MONTGOMERY WATER POWER CO. v. WILLIAM A. CHAPMAN & CO., 126 F. 68

SHERBY, Circuit Judge, after stating the case as above, delivered the opinion of the court. It is contended by the contractors that the company was not injured by the ruling of the court in sustaining the demurrers to the. special pleas, because under the plea of “Not guilty,” on which the case was tried, the defense interposed by the special pleas could have been made, and that in the absence of a bill of exceptions it is presumed that it was made.

In Alabama, in actions founded on tort, the plea of not guilty is, by statute, made the general issue, and “puts in issue all the material allegations of the complaint.” Code 1896, § 3295.’ But in trespass de bonis asportatis a defense based on legal authority for the taking complained of, like other pleas in confession and avoidance, must be pleaded specially. This is equally true as to any contract which the defendant desires to set up as authorizing him to take the property.

Under former decisions in Alabama, if such authority was not specially pleaded, it was not permitted to be proved under the general issue, even in mitigation of damages. Womack v. Bird, 51 Ala. 504, 63 Ala. 500. But according to more recent decisions, if a defendant acted under a supposed, though invalid, authority, this fact may be proved for the purpose of mitigating or preventing exemplary damages. Boggan v. Bennett, 102 Ala. 400, 14 South. 742; Stephenson v. Wright, 111 Ala. 579, 20 South. 622. In the action of trover a different rule prevails.

In that action a valid authority for the appropriation of the property may be proved under the plea of not guilty and in bar of the action, for it is said' that the conversion is the gist of the action in trover, and is ex vii termini a tortious act which cannot in law be justified or excused; and it is manifest that any plea alleging matter of justification or excuse is equivalent to the plea of not guilty, since it must involve a denial of the conversion. Barrett v. City of Mobile, 129 Ala. 179, 30 South. 36, 87 Am. St. Rep. 54. “A conversion,” said Mr.

Justice Sharpe, speaking for the Supreme Court of Alabama, “is necessarily wrongful and cannot be justified. Where the appropriation is rightful, there is no conversion; therefore, a plea showing that fact directly contravenes the complaint, and is not in confession and avoidanee or in justification.” Id. A distinction between the form of action in trespass and trover is maintained in Alabama.

The form prescribed by statute for trespass in taking goods is a brief statement that “the plaintiff claims of the defendant-dollars damages for wrongfully taking the following goods and chattels, the property of the plaintiff,” describing them; and the form for the action for the conversion of chattels is a claim for “damages for the conversion by the defendant of the following chattels,” describing them. Code 1896, p. 947. The declaration in this case is composed of two special counts.

They do not follow the code form for either trespass or conversion, but each count contains all of the averments (and more) that are required in the code form for both actions, for in the first count special facts are stated to show that the possession was obtained wrongfully, and it is alleged that the possession was taken “forcibly, willfully, and maliciously,” and in the second count it is charged that the possession was taken “maliciously, willfully, forcibly, and wrongfully,”' and in each count it is averred that the company “converted the same [the property so taken] to its own use.” The distinction between trespass and conversion is this: that trespass is an unlawful taking — as, for example, the unlawful removal of the property — while conversion is an unlawful taking or keeping in the exercise, legally considered, of the right of ownership.

A mere seizure or unlawful handling may amount to trespass, while conversion is usually characterized by a usurpation of ownership. Fouldes v. Willoughby, 8 M. & W. 540, 551; Bigelow on Torts (7th Ed.) 510. If the declaration is in trover, the contract was admissible in evidence under the general issue and in bar of the action, if it authorized the company to take and appropriate the property.

If the action is trespass, the contract, which the company exhibited with the special pleas as giving it authority to take and use the property, was admissible in evidence under the plea of not guilty, but for the purpose only of mitigating or preventing exemplary damages. Counsel on both sides, in the briefs filed here, treat the action as trespass.

Conceding that their construction of the declaration is correct, the contract exhibited with the special pleas was not admissible in justification of the alleged trespass under the general issue, and it therefore becomes necessary to determine whether or not the special pleas were subject to the demurrers. The contractors by their suit charge that the company unlawfully and forcibly took and converted certain chattels owned and possessed' by them, the contractors.

The company, by special plea, admit the taking and the using of the property, and produce a contract which it alleges, under the circumstances stated, authorized it to take and use the chattels. The contractors demur to the special pleas, averring that the contract did not confer authority to take the property. The ultimate question therefore is, did the contract confer authority on the company to forcibly take possession of the property, and convert it to its own use in the construction of the works described in the contract ? Such authority is not conferred specifically.

We do not find in the contract words to the effect that on default of the contractors the company was empowered or authorized to take possession of the property and fio use the same in the construction of the works. All that relates to the subject has been given in the statement of the case.

Section 49, in a named contingency, authorizes the company “to employ other parties to finish the work, and the said contractor shall be liable for any and all damages arising from his said breach of contract.” This section, it is clear, is not a license to take and use the property. If authority exists at all, it must be found in the part of

section 5 which we have quoted. That section, in certain contingencies, after giving a specified notice, conferred on the engineer of the company the power and right “to take any measure he may think proper to complete the work within the specified time.” The contention is that this language conferred on the company the right and power to take the property from the possession of the contractors against their consent, and to use it on the works. Our attention is called to the fact that the contract contains no restrictions upon the power conferred.

