Hooper v. Reed

• Decision Date: 12 June 1924
• Docket Number: 8 Div. 595.
• Citation: 211 Ala. 451,100 So. 875
• Parties: HOOPER v. REED ET AL.
• Court: Alabama Supreme Court

100 So. 875

211 Ala. 451

HOOPER v. REED ET AL.

8 Div. 595.

Supreme Court of Alabama

June 12, 1924

Appeal from Circuit Court, Marshall County; W. W. Haralson, Judge.

Bill in equity by Jerry Reed and Anna Coulter against A. R. Hooper for accounting and redemption. From a decree overruling demurrer to the bill, respondent appeals. Affirmed.

D Isbell, of Guntersville, for appellant.

Rayburn Wright & Rayburn, of Guntersville, for appellees.

BOULDIN J.

The case made by the amended bill is this: A. contracted to sell real estate to B. B. borrowed from C. the money to meet the cash payment, and caused A. to execute to C. an absolute deed of conveyance intended as a mortgage to secure the loan. Upon payment of the mortgage debt C. was to convey the property to B. B. gave A. his notes for the deferred payments of purchase money. The entire agreement, so far as it defined the rights of B. rested in parol. Neither A. nor C. gave him any writing.

Thereafter B. paid to C. all or a portion of the mortgage debt, and paid a portion of the deferred notes to A. A. and B. file a bill against C. for an accounting and redemption, and for general relief. There is an added prayer that the vendor's lien held by A. for balance on the deferred notes be foreclosed.

Demurrers assail the general equity of the bill, set up the statute of frauds, and attack the bill as multifarious.

The appeal is from a decree overruling the demurrers.

The power of a court of equity to declare a deed absolute in form to be a mortgage only is unquestioned. The essential fact is that it was intended as security for debt. It implies a debt due the mortgagee and a conveyance accepted as security therefor. These facts may be proven by parol evidence.

It is immaterial whether the debt secured is that of the mortgagor or the debt of another. One person may give a mortgage on his lands to secure the debt of another. When the debt is paid the mortgagor is entitled to have his property released. If a deed intended as a mortgage is given the same reason would entitle the grantor to have the title revested upon payment of the debt. All the incidents of an accounting and redemption apply in the one case as in the other.

Now, if in the transaction, or thereafter, the mortgagor sells or assigns his equity of redemption, the purchaser would succeed to the right to be invested with the legal title on payment of the mortgage debt. The bill does not show that the purchaser, on payment of a portion of the purchase money, obtained possession of the property, unless this be implied from the averment that later on the purchaser agreed with the mortgagee that the latter was to collect and did collect the rents on the property for credit on the mortgage debt.

If the purchaser did not obtain possession, his mere payment of a portion of the purchase money would not take the case out of the statute of frauds. It was subject to be avoided by the vendor.

But the statute of frauds is a personal defense. The mortgagee cannot set up the statute of frauds in the transaction as between the vendor and purchaser.

The vendor may waive the statute, and does so by joining the purchaser in the bill affirming the...