Allison v. Cody

• Decision Date: 21 April 1921
• Docket Number: 3 Div. 461
• Parties: ALLISON v. CODY et al.
• Court: Alabama Supreme Court

89 So. 238

206 Ala. 88

ALLISON v. CODY et al.

3 Div. 461

Supreme Court of Alabama

April 21, 1921

Rehearing Denied May 19, 1921

Appeal from Circuit Court, Montgomery County; Leon McCord, Judge.

Bill by H.B. Allison against Michael Cody and others to redeem from a redemption from foreclosure. From a decree sustaining demurrers to the bill, complainant appeals. Affirmed.

W.A Gunter, of Montgomery, for appellant.

Ball &amp Beckwith, of Montgomery, for appellee.

McCLELLAN J.

The Tri-States Realty Company executed, on different dates, three mortgages on the same real property, to secure respective indebtedness maturing on different dates. The first, superior mortgage was foreclosed, and the holder of the first superior mortgage became the purchaser at the foreclosure sale, this land being afterwards sold to other parties, "and," as averred in paragraph C of the bill, "finally passed into the ownership of the Mabry Securities Company, a corporation." On April 1, 1919, Michael Cody, to whom had been assigned the third mortgage (executed by the Tri-States Realty Company to J.C. Crowson), exercised the statutory right of redemption and effectually redeemed from the Mabry Securities Company the land sold under the foreclosure of the first, superior mortgage. On February 16 1916, Allison, the complainant (appellant), became the assignee of the second mortgage executed to J.C. Crowson by the Tri-States Realty Company on December 2, 1915.

The special prayer of Allison's bill is this:

"*** And that it be decreed that orator is entitled to the benefit of said redemption of said land described in orator's said mortgage by Cody on equitable terms, and that a receiver be appointed to take charge of said redeemed property, and to sell the same, and that the proceeds be applied first to the reimbursement of said Cody for his outlay in effecting said redemption, and then as is equitable between all the interested parties, according to their several rights, and that the amount due to orator and to said Cody on their respective mortgages be ascertained and paid out of said proceeds of said property according to their equitable rights severally, and that said Cody be charged with the rent of said lands since he recovered the same."

The question arising on demurrer to the bill is thus stated in brief for appellant:

"Whether a third mortgagee can redeem from a sale under the first mortgage and hold exclusively for himself against the second mortgagee claiming, without laches, on equitable terms, the benefit of the redemption."

The design of the bill and the effect of its allegations is thus defined in brief for appellee:

"To state the proposition in another way, the bill is filed by a second mortgagee after foreclosure of the first mortgage and redemption by the third mortgagee and the expiration of the time within which the second mortgagee might have redeemed to hold the third mortgagee as a trustee for the benefit of himself and the second mortgagee. There is no contention that any express trust has ever been entered into. The only trust which is hinted at is supposed to grow out of the relations above stated." (Italics supplied.)

Upon familiar principles the valid foreclosure of the first superior mortgage effected to completely extinguish the equity of redemption resulting from the mortgage, leaving in the mortgagor, or those claiming under or through the mortgagor, only the statutory right of redemption. Jackson v. Tribble, 156 Ala. 480, 489, 490, 47 So. 310; and Lehman, Durr & Co. v. Shook, 69 Ala. 486, 491, 492 (among others); 10 Michie's Dig.Ala.Rep. pp. 194, 195. In the purchaser at such foreclosure sale the legal estate vested; the equity of redemption being entirely cut off and barred. Authorities supra. The statutory right to redeem exists after the foreclosure, the act which creates it; and under the amended statute that is now, as always heretofore, a privilege only, not a property right or interest. Toney v. Chenault, 204 Ala. 329, 85 So. 742. This statutory right of redemption can only be exercised by those described in the statute and in the mode defined therein, and with the effects the statutory design prescribes. Beebe v. Buxton, 99 Ala. 117, 118, 12 So. 567. The effectual, seasonable exercise by Cody of the statutory right to...