Dennis v. McEntyre Mercantile Co.

• Decision Date: 14 May 1914
• Docket Number: 765
• Citation: 65 So. 774,187 Ala. 314
• Parties: DENNIS v. McENTYRE MERCANTILE CO.
• Court: Alabama Supreme Court

65 So. 774

187 Ala. 314

DENNIS v. McENTYRE MERCANTILE CO.

No. 765

Supreme Court of Alabama

May 14, 1914

Appeal from Circuit Court, Winston County; J.J. Curtis, Judge.

Bill by D.R. Dennis against the McEntyre Mercantile Company to quiet title to land. Decree for respondent, and complainant appeals. Reversed and rendered.

Gunn &amp Powell, of Jasper, for appellant.

F.E St. John, of Cullman, for appellee.

SAYRE J.

Complainant (appellant) filed this bill to clear up his title to a tract of land. Complainant and defendant claim through one Barron as a common source of title. Complainant's title is evidenced by a mortgage dated December 23, 1905, recorded February 6, 1906, and a deed from the mortgagor, Barron executed and delivered December 3, 1907, recorded December 11, 1907. During the year 1908 complainant held undisputed actual possession through a tenant.

Defendant traces its title through a mortgage of May 5, 1906, recorded May 10th, and a foreclosure deed of December 24, 1908. Complainant's tenant having abandoned possession at the end of 1908, defendant, after its foreclosure, entered by its tenant and held possession during the year 1909. During the year 1910, and until this bill was filed, October 6, 1911 the land was unoccupied, nor had either party exercised visible acts of ownership over the property during this period. Each claims, however, to have paid taxes since the date of their respective deeds.

Defendant bases its denial of the validity of the prior title thus shown in complainant on the fact that when complainant took his deed he noted satisfaction of his mortgage upon the margin of the record. Complainant's agent having the matter in charge has also testified that he took the deed in satisfaction of the mortgage debt. Defendant relies upon the authority of New England Mortgage Security Co. v. Hirsch Bros., 96 Ala. 232, 11 So. 63.

In the case just referred to it was held that where a mortgagee, having notice of a later mortgage, gave a receipt for the mortgage debt, executed a release of his mortgage security, and took a new mortgage to secure a renewal and extension of the old debt, these facts established the priority of the intervening mortgage, in the absence of proof that the receipt and release were not intended to operate as a satisfaction of the old mortgage debt and a release of the lien of the old mortgage. In other words, the receipt and the release were given effect by way of establishing the priority of the intervening mortgage according to their prima facie import.

In the case before us the debt due complainant was satisfied by a deed taken in lieu of formal foreclosure, not otherwise. The deed operated as a satisfaction and extinguishment of the debt secured by the mortgage; but its effect upon complainant's interest in the land was, not to destroy the legal title vested in him by the mortgage and defendant's default, nor to create a new and independent title by way of substitution, but simply to vest in complainant defendant's equity of redemption and strip the latter of all his remaining interest in the land, thus uniting in complainant the titles of mortgagor and...