Federal Land Bank of New Orleans v. Ozark City Bank, 4 Div. 591.

• Decision Date: 17 December 1931
• Docket Number: 4 Div. 591.
• Citation: 225 Ala. 52,142 So. 405
• Parties: FEDERAL LAND BANK OF NEW ORLEANS v. OZARK CITY BANK.
• Court: Alabama Supreme Court

142 So. 405

225 Ala. 52

FEDERAL LAND BANK OF NEW ORLEANS v. OZARK CITY BANK.

4 Div. 591.

Supreme Court of Alabama

December 17, 1931

Rehearing Denied May 26, 1932.

Appeal from Circuit Court, Dale County; J. S. Williams, Judge.

Bill to quiet title by the Federal Land Bank of New Orleans against the Ozark City Bank. From a decree denying relief complainant appeals.

Reversed and remanded.

John W Rish and O. S. Lewis, both of Dothan, for appellant.

Sollie & Sollie, of Ozark, for appellee.

THOMAS J.

The bill was to quiet title to real property. The cause was submitted upon an agreed statement of facts.

Prior to and on February 13, 1914, one W. L. Casey owned in fee simple and was in possession of lands in Dale county in two tracts designated for convenience as the 40-acre tract and the 273-acre tract. And on that date Casey and wife, Melissa Casey, conveyed to M. M. Pippin, a one-half undivided interest in the 40-acre tract by warranty deed duly recorded March 6, 1915; and on the same date, conveyed a one-half undivided interest in the 273-acre tract to said Pippin to secure $1,000, and that deed was recorded on the 12th day of October, 1915; on December 11, 1915, said Casey and wife conveyed by mortgage one-half undivided interest in both tracts to the Dale County Bank to secure a loan of $6,036.07, and the mortgage was duly recorded December 13 1915; and it was transferred and assigned on March 6, 1916, for value to the Ozark City Bank, and the latter (on the 8th day of March, 1916) transferred said mortgage and debt to Mrs. A. E. Sollie, who, in turn, transferred and assigned said mortgage, on June 2, 1916, to the Dale County Bank, and on November 11, 1916, it (Dale County Bank) transferred and assigned same to Mrs. Melissa Casey.

The mortgage in favor of the Dale County Bank was duly foreclosed and Mrs. Casey became the purchaser on February 23, 1917, and her deed therefor from the auctioneer was duly recorded on the 8th day of February, 1917; and on the same day said purchaser and husband conveyed by warranty deed to said M. M. Pippin said undivided one-half interest in both tracts of land.

By virtue of this conveyance and the due record thereof, M. M. Pippin acquired the record legal title to and went into possession of both tracts of land embraced in this suit, and remained in possession until he surrendered the same to complainant, the Federal Land Bank of New Orleans.

The appellant's title is that on August 1, 1921, Pippin executed and delivered mortgage to complainant for a $3,000 loan on the 273-acre tract, which was duly recorded on August 17, 1921; and on April 16, 1923, mortgaged the 40 acres to the complainant, which mortgage was record May 1, 1923. There were defaults and due foreclosures on May 10, 1926, and May 16, 1927, respectively, and foreclosure deeds were respectively recorded on May 14, 1926, and May 17, 1927. Immediately thereafter the mortgagor, M. M. Pippin, surrendered the possession to said complainant.

It is further without dispute that complainant had no actual notice of any pending litigation affecting the title to said lands when said mortgages were given, and there was no lis pendens notice of record under the Act of March 5, 1915, page 122, General Acts of 1915 (Code, § 6877 et seq.).

The provisions of the statute (Code, §§ 6878, 6879, 6881) are:

"That when any person shall begin a suit in any court, to enforce a lien upon, right to, or interest in, or to recover any real estate, such person shall file with the judge of probate of each county, where the real estate, or any part thereof is situated, a notice containing the names of all the parties to the suit, or proceedings, a description of the real estate and a brief statement of the nature of the lien, writ, or suit sought to be enforced. ***

"That when a sheriff, constable, United States marshal, or other officer, shall levy upon real estate by virtue of any process, he shall file with the judge of probate of each county where the real estate or any part thereof is situated, a notice of the levy, showing the names of the parties to the proceedings, the kind of process, and a description of the real estate levied on. ***

"That, if a person beginning any suit affecting, or if any officer, levying any process upon real estate, shall fail to have the required notice entered in the lis pendens record, such suit or levy shall not affect the rights of a bona fide purchaser, *** of such real estate unless they have actual notice of the suit or levy." General Acts 1915, page 122, §§ 2, 3, and 5.

This statute was recently construed in Reeder v. Cox, 218 Ala. 182, 118 So. 338, 339; McCarty v. Robinson, 222 Ala. 287, 131 So. 895; Faulk v. McDuffie, 215 Ala. 584, 586, 112 So. 229; McCollum v. Burton, 220 Ala. 629, 127 So. 224; Marsh v. Elba Bank & Trust Co., 221 Ala. 683, 130 So. 323; and Macke v. Scaccia, 222 Ala. 359, 132 So. 880.

The lis pendens statute as to constructive notice was to substitute state rather than the common law as to pending suit. 17 R. C. L. p. 1015 et seq.

It should be further stated that on the 21st of February, 1916, L. W. Haskell filed certificate of judgment against W. L. Casey in the probate office; and the latter and wife had, as we have shown, by warranty deed disposed of all their interest in said lands on, to wit, February 13, 1914, March 6, 1915, and December 11, 1915. It is further admitted that said Haskell on December 15, 1917, filed a bill in the District Court of the United States against W. L. Casey and wife, Melissa Casey, challenging and to have set aside the conveyances of disposition of said lands, and on February 26, 1921, he made as a party defendant M. M. Pippin; and on the 18th day of November, 1924, there was a decree granting relief and holding the deeds from W. L. Casey to Melissa Casey, and that from her and husband to M. M. Pippen, were null and void and thereby canceled. The rights of said complainant Haskell under that decree were transferred and assigned to the Ozark City Bank, the appellee in this court.

The insistence of appellant is that by failure to file lis pendens notice, as provided by the statute to which we have adverted, the complainant was without actual or constructive notice of the rights, interests, lien, or equity of L. W. Haskell at the time complainant acquired its title and interest in said land as mortgagee of M. M. Pippin, and therefore complainant had the superior right, title, and interest in these lands, and the trial court should have so declared on its bill for such purpose.

The assignment of errors challenges the correctness of the decree denying relief and dismissing its bill.

In Reeder v. Cox, 218 Ala. 182, 118 So. 338, 342, supra, it is observed of the lis pendens statute that its "manifest purpose is to provide a means whereby one desiring to purchase land may ascertain if there is any pending suit which affects the title by examining the lis pendens record."

And McCarty v. Robinson, 222 Ala. 287, 131 So. 895, a creditor's bill, held where a cotenant debtor had prosecuted the partition proceedings to final decree, the lien of the creditor who thereafter sought to set aside the alleged conveyance did not affect the right in the land and attached merely to the debtor's share of the proceeds of sale.

In Macke v. Scaccia, 222 Ala. 359, 132 So. 880, the announcement was that as to bona fide purchaser at foreclosure during the pendency of the mortgagor's suit to enforce equity of redemption, lis pendens is inoperative in the absence of statutory notice. And such was the effect of Marsh v. Elba Bank & Trust Co., 221 Ala. 683, 130 So. 323; Faulk v. McDuffie, 215 Ala. 584, 112 So. 229. McCollum v. Burton,

220 Ala. 629, 127 So. 224.

The federal court has given full force and effect to such state statute. United States v. Calcasieu Timber Co. (C. C. A.) 236 F. 196; United States v. Chicago, M. & St. P. Ry. Co. (C. C.) 172 F. 271; Romeu v. Todd, 206 U.S. 358, 27 S.Ct. 724, 51 L.Ed. 1093; People of Porto Rico v. Livingston (C. C. A.) 47 F. (2d) 712; Mellen, Trustee v. Moline Malleable Iron Works, 131 U.S. 352, 9 S.Ct. 781, 33 L.Ed. 178; Tennis Coal Co. v. Sackett, 172 Ky. 729, 190 S.W. 130, Ann. Cas. 1917E, page 629.

The lis pendens statute of a state is a rule of property by which the federal and state courts are bound. 38 C.J. 35, § 56; 17 R. C. L. 1032, §§ 28, 35; Swift v. Tyson, 16 Pet. 3, 10 L.Ed. 865; Kowalski v. Chicago, G. W. Ry. Co. (C. C.) 84 F. 586; Id. (C. C. A.) 92 F. 310; Blackwell v. Southern Pac. Co. (C. C.) 184 F. page 489; Kuhn v. Fairmont Coal Co., 215 U.S. 349, 30 S.Ct. 140, 54 L.Ed. 228, 234; Warburton v. White, 176 U.S. 484, 20 S.Ct. 404, 44 L.Ed. 555.

The sole and only question that is presented is: Should the federal court give full force and effect to the provisions of the state statute pertaining to real estate within its domain? And, being so bound by our statute as to constructive notice-the lis pendens notice-there was error in rendering the decree denying appellant relief and dismissing its bill.

Reversed and remanded.

ANDERSON, C.J., and BROWN and KNIGHT, JJ., concur.

On Rehearing.

THOMAS J.

The agreed statement of facts, among other things, recites of the material issue of fact and question for decision as follows:

"There was no notice ever filed in the Probate Office of Dale County, Alabama, in the Lis Pendens record, under the provisions of the Acts of 1915, approved March 5, 1915, Acts 1915, pages 122 and 123, and sections 6878 and 6881 of the 1923 Code of Alabama. The complainant had no actual notice of any pending litigation affecting title to the lands hereinabove described, when either of said mortgages to it, involved in this suit, were executed and delivered. In this

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