Carroll v. Henderson

• Decision Date: 11 February 1915
• Docket Number: 548
• Citation: 191 Ala. 248,68 So. 1
• Parties: CARROLL v. HENDERSON
• Court: Alabama Supreme Court

68 So. 1

191 Ala. 248

CARROLL v. HENDERSON

No. 548

Supreme Court of Alabama

February 11, 1915

McClellan J., dissenting.

Appeal from Chancery Court, Coffee County; W.R. Chapman, Chancellor.

Bill by J.W. Carroll against J.E. Henderson, to cancel mortgages because of payment of the debt and because the debt was infected with usury, and for an accounting, and in the alternative for redemption by payment of any balance due. From a judgment for defendant, complainant appeals. Reversed and rendered.

One allegation of the bill is that complainant has paid the principal of his debt to J.E. Henderson, and that, excluding usurious interest, he is not now indebted to said J.E Henderson in any amount whatever. The bill was filed November 1, 1913, and on January 3, 1914, respondent filed an answer denying the allegation of full or partial payment of the debt and usury therein, and claiming a balance due of $2,108. The answer also alleges that the respondent mortgagee foreclosed both of the mortgages in question by sale under the powers therein contained on November 11, 1913, and became the purchaser and owner of the mortgaged property at said sale. These foreclosure sales under power and respondent's purchases thereat are also set up as a defense to the bill by a special plea as a bar to the further assertion of the mortgagee's equity of redemption. The respondent having on November 11, 1913, instituted suits in ejectment and in detinue, respectively, for the real and personal property thus purchased by him on the same day, complainant by supplemental bill filed February 14, 1914, informed the chancery court of the respondent's foreclosure sale after the original bill was filed, and of his suits at law for the possession of the mortgaged property, praying for a temporary injunction against respondent's possessory action, to be made permanent upon the granting of the relief originally sought, and containing prayer for general relief. The temporary injunction was granted and issued. The chancellor rendered a decree holding that the special plea exhibited a good defense in bar of the relief sought, and also sustained a demurrer to the supplemental bill, and granted a motion to dissolve the temporary injunction for want of equity in the supplemental bill. The grounds of demurrer interposed to the supplemental bill were want of equity, the circuit court had jurisdiction of the possessory action, no facts showing irreparable injury, no facts as shown in denial of the validity of the foreclosure sale, and no reason for setting them aside.

J.A Carnley, of Elba, for appellant.

W.W Sanders, of Elba, for appellee.

SOMERVILLE, J.

When complainant, filed his original bill of complaint, the chancery court acquired full jurisdiction of the cause for the purposes set forth.

"It is of no consequence that a foreclosure under the power contained in the mortgage has been had since the filing of the bill. The equity of redemption and the right of its enforcement by bill in chancery, under the facts alleged, existed at the date of the filing of the bill; and, this being true, it is not within the power of the mortgagee to impair such right by any subsequent act of foreclosure under the power contained in the mortgage. The court, having acquired jurisdiction for the purpose of an accounting and redemption, will set aside any subsequent sale made under the power, by the mortgagee, when necessary to accomplish that for which jurisdiction has been assumed." Nat. B. & L. Ass'n v. Cheatham, 137 Ala. 395, 401, 34 So. 383, 384.

This principle is so elementary that it has seldom been challenged, and it is stated as of course by the text-writers. 2 Jones on Mortg. (9th Ed.) § 1797; 27 Cyc. 1453. It has been several times affirmed by the courts of other states. Ryan v. Newcomb, 125 Ill. 91, 16 N.E. 878; Clark v. Griffin, 148 Mass. 540, 20 N.E. 169.

It is to be observed, of course, that the execution of a power of sale pending a bill for redemption is not a nullity, and, indeed, is valid for every purpose not inconsistent with the relief afterwards granted to the redemptioner under the prayers of his bill, assuming that any part of the mortgage debt remained due and unpaid. The decree for redemption usually fixes a future day on which the mortgage debt must be paid and, in default of payment, declares the bill must stand dismissed at the cost of complainant. McGuire v. Van Pelt, 55 Ala. 344, 351. It is obvious that, when a bill for redemption is thus dismissed, an intervening foreclosure would stand as though the bill had never been filed.

Hence, while a power of sale is not absolutely suspended by the mere pendency of a bill to redeem, its exercise is subject to the equity of the bill, as decreed by the court, and as availed of by the complainant. The statement in the recent case of Presnall v. Burgess, 181 Ala. 263, 61 So. 804, that "the pendency of the cause to redeem will not suspend the right to exercise the power of sale, *** notwithstanding the bill offers to do equity by satisfying the ascertained sum secured by the mortgage," must be taken with the qualifications above stated, and, as there applied, it is not in conflict with the principles now affirmed. In that case it appeared that the amount of the mortgage debt had been previously fixed by a mutual accounting and adjustment between the parties. The bill not impeaching this account stated, and not offering to pay the sum thereby fixed, was without equity, and was properly dismissed. This left the foreclosure sale, though made pending the suit, in full force and effect.

It results that on the allegations of the original bill, as amended, in connection with the admissions of the answer, the complainant was entitled to an accounting to ascertain the balance due on the mortgages, if any, and finally to a decree for redemption upon its payment as directed, or if, as alleged, no balance remained due, then to a decree of cancellation. The chancellor erred, therefore, in holding that the special plea was sufficient as a bar to the relief sought.

It may be conceded that the complainant, in a bill for the redemption of mortgaged property, is not in every case entitled, as of course, to the issuance of a temporary injunction to prevent a foreclosure under the power of sale, or to prevent a recovery of possession of the property by the mortgagee in an action at law. The law in that regard has been frequently discussed and stated. S.L. Ass'n v. Lake, 69 Ala. 456, 465; Whitley v. Dunham Lumber Co., 89 Ala. 493, 7 So. 810; Wittmeier v. Tidwell, 147 Ala. 354, 40 So. 963; Id., 150 Ala. 253, 43 So. 782.

In the instant case, however, the bill charges usury in the mortgage indebtedness, and alleges that, interest excluded, the principal has been satisfied, and that the complainant is not indebted to the mortgagee respondent in any sum whatever. If these allegations are true, the supplemental bill for a temporary injunction contained equity, and the writ was properly issued, and should have been retained until the cause was disposed of by final decree.

It results that there was error in the decree sustaining the motion to dissolve the injunction for want of equity in the supplemental bill, and also in sustaining the demurrer to the supplemental bill. The decree of the chancery court will be reversed, and a decree will be here rendered overruling the respondent's special plea, as being insufficient, overruling the demurrer to the supplemental bill, and reinstating the temporary writ of injunction as originally issued.

Reversed and rendered. All the Justices concur, except McCLELLAN, J., who dissents.

McCLELLAN J.

The prevailing opinion qualifies the following expressions of doctrine set forth in Presnall v. Burgess, 181 Ala. 263, 270, 61 So. 804, 807:

"Where the bill does not show that the entire amount for which the mortgage affords security has been paid or tendered, the pendency of the cause to redeem will not suspend the right to exercise the power of sale vested by the mortgage in the mortgagee, *** notwithstanding the bill offers to do equity by satisfying the ascertained sum secured by the mortgage."

Reduced to final analysis, the qualification made of the stated doctrine is that the unenjoined exercise of the power of sale, according to the terms of a mortgage given to completely secure a named or legally ascertainable money obligation or obligations, pending a

bill for an accounting and redemption, in which offer is made to pay the ascertained sum secured by...