Jim Walter Corp. v. Rush

• Decision Date: 14 July 1966
• Docket Number: 1 Div. 248
• Citation: 189 So.2d 129,279 Ala. 611
• Parties: JIM WALTER CORPORATION v. Tommie RUSH.
• Court: Alabama Supreme Court

Page 129

189 So.2d 129

279 Ala. 611

JIM WALTER CORPORATION v. Tommie RUSH.

1 Div. 248.

Supreme Court of Alabama.

July 14, 1966.

E. Graham Gibbons, Mobile, for appellant.

Lee B. Williams, Grove Hill, for appellee.

COLEMAN, Justice.

Plaintiff appeals from judgment for defendant in statutory action in the nature of ejectment to recover one acre of land.

To the complaint in code form, defendant pleaded the general issue. Under that plea, defendant may give in evidence the same matters which may be given in evidence under such plea in an action of ejectment. § 941, Title 7, Code 1940.

The principal question on this appeal is whether certain evidence offered by defendant was admitted without error.

Under date of May 11, 1960, defendant and her husband executed to plaintiff a mortgage on the land in suit. The mortgage was given to secure payment of a monthly installment note due from defendant and her husband to the plaintiff. The note was given by defendant and her husband in consideration of the erection of a house on the land by plaintiff.

On January 21, 1963, plaintiff foreclosed the mortgage under the power therein contained and became the purchaser at the foreclosure sale. Foreclosure was had after default in payment of the mortgage debt. Defendant's husband died prior to foreclosure of the mortgage. Monthly payments were made on the mortgage up until the husband's death and two payments were made after his death.

The defense made by defendant is that plaintiff's representative, with whom defendant and her husband negotiated the loan, represented to defendant and her husband that the mortgage debt was insured so that if either defendant or her husband died the debt would be paid in full, that such representation was false, and, therefore, defendant was relieved from the obligation to pay the mortgage debt, wherefore plaintiff was not entitled to foreclose the mortgage and is not entitled to recover the land in this action.

At the outset, we note that defendant did not request the affirmative charge, either with or without hypothesis.

Plaintiff introduced into evidence four instruments of writing, to wit:

1. Mortgage of the land in suit from defendant's husband and defendant to plaintiff.

2. Assignment of the mortgage by plaintiff to Mid-State Homes, Inc.

3. Assignment of the mortgage by Mid-State Homes, Inc., back to plaintiff.

4. Foreclosure deed executed by the auctioneer purporting to convey the land to plaintiff as purchaser at foreclosure of the mortgage under the power of sale therein set out.

After introducing the four instruments, plaintiff rested. At this time, there had been no proof of prior possession or any possession at all by plaintiff; and there had been no proof that plaintiff's grantors, defendant or her husband, had ever been in possession of the land.

In order to discharge its burden to show, at least prima facie, a right to recover, it was necessary that plaintiff show a regular chain of title back to some grantor in possession or to the United States. Florence Building & Investment Association v. Schall, 107 Ala. 531, 18 So. 108; Henry v. Brannan, 149 Ala. 323, 42 So. 995; The Trial of an Action in Ejectment, Robert T. Milner, 3 Ala.Law. No. 2, page 155, April 1942.

Plaintiff rested before it proved a prima facie case, but defendant then proceeded to offer evidence to prove that the mortgage was void because of the fraud allegedly practiced by plaintiff's agent who represented plaintiff in the negotiations leading up to and culminating in the execution of the mortgage by defendant's husband and defendant. The case was tried on the theory that plaintiff is entitled to recover unless the mortgage is to be avoided for the alleged fraud of plaintiff's agent; but that if plaintiff's agent was guilty of the fraud then plaintiff was not entitled to recover; and that it was for the jury to say whether plaintiff's agent was guilty of fraud or not.

Plaintiff objected to admission of the testimony which showed that plaintiff's agent represented that insurance would be provided on the life of the mortgagors whereby the mortgage debt would be paid in event either one of them died. Plaintiff's objections were overruled and plaintiff asserts that these rulings were error because, in ejectment, defendant cannot impeach the consideration of the mortgage nor show the original absence or subsequent failure of consideration to avoid the mortgage.

Defendant replies that in ejectment, defendant may introduce any evidence which will bar plaintiff's right to recover, and, that if the mortgage was procured by fraud, the mortgage has no existence in a court of law or equity and does not convey the legal title to plaintiff, wherefore plaintiff cannot recover.

