Baker, Lyons & Co. v. Eliasberg & Bros. Mercantile Co.

• Citation: 79 So. 13,201 Ala. 591
• Decision Date: 18 April 1918
• Docket Number: 2 Div. 6555
• Court: Supreme Court of Alabama
• Parties: BAKER, LYONS & CO. v. ELIASBERG & BROS. MERCANTILE CO.

79 So. 13

201 Ala. 591

BAKER, LYONS & CO. v. ELIASBERG & BROS. MERCANTILE CO.

2 Div. 6555

Supreme Court of Alabama

April 18, 1918

Appeal from Circuit Court, Wilcox County; B.M. Miller, Judge.

Bill in equity by the Eliasberg & Bros. Mercantile Company against Baker, Lyons & Co. Decree for complainant, and defendant appeals. Affirmed.

H.H McClelland, of Mobile, for appellant.

Pettus Fuller & Lapsley, of Selma, for appellee.

THOMAS J.

The bill was filed in the circuit court in equity on October 30 1916, for the redemption of certain real estate sold under the power of a mortgage. The mortgage in question was executed by J.H. Andrews and wife on October 30, 1908, to secure an indebtedness due Monroe County Bank; and on January 4, 1912, the same was duly transferred by said bank to Baker Lyons & Co. After the giving of this mortgage, and prior to the 13th day of May, 1914, the mortgagor husband died intestate, leaving as his only heirs at law four children, one of whom was G.W. Andrews. On the 13th day of May, 1914, said G.W. Andrews and his wife, to secure ah indebtedness owing to Eliasberg & Bros. Mercantile Company, a corporation, gave that concern a mortgage on the undivided one-fourth interest in said lands vesting in him by descent upon the father's death. On the 31st day of October, 1914, which was after default, said transferees foreclosed said senior mortgage by sale pursuant to the terms thereof, and at such sale became the purchasers of the lands so conveyed, and received an auctioneer's deed thereto. Within two years after this foreclosure, said Eliasberg corporation, as a junior mortgagee of the undivided one-fourth interest in said lands, conveyed it by G.W. Andrews, served upon the purchasers at the foreclosure sale a written demand for a statement in writing of the debt, together with all lawful charges claimed by them as purchasers, as provided by section 5748 of the Code of 1907, as that section was amended by the Acts of 1911, p. 391. The purchasers failing to comply with such demand the complainant, after the expiration of ten days, filed its bill to enforce its rights under the statute. Respondents demurred on the ground that there was "no equity in the bill" and their demurrer was overruled. Complainant's demurrer was sustained to respondent's plea, which plea was as follows:

"The act of Legislature of 1915, page 598, does not confer upon the circuit court jurisdiction to enforce a statutory right of redemption where land is sold under power contained in the mortgage; that said statutory right of redemption is not a 'matter of equity.' "

The cause was then submitted for final decree upon the pleadings and an agreed statement of facts, which was, in short, as we have heretofore recited; and the circuit court found that complainant was entitled to ascertainment of the amount due upon the senior mortgage, and to redemption. Complainant having complied with the decree as to redemption by it, a deed was executed to it by the register of the court, and on report thereof it was confirmed by the court.

Pretermitting for the movement consideration of the ruling of the trial court sustaining demurrer to complainant's plea to the jurisdiction of the circuit court to proceed in equity to a final determination of said cause, we will determine whether or not the Eliasberg corporation, as junior mortgagee, was entitled to redeem under the statute. Code, § 5746 et seq.

It cannot be doubted that the statutory right of redemption is nonexistent until the equity of redemption is extinguished by a valid foreclosure. Dinkins v. Latham, 79 So. 493. Mr. Justice Mayfield observes that prior to the Code of 1907, redemption was "neither property nor the right of property," but was "a mere privilege" personal to the debtor; saying, further, that:

"The right was made assignable by the Code of 1907, but only by the mortgagor or owner thereof. It is not yet made subject to sale under execution. It still retains its character of a personal privilege to the mortgagor or owner, or to others mentioned in the statute. The statute does not authorize this right or privilege to be assigned by any one except the debtor; while it confers the right on others specified, it does not authorize such others to assign the right, as it does the debtor." Leith v. Galloway Coal Co., 189 Ala. 204, 206, 66 So. 149.

Appellants rely largely upon the Leith Case as an authority that would deny the right of redemption sought by complainant. The question there for decision was whether or not the mortgagor's statutory right of redemption passed to the purchaser from the trustee of the bankrupt court, "where the equity of redemption had been cut off by a foreclosure, before the mortgagor was adjudicated a bankrupt." Therein lies the distinction between the facts of the instant case and the facts dealt with by Mr. Justice Mayfield in Leith's Case. That decision was not an ascertainment and determination by this court of the various classes to whom the Legislature had granted the privilege or right of redemption. It is therein specifically stated that the purpose of the statute is "primarily for the benefit of the debtor, and secondarily for the benefit of his creditors and of others mentioned in the statute, by affording him first, and the others mentioned next, the advantage of any increase in the value of the lands during the two years next after the sale of the property." That decision does not attempt to define the "others mentioned in the statute," intended to be included in the several classes to whom the right of redemption is accorded. As thus understood, the Leith Case, supra, is seen not to be in conflict with the decision here made.

The statement of facts showed that the equity of redemption remaining in the original mortgagor dying intestate descended to his sons or to each of them. When one of these sons conveyed his interest to Eliasberg corporation, before the extinguishment, by foreclosure, of the equity of redemption vesting in him on the death of his father, did the grantee corporation having such equity of redemption come within the class to whom the statutory right of redemption was secured by statute? Appellants' insistence is that the statute gives the right of redemption only to a junior mortgagee in a mortgage executed by the same mortgagor who executed the senior mortgage. We are of the opinion that if, at the time of foreclosure sale under a senior mortgage, there is a holder of a junior mortgage executed by the wife, widow child, heir at law, or devisee, who had taken or inherited from the senior mortgagor an undivided interest in the lands so conveyed by such senior mortgagor, and such title had vested in such junior mortgagor before the foreclosure of the senior mortgage, the junior mortgagee, or vendee or assignee, of such wife, widow, child, heir at law, or devisee, of the senior mortgagor is entitled to exercise the statutory right of redemption. ...