Thomas v. Barnes

• Decision Date: 09 May 1929
• Docket Number: 4 Div. 352.
• Parties: THOMAS, SUPERINTENDENT OF BANKS, ET AL. v. BARNES ET AL.
• Court: Alabama Supreme Court

123 So. 18

219 Ala. 652

THOMAS, SUPERINTENDENT OF BANKS, ET AL. v. BARNES ET AL.

4 Div. 352.

Supreme Court of Alabama

May 9, 1929

Rehearing Denied June 27, 1929.

Appeal from Circuit Court, Dale County; J. S. Williams, Judge.

Bill in equity by James C. Barnes (revived in the name of J. L Barnes and J. E. Barnes, as executors of the estate of James C. Barnes, deceased) against the Ariton Banking Company and others. From the decree C. E. Thomas, as Superintendent of Banks, liquidating the affairs of the Ariton Banking Company appeals. Modified and affirmed.

Circuit court in suit to redeem did not err in ascertaining amount of mortgage debt without reference, where evidence was taken by deposition and issues were ready for final hearing.

James C. Barnes and E. R. Phillips were partners doing business as Barnes & Phillips. James J. Barnes was president of the Ariton Banking Company. They were closely related and very intimate. It is claimed that at the instance of the bank, the partners purchased much cotton, in the fall of 1916, above the market to prevent it from going to other cotton marts, and so that the proceeds would remain in the bank, it promising to pay for the cotton for the partners and to carry the account until the market went to 20 cents; that after a small rise the partners wished to sell, but the bank induced them to hold, promising again to carry the account for them. The price then began to go down, and the bank called upon the partners for additional security, whereupon James C. Barnes executed two mortgages to the bank on his separate property, real and personal, as further security. The bank later pressed the partners for collection of their account, and finally with their consent sold the cotton. The proceeds were applied to the account, and there was left a substantial balance claimed by the bank.

James C. Barnes filed the bill in this case, seeking to redeem the property from said mortgages. The partnership and partners were made parties. They filed a cross-bill setting up the same facts, and further claimed usury in the debt. The bill offered to do equity, and pay what, if anything, was ascertained to be due on the mortgages.

The pleadings are very voluminous, and set out in great detail every transaction.

The testimony was taken by deposition. After the taking of the testimony, an amendment was filed to the bill, designating the complainants as J. L. Barnes and J. E. Barnes, as executors of the estate of James C. Barnes, deceased. The record does not contain a suggestion of his death nor an order of revival, though such is alleged in some of the pleadings to have occurred, and was so treated by all parties. There was also an amendment to the cross-bill by E. R. Phillips as surviving partner. Such pleadings were duly answered, including demurrers as a part of the answer. The demurrers being overruled, additional amendments were filed to the bill and cross-bill.

It does not appear that copies of such additional amendments were served on the opposite party as required by section 6559 of the Code, nor any attention given to them. No testimony was taken after the amendments were filed. They rehearse in great detail the contentions of complainant and cross-complainant as to the effect of the evidence, but present no new issue, nor do they present the issue in any different legal aspect.

The case was submitted for decree in January, 1923, and a final decree entered in March, 1927.

The decree ascertained that there was usury in the mortgage debt, and allowed no interest, denied relief to complainant and cross-complainant in many of their contentions, fixed the amount of the mortgage debt, rendered a judgment against J. C. Barnes or his administrators or executors, and allowed 90 days in which to pay same, and provided that if not paid in such time, the register should sell the property embraced in the mortgages, and out of the proceeds pay the judgment and turn over the balance to the heirs (they were not parties) of said J. C. Barnes, or his administrators or executors. The decree taxed Ariton Banking Company with all the costs, and refused to allow an attorneys' fee for representing it in the litigation. The decree refers to a cross-bill by Ariton Banking Company, but such does not appear in the record. Ariton Banking Company, now in liquidation, acting by the superintendent of banks, prosecutes this appeal.

The decree of foreclosure of the mortgage was without the presence in court of the heirs or legatees of the deceased mortgagor.

Steiner, Crum & Weil, of Montgomery, and C. O. Stokes and Sollie & Sollie, all of Ozark, for appellant.

O. S. Lewis, of Dothan, for appellees.

FOSTER J.

An executor of the deceased mortgagor may maintain a bill to enforce the equity of redemption of real estate when it would have been available to the mortgagor if alive. Griffith v. Rudisill, 141 Ala. 200, 37 So. 83, cited in Foster v. Foster (Ala. Sup.) 121 So. 80. In such proceeding the heirs with the legal title are not necessary parties, as it does not necessarily lead to a sale. But a bill for the foreclosure of such a mortgage must bring before the court the legal title, as it directly leads to a sale of the land. Therefore, if the mortgagor is dead, his heirs or legatees must be parties, for in them is vested the legal title, and in some instances his personal representatives must also be before the court. Carwile v. Crump, 165 Ala. 206, 51 So. 744. If the mortgagor has executed a subsequent mortgage, or conveyed the property to another, such subsequent claimants of the title are necessary parties. Bolling v. Pace, 99 Ala. 607, 12 So. 796; Hambrick v. Russell, 86 Ala. 199, 5 So. 298; Langley v. Andrews, 132 Ala. 147, 31 So. 469; Sims, Chan. Pract. § 148. Section 5711 of the Code provides for a revival of real actions in favor of heirs and personal representatives, according to their respective rights.

The authorities above cited, and others noted below, point out that in such foreclosure actions the heirs being indispensable parties where land is included, their omission is available on error, without previous objection. Powe v. McLeod, 76 Ala. 418, 420; Boyle v. Williams, 72 Ala. 351; Lawson v. Ala. Warehouse Co., 73 Ala. 289.

This is not a bill for foreclosure, nor was there a cross-bill praying for such relief. But it is well known that on a bill for redemption, when complainant offers to do equity, the court may decree a foreclosure without a cross-bill by the mortgagee. Haralson v. Whitcomb, 200 Ala. 165, 75 So. 913; Seed v. Brown, 180 Ala. 8, 60 So. 98; Alston v. Morris,

113 Ala. 506, 20 So. 950.

We think that in decreeing a foreclosure without the heirs or legatees of the deceased mortgagor before the court, there was error. The decree should only have fixed the amount of the mortgage debt, as it did, and authorized a redemption by the executors of decedent; but in so far as it directed a foreclosure it was contrary to the rules we have noted, in the absence of the heirs of the mortgagor.

Section 6149 of the Code authorizes this court on appeal, upon finding error in the record, to render such judgment or decree as the court below should have rendered when the record enables it to do so. Lampkin v. Irwin, 202 Ala. 14, 79 So. 300; Seed v. Brown, supra. While the decree of foreclosure was improper, the condition of the record, we think, authorizes the court to modify it so that it shall be a decree of redemption, and not of foreclosure.

Appellant also called to the attention of this court the condition of the record, as respects the failure to show that the...