Proctor v. Gissendaner

• Decision Date: 05 September 1978
• Docket Number: No. 76-4239,76-4239
• Citation: 579 F.2d 876
• Parties: Joseph H. PROCTOR, as Administrator, c/t/a of the Estate of Pinkie Sutton, Deceased, Plaintiff-Appellee, v. J. C. GISSENDANER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 876

579 F.2d 876

Joseph H. PROCTOR, as Administrator, c/t/a of the Estate of Pinkie Sutton, Deceased, Plaintiff-Appellee, v. J. C. GISSENDANER, Defendant-Appellant.

No. 76-4239.

United States Court of Appeals Fifth Circuit.

Sept. 5, 1978.

J. Gorman Houston, Jr., Eufaula, Ala., for defendant-appellant.

Robert B. Albritton, William Harold Albritton, Andalusia, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before TUTTLE, GEE and FAY, Circuit Judges.

FAY, Circuit Judge:

This appeal arises from a slander of title action in which the jury awarded a $40,000 ¹ verdict to the plaintiff, as Administrator cum testamento annexo of the estate of Pinkie Sutton. Jurisdiction is premised upon diversity of citizenship.

Pinkie Sutton, deceased, contacted an individual named William Bell in the early part of 1968 in order to have home improvements performed on her place of residence. As evidence of the contractual undertaking of Sutton, Bell allegedly obtained an executed "Work Contract" ² specifying that 84 monthly payments of $48.19 were to be received by Bell. Additionally, Bell allegedly received a promissory note in the face amount of $4,047.96, ³ secured by a mortgage on the real estate in question. Both the note and the mortgage contain the alleged signature of "Pinkey Sutton Brown" and are dated February 29, 1968.

On February 29, 1968, the same day that the mortgage was allegedly executed, Bell transferred and assigned the mortgage to the defendant, J. C. Gissendaner, for $2,234.99. Gissendaner, who is in the business of purchasing mortgages, testified that he personally spoke with Pinkie Sutton prior to accepting the mortgage assignment from Bell. Gissendaner recorded the mortgage in the office of the Judge of Probate of Covington County, Alabama, on March 4, 1968. Shortly thereafter, a payment book entitled "Mortgage Payment Book" directing that payments be sent to "Gissendaner Mortgage Co." was mailed to Pinkie Sutton. Sutton had made fifty-five payments up to October 6, 1972, the date of her death, when payment ceased.

Joseph Proctor was appointed Administrator cum testamento annexo on October 9, 1974. On April 10, 1975, the defendant caused to be published a notice of foreclosure of the mortgage in the Andalusia Star-News, a newspaper of general circulation in Covington County, Alabama. The notice of foreclosure was published despite the fact that judgment had been rendered against the defendant Gissendaner in at least four other cases involving forged mortgages and in which Gissendaner had purchased the mortgages from the same William Bell.

An action to restrain the defendant from proceeding with the foreclosure and to declare the mortgage a forgery was instituted by the plaintiff Proctor in the Circuit Court of Covington County, Alabama. The state court granted the temporary restraining order and subsequently declared the mortgage allegedly executed by "Pinkey Sutton Brown" to be a forgery. ⁴ The plaintiff then instituted suit for slander of title in state court. The defendant removed the action to federal court and the proceedings giving rise to this appeal followed.

The defendant urges several grounds, both legal and factual, in support of his contention that the judgment of the district court is due to be reversed. Finding the contentions of the defendant to be without merit, we affirm the judgment entered by the district court.

I. ISSUES OF LAW

The defendant initially contends that this suit cannot be maintained because a cause of action for slander of title to real estate does not survive the death of the owner of the property. We are mindful of the body of Alabama law which clearly distinguishes between an "action" and a "cause of action" for purposes of survival. ⁵ Only the former survives in favor of the personal representative, subject to limited exceptions not applicable here. It is undisputed that the forged mortgage was filed for record during the lifetime of Pinkie Sutton and that no action for slander of title was filed by Sutton during her lifetime. We are nevertheless convinced that an action for slander of title can be maintained under the particular facts of this case. On April 10, 1975, more than three years after the death of Pinkie Sutton, the defendant caused to be published the notice of foreclosure on the property described in the forged mortgage. The act of filing the foreclosure notice constituted a separate and distinct slander of title for which the defendant may be held answerable in damages. ⁶ Our conclusion that this action may be maintained is premised upon the separate and distinct nature of the slander of title ⁷ perpetrated by the filing of the foreclosure notice, after the death of Pinkie Sutton, and in no way runs afoul of the well settled rule of law in Alabama that a personal "cause of action" generally does not survive in favor of the personal representative. ⁸

