Lockwood v. Tate

• Decision Date: 23 June 1892
• Citation: 11 So. 406,96 Ala. 353
• Parties: LOCKWOOD v. TATE.
• Court: Alabama Supreme Court

11 So. 406

96 Ala. 353

LOCKWOOD v. TATE.

Supreme Court of Alabama

June 23, 1892

Appeal from chancery court, Jefferson county; THOMAS COBBS Chancellor.

Bill in equity by Mary D. Tate against J. L. Lockwood. From a decree for complainant, defendant appeals. Affirmed.

The bill in this case was filed by the appellee against the appellant. The facts are sufficiently stated in the opinion. On the final submission of the cause, on the pleadings and proof, the chancellor granted the relief prayed for. The defendant, J. L. Lockwood, prosecutes this appeal, and assigns the decree of the chancellor as error.

H C. Selheimer, for appellant.

Arnold & Evans, for appellee.

WALKER J.

Mrs Tate, the appellee, was the owner of a tract of land near the city of Birmingham. A part of this tract was sold and conveyed to a Miss Berry, who paid all the purchase money therefor except $1,000. For this sum she executed a note which was made payable, not to Mrs. Tate alone, but to Mrs. Tate and her husband. To secure the payment of this note, Miss Berry reconveyed the land which she had purchased by a mortgage which was also made to Mrs. Tate and her husband. Several months after the note and mortgage were executed, Mrs. Tate indorsed the note in blank, and handed it to her husband. The latter wrote a formal transfer over his wife's signature, added his own signature, and delivered the note and mortgage to the appellant, J. L. Lockwood. Lockwood transferred the note and mortgage to Goodall, Fite & James as collateral security for a debt owing to them. In their names the power of sale contained in the mortgage was executed. At the sale Lockwood became the purchaser, and, having paid the amount of his bid, Goodall, Fite & James executed a deed of the land to him. The purpose of Mrs. Tate's bill in this case is to have the transfer of the note and mortgage to Lockwood, his assignment to Goodall, Fite & James, and the sale under the power to Lockwood, annulled and set aside; to have herself decreed to be the sole owner of the note and mortgage, and to be entitled to the security thereof, just as if the transfer to Lockwood and the sale under the power had never been made; and to obtain a decree in her favor for the foreclosure of the mortgage. The claim to this relief is based upon the facts already stated, and upon allegations to the effect that the note and mortgage were delivered by Mrs. Tate to her husband to be used in a certain way agreed to by her; that he made an unauthorized use thereof in transferring them to Lockwood; and that when Lockwood received them he had notice of Mrs. Tate's ownership, and that the transfer to him was unauthorized and for a purpose to which she did not consent. When Lockwood received the note and mortgage, he and Mr. Tate were partners engaged in business as railroad contractors. Their operations had not been successful, and at that time the firm was largely indebted. Lockwood claims that Tate was then owing him a considerable amount for supplies which he had drawn out for his own use from the firm commissaries, and for money advanced to him for his private purposes. Lockwood testifies: "In settlement or part settlement, he (Tate) gave me his individual notes, and turned over this note and mortgage for me to sell and pay them with." We are fully satisfied from the evidence that Mrs. Tate was, from the beginning, opposed to her husband's business venture with Lockwood, and that she had repeatedly warned Lockwood that she would not consent for any of her property to be used in any business between him and her husband; that he must have been aware of the fact that the note and mortgage were given to secure a part of the purchase money for land which had belonged