Conway v. Andrews

• Decision Date: 28 May 1970
• Docket Number: 1 Div. 468
• Citation: 236 So.2d 687,286 Ala. 28
• Parties: Maudine D. Neese CONWAY v. Francis J. ANDREWS et al.
• Court: Alabama Supreme Court

Page 687

236 So.2d 687

286 Ala. 28

Maudine D. Neese CONWAY v. Francis J. ANDREWS et al.

1 Div. 468.

Supreme Court of Alabama.

May 28, 1970.

Rehearing Denied July 2, 1970.

Gordon & House, Don Conway, Mobile, for appellant.

Coley & Coley, Mobile, for appellees.

MERRILL, Justice.

This is an appeal from a decree in equity setting aside the foreclosure of a mortgage and ordering appellant to release certain realty from a mortgage.

In 1955, Gulf Development Company (hereinafter referred to as Gulf) approached one Otto Neese and proposed that he purchase a plot of unimproved land in Mobile County and sell it to Gulf. Gulf indicated that it planned to turn this land into a subdivision by improving the lots and selling lots and houses. Neese had had some previous business dealings with the president of Gulf, E. N. Merriwether. Neese purchased the property in the name of his daughter, Mrs. Conway, for about $75,000.00 and sold the land to Gulf for $90,000.00.

As consideration for the sale, Gulf gave Mrs. Conway a note for $90,000.00 bearing interest at 6%. Mrs. Conway also took a mortgage upon the property and the mortgage was duly recorded. Payments on the note were to be $500.00 per month. The mortgage provided that the mortgagee would release individual lots from the mortgage upon the payment of a certain sum of money, later agreed by the parties to be $1,200.00, on the lots with which we are concerned. Gulf never made a monthly payment on the note but paid about $60,000.00 for releases on 47 lots. Thereafter, Gulf's business activity in developing the lots apparently ceased, leaving 31 vacant lots in a second phase of the development and Lot 8 in the first phase of the development all unreleased and still subject to the mortgage.

Complainant Andrews bought the house constructed by Gulf on Lot 8 of Phase I in 1957 and has lived there since that time. He paid a total of about $35,000.00 for the house and lot. Gulf gave Andrews a warranty deed on this property. Andrews considered having the title searched but never got around to it.

In 1965, after it became clear that she could not collect the balance due on Gulf's note, Mrs. Conway decided to foreclose. She learned through her husband, who acted as her agent, that Lot 8 contained a house and that Andrews had been paying taxes on the property since 1957. Pursuant to the power of sale provision in the mortgage, Mrs. Conway published four weekly advertisements of foreclosure in a Mobile newspaper and then sold the 32 parcels at public auction. She submitted the highest bid and bought the property for $50,000.00.

Andrews lived alone on Lot 8. His job required frequent long business trips lasting several weeks. He apparently left the city on such a trip before the first advertisement was run and returned after the sale had been completed. Mrs. Conway lived in the same subdivision about a block from Andrews but did not know him. She made no effort to inform him of the impending sale of his house and lot.

After the sale of the property that secured Gulf's note, Mrs. Conway brought a statutory ejectment suit against Andrews and Gulf. Andrews filed a declaratory judgment petition in equity, seeking a declaration of his rights in the property. He then moved for a transfer of Mrs. Conway's ejectment suit to the equity side of the court and for a consolidation of that transferred case with his declaratory judgment action. The court transferred the law case to equity and later consolidated it with the declaratory judgment action.

