Chicago, Mobile Development Co. v. G. C. Coggin Co.

• Decision Date: 18 June 1953
• Docket Number: 1 Div. 452
• Citation: 259 Ala. 152,66 So.2d 151
• Parties: CHICAGO, MOBILE DEVELOPMENT CO. co. v. G. C. COGGIN CO. et al.
• Court: Alabama Supreme Court

Page 151

66 So.2d 151

259 Ala. 152

CHICAGO, MOBILE DEVELOPMENT CO. co. v. G. C. COGGIN CO. et al.

1 Div. 452.

Supreme Court of Alabama.

June 18, 1953.

Caffey, Gallalee & Caffey, Mobile, for appellant.

Bart B. Chamberlain, Jr., Mobile, for appellee Coggin Co.

Johnston, McCall & Johnston, Mobile, for appellees Snow.

PER CURIAM.

This is an appeal from a final decree in equity in two aspects. In fact it is in the form of two separate appeals by the same party from one final decree which has two aspects. That means that the final decree was favorable to the complainant against appellant as one of the respondents, and favorable to cross-complainant (who was also a respondent) against appellant as a cross-respondent. There are two separate supersedeas appeal bonds, and appellant has assigned error separately on each such appeal. There is no question raised as to the sufficiency of the bill of complaint on a test by demurrer.

We will first refer to the aspect of the decree granting relief to the complainant.

The bill of complaint alleged the following facts. On July 15, 1944 the appellant owned 2620 acres of land in Mobile County. On that date appellant executed an oil lease to the Sun Oil Company for the purpose of exploring and drilling or mining for oil, gas and other minerals. On December 7, 1948 appellant executed a deed to Rufus H. Snow and H. W. Snow conveying 1100 acres of land specifically described. The purchase price named in the deed was $16,000, of which $4,750 was paid in cash. The balance due was evidenced by a promissory note, secured by a lien reserved in the deed, payable $3,750 in one, two and three years after date with interest at the rate of six per cent per annum on the unpaid balance, and with the privilege of paying any annual installment on or before maturity. The deed contained the usual covenants of warranty. The oil lease permitted the lessee upon payment of a stipulated sum per annum on or before the anniversary of said lease, which was the 15th day of July, to extend the same for the next succeeding year.

At the time of the execution of the deed by appellant to the Snows on December 7, 1948 the rentals under said oil lease had been paid to appellant for the year ending July 15, 1949: that payment having been made in advance as of July 15, 1948 on or about the anniversary 1948. The rent for the next succeeding year was paid by the lessee to appellant, which extended the lease until July 15, 1950. The oil company did not and has not entered upon the land under said lease.

On October 13, 1949, after the lessee had paid the rental to appellant on July 15, 1949 for the year ending July 15, 1950, the Snows executed a warranty deed to the complainant G. C. Coggin Company, Inc., conveying to it all of the land which had been conveyed to them by the deed from appellant dated December 7, 1948, except 20 acres which had been included by mistake, and as to which the parties had agreed that the purchase money should be abated in the sum of $300. In said deed it was stipulated that Coggin Company would assume the indebtedness to appellant, for which a lien was reserved in the deed from appellant to the Snows. Coggin Company took possession of the lands and began cutting timber and pulpwood and making payments on the purchase price to appellant.

On February 27, 1950, before another deferred rental became due, Coggin Company filed the instant bill in equity against appellant and the Snows seeking an ascertainment of the balance due appellant secured by said lien and for a redemption. The bill alleged the payments and credits, leaving a balance to be due under said lien of $3,674, and tendered and paid that amount into court. Complainant in said bill claimed that it was entitled to credit as against such unpaid balance for a prorata share of the rents earned after October 13, 1949 under said lease: complainant's deed being dated October 13, 1949.

The bill prayed that the court would ascertain the balance remaining unpaid to appellant after giving complainant credit for said prorata rentals and such damages as it may be entitled to on account of the existence of said oil lease, contrary to the warranty expressed in the deed from appellant to the Snows and in their deed to complainant.

The bill alleged that appellant claimed there was an oral agreement between the Snows and appellant whereby appellant was to receive, in addition to the sum stipulated in the deed, the deferred rentals provided for in the oil lease, and that said agreement was void and without force and effect or, in the alternative, that appellant should be estopped to claim or set up the existence of said oral agreement on account of certain matters alleged in the bill.

