First Nat. Bank v. De Jernett

• Court: Alabama Supreme Court
• Writing for the Court: KNIGHT, Justice.
• Citation: First Nat. Bank v. De Jernett, 159 So. 73, 229 Ala. 564 (Ala. 1935)
• Decision Date: 17 January 1935
• Docket Number: 6 Div. 655.
• Parties: FIRST NAT. BANK OF BIRMINGHAM v. DE JERNETT.

159 So. 73

229 Ala. 564

FIRST NAT. BANK OF BIRMINGHAM v. DE JERNETT.

6 Div. 655.

Supreme Court of Alabama

January 17, 1935

Appeal from Circuit Court, Jefferson County; Wm. M. Walker, Judge.

Bill to foreclose a mortgage by the First National Bank of Birmingham against Nell V. De Jernett, individually and as administratrix of the estate of Horace C. Dale, deceased, and others, and cross-bill by the named respondent. From a decree overruling a demurrer to the cross-bill, complainant appeals.

Affirmed.

Murphy Hanna, Woodall & Lindbergh and Rossie Rogers, all of Birmingham, for appellant.

Howze &amp Brown and Richard D. Gilliam, Jr., all of Birmingham, for appellee.

KNIGHT Justice.

This is an appeal from an interlocutory decree overruling demurrers of appellant, complainant in the original bill, to the cross-bill filed in the cause of Nell V. De Jernett individually and as administratrix of the estate of Horace C Dale, deceased.

It appears from the original bill that the said Horace C. Dale died intestate, and that the said Nell V. De Jernett was appointed administratrix of his estate. The said decedent left him surviving, as the only person interested in the property involved in this suit, his widow, the said Nell V. De Jernett (formerly Nell V. Dale), and Ellen Elizabeth Dale, an infant child.

The administration of the decedent's estate was duly removed to the circuit court, in equity.

It appears from the petition filed in the circuit court, in equity, by the administratrix, and made an exhibit to the original bill, that the decedent left unpaid debts, and that the personal property of the estate was insufficient to pay the same; that it was impossible to sell at that time the real estate without causing great loss to the estate.

It appears from the said petition that the decedent died seized and possessed of a certain lot described "as lot 20, in Block 17-C, in the survey of the East Lake Land Company, map of which is recorded in the office of the Judge of Probate for said county in Map Book 6, page 31."

It further appears from said petition that the administratrix, petitioner, had "negotiated a loan for the sum of $1750.00, to be secured by a mortgage on said real estate for the purpose of paying the debts of the estate," and averring that it was to the "interest of the minor heir to mortgage said real estate for the purposes set out."

The petitioner prayed that she be given the right and power, as such administratrix, to borrow a sum not exceeding $1,750, for the purpose of paying the debts of the estate, expenses of the loan, and to execute a mortgage on said lot 20, block 17-C, to the party making such loan to secure the payment thereof.

It further appears from the bill and exhibits that the said administratrix was authorized, by a decree of the court, entered on March 27, 1931, in said cause, to execute a mortgage conveying "all the right, title and interest in said lot 20, in Block 17-C, in the survey of the East Lake Land Company, map of which is recorded in the office of the Judge of Probate of Jefferson County, Alabama, in Map Book C, page 31, which the said decedent had therein at the time of his death, and which the petitioner, Nell V. Dale, widow of said decedent and Ellen Elizabeth Dale, infant child of said decedent now have therein, to secure a loan of not over $1,750.00. * * *"

It appears that thereafter the said administratrix, acting upon the authority, or supposed authority, of said decree, executed to one Frank P. Mansfield a promissory note, signed by herself as administratrix of the estate of Horace C. Dale, deceased, in the principal sum of $1,750, due and payable April 3, 1934, with interest at the rate of 8 per centum, payable semiannually. Along with this principal note, six interest coupon notes were also executed. To secure the said notes, the said Nell V. De Jernett, as administratrix of the estate of Horace C. Dale, and individually, executed a mortgage on said above-described lot.

Thereupon, the said administratrix made report to the court that she had secured a loan from Frank P. Mansfield in the sum of $1,750 for the period of three years, bearing interest at the rate of 8 per cent. per annum, payable semiannually, and had executed a mortgage conveying the property to said Frank P. Mansfield to secure said loan. No reference to the execution of a negotiable promissory note in evidence of said loan is made, and that she had paid out the money as set forth in the report.