Plaintiff replies that fraud not going to the execution of the mortgage, as by misreading it or misrepresenting its contents, or the like, is not available to nullify the mortgage in defense of ejectment in a court of law; and that any relief for fraud in the inducement which caused defendant and her husband to execute the mortgage must be sought by defendant in equity.

The question for decision comes to this: In an action of ejectment, is defendant permitted to show as a defense that in obtaining the conveyance under which plaintiff claims title, plaintiff was guilty of fraud in the inducement as distinguished from fraud in the execution or procurement of the conveyance.

In Morris v. Harvey, 4 Ala. 300, in an action of detinue for a slave, plaintiff contended that his deed to defendant, under which defendant claimed, was void for fraud in the execution, or, if not fraudulent, the deed was not supported by adequate consideration. This court said that plaintiff was shown to be illiterate, but it was certain that the deed was drawn at his request and in conformity to his wishes as previously expressed, and that there was nothing in the case 'to warrant the inference of fraud in the execution of the deed, and therefore it cannot be impeached, however inconsistent the acts of the grantee may have been to the trust, if any existed.' The court further said, as to the inadequacy or want of consideration, '* * * the current of decision is uniform to show that this is not the subject of inquiry at law.'

In Kelly v. Mobile Building and Loan Association, 64 Ala. 501, in ejectment by a mortgagee, the defendant objected to the admission of the mortgage on the ground that it showed on its face that the transaction was usurious. The trial court overruled defendant's objections and this court affirmed, saying, that, in ejectment, there can be '* * * no inquiry into the consideration of the debt, or of its validity.--Doe v. Roll, 7 Ham.Ohio, 401.' This court said further:

'* * * A court of equity, in which each party can be compelled to do equity, is the appropriate forum for the consideration of all other questions, than fraud in the execution of the conveyance.--Morris v. Harvey, 4 Ala. 300.' (64 Ala. at page 503.)

In Doe v. Roll, supra, a mortgagee sued the mortgagor in ejectment. The mortgagor offered testimony that the mortgages were given to secure payment of one thousand dollars, in consideration of mortgagee's agreeing not to prosecute the son of mortgagor for theft. Mortgagor contended that the mortgages were founded on an illegal consideration and, for that reason, the court should not permit plaintiff to recover. Although the court had refused to grant a new trial to mortgagee, after defendant had recovered a verdict in a statutory scire facias proceeding based on the mortgage, Raguet v. Roll, 7 Ohio 76; in 7 Ohio R. 401 (7 Ham.Ohio 401), the court held that defendant's evidence to impeach the mortgage was improperly admitted and granted the mortgagee a new trial. In stating the reason for decision, the court considered the rule that, in the case of contracts based on illegal considerations, the law will not annul an executed contract but will not enforce an executory contract. The court said that it might be supposed that although a deed operates as an actual transfer of title, yet if it were necessary to sue to recover possession, the court would not enforce the right to recover. The court reasoned, however, that a mortgage conveys a conditional fee and the case comes within the principle that the court will not merely not annul a contract executed on an unlawful consideration, but will even permit it to be enforced. The court said:

'* * * A mortgage is in reality an actual payment of the debt, as well as an actual transfer of the land, although in consequence of the land being sometimes greater in value than the debt, An equity was supposed to arise in favor of the mortgagor, which was called his right of redemption, and which is now extended to every case of a conveyance by way of mortgage. It is a mere equity then, an equity which is not recognised by a court of law, but only by a court of chancery; an equity which, proceeding on the ground that the debt has already been paid in one way, enables the grantor, on certain terms, to pay it in another. There is, then, no real difficulty in the case, however intricate the questions presented, may at first sight appear to be. * * *' (7 Ham.Ohio at pages 404 and 405.)

In Lomb v. Pioneer Savings & Loan Co., 106 Ala. 591, 17 So. 670, in statutory ejectment by mortgagee against mortgagor, this court affirmed a judgment for plaintiff and said:

'In an action of ejectment, or in the corresponding statutory real action, the legal title only is involved. The plaintiff can recover only on a superior legal title. The defendant can defeat a recovery only by legal defenses. The equities of the parties cannot be asserted or regarded. Mitchell v. Robertson, 15 Ala. 412; Nickles v. Haskins, Id. 619; McPherson v. Walters, 16 Ala. 714; You v. Flinn, 34 Ala. 409; 3 Brick. Dig. 325, §§ 33, 34. The mortgage passed the legal estate to the plaintiff, subject to be defeated by the performance of the...