Grayson v. Goolsby

• Decision Date: 14 January 1932
• Docket Number: 6 Div. 927.
• Citation: 224 Ala. 75,139 So. 106
• Parties: GRAYSON ET AL. v. GOOLSBY ET AL.
• Court: Alabama Supreme Court

139 So. 106

224 Ala. 75

GRAYSON ET AL. v. GOOLSBY ET AL.

6 Div. 927.

Supreme Court of Alabama

January 14, 1932

Appeal from Circuit Court, Jefferson County; J. Russell McElroy Judge.

Bills for enforcement of materialmen's liens by C. H. Grayson doing business as the Grayson Lumber Company, against E. L Goolsby, the Sudduth Realty Company, the United States Bond &amp Mortgage Company, and F. Bozeman Daniel, and by the Enterprise Furnace Company against the same defendants and also said Grayson (consolidated by order of the court); and a cross-bill by the United States Bond & Mortgage Company to have its mortgage declared paramount to the liens of the complainants and foreclosed as to the lands. From a decree fixing the liens and priorities of the parties and directing a sale of the land and of the improvements separately, original complainants Grayson and the Enterprise Furnace Company appeal.

Reversed and remanded.

Murphy, Hanna, Woodall & Lindbergh, R. DuPont Thompson, and Walter S. Smith, all of Birmingham, for appellants.

Fort, Beddow & Ray and G. Ernest Jones, all of Birmingham, for appellees.

GARDNER J.

The original bill was for the enforcement of a materialman's lien in the erection of a new house on a vacant city lot owned by one Goolsby, and upon which vacant lot there was a first mortgage to the United States Bond & Mortgage Company in the sum of $1,800, the mortgage reciting that it was "given to secure a construction loan on the real estate."

All lienholders, mortgagees, and those claiming any interest in the property were made parties, and by the decree their respective interests, liens, and priorities were fixed. As to this feature of the decree no complaint is made, and details in reference thereto may be here omitted.

The evidence discloses, and the chancellor so found, that the lot with the dwelling thereon was worth less than the mortgage debt; that the lot alone, with the house removed, was of the value of $900; and that, on account of the manner of its construction (not here necessary to detail), the dwelling house would be practically without value if sold separate and apart from the land. The chancellor was of the opinion, however, that he was restricted in the form of the decree by the language of section 8833, Code 1923, and the decision of this court in Central Lumber Co. v. Jacks, 222 Ala. 475, 132 So. 721, and, contrary to his better judgment, ordered a sale of the dwelling separate and apart from that of the lot, expressing his views in the following language: "The court is of the opinion that the dwelling house constructed upon said land, as to which said mechanic liens are superior to the said mortgage liens, is of such nature, character and construction that said dwelling house would be practically without value if sold separate and apart from the land, but that said dwelling house is of substantial market value, to-wit of the value of $1000.00 as a part of and as situated upon the land; and that to order a sale of the land and a sale of said dwelling house separately would be to practically destroy the value of the said mechanic liens or without any corresponding, just or equitable advantage to the mortgagees; and that an equitable result may be obtained without detriment to the mortgagees by decreeing a sale of said land and dwelling house as an entirety, and by decreeing to the first mortgagee a first lien upon the proceeds of the sale to the extent of the value of the land as the said value would be if there were no dwelling house thereon. But the court is of the opinion that under the decisions of the Supreme Court of Alabama, particularly the decision of the Court in the case of Central Lumber Company v. Tom Jacks, that it has no authority to order a sale of the land and the dwelling house thereon as an entirety, but is required to order the land and the dwelling house thereon sold separately."

But we think the Jacks Case, supra, is to be differentiated from the instant case upon most material points. There the mortgages had been foreclosed, and the lienholders were seeking the enforcement of their liens against the purchasers at the foreclosure sales, who were, as they had the right to do, standing upon their perfected legal title. Here, the mortgage had not been foreclosed and the mortgagee made its answer a cross-bill and sought the affirmative relief of a foreclosure of its mortgage. There is nothing in the provision of section 8833 of the Code, nor in the language of the opinion in the Jacks Case, indicating any purpose to abrogate the equitable maxim, as old as equity jurisdiction itself, that "he who seeks equity must do equity," which in its broadest sense has been regarded as the foundation of all equity. 1 Pom. Eq. Jur. § 785. This maxim has been given frequent application by this court ( Interstate Trust & B. Co. v. Nat. Stockyards Nat. Bank, 200 Ala. 424, 76 So. 356, 357; Davis v. Elba Bank & Trust Co., 216 Ala. 632, 114 So. 211; Cross v. Bank of Ensley, 203 Ala. 561, 84 So. 267; Grider v. American Freehold L. & M. Co., 99 Ala. 281, 12 So. 775, 42 Am. St. Rep. 58), and is illustrated by numerous decisions found in the notes to 1 Pom. Eq. Jur. (4th Ed.) §§ 385, 396, inclusive. And the doctrine of marshaling of securities is said to rest upon the principle of this equitable maxim. 1 Pom. Eq. Jur. § 396. See also, in this connection, Farmers' S. & B. & L. Ass'n v. Kent, 117 Ala. 624, 23 So. 757; Vines v. Wilcutt, 212 Ala. 150, 102 So. 29, 35 A. L. R. 1301.

In discussing this maxim, this court in Interstate Trust & B Co. v. Nat. Stockyards Nat. Bank, supra, pointed out that the power of a court of equity in the...