This report was confirmed by the court, and said mortgage was "declared to be a valid conveyance of all the interest which the said decedent had in said property at the time of his death, as well as all the interest which the said Nell V. Dale, widow of said decedent, and Ellen Elizabeth Dale, infant heir of said decedent, now have in said property. It will also be observed that the court makes no reference to any note, negotiable or otherwise, in this order of confirmation. This order was entered on April 4, 1931.

There is attached to the original bill, as exhibits, copies of the note and interest coupons, and the mortgage. Said mortgage and notes bear date April 3, 1931.

The bill avers that on April 4, 1931, the day on which the order of confirmation was entered, the said Frank P. Mansfield indorsed said note and coupons, and did transfer said mortgage (with apt words of conveyance) to one H. H. McFerren, and that said H. H. McFerren, on May 5, 1931, did by a written instrument "grant, bargain, sell and convey, assign and deliver to complainant herein all his right, title, claim and interest in and to the mortgage and mortgage indebtedness represented by the notes herein described and lands conveyed by said mortgage."

The bill, in this last respect, avers: "And complainant further avers that said principal note was by the payee therein indorsed and said note, the herein described interest coupon notes, and the herein described mortgage were on, to-wit: April 4, 1931, for a valuable consideration, before maturity of any one of said notes, sold and delivered to the complainant, who is now the owner and holder in due course of said notes and mortgage, which are past due, owing and unpaid, as set out below."

The prayer of the bill is for a foreclosure of the mortgage and a sale of the property, and for a moneyed decree over against the said Nell V. De Jernett, in the event the property does not sell for enough to pay the indebtedness, interest, and cost.

To this bill the respondent, Nell V. De Jernett, filed an answer making same a cross-bill against the said First National Bank of Birmingham, and Mrs. William J. Winston, who claimed also to be an indorsee of said notes and a transferee of said mortgage. In her cross-bill, the said cross-complainant denied that she executed the notes in her individual capacity, and denied that the court had authorized her as such administratrix to execute a negotiable promissory note. She averred that the loan which the court had authorized her to secure was not consummated; that the said note and mortgage were without consideration, in that no money was ever paid to her by said Mansfield on said mortgage; and that the possession of said note was obtained by the said Mansfield by fraud and the same was never delivered to him.

With reference to the execution of said mortgage and notes, the respondent makes the following charge: "3. During the negotiations for the loan authorized by the order of court referred to in paragraph 2 of the bill, the attorney who represented Frank P. Mansfield in the transaction required that respondent execute the mortgage prepared by him and then have the execution thereof confirmed before the loan could be made. Respondent followed these instructions. The mortgage was never delivered to the said Mansfield but was left with him to be delivered and to take effect when and if he should make the loan as agreed. The said Mansfield has never made the loan as agreed or any loan, to respondent, either individually, or in her capacity, nor has he used any of his or anyone else's money to redeem the property described in said mortgage from the tax sale and municipal assessments sale, as required in the order authorizing the loan. In order to obtain her signature to the mortgage referred to in the bill and the note, the said Frank P. Mansfield fraudulently represented to respondent that he had the money on hand to make the loan and furnished her with what he represented to be the exact figures necessary to be paid to redeem the property from the tax sale and the municipal assessment sale and to pay the insurance premium, so that she could insert them in her report, and he fraudulently represented to her that all the sums listed in her report would be paid as soon as the decree confirming the execution of the mortgage was signed."

The said respondent prayed that the said First National Bank of Birmingham and Mrs. William J. Winston be decreed to have no right, title, and interest in, or incumbrance upon, the real estate described in the bill of complaint; that the mortgage be canceled as a cloud upon respondent's title to said real estate; that the court decree that respondent is not indebted to the complainant nor to Mrs. Winston on account of said note and mortgage; and that the said note and mortgage be canceled and surrendered to respondent.

The respondent, First National Bank of Birmingham, filed many grounds of demurrer to the cross-bill filed by Nell V. De Jernett, and "to each paragraph, allegation and phase thereof, separately and severally." The demurrers were overruled by the court, and this appeal is from that decree.

The demurrer interposed by the First National Bank of Birmingham as framed and addressed, under our uniform...