Leith v. Galloway Coal Co.

• Decision Date: 11 June 1914
• Docket Number: 834
• Citation: 66 So. 149,189 Ala. 204
• Parties: LEITH v. GALLOWAY COAL CO.
• Court: Alabama Supreme Court

66 So. 149

189 Ala. 204

LEITH v. GALLOWAY COAL CO.

No. 834

Supreme Court of Alabama

June 11, 1914

Upon Application for Rehearing, June 30, 1914

Appeal from Chancery Court, Walker County; Alfred H. Benners Chancellor.

Bill by Belier Leith against the Galloway Coal Company to redeem from mortgage foreclosure sale. Decree for respondent, and complainant appeals. Affirmed.

Bill alleges the execution by the Douglass Coal & Coke Company on August 19, 1910, of a mortgage to the Galloway Coal Company to secure the payment of an indebtedness due from the mortgagor to the mortgagee. The bill also contains a description of the mortgaged property, and the mortgage is made an exhibit. It is alleged that the mortgagor became bankrupt and was so adjudged on September 19, 1911, but prior to such adjudication the mortgagee in the above-described mortgage had foreclosed the same by sale; that in September 1912, referee rendered a decree authorizing the trustee in bankruptcy to sell the equity of redemption of the bankrupt and the right to redeem, together with all the right, title and interest in said bankrupt estate to the property conveyed by the mortgage and described in the bill, and in March 1913, the trustee sold the same, reported his sale to the referee, which was duly confirmed and a deed was made to complainant as a purchaser at said sale; that in April, 1913, complainant, being desirous of redeeming and being entitled to redeem said property, made written demand on Galloway Coal Company for a statement in writing of the debts and lawful charges claimed by it, and that said company has failed and refused to make such statement.

W.H. Smith, of Birmingham, and Ray & Cooner, of Jasper, for appellant.

Tillman, Bradley & Morrow, M.M. Baldwin, and J.A. Simpson, all of Birmingham, for appellee.

MAYFIELD J.

The main question presented by this appeal for decision is whether or not the mortgagor's statutory right of redemption under section 5746 of the Code of Alabama of 1907 passes to a purchaser from the trustee of the bankrupt, where the equity of redemption had been cut off by a foreclosure, before the mortgagor was adjudicated a bankrupt. The purpose of our statute is held to be primarily for the benefit of the debtor, and secondarily for the benefit of his creditors and of others mentioned in the statute, by affording him first, and the others mentioned next, the advantage of any increase in the value of the lands during the two years next after the sale of the property. Posey v. Pressley, 60 Ala. 250.

The statutory right of redemption does not come into existence until the equity of redemption is extinguished by a foreclosure. Prior to the Code of 1907 it was a mere privilege--neither property nor the right of property--a mere privilege personal to the debtor. The right was made assignable by the Code of 1907, but only so by the mortgagor or owner thereof. It is not yet made subject to sale under execution. It still retains its character of a personal privilege to the mortgagor or owner, or to others mentioned in the statute. The statute does not authorize this right or privilege to be assigned by any one except the debtor; while it confers the right on others specified, it does not authorize such others to assign the right, as it does the debtor.

The bill in this case shows that the equity of redemption was cut off by a foreclosure, before the mortgagor was adjudicated a bankrupt; hence no one except a person mentioned in the statute succeeded to the statutory right of redemption, and of course the right of redemption cannot be exercised by one...