bing. 578; Rose v. Sims, 1 B. & Ald. 521; Easum v. Cato, 5 B. & Ald. 861. But they contended, that the case was plainly distinguishable from this, as it is not shown that Coffee knew that the goods were purchased with a note of P. F. Pearson & Co., and unless he did know the fact, there was not even an implied assumpsit that he would refund, and Donelson could not by paying the debt without his consent, make himself his creditor.

5. They contended that where third persons, as in the present case, have acquired rights by an assignment, no equities attach except those existing at the time of the assignment, and no liabilities will be allowed as sets off against such persons, except those subsisting in the shape of actual debts, as contra-distinguished from contingent liabilities, against the assignor, at the date of the assignment. 2 Story's Eq. 656-8, 664, § 1436, note 1; 5 Paige, 592; 2 Sumner,

Donelson's Adm'rs v. Posey, et al.

409; 3 Johns. C. 358; 1 Edwards Ch. 402; 2 Id. 73; 5 Mason, 202; Holcombe's Introduction, 284; Gay v. Gay, 10 Paige, 369.

6. Lastly, they contended that upon the proof, the case was with them.

CHILTON, J.-It is insisted by the counsel for the defendants in error, that the will is multifarious, as containing an improper joinder of distinct matters. Also that its objects are inconsistent and repugnant, because it seeks to set aside the deeds of trust made by Pearson to Messrs. Pope & Posey for fraud and incapacity on the part of Pearson, the grantor, and at the same time, prays relief which can only be granted by admitting the entire validity of both deeds. This inquiry becomes proper in this view of the case,—if the bill for any cause should have been dismissed, this court will not reverse the decree of the chancellor, because he may have failed to dismiss it for the true reason.

The gravamen of the bill is, that Pettus, the administrator of P. F. Pearson, is endeavoring to enforce collection of certain alledged demands due by account from the complainant's intestate, to P. F. Pearson and Pearson & Coffee in their lifetime, and against which complainant cannot defend at law; first, because of the nature of the subject matter of their defence, being, as is alledged, equitable sets off; second, because of the peculiar relation in which the parties stand to each other, representing partners in a late mercantile firm; third, because an account which can be alone appropriately had in equity, is required to be had, to define the rights of the respective parties; and fourth, that the demands are sued to the use of certain persons claiming them by virtue of trust deeds, executed by Pearson, which deeds, as against complainants, are charged to be inoperative, because they were obtained from him while intoxicated. This is one aspect of the bill, upon which complainant predicates her claim for relief. Another is, that complainant has been compelled to pay firm debts due by Pearson & Coffee, which debts should be a charge in equity upon the firm effects, and be preferred to the claims of the trustees; and, allowing the trust deeds

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