The defendant next contends that, under Alabama law, an Administrator cum testamento annexo is not a proper party to institute an action for slander of title when the testatrix has devised the realty in question to specified individuals. This contention is premised upon the consideration that under the law of Alabama title to realty owned by the decedent immediately vests in the decedent's heirs or devisees at the time of death. See Little v. Gavin, 244 Ala. 156, 12 So.2d 549 (1943). Moebes v. Kay, 241 Ala. 294, 2 So.2d 754 (1941).

Rule 17(a) of the Federal Rules of Civil Procedure provides in pertinent part that "Every action shall be prosecuted in the name of the real party in interest. An executor, administrator . . . may sue in his own name without joining with him the party for whose benefit the action is brought." The rationale underlying the rule is that by requiring suit to be brought by the real party in interest, the defendant can be shielded from subsequent suits on the same action and the judgment rendered can have proper res judicata effect. United Federation of Postal Clerks, AFL-CIO v. Watson, 133 U.S.App.D.C. 176, 184, 409 F.2d 462, 470 (1969), Cert. denied, 396 U.S. 902, 90 S.Ct. 212, 24 L.Ed.2d 178 (1969). It is settled that in a diversity case we must look to the substantive rights afforded by state law in making the determination of whether the named party is a real party in interest. United States v. 936.71 Acres of Land, State of Fla., 418 F.2d 551, 556 (5th Cir. 1969). In 936.71 Acres of Land we noted that it is elementary that "The 'real party in interest' is the party who, by substantive law, possesses the right sought to be enforced, and not necessarily the person who will ultimately benefit from the recovery." Id.

We must, therefore, look to Alabama ⁹ law to determine whether Proctor, as Administrator cum testamento annexo, is a proper party to maintain this suit. The starting point of our analysis is Title 7, section 89 of the Alabama Code, pursuant to which this action was commenced. Section 89 provides that:

The owner of any estate in lands may maintain an action for libelous or slanderous words, falsely and maliciously impugning his title.

The defendant contends that the plaintiff Proctor cannot be deemed to be an "owner of any estate" in the land in question because title to the property passed to the devisees immediately upon the death of Pinkie Sutton. Proctor counters with the contention that Title 61, section 243 of the Alabama Code confers the requisite estate in the case at bar. This section provides as follows:

Lands may be sold by the executor, or by the administrator with the will annexed, for the payment of debts, when the will gives no power to sell the same for that purpose, and the personal estate is insufficient therefor.

Proctor argues that the realty in question is the only asset of the estate of Pinkie Sutton, and, because claims aggregating in the amount of approximately $2,255 were filed against the estate during the six month statutory period, ¹⁰ it may be necessary for him to exercise the authority conferred by section 243.

We conclude that the authority conferred upon Proctor by section 243, as administrator with the will annexed, creates a sufficient "estate in lands" within the meaning of Title 7, section 89 so as to render him a proper party to maintain this action. First, the administrator has a Duty to exercise the statutory authority granted by section 243 in the event that the personal estate is insufficient to pay the debts of the estate. See Moebes, supra ; Boyte v. Perkins, 211 Ala. 130, 99 So. 652 (1924). The realty passed to the devisees upon the death of Pinkie Sutton but such passing was subject to the payment of debts and charges against the estate. The immediate passing at death must indeed be deemed to be a "conditional" passing because according to the non-claim statute, claimants have until six months after the granting of letters testamentary or of administration in which to file claims against the estate. Therefore, in a given case, it may not be possible to determine whether it will be necessary for the personal representative to sell realty to pay the debts until the six month statutory period has expired. See Powell v. Labry, 210 Ala. 248, 97 So. 707 (1923). Furthermore, considering the duty imposed by law upon the administrator in the event the personal estate is insufficient to pay the debts, we believe that it simply cannot be disputed that the administrator would be a proper party to maintain suit to declare a forged mortgage a nullity. It is elementary that the administrator could not effectively exercise the duty mandated by section 243 so long as the forged mortgage remained as a cloud on the title. We are likewise convinced that Proctor, as administrator, is clothed with a sufficient "estate in lands" to maintain suit for damages flowing from the foreclosure notice, the consequence of the forged mortgage.

Second, the right of an...