Farmers & Ginners Cotton Oil Co. v. Hogan

• Decision Date: 24 October 1957
• Docket Number: 8 Div. 806
• Citation: 100 So.2d 761,267 Ala. 248
• Court: Alabama Supreme Court
• Parties: FARMERS & GINNERS COTTON OIL COMPANY v. B. W. HOGAN.

Page 761

100 So.2d 761

267 Ala. 248

FARMERS & GINNERS COTTON OIL COMPANY v. B. W. HOGAN.

8 Div. 806.

Supreme Court of Alabama.

Oct. 24, 1957.

Rehearing Denied Jan. 23, 1958.

Further Rehearing Denied March 6, 1958.

Peach, Caddell & Shanks and John A. Caddell, Decatur, and Cabaniss & Johnston and Lucien D. Gardner, Birmingham, for appellant.

Harris & Harris, Decatur, for appellee.

LAWSON, Justice.

This suit was filed in the circuit court of Lawrence County, in equity, by B. W. Hogan against his brother, O. A. Hogan, and the latter's wife, Ruby Hogan, and against Farmers and Ginners Cotton Oil Company, a corporation, and Duncan Cotton Company, a corporation.

The bill sought to have the court decree that a purported satisfaction of a mortgage given to B. W. Hogan by O. A. Hogan and Ruby Hogan on certain real estate and personal property located in Lawrence County was a forgery and invalid; that the indebtedness secured by said mortgage was unpaid and past due; that the mortgage constituted a lien on the the property covered by the mortgage superior to the liens held by Farmers and Ginners Cotton Oil Company and Duncan Cotton Company under mortgages given to them by O. A. Hogan and wife, Ruby, on the same property subsequent to the date of the purported satisfaction of the mortgage to the complainant, B. W. Hogan. The bill further prayed for the foreclosure of the mortgage to B. W. Hogan and the sale of the mortgage property for the satisfaction of the indebtedness thereby secured.

The respondents O. A. Hogan and Ruby Hogan did not enter an appearance and allowed decrees pro confesso be be entered against them.

Farmers and Ginners Cotton Oil Company, a corporation, which we will refer to hereafter as Farmers and Ginners defended the suit on the grounds, among others, that there had been no actual consideration for the mortgage given by O. A. Hogan and wife to B. W. Hogan; that if there had been any such consideration it had been paid; and that B. W. Hogan, the complainant, had actually entered the satisfaction on the margin of the mortgage record. During the course of the hearing Farmers and Ginners apparently abandoned the above contentions and narrowed its line of defense to the grounds that the satisfaction of the mortgage to B. W. Hogan was made with his knowledge and consent and had been ratified by him and that he was estopped to assert his mortgage as against that of Farmers and Ginners; that the mortgage debt which the complainant sought to enforce was tainted with usury which would limit his recovery to the actual outstanding unpaid principal; and that B. W. Hogan, the complainant, was not a bona fide holder because of his usurious contract and could not assert rights against Farmers and Ginners which could not be asserted by the mortgagors, whose mortgage to Farmers and Ginners warranted that the property was free from encumbrances.

We are not here concerned with the rights of Duncan Cotton Company, a corporation, and hence we will not attempt to describe its defense.

After a hearing where all the testimony was taken orally before the trial court except that of the Probate Judge of Lawrence County, the court entered a decree denying all of the defenses interposed by Farmers and Ginners. The trial court decreed the purported satisfaction of the mortgage to B. W. Hogan to be null and void and ordered the sale of the property covered by that mortgage for the satisfaction of the indebtedness thereby secured.

From that decree Farmers and Ginners has appealed to this court.

The mortgage from O. A. Hogan and wife to B. W. Hogan was executed on August 26, 1946. It recited that B. W. Hogan had that day loaned O. A. Hogan the sum of $24,994.70 with which to purchase certain gin equipment and that the mortgage was given to secure that indebtedness. The gin equipment was to be installed in a building O. A. Hogan was then constructing on property owned by him in the Speake community in the southeastern part of Lawrence County. The mortgage covered the real estate, gin equipment and other personal property. The B. W. Hogan mortgage was recorded in the office of the Probate Judge of Lawrence County on September 4, 1946.

The mortgage from O. A. Hogan and wife to Farmers and Ginners was executed on February 18, 1949, and was recorded on the same day. It purports to be a first mortgage on all of the property therein described and includes the property covered by the mortgage from O. A. Hogan and wife to B. W. Hogan which, as shown above, was executed on August 26, 1946. The Farmers and Ginners mortgage was given to secure a loan of $40,000 made by that company to O. A. Hogan payable $8,000 a year for five consecutive years. The debt thereby secured was evidenced by five notes, each for $8,000.

The Farmers and Ginners loan was not completed until after an official of that company had examined the record of the B. W. Hogan mortgage in the office of the Probate Judge of Lawrence County and had found thereon the following entry:

'The debt secured hereby having been paid this mortgage is hereby satisfied and discharged in full this 12 day of Feb 1949

B. W. Hogan

Mortgagee

Attest: Isaac Johnson, Jr.

