First Nat. Bank v. Wise, 4 Div. 961

• Decision Date: 16 December 1937
• Docket Number: 4 Div. 961
• Citation: 235 Ala. 124,177 So. 636
• Parties: FIRST NAT. BANK OF OPP v. WISE et al.
• Court: Alabama Supreme Court

177 So. 636

235 Ala. 124

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

4 Div. 961

Supreme Court of Alabama

December 16, 1937

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

Bill for accounting by Mrs. Kimmie Wise and others against the First National Bank of Opp. From a decree overruling a demurrer to the bill, respondent appeals.

Affirmed.

Rowe &amp Rowe, of Elba, and Mulkey & Mulkey, of Geneva, for appellant.

BROWN Justice.

This appeal is from an interlocutory decree overruling the defendant's demurrer to the bill. The bill is filed by the widow and heirs at law of P.T. Wise, deceased, some of whom are minors, the personal representatives of said Wise joining therein, against the defendant mortgagee for an accounting, discovery, and relief.

While the bill is not artfully drawn, it avers that said P.T. Wise died on the 28th day of December, 1930, and at the time of his death was indebted to the defendant in the sum of $2,300 evidenced by note and secured by mortgage on the 400-acre farm of said Wise, of the value of from $12,000 to $16,000 and personal property consisting of "9 mules, 400 bushels of corn; 9 tons of hay; 3 two-horse wagons; one mower and rake; one cane mill and pan; one Ford car; one Ford truck; one ton of seed peanuts; 7 bales of cotton seed; one cow and calf; one sow and 4 pigs; one compost drill; one stalk cutter; 3 cotton planters; 5 droppers; one jersey wagon and a number of other plow tools and harness, consisting of plow stocks, plows and other equipment," of the value of $2,500.

That "respondent immediately after the death of the said P.T. Wise, and before any administration was had on his estate and without conferring with complainants, seized all of the personal property posted notice for five days, offered for sale part of said property at Elba, Alabama, in bulk and because [[became] the purchaser of all the property offered for sale for the sum of six or seven hundred dollars; that said property was some fifteen miles from the place of the sale; that the lands were likewise sold in bulk at and for the sum of $1800.00. *** That the fair market value of said personal property greatly exceeded the amount of the bid by respondent at foreclosure sale; that the fair and reasonable market value of the real estate greatly exceeded the respondent's bid at said foreclosure sale."

The bill also avers that the said Wise had been dealing with the respondent bank for several years; that he was unlearned and depended on the bank and its officers to keep the accounts between them; that he had made respondent payments in money and the delivery of farm products to apply on his debts; that the alleged mortgage was a renewal, and that complainants have no way of ascertaining the true state of the accounts; that the statement furnished by the respondent on the request of some of the complainants is not correct but is excessive; that though the debt was only $2,300, the bank after the seizure and sale of the personal property still claim $3,000 to be due it.

That the personal property was more than sufficient to pay the liability, that said "sale was made for the purpose of oppression and the acts of said bank in so foreclosing said mortgage was fraudulent and made for the purpose of oppressing these complainants and depriving them of their rights as heirs and distributees of the said Wise." Complainants offer to do equity.

The specific prayer of the bill is: "That the sale of the personal property be held for naught and that the said Bank be charged with the reasonable fair cash market value of said property at the time they took or converted the same, and that it be ascertained and determined the amount due said Bank after deducting the value of said personal property, and that they be allowed to redeem said lands if there is found to be anything due on said mortgage." The bill also prays for general relief.

Looking at the allegations of the bill in the light of the special prayer, it appears with certainty to a common intent, that it seeks to have the value of the personal property seized by the mortgagee credited on the mortgage debt and a recovery of the real estate, in equity, for the benefit of the deceased mortgagor's estate, the widow, and the lawful distributee thereof.

The objection that there is a misjoinder of parties complainant, therefore, is not well taken. The widow and the heirs as well as the administrators have a common interest in having the mortgage debt satisfied by the application of the value of the personal property to its discharge. Randolph et al. v. Vails et al., 180 Ala. 82, 60 So. 159, 162.

It is not of material importance whether the sale of the personal property, under the circumstances, was void or merely voidable, as the filing of the bill is a direct attack upon the irregular and oppressive foreclosure. Chenault v. Milan, 205 Ala. 310, 87 So. 537; Marsh et al. v. Elba Bank & Trust Co., 207 Ala. 553, 93 So. 604; Id., Third Appeal, 221 Ala. 683, 130 So. 323; Cogburn et al. v. Callier et al., 213 Ala. 46, 104 So. 330; Fowler v. Fowler, 219 Ala. 453, 122 So. 440.

The general rule in respect to the sale of real property under the power of sale in a mortgage is that:

" 'Where the price realized at the sale is so inadequate as to shock the conscience, it may itself raise a presumption of fraud, trickery, unfairness, or culpable mismanagement, and therefore be sufficient ground for setting the sale aside.' 27 Cyc. 1508.

"And, although mere inadequacy of price is not sufficient to that end, it is 'always a circumstance to be considered in connection with other grounds of objection to the sale, and will be sufficient to justify setting the sale aside, when coupled with any other circumstances showing unfairness, misconduct, fraud, or even stupid management, resulting in the sacrifice of the property.' *** The remedial action of courts in such cases is grounded upon the duty of the mortgagee, as stated by Shaw, C.J., in Howard v. Ames, 3 Metc. (Mass.) [308] 311: 'In executing such power, he becomes the trustee of the debtor, and is bound to act bona fide, and to adopt all reasonable modes of proceeding, in order to render the sale most beneficial to the debtor.' " Hayden v. Smith, 216 Ala. 428, 113 So. 293, 295; HunterBenn & Co. Company v. Bassett Lumber Co., 224 Ala. 215, 139 So. 348. See, also, Dewberry v. Bank of Standing Rock, 227 Ala. 484, 150 So. 463; Note, 69 A.L.R. 1194.

If the averments of the bill are true, and they must be so treated, the personal property was sold at less than one-third of its value, and the real estate at not exceeding 12 per cent. of its value, and under the authorities last above cited the complainants, unless they have been guilty of laches, which bars their right, were entitled to have the sale set aside and annulled.

The appellant's contention here is that it appears that the bill was filed more than 2 years after the alleged foreclosure of the mortgage, and that complainants are barred by their laches from seeking relief, notwithstanding some are minors, and cite, as conclusive of this contention, Canty v. Bixler et al., 185 Ala. 109, 64 So. 583, 585. That was what the court has referred to in numerous decisions "As the ordinary case" where the mortgagee purchases at the foreclosure without being authorized in the mortgage to do so, and the bill is to disaffirm the sale on that ground. In that case it was observed: "It is true that the bill in this case does attempt to show an extraordinary case, in which the two years of judicial limitation should not apply, but we...