The trial court set aside the foreclosure under the power of sale contained in the mortgage and ordered Mrs. Conway to release Lot 8 from her mortgage upon the payment to her by Andrews of $1,200.00. The court found that (1) Mrs. Conway and Gulf entered into a plan or scheme for the cooperative development of the subdivision with Mrs. Conway to provide the funds to acquire the land and Gulf to improve and promote the sale of subdivision lots; (2) that Gulf misapplied the proceeds of the sale of Lot 8 by not paying the $1,200.00 to Mrs. Conway for a release of the lot and that Mrs. Conway deliberately failed to inform Andrews of this misapplication or that she had not released the lot, although she knew that Andrews had bought the lot; (3) that, although the lots were advertised for sale in individual parcels, the property was offered at the auction en bloc and that an en bloc sale of the lots was deliberately calculated to unduly hamper the right of redemption of complainant; (4) that the conduct of Mrs. Conway and her agents in refraining from calling Andrews' attention to the existence of the lien upon his home and making misrepresentations about the existence of the lien to a neighbor of Andrews' was deliberately calculated to lull him into a 'sense of security, to the end that he should not be afforded a timely opportunity to exercise his legal and equitable rights in the premises, and to insure that he not be afforded any knowledge of, or opportunity to attend or bid at the foreclosure sale of said mortgage'; (5) that Mrs. Conway and her agents engaged in conduct deliberately calculated to conceal from complainant and prevent his discovery of the lien, to the end that he should not be afforded a timely opportunity to exercise his legal and equitable rights in the premises; (6) that Mrs. Conway's failure to inform Andrews that she had not been paid for the release of his lot was for the deliberate purpose and end that she be afforded an opportunity of unjust enrichment by the acquisition of Andrews' improvements to the lot by foreclosure of her mortgage lien, should Gulf fail to pay off its note; and (7) that the respondent's exercise of her power of sale constituted a perversion of the power to a purpose foreign to its intendment and that the sale was 'fraught with ill motive, fraud and oppression.'

Appellant argues that her demurrer to appellee Andrews' motion to transfer appellant's ejectment action from law to equity should have been sustained. She says that the motion to transfer was not verified by affidavit as required by Tit. 13, § 153, and that the motion did not assert the equitable right sought to be protected with adequate precision. She also assigns this lack of precision as support for the proposition that the trial court erred in granting the motion to transfer.

Appellant's demurrer to the motion did not raise the point that the motion was unverified. A demurrer is properly overruled where the motion is not subject to any of the grounds stated, even though it might be subject to demurrer on some other ground. Bank of Cottonwood v. Hood, 227 Ala. 237, 149 So. 676; Ala.Dig., Pleading, k216(3). Thus, the trial court did not err in overruling appellant's demurrer on this issue.

Also, we do not agree with appellant that the trial court was left without 'rule, compass or guide' to determine whether or not the averments in appellee's motion to transfer, relating to his equitable defense, were sufficient. Appellee's motion set forth the case number of his petition on the equity side of the court which, by the time of the filing of appellee's last motion to transfer, had been amended to show his equitable defenses. The motion specifically referred to the petition in equity and the equitable defenses contained therein. We, therefore, do not think that the trial court erred in finding that there existed in the case an equitable right which could not be disposed of on the law side of the court.

Appellant next argues that the trial court's consolidation of Andrews' original equity suit with Mrs. Conway's transferred ejectment suit was improper because consolidation could only result in confusion and complication due to different actions. However, the trial court's exercise of discretion was not error.

Upon transfer of the ejectment suit to equity, at Andrews' request, he became the complainant and had to file a bill in equity which became the initial pleading in that case. Tit. 13, § 154, Code 1940; Cornelius v. Moore, 208 Ala. 237, 94 So. 57. Thus, Andrews was complainant in both equity cases and Mrs. Conway was respondent in both cases, so that the alignment of parties was not changed by consolidation. Similarly, the two actions in equity were identical after transfer as is shown by the complaint in the two suits. Finally, Mrs. Conway's ejectment action dealt with Lot 8 plus 31 other parcels of vacant land and Andrews' original bill in equity asked the court to set aside the mortgage sale of Lot 8 and the other 31 parcels. Thus, the subject matter of the two bills was identical. And the record of the hearing on the consolidated bills shows that consolidation added no facts, issues or parties to Mrs. Conway's transferred suit that would not have been present had consolidation not been ordered.

Appellant begins her argument in brief with the following sentence: 'The essence of Appellant's argument is that there is no Equity in this case.' She argues that the court erred in overruling her demurrer to appellee's bill. Appellant contends that the bill contains one aspect with six alternative averments. Appellee contends that his bill has six aspects. We are not sure that we can identify six aspects of the bill, but we can...