First Nat. Bank of Opp v. Wise

• Decision Date: 15 May 1941
• Docket Number: 4 Div. 182.
• Citation: 241 Ala. 481,3 So.2d 68
• Parties: FIRST NAT. BANK OF OPP et al. v. WISE et al.
• Court: Alabama Supreme Court

3 So.2d 68

241 Ala. 481

FIRST NAT. BANK OF OPP et al. v. WISE et al.

4 Div. 182.

Supreme Court of Alabama

May 15, 1941

Rehearing Denied June 30, 1941.

Appeal from Circuit Court, Coffee County; W.L. Parks, Judge.

Mulkey & Mulkey, of Geneva, J.M. Rowe, of Elba, and Steiner Crum & Weil, of Montgomery, for appellants First Nat Bank of Opp et al.

B.W Smith, of Samson, and E.F. Steiner, T.H. Hedgepeth, and H.D. Finlay, Jr., all of New Orleans, La., for appellant Federal Land Bank of New Orleans.

Powell & Fuller, of Andalusia, for appellees.

GARDNER, Chief Justice.

The original bill sought the avoidance of a foreclosure sale of real and personal property under a power of sale in mortgages executed by P.T. Wise to the defendant, First National Bank of Opp, and an exercise of the equity of redemption by the widow, heirs at law of P.T. Wise, deceased, and the administrators of his estate. The mortgagor Wise died on December 28, 1930, and the mortgage foreclosure sale occurred January 16, 1931. This bill was filed April 15, 1935, more than four years after the foreclosure sales.

In the "ordinary case" by analogy to the time allowed for statutory redemption, there is fixed the period of two years as a reasonable time for the mortgagor to elect to disaffirm the sale, and if an ordinary case is here presented, so far as the adult heirs are concerned, the bill is filed too late. But where there are peculiar features that seem to rebut the presumption of ratification after the lapse of two years, the courts relax the rule and decline to give effect to the presumption of ratification.

In First National Bank of Opp v. Wise, 235 Ala. 124 177 So. 636, the holding was that the bill's averments sufficed to establish the exception and that the doctrine of laches did not stand in the way of relief. A careful reading of the averments of the bill upon which that decision was rested, as therein found reported, suffices to demonstrate the correctness of the holding of that authority.

Subsequently the bill was amended with the Federal Land Bank and others made parties thereto seeking also to invalidate a foreclosure sale of the Land Bank's mortgage, charging among other things fraud and collusion with the First National Bank of Opp. The sufficiency of the bill as amended was here sustained. First National Bank of Opp v. Wise, 238 Ala. 686, 193 So. 131. The bill was again amended, answers duly filed and testimony taken by depositions. Upon submission of the cause for final decree on pleadings and proof the court granted complainants full relief sought and from that decree defendants prosecute this appeal.

In the bill as last amended some of the matters charged and stressed originally are omitted. Illustrative is that contained in the original bill that the mortgagor Wise was unlearned and that he had delivered farm products in part payment and was wholly dependent upon the Bank as to the status of his account and complainants have no way to ascertain the same. The evidence gives no support to these averments of the original bill, and as last amended the amount of the account does not appear to be questioned except that it contained usury. And as to the mortgagor's unlearned condition, his son, J.E. Wise, one of the administrators of his estate, testified that his father had "a pretty good education" and kept his books "for the hands on the place".

But no question of pleading is here involved and no occasion to elaborate thereon. In the main the averments of the original bill are relied upon for relief as to the mortgage foreclosures of the First National Bank (to so abbreviate the name).

Charges are readily made, but substantiation by the proof is an entirely different matter. From the bill as here first considered the defendant, First National Bank, was portrayed as taking advantage of the death of the mortgagor in order to acquire the property embraced in its mortgage at a great sacrifice in utter disregard of the rights of his heirs and to reap a profit at their expense. And all of this done precipitately and without consultation with any of the heirs. But the proof, to our minds, presents an entirely different picture.