The equity of the bill is to redeem land from a lien, reserved in the deed executed by appellant to the Snows on December 7, 1948. The distinction between such a lien and a vendor's lien (so-called) is not here material. See Sims v. City of Birmingham, 256 Ala. 540, 55 So.2d 833.

It is clear that the bill has equity to redeem, section 3, Title 33, Code; Baker v. Farish, 244 Ala. 178, 12 So.2d 547, and to obtain the incidental relief prayed for as stated above. Neal v. Williams, 168 Ala. 310, 53 So. 94; Alger-Sullivan Lumber Co. v. Union Trust Co., 207 Ala. 138, 92 So. 254.

Since complainant acquired the reversion on October 13, 1949, appellant was held by the decree of the court to be due to pay complainant the proportionate part of the annual rent from October 13, 1949 to July 15, 1950, treated as the difference between the value of the land with and without the oil lease, using the proportionate part of the rentals as a factor in finding the result. This was found to be $409.42, which with interest at six per cent amounted to $442.29. For that amount a personal judgment was rendered in favor of complainant and against appellant. The court also ascertained and decreed that the balance of the purchase money which complainant assumed in its deed of October 13, 1949 was $4,342.27 with interest at six per cent from December 29, 1949.

The assignments of error (1 and 2) in respect to that aspect of the decree are as to the rendition of a judgment in favor of complainant against appellant in the sum of $442.29 and all costs in this behalf expended, but they do not question the amount of the balance of the purchase money assumed by complainant. Also error (assignment 3) in decreeing that the claim of appellant to the rentals accruing and to accrue after October 13, 1950 under the oil lease be cancelled, and (4) that appellant has no claim to rentals which have accrued or may arise in the future under the oil lease after October 13, 1944 (1949?).

Considering the last above assignments of error (3 and 4), we are told that the ruling of the court was based on the theory that appellant did not and could not by parol agreement effectually sever from the reversion the right to rents subsequently maturing on a sale of the land by deed with no such reservation in it nor in some other writing. The theory on which the court acted is stated in Alabama Gold Life Ins. Co. v. Oliver, 78 Ala. 158, to be that 'the legal effect and import of the conveyance from Mrs. Smith to the defendant, C. D. Oliver, are to vest in him all the estate in the lands conveyed, which she held and owned at the time of its execution; and cannot, as between the parties, be substantially added to, or diminished, or varied, by evidence of parol agreements, prior or contemporaneous.' McCall v. Morgan, 244 Ala. 472, 14 So.2d 374.

The effect of that principle is not to cancel such claim of appellant, the grantor, in such a conveyance but to recognize it as passing to the grantee. In this case it passed from appellant to the Snows by the deed of December 7, 1948. McCall v. Morgan, supra. The authorities are digested in 19 Alabama Digest, Vendor and Purchaser, k196, including pocket part. When the Snows sold to complainant their deed of October 13, 1949 passed to complainant all rents which matured thereafter. The decree was therefore inaccurate in cancelling the claim. It should be modified by eliminating that feature of it. However, as drafted, it was not prejudicial to appellant. The effect is that all rents which matured under the lease after December 7, 1948, when appellant sold to the Snows, were assigned to the Snows; and that all the rents which matured after October 13, 1949, when the Snows sold to complainant, passed to complainant. That left ownership in the Snows of all rents which matured after December 7, 1948 and before October 13, 1949, which are not claimed on this appeal.

On that principle the amount of the rents is not subject to proration between the grantor of the reversion and the grantee. The grantee is not entitled to any portion of the rent which was due under the lease prior to the deed to him, and was entitled to the whole of the rent which matured under the lease after the deed. Walsh v. Bank of Moundville, 222 Ala. 164, 166, 132 So. 52; English v. Key, 39 Ala. 113.

The rent for the year from July 15, 1948 to July 15, 1949 and for the year from July 15, 1949 to July 15, 1950 were due and paid to appellant before complainant received a deed to the reversion on October 13, 1949. The rent was next to become due July 15, 1950, which was after this suit was begun in February 1950.

That brings us directly to the first assignment of error complaining of a personal judgment rendered in favor of complainant against appellant for a breach of the covenants in the deed to the Snows. There was no prayer for a personal judgment, but there was a prayer for general relief which would justify a personal judgment if found to be proper. But if appellant is found to be due complainant anything on account of a breach of the covenants referred to, the appropriate relief would be to allow it as a credit on the debt to appellant assumed by complainant, as prayed for.

The question at...