Crowson v. Cody

• Decision Date: 03 November 1921
• Docket Number: 3 Div. 526.
• Citation: Crowson v. Cody, 207 Ala. 476, 93 So. 420 (Ala. 1921)
• Parties: CROWSON v. CODY ET AL.
• Court: Alabama Supreme Court

93 So. 420

207 Ala. 476

CROWSON v. CODY ET AL.

3 Div. 526.

Supreme Court of Alabama

November 3, 1921

Rehearing Denied May 11, 1922.

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Bill by J. C. Crowson against Michael Cody and others for accounting and discovery. From a decree sustaining demurrers to the bill, complainant appeals. Affirmed.

W. A Gunter, of Montgomery, for appellant.

Ball &amp Beckwith, of Montgomery, for appellees.

PER CURIAM.

The bill in this case shows that the Tri-State Realty Company executed three mortgages on the same real estate to secure the respective indebtednesses maturing on different dates. The first and superior mortgage was duly foreclosed under the power therein, and purchased by the holder of the mortgage. The two other mortgages were executed to the appellant Crowson; the second in point of time Crowson assigned to one Allison; and the third mortgage for $16,500 he assigned to Cody as collateral security for his indebtedness to him. The holder of the first mortgage sold the property to the Mabry Securities Company, and the bill alleges that Cody, as mortgagee under the transfer made by complainant to him of said $16,500 mortgage, redeemed said mortgage from the mortgage sale, and obtained a deed therefor. This deed is made an exhibit, showing its execution on April 1, 1919, and a consideration of $13,696.28.

Crowson and Cody had previous to these transfers been engaged in the business of buying and selling real estate: Cody to furnish the funds and Crowson to have active management thereof. The operations of this business were closed on October 19, 1915.

The amount of the indebtedness found to be due by Crowson to Cody was represented by a note for $16,050, and secured by the transfer of the mortgage above referred to.

This bill is filed by Crowson against Cody, as well as Allison, upon the theory that the redemption by Cody from the foreclosure sale of the first mortgage inured to Crowson's benefit, as well as the benefit of Allison, subject to Cody's equity to have his expenditure in redeeming the property paid to him. The prayer of the bill is for an accounting as to the indebtedness due by Crowson to Cody, as well also the amount due upon the mortgage held by Allison, and that the lands be sold under order of the court, the proceeds to be applied (1) to the payment of the costs; (2) to the reimbursement of Cody for redeeming the land; (3) to the payment of the Allison mortgage; and (4) the balance, if any, upon Crowson's indebtedness to Cody, with the remaining balance to Crowson. Allison had also filed a bill against Cody, seeking to redeem, but the decision of this court was adverse to his contention. Allison v. Cody, 206 Ala. 88, 89 So. 238.

It is insisted by counsel for appellant that the Allison Case is without any controlling influence upon that here presented. Upon a reconsideration of that question, we are persuaded that this position is correct.

The assignment of the mortgage by Crowson to Cody as collateral security for his indebtedness was in substance a pledge of the mortgage, thus creating the relationship of pledgor and pledgee, where the responsibilities of the latter to the former are similar to those of a trustee. Keeble v. Jones, 187 Ala. 207, 65 So. 384; Hicks v. Dowdy, 202 Ala. 535, 81 So. 37; Nelson v. Owen, 113 Ala. 372, 21 So. 75. In the latter case, speaking of the right of the pledgor to file a bill in equity to redeem, the court quoted approvingly the following from Judge Story:

"Generally speaking, a bill in equity to redeem will not lie on behalf of the pledgor or his representative, as his remedy upon a tender is at law. But if any special ground is shown, as if an account or a discovery is wanted, or there has been an assignment of the pledge, a bill will lie."

Whether the security be a chattel or chose in action, the payment of the debt by the pledgor revests in him the beneficial interest, and he becomes again the absolute owner; and payment or tender of payment is the only means whereby the pledgor can by his own act revest himself with the right of possession of the pledge. Jones on Pledges, § 540. It is also held by the same authority that as a general rule a bill in equity does not lie to redeem property from a pledge, but that a special ground for a proceeding in equity must be shown, as a discovery or...