4 Ala. 735 (Ala. 1843), Mansony v. U.S. Bank

Citation:4 Ala. 735
Opinion Judge:COLLIER, C.J.
Attorney:STEWART & DARGAN for the plaintiffs in error. CAMPBELL & GIBBONS, for the defendants.
Court:Supreme Court of Alabama

Page 735

4 Ala. 735 (Ala. 1843)




Supreme Court of Alabama

January Term, 1843

A payment of rent of mortgaged premises to the mortgager, after the mortgagee has become entitled thereto, is good as against the mortgagee, in the absence of notice to the tenant.

WRIT of Error to the Court of Chancery sitting at Mobile.

In the cause out of which this case arises, three bills have been filed; the first at the suit of Jos. Cowperthwaite, Thos. Dunlap and Herman Cope, against Isaac H. Erwin, as administrator cum testamento annexo of Henry Hitchcock; in the second, "The President Directors and Company of the Bank of the United States," a corporation of the State of Pennsylvania, is added as a complainant, and the widow of Mr. H. and her children, all of whom are infants, are joined as defendants; and in the last, the names of the complainants in the first bill are prayed to be stricken out, and in their stead the assignees of the Bank are stated by name, and prayed to be joined with the corporation as complainants. From the several bills considered together, it appears that Henry Hitchcock, late of Mobile, was on the fourth day of July, 1838, indebted to "The President Directors and Company of the Bank of the United States," in the sum of six hundred and twenty thousand five hundred and thirty dollars and ninety-six cents. To secure which sum Mr. Hitchcock and wife, on that day, executed to Joseph Cowperthwaite, Thomas Dunlap and Herman Cope, a deed of mortgage on a large and valuable real estate, situate in the city of Mobile; conditioned to be void, if the debt intended to be secured should be paid at certain periods prescribed by the deed. Mr. Hitchcock in his lifetime having failed to pay one of the instalments which first became due, the mortgagees filed their bill in Chancery for a foreclosure of the mortgage. To this bill the mortgagor answered, setting up a defence, which, if sustained and allowed would not only have avoided the mortgage, but have defeated a recovery of any part of the debt. While that cause was thus pending, Mr. H. died, having made his will, in which his wife was appointed sole executrix, and as it is alledged, constituted her sole devisee of all his estate, real, personal and mixed, with a power to dispose of the same by public or private sale, for the purpose of paying his debts.

Mr. H. after he had filed his answer to the bill of Messrs. Cowperthwaite, Dunlap and Cope, repeatedly expressed the determination to pay his indebtedness to the United States Bank, by a transfer of so much of the property embraced by the mortgage as was sufficient for that purpose; and actually endeavored to originate a negotiation through which a settlement would be effected. But the death of the mortgagor, on the 11th August, 1339, closed all efforts to compromise the controversy. After that event, Mr. Cope, as agent of "The President Directors and Company of the Bank of the United States," came to Mobile, for the purpose of negotiating with the representatives of Mr. H. for the immediate possession of the mortgaged property, and thus putting an end to litigation. In furtherance of this object Mr. C. had many interviews with James Erwin, the brother of Mrs. Hitchcock, who represented himself to be fully authorized by her, and those who were interested in the estate of Mr. H. to treat with him, for the purpose of adjusting the controversy then pending--and it is accordingly charged, that Mr. E. was fully authorized by his sister, as devisee under the will of her husband, to exercise the power which he assumed.

A settlement was effected on the following terms, viz: The complainants were to advance one hundred and fifty thousand dollars in cash, which sum Mr. E. represented to be indispensable to pay the creditors of Mr. H., who were unprovided for; this sum being paid, the complainants were, in virtue of a conveyance from Mrs. H. as the devisee under her husband's will, to enter upon and enjoy the mortgaged property without molestation of the representatives of Mr. H.; the bill filed against the mortgagor was to be abated by the failure to revive it; and the executrix named in the will was to decline taking upon herself its execution, and in her stead a friendly administrator was to be appointed, with the concurrence of the parties to the settlement, who should acquiesce therein.

In pursuance of the adjustment, the complainants paid to Mr. E. one hundred and fifty thousand dollars, to be applied to the debts of the creditors of Mr. H., whose debts were unsecured; the devisee, by deed of release, did convey to the complainants all her legal and equitable estate in the mortgaged premises, and they in turn executed to her a release of all demands against the estate of her deceased husband, saving such as were reserved by the mortgage executed by him. In addition to all which, the devisee made to the complainants an assignment of all the leases which were outstanding on the premises, and they consequently supposed that their possession was undisputed.

Further--Sometime previous to the negotiation with Mr. E. he purchased at a sale under execution, the reversionary interest of Mr. H. in eight store houses which had been conveyed by the mortgage, executed by the latter to secure his indebtedness to the Bank of the United States, for which he paid fifty dollars and received a sheriff's deed. Mr. E. represented to the complainants, that he purchased the houses for the purpose of strengthening his position in the negotiation. The eight houses were valued by Mr. H. in his mortgage at two hundred thousand dollars, and Mr. E. proposed to convey to the complainants whatever title he had acquired by his purchase, which was believed by the complainants to be a mere equity of redemption; but he requested the complainants to insert in the deed as its consideration, the sum of one hundred and fifty thousand dollars, stating that he would be thus left more at liberty in using that sum, which he was to receive, for the payment of the unsecured creditors of Mr. H. The wishes of Mr. E. were acceded to, but without any intention on the part of any one, of varying the terms of the settlement.

Isaac H. Erwin, a brother of Mrs. H., was appointed administrator of Mr. H. with the concurrence of the complainants, Mrs. H. and Mr. J. E. with a view to carry out the terms of the agreement they had entered into. But instead of thus acting, the administrator by every means in his power has molested the complainants, advertising that they were not in possession of the premises, and cautioning all persons not to pay them rent; he has leased much of the property and received a large portion of the rent, in violation of the settlement and to the destruction of complainants' security.

The bill sets out that the administrator pretends to have some claim to the premises, has asserted a property therein, &c., and prays that the claim may be inquired into, the debt due the Bank paid, or else that their title may be quieted and possession undisturbed, &c. Further, that the administrator be enjoined from all interference with the property, the rents, profits, &c.

Isaac H. E. Mrs. H. and her four infant children are the only defendants, the former of whom has answered. In his answer he denies that he was a party, or in any manner concerned in the negotiation, which was consummated by a settlement between the United States Bank, through its agent and Mr. J. E. He has refused to give effect to that settlement as administrator cum testamento annexo, for the reason that he conceives his powers will not authorize him to do so; besides his sureties and the creditors of the testator who are unprovided for, to a very large amount, object to his taking any steps which may impose liability upon the former, or jeopard the rights of the latter. In fine, he declares the honesty of his course, and a fixed purpose to adhere strictly to his duty, as it is defined by law.

At the term of the Chancery Court, holden in May, 1841, a motion was made for an injunction in this cause, to restrain the administrator cum test. an. from intermeddling in any way with the mortgaged premises described in the bill, or the rents and profits thereof; also "to appoint a receiver to be let into the possession, and have the management of, the mortgaged premises, and to collect and receive the rents and profits." These motions were granted in the terms in which they were asked, the Court ordering that the receiver collect and receive as well the rents in arrear, which have accrued since the 8th February, 1840, as the rents to become due from the tenants. Further, that the receiver manage as well as let the estate, with the approbation of the Master, and pass his accounts and pay in his balances from time to time, and invest the same as the Court may direct. The administrator was ordered to deliver up to the Master all notes, &c. in his possession. If the parties could not agree in the appointment of a receiver, the...

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