Federal Land Bank of New Orleans, La. v. Sutton

• Decision Date: 05 December 1946
• Docket Number: 4 Div. 409.
• Parties: FEDERAL LAND BANK OF NEW ORLEANS, LA., v. SUTTON et al.
• Court: Alabama Supreme Court

28 So.2d 553

248 Ala. 529

FEDERAL LAND BANK OF NEW ORLEANS, LA., v. SUTTON et al.

4 Div. 409.

Supreme Court of Alabama

December 5, 1946

Rehearing Denied Jan. 16, 1947.

E W. Norton, of Clayton, and H. D. Finlay, Jr., of New Orleans La., for appellant.

Jas W. Winn, of Clayton, for appellees.

STAKELY Justice.

This litigation originated in an ejectment suit filed by The Federal Land Bank of New Orleans, La., against J. S. Sutton, since deceased, A. B. Sutton, Annie Sutton and Tom Baker. A. B. Sutton and Tom Baker were tenants of J. S. Sutton of the lands involved in the suit. The Federal Land Bank of New Orleans, La., claims title to the lands through a mortgage dated July 16, 1923, and the foreclosure thereof as shown by foreclosure deed dated August 14, 1935. This suit involved the validity of these instruments.

The mortgage purports to have been executed by Catherine Sutton and J. S. Sutton to The Federal Land Bank of New Orleans, La. Catherine Sutton was the first wife of J. S. Sutton. She died, intestate, in January, 1926, leaving as her sole heirs, her husband J. S. Sutton and their only child A. B. Sutton, who in 1923 was 27 years of age. The lands without dispute belonged to Catherine Sutton at the time of the alleged execution of the mortgage. Annie Sutton became the wife of J. S. Sutton by his second marriage.

The suit was transferred by order of the court to the equity side of the docket and there validity of the mortgage and the foreclosure thereof was assailed by a bill of complaint filed by the aforesaid defendants in the ejectment suit against The Federal Land Bank of New Orleans, La. During the pendency of the suit J. S. Sutton died and the suit was revived in the name of A. B. Sutton, as his personal representative. The case was submitted for final decree eleven years after its institution. Under the amended bill, the complainants are A. B. Sutton, individually, and as administrator of the estate of J. S. Sutton, deceased, Annie Sutton and Tom Baker.

The bill of complaint has three aspects. It attacks the validity of the instruments on the grounds, (1) the indebtedness for which the mortgage was claimed to have been given as security was the debt of the husband, J. S. Sutton, and not the debt of the wife Catherine Sutton, (2) the mortgage was not signed by Catherine Sutton and (3) Catherine Sutton was a non compos mentis at the time the mortgage is alleged to have been executed. The court rendered a final decree holding the instruments invalid on the theory alone that the alleged indebtedness claimed to be secured by the mortgage was not the debt of Catherine Sutton, but was solely the debt of J. S. Sutton. This appeal is from that decree. None of the testimony on which the case was submitted for final decree was taken orally in open court. Accordingly it is our duty to consider the case without presumption in favor of the correctness of the decree of the lower court. Ruf v. Davis, 232 Ala. 477, 168 So. 174; Ezzell v. First Nat. Bank of Russellville, 232 Ala. 161, 167 So. 546.

The mortgage introduced in evidence clearly shows from its recitals that the debt secured thereby was the debt of Catherine Sutton. This creates a prima facie presumption in favor of its truth which can only be overcome by clear and convincing evidence. Stroup v. International Life Ins. Co., 218 Ala. 382, 118 So. 752; Gafford v. Speaker, 125 Ala. 498, 27 So. 1003; Myers v. Steenberg, 206 Ala. 457, 90 So. 302. If the instruments are declared invalid, A. B. Sutton, the only heir, succeeds to the title of his mother and if J. S. Sutton were still alive, he would have had a life estate in the property. Accordingly, under the circumstances which we shall in part relate, their testimony should be considered with great caution before solemn conveyances, purporting to be acknowledged according to law, are set aside. Fies & Sons v. Lowery, 226 Ala. 329, 147 So. 136; Smith v. McGuire, 67 Ala. 34.