This record is voluminous. Numerous witnesses have been examined and the evidence of each has been read with painstaking care and with due regard for the responsibility resting upon us. No detail of proof has escaped attention. We have interpreted the passage of the Act of 1915 (General Acts 1915, p. 594, now Section 10336, Code 1923) as a legislative invitation to refrain from a detailed discussion of facts which would serve no useful purpose as a precedent. Williams v. Dent, 233 Ala. 109, 170 So. 202. We will, therefore, rest content with some general observations leading to our conclusion that the trial court incorrectly decreed relief in this case.

Our study of the evidence is persuasive that the First National Bank not only did not want to acquire this property and had no desire whatever to oppress the heirs of the mortgagor, but on the contrary did all possible to interest two of the heirs, J.E. or Doc Wise and his brother Sam, who were the representatives of the others, to take over the property for the debt due. The aggregate of the two bids by the Bank, that of the real estate of $1,800 and of the personalty of $960, constituted the sum the Bank claimed as the balance due by the mortgagor on his indebtedness to it. These two brothers appear to have been the most successful of the children and seem to have had some property of their own. Sam Wise, at the request of the Bank's president, went on the premises and made a list of the personalty which he gave the Bank and we are convinced agreed to the valuation as then written down. We do not overlook the argument of counsel for complainants that this list was secured by the Bank's president by some sort of deception and constitutes an act indicating the fraud of which complaint is made in the entire matter. But we find no justification in this record for any such argument, and we are persuaded it arose, as defendants insist, out of the effort to have these two men take over the property and assume the debt.

True the Bank wanted them to give better security by inclusion of some of their personal property in a new mortgage. But if the property of the mortgagor was as valuable as they now insist, that does not appear at all unreasonable. This they declined to do and several witnesses testify these two stated that the property embraced in the mortgages was worth no more than the debt. By giving the additional security the mortgaged property could have been by them acquired on credit. But they were unwilling to so acquire the property. We do not overlook the reason now advanced that some of the heirs were minors. But we are not impressed that this question then entered into their consideration.

The Bank officials testify these two stated that the property may as well be sold, and we think their testimony is corroborated by all the facts and circumstances here appearing. We are persuaded also that the representative of the Bank who went to the place and took charge of some of the personalty just prior to date of foreclosure, placing some of the corn and other products under lock and key, did so with no other purpose than protection against waste and with the knowledge and acquiescence of Sam and Doc Wise, if not indeed at their suggestion. We cannot agree with complainants there was anything improper here. The sale both of the real estate (situated in Coffee County) and the personalty was had at the court house in Elba, conducted by the attorney for the Bank. It was at public outcry and the Bank was the only bidder. Some of the witnesses say the heirs were present, meaning, we assume, the adult heirs. The widow was there with J.P. and J.E. or Doc Wise and Averett, their brother-in-law and one of the administrators of the estate.

As we read the record, Sam Wise himself was not present though some of the evidence indicates all the brothers were on hand. At any rate, the heirs were well aware of the sale and were well represented thereat. True the personalty was on the farm eleven miles away and it was sold in bulk. But no objection whatever was made to the sale on account of either of these matters. So far as the sales were concerned the widow and heirs present acquiesced in the manner in which it was being conducted. And the price for which the personalty was bid in was the exact amount which Sam and Doc Wise had agreed was the valuation when talking with the Bank president at the time of the prior negotiations. Of course, the mortgagee must act in good faith with fairness and prudence in the execution of the power of sale, just as any other trustee. Harmon v. Dothan Nat. Bank, 186 Ala. 360, 64 So. 621; Zadek v. Burnett, 176 Ala. 80, 81, 57 So. 447; Schloss &amp Kahn v. Brightman, 195 Ala. 540, 70 So. 670; State Bank of Elberta v. Peterson, 226 Ala. 13, 145 So. 154. And though a sale in bulk may be irregular (De Moville v. Merchants & Farmers Bank, 233 Ala. 204, 170 So. 756), yet to avail the mortgagor or his heirs it must...