Judge of Probate'

As heretofore indicated, B. W. Hogan took the position that the purported satisfaction of his mortgage was a forgery and void and that the debt secured by his mortgage had not been paid or in any way discharged.

A forged satisfaction of a mortgage on the mortgage record is void and not effectual even in favor of one who has purchased the mortgaged premises in the honest belief that the satisfaction was in all respects genuine. Seidl v. Paulu, 174 Wis. 403, 183 N.W. 246; Crecelieus v. Home Heights Co., Mo., 217 S.W. 508; Luther v. Clay, 100 Ga. 236, 28 S.E. 46, 39 L.R.A. 95; Thompson on Real Property (Permanent Ed.), Vol. 9, § 5085, p. 570; Wiltsie on Mortgage Foreclosures (5th Ed.), § 120, p. 214; 2 Jones on Mortgages (8th Ed.), § 1246, p. 739; 35 A.L.R.2d 948, 951, 953. Cf. Blount v. Blount, 158 Ala. 242, 48 So. 581, 21 L.R.A.,N.S., 755.

But the burden was upon B. W. Hogan to show that the mortgage debt was not actually paid and that the satisfaction was a forgery. Meyers v. Murphy, 181 Md. 98, 28 A.2d 861; Barnhart v. Brown, 86 Pa.Super. 437. Cf. Horton v. Spears 238 Ala. 464, 191 So. 622; McIntyre v. White, 124 Ala. 177, 26 So. 937.

Appellant's attorneys in their able and meticulous briefs assert, as they did in oral argument, that the trial court erred in finding from the evidence adduced that the purported satisfaction of the B. W. Hogan mortgage was in fact invalid and ineffective. They contend: '* * * that the overwhelming preponderance of the evidence leads to the inescapable conclusion that the complainant [B. W. Hogan] did authorize or ratify the satisfaction of his mortgage and that the weight of such evidence is so great as to overcome the presumption in favor of the decision by the Trial Court on the question of fact.'

The 'presumption' to which the attorneys for appellant refer is that which this court indulges in favor of the correctness of findings of fact made by trial judges where the witnesses testify orally before them. Where the testimony is so taken the findings of fact are given the weight of a jury's verdict, not to be disturbed unless plainly or palpably wrong. Barkley v. Boyd, 211 Ala. 50, 99 So. 196; Smith v. City of Dothan, 211 Ala. 338, 100 So. 501; Curb v. Grantham, 212 Ala. 395, 102 So. 619; Wiegand v. Alabama Power Co., 220 Ala. 620, 127 So. 206; Ex parte State ex rel. Grace, 224 Ala. 273, 139 So. 288; Patterson v. First Nat. Bank of Piedmont, 229 Ala. 406, 157 So. 446. Although the conclusion reached by the trial court may be different from that which this court might reach as a court of review, where the question is fairly debatable we will not substitute our judgment for that of the trier of facts at nisi prius, on whom rested the primary duty and responsibility of passing on the credibility of the witnesses who appeared and testified before him. Ex parte State ex rel. Grace, supra; Fitzpatrick v. Shine, 254 Ala. 323, 48 So.2d 220; Forest Hill Corp. v. Latter & Blum, Inc., 249 Ala. 23, 29 So.2d 298; Pugh v. Cannon, Ala., 94 So.2d 386. The same presumption applies even though some of the testimony was not taken orally before the trial court. Marks v. Marks, 254 Ala. 612, 49 So.2d 166; Donohoo v. Smith, 207 Ala. 296, 92 So. 455; Cox v. Somerville, 204 Ala. 261, 85 So. 525; Moore v. Walker, 201 Ala. 629, 79 So. 191; Faulkner v. Fowler, 201 Ala. 685, 79 So. 257.

B. W. Hogan testified that he did not write his name on the mortgage record in question. He is supported in this respect by the testimony of several bankers shown to have been familiar with his signature and by the testimony of a handwriting expert who expressed the opinion that O. A. Hogan wrote the name of his brother, B. W. Hogan, on the mortgage record. The respondents below offered no evidence tending to show that the signature of B. W. Hogan was on that record and Farmers and Ginners does not now contend that the trial court erred in finding from the evidence: '* * * that complainant [B. W. Hogan] did not write his name on the mortgage satisfaction in the office of the Judge of Probate, but that the respondent, O. A. Hogan, did write the complainant's name on this record.'

B. W. Hogan denied that he was present when anyone else wrote the name 'B. W. Hogan' on the mortgage record or when the name 'Issac Johnson, Jr.,' was written thereon. He asserted that he had not authorized anyone to sign his name on the record and stated that the first time he ever saw the endorsement on the record which purported to be a satisfaction of his mortgage was on Monday, May 24, 1954. He also stated that the first time he ever heard that anyone contended that the mortgage had been satisfied was on or about Friday, May 21, 1954, when an official of Farmers and Ginners indicated that his mortgage had been...