That there must be some restriction is obvious, because the language does not and could not confer authority to do unlawful acts, nor would it be claimed, we suppose, that the language, broad as it is, would authorize the company to seize property of the contractors entirely disconnected in location and use with the works, nor would it authorize the company to imprison the contractors and force them to labor. The language must be read in the light of controlling principles of law. We must also look to the context, the contract as a whole, and the circumstances surrounding the parties.

Immediately following the words relied on as conferring the power, and without a period between them, is the paragraph: “And all moneys expended by the company in carrying out said measures shall thereupon be paid by the contractor, or may be deducted or retained out of any moneys due or to become due to the contractor; and should these moneys be insufficient, the balance shall be recoverable in the usual way as a debt due by the contractor to the company.” This language and

section 49, which conferred the right to employ “other parties” to finish the work, show that at least the engineer was empowered to take “any measure he may think proper [at the cost of the contractors] to complete the work within the specified time,” in the use of money and in the securing of “other parties” to complete the works. Is it not probable that the parties did not look beyond the expenditure of money to secure supplies, material, implements, and labor and the making of other contracts, or at least that they did not have in view the seizure and conversion of the contractor’s tools and materials?

Usually, perhaps not always, when a party to a contract has in view the taking of the possession of personal property held and owned by another, the contract is made to clearly show the authority. Such words of authority are familiar, as found in mortgages, deeds of trust, and other contracts. One paragraph would have explicitly conferred the power. Should we, by construction, put it into the contract, or should we conclude that its absence shows that it was not within the intention of the parties?

As analogous to this case, our attention is called by the learned counsel for the company to decisions of the Supreme Court of Alabama on the right and power of a mortgagee to take possession of mortgaged chattels. It was once held in Alabama that a mortgagee of personal property had no right to take it out of the mortgagor’s possession by force or threats or against his will, although the law day had passed and the mortgage contained an express power authorizing him to take possession on default being made in the payment of the secured debt. Thornton v. Cochran, 51 Ala. 415.

Later, however, it was held that under such circumstances the mortgagee could take possession of the mortgaged property without process of law and without the consent of the mortgagor and against his will, if he takes it without violence or breach of the peace, and that such taking, being the exercise of a right, will not constitute him a trespasser. Street v. Sinclair, 71 Ala. 110.

One of the three justices dissented from this decision, but it is the unquestioned law of the state, for later, and without dissent, the court held that after default the mortgagee could execute the power by entering upon the premises of the mortgagor and taking peaceable possession of the mortgaged property without the consent of the mortgagor, provided he thereby committed no breach of the peace. Burns v. Campbell, 71 Ala. 271, 287. In Alabama the mortgagee has the legal title, and can recover possession of the property in an action at law. After default, he is entitled to possession.

The mortgages in each of the cases cited contained distinct language authorizing the mortgagee on the default to take possession of the property and to sell the same. But it will be seen from these cases that notwithstanding the power to take possession is so clearly expressed, and is coupled with the legal title, the court hesitated in holding that the mortgagee had this right, and limited its exercise to cases in which he could take possession peaceably and without violence or breach of the peace.

There is no language in the contract, pleaded here that vests in the company the title to the property involved, nor is there ány language which specifically authorizes the company to take possession of the property. In the absence of such language, and where there may be doubt as to the proper construction of the contract, it does not seem proper nor conducive to peace and orderly conduct to permit one of the parties to it to construe it and to enforce its own construction. Such a rule would naturally lead to disorder and violence.

Where the contract clearly gives the right to take possession, the courts carefully guard and limit its exercise. The doctrine conferring such right should not be extended to contracts where the right to take possession is not clearly and expressly conferred. The law is reluctant to permit the exercise of arbitrary power. The courts themselves, with a presumption in favor of their impartiality, are forbidden to take property for litigants except by due' process.

Where a party to a contract claims the right under it to take for his own use the property owned by and in the possession of the other party to the contract, to justify the taking it should appear in clear and unmistakable terms that such right has been conferred on him. It ought not to require argument and construction to deduce the authority. If such be required, the owner and holder of the property, if unwilling to surrender it, should have his day in court before he is deprived of possession and ownership.

The view we take of the case makes it unnecessary for us to comment on the two contentions of counsel for the contractors — one founded on the authority of Champlain Const. Co. v. O’Brien (C. C.) 104 Fed. 930, and the other on Walker v. London, etc., Ry., 1 C. P. Div. 518. The contract did not, in our opinion, justify the seizure and appropriation of the property without the consent of the owners. It may be, as is claimed, that its use in the way shown by the plea was to the pecuniary advantage of the contractors, in that it lessened the amount of damages they would otherwise have been liable for.

If so, such facts could have been shown, not in complete justification of the trespass, but in mitigation of damages, under the plea of not guilty on which plea the case was tried. In the absence of exceptions on that point, we must presume that the company had on the trial the full benefit of the contract and all relevant facts in mitigation of damages. The Circuit Court decided correctly in sustaining the demurrers to the special pleas. The judgment is affirmed.