The evidence is voluminous. We have considered it with great care. It would be impractical to set it all out, but we shall try to summarize in part its salient features. After the loan was closed in 1923, appellant mailed statements of the yearly installments maturing on the loan to Catherine Sutton at Route 4, Ariton, Alabama. Payment was made to appellant of the annual installments from December 15, 1923, to and including April 19, 1931. There was failure to pay the annual installments maturing December 15, 1931, 1932 and 1933 and in April 1934 the loan was declared fully due and payable and the mortgage ordered foreclosed. The foreclosure proceedings were first enjoined by J. S. Sutton and A. B. Sutton in a suit instituted before this suit. That suit terminated and the injunction was dissolved for failure to give the required bond and the foreclosure sale was again advertised in 1935. In that suit the bill of complaint sworn to by J. S. Sutton and A. B. Sutton charged in part as follows:

'Your orator, J. S. Sutton, further avers that until recently did he learn that Catherine Sutton, deceased, the owner of said land embraced in said mortgage did not sign said mortgage.'

J. S. Sutton and A. B. Sutton again stopped the foreclosure by filing a petition in bankruptcy where they listed in their schedule of liabilities and encumbrances the mortgage from Catherine Sutton and husband J. S. Sutton to appellant. In those proceedings they offered and agreed 'to pay to the Federal Land Bank of New Orleans on their indebtedness to it the sum of Seventy-five Dollars on the first day of November 1935 and Seventy-five Dollars on the first day of November of each succeeding year until the indebtedness is fully paid.' The Bankruptcy Court found that the petitioners had no equity in the real estate embraced in the mortgage and authorized appellant to proceed with the foreclosure. The mortgage was foreclosed on April 14, 1935, and the property purchased by appellant. The appellant then instituted the ejectment suit, hereinabove referred to, which was the beginning of the present litigation.

J. S. Sutton, the husband of Catherine Sutton, deceased, one of the original complainants, testified that he signed and filed an application in the name of his wife with the Farm Loan Association for a loan of $1200 from The Federal Land Bank of New Orleans, La., to be secured by a first mortgage on lands belonging to Catherine Sutton, his wife, after informing H. L. Martin, the Secretary-Treasurer of the Association, that his wife had had a stroke of apoplexy and paralysis which left her in a helpless physical and mental condition; that his wife Catherine Sutton did not sign or acknowledge the mortgage; that he received the proceeds of the loan and used the funds in his individual business operations. This is the testimony on which largely rests the case of complainants. We shall consider it in greater detail along with the testimony of other witnesses. So as to give some order to the inquiry, we shall consider the evidence from the standpoints of the application for the loan, the execution of the mortgage and the disbursement of the proceeds of the loan. Since, however, the mental and physical condition of Catherine Sutton plays an important part in all these matters, we shall first consider this general aspect of the case.

Several non-expert witnesses including J. S. Sutton and A. B. Sutton, who were relatives, tenants and neighbors, testified that Mrs. Catherine Sutton suffered a stroke of apoplexy prior to the date the application and mortgage purported to have been executed, which paralyzed her and affected her speech and mind. A substantial part of this testimony went so far as to show that Mrs. Catherine Sutton was not only entirely incapacitated physically but was a non compos mentis. However, H. R. Dykes, a physician who waited upon Mrs. Catherine Sutton after she suffered the alleged stroke, testified that he treated her during the period from sometime in 1920 or 1921 to sometime in 1923 prior to July 16, 1923, that he then moved to California where at the time he was practicing his profession and had not seen Mrs. Sutton since. In a letter which he wrote to J. S. Sutton in April, 1937, he stated:

'She was very feeble, also her mind was not good and if I remember correctly she was totally disabled to do any work at that time.'

In his testimony, which was taken by deposition, he was asked the following questions:

'* * * If you have answered above questions, stating that Mrs. Sutton had a stroke of apoplexy and was paralyzed, please state, Doctor, the extent of the paralysis? Did it involve her entire body? Her arms? Her hands? Her lower limbs? Was her speech affected? Could she talk? Was her mind impaired as a result of the paralysis? Is it not a fact, Doctor, that said stroke of apoplexy and paralysis was of such extent and character as to render Mrs. Sutton absolutely helpless? Is it not a fact that her mind was so badly impaired as to be almost entirely gone? Is it not a fact, Doctor, that for all practical purposes so far as attending to or transacting business, Mrs. Sutton was practically, if not in fact, non compos mentis?'

In answer to the foregoing questions, Dr. Dykes testified;

'In the course of my practice in Barbour County, I had as one of my patients the wife of J. S. Sutton, Catherine Sutton. I visited her professionally for the first time sometime during the years of 1920 or 1921, the exact date of which I cannot recall. At the said time of my first visit she had suffered a severe stroke and was paralyzed and helpless. I cannot recall the time of year or the particular year but it was one of the two years above stated. I do not recall the relative condition of the different parts of her body, except to say that during the...