[Thompson, et al. v. Hudgins, Exec., &c.] ecuted by the husband. The compromise conveyance recited, that the parties of the first part had taken legal steps to have the land sold under the deed of trust; that there were some doubts as to the validity of the conveyance, and protracted litigation was threatened; therefore, to prevent litigation, and to settle the matters in dispute, the parties aforesaid do covenant and agree, as follows, &c., expressing the conveyance of the land. The administrators afterwards sold the land, so conveyed, to J. S. Ryall. It was contended, that at the time this compromise was effected, the court had not announced its conclusion holding such mortgages of married women's property to be void; and that it presented a grave matter of doubt among members of the legal profession; but this court said: "The facts, however, were undisputed, and the only doubt was as to the law. The statutes on this subject were then as fully promulgated as now. Every one was required to know their proper construction, and neither ignorance nor doubt was any excuse." The contract was held invalid for the want of a legal consideration. In Ernst v. Hollis, 86 Ala. 511, the same principle was applied. STONE, C. J., said: "The surrender of a mere assertion of claim, or the withdrawal of a threat to sue, when the claim is without legal merit, whether its legal invalidity is known or not, will not uphold a release or agreement of compromise," citing cases supra, and cases from other courts. In Russell v. Wright, 98 Ala. 553, Justice HARALSON reviewed all these cases, and held to the same doctrine. Christian v. Niagra Ins. Co., 101 Ala. 634, opinion by COLEMAN, J., is to the same effect. Keeping in mind the principle thus so clearly estab lished in this court, let us carefully examine, each and every, the premises upon which the parties stood, and which are advanced by the respondents, as the sole support of the supposed obligation of Mrs. Thompson. We will find, that the unquestionably true analysis of these promises shows that there was an absolute and total absence of any disagreement, whatever, between the parties as to any fact or facts, in the slightest degree or remotest conception, material or relevant to their acts or conduct; and further, that the complainants conceded to be true, in its fullest import, every fact asserted for [Thompson, et al. v. Hudgins, Exec., &c.] their action, and unreservedly yielded and surrendered to the extremest verge of every demand asserted, claimed or made against them. If respondents had sued the complainants for everything which had entered into their minds to conceive they were entitled to, the claim could not possibly have been made broader than that to which the complainants surrendered. Not only this, although indisputably incorrect assertions of legal principles are recited, the very form, nature, contents and effect of the writings, construed by their four corners, show unmistakable recognition by all the contracting parties that, as matter of law, neither the life tenant nor his personal representative was entitled to the undivided. surplus accruing during his life; but that the remainderman was entitled to the same, when subsequently divided by the bank; that she alone was authorized to receive them, and that the bank had no authority to pay them to any other than herself. Adverting now to the premises, the agreement of June 26th, 1886, recites the substance of the deed of gift of 1884, and proceeds thus: "And, whereas, the said Tarlton L. Hudgins is entitled to have and receive during his lifetime the income, dividends and earnings of said two hundred shares of stock." This recital, properly interpreted, would seem to mean that he was entitled to have and receive such earnings, &c., as should be divided and allotted to his shares during his life. So interpreted, it correctly states the law; otherwise, it is a mere misstatement of the law. "And, whereas, the 'surplus fund' that has been heretofore set apart, from time to time, out of the net profits of said First National Bank of Birmingham, now amounts to the sum of twelve thousand, five hundred ($12,500) dollars." That fact was not disputed, at all, by the complainants. "And, whereas, the capital stock of said First National Bank being two hundred and fifty thousand dollars, the said two hundred shares of said capital stock has earned one thousand dollars of said twelve thousand, five hundred dollars of surplus fund, heretofore set apart, as aforesaid. And whereas, the surplus fund of said First National Bank will be increased from time to time by the setting apart of certain portions of the net profits of said bank." There was not the least dispute of these facts. "And, whereas, the said sum of one thousand dollars of said surplus fund heretofore set [Thompson, et al. v. Hudgins, Exec., &c.] apart, as aforesaid, and such part of the surplus fund of said bank hereafter to be set apart during the lifetime of the said Tarlton L. Hudgins as shall be earned by the said two hundred shares of the capital stock of said bank, constitute and form a part of the income and earnings of said two hundred shares of said stock, which the said Tarlton L. Hudgins, in his lifetime, or his personal representative after his death, is entitled to have and receive." This is a mere misstatement of a legal conclusion. "And, whereas" (mark this recital) "such part of said surplus fund as shall have been earned, at the time of the death of the said Tarlton L. Hudgins, by the said two hundred shares of said capital stock, will remain and constitute a part of the assets of said bank, after the death of said Tarlton L. Hudgins, and said two hundred shares of said capital stock will thereby be increased and enhanced in value." Here is a terse, clear statement of the law, as it was and is; directly repugnant to the preceding erroneous conclusions, and those that follow. By reason of the fact and conclusion here declared, that the stock will thereby be rendered more valuable to Mrs. Thompson, the writing, gravely, (we cannot say seriously) proceeds to recite: "And, whereas, equity and good conscience require that the undersigned Thomas C. Thompson and Julia N. Thompson should pay to the personal representative of said Tarlton L. Hudgins, after his death, the full amount of such surplus fund as shall have been earned, at the time of the death of said Tarlton L. Hudgins, by the said two hundred shares of the capital stock; and, whereas, a court of equity would direct and require the undersigned, Thomas C. Thompson and Julia N. Thompson" (both husband and wife) "to pay to the personal representative of Tarlton L. Hudgins, after his death, the full amount of such surplus fund as shall have been earned at the time of the death of said Tarlton L. Hudgins, by the said two hundred shares of said capital stock." Then follows the contractual clause, which we have already copied, by which the complainants contracted, promised and agreed to pay, as it was recited they ought to pay. And, in order to change the payment of dividends by the bank, from the direction which the parties knew the law would give them, care was taken to provide that the payment of dividends by the bank should be made di [Thompson, et al. v. Hudgins, Exec., &c.] rectly to the personal representative, whose receipt therefor should discharge and exonerate the bank for the amount so paid. It is clear as the light of day that this whole transaction was conceived in the knowledge of Mr. Hudgins, or his adviser, that by law he had no right whatever to the undivided surplus on hand at his death; and the effort was to secure such a right by contract. If his executrix was, by law, entitled to the surplus, what had Mrs. Thompson to do with it? How could she collect it, when divided, from the bank? Why the necessity to create a power of attorney in Mrs. Hudgins to collect the dividends, and why provide for the protection and exoneration of the bank in making the payments to her? Why should Mrs. Thompson and her husband promise and bind themselves to pay it? Why would a court of equity, as the agreement recites it would, compel them to pay it, when they did not and could not receive the dividends? What better remedy would the executrix desire than her right of action against the bank for the dividends when declared, if by the law they belonged to her? And if, by law, they belonged to Mrs. Thompson, as remainderman, what had the executrix to do with them? Why should Mrs. Thompson bind herself to account to the latter for them? These inquiries in view of the undisputed facts, serve to demonstrate how absolutely futile and unfounded was the assertion of this claim, in behalf of the respondents; and, as we said before, the very form and nature of the agreement demonstrate that the parties knew, at the time, that the claim had no foundation, in law. We have already set out the recitals of the two mortgages. They introduce nothing new, except that when the first one was given, on December 24, 1888, it was recited that Mr. Hudgins died on June 28, 1888, and that, at the time of his death, the surplus had increased to $125,000, whereby the 200 shares had earned $10,000; that a dividend of 6 per cent, amounting to $1,200, had since been declared, which was, by the instrument, surrendered to the executrix; and for the balance of the accumulated surplus, earned by said shares, to-wit, $8,800, complainants gave their notes, secured by the mortgage. The mortgage recites, as we have seen, that complainants claimed that said Julia N. was entitled to [Thompson, et al. v. Hudgins, Exec., &c.] said dividend, and the executrix claimed that she was entitled to it; and, further, that complainants claimed that there was no legal or equitable obligation resting upon them to pay the executrix said $10,000, but the executrix claimed that they were, both of them, legally and equitably bound to pay the same; wherefore, as a compromise, the complainants surrendered to the execu trix all claim to the six per cent. dividend, and gave their notes and mortgage for the entire balance of the $10,000 claimed. Thus, we see, they not only gave up, on a most fictitious and unfounded demand, every dollar which was claimed against them, but, if the contract were binding, they actually became guarantors of the future success of the bank, and its ability to maintain. the surplus until some indefinite time, in the future, when it might, in its discretion, see fit to divide the same among the shareholders. Although the accumulated surplus might, the next day, have been swept away by the casualties of business; nay, although the bank might have gone to failure and insolvency, and its stock become worthless, without the receipt of, or possibility to receive, a dollar by the complainants, in dividends or otherwise; yet, the inexorable demand of the contract into which they entered, would require them to pay the entire, then existing, surplus of $8,800. We think it is not possible to conceive a case more completely within the influence of the salutary principles of law announced by this court, to which we have adverted. Those principles were evolved from the wisdom of the past, for just such cases as this. The last mortgage is based alone upon the first, and is infected with the same vice. There is clearly no merit in the contention that the agreement of Mrs. Hudgins, as executrix, to transfer the stock to Mrs. Thompson on the books of the bank, constituted a consideration for the mortgage, &c. If such a transfer by her was required by the by-laws of the bank, it was a duty enjoined by law upon the executrix to make it without compensation.-Webster v. Upton, 91 U. S. 65. As said by Judge CHILTON in Prater v. Miller, supra, "To make such consideration valid there must be some legal right abandoned or postponed, or some obligation imposed by the contract beyond what the law, without it, enjoins as a duty." Mrs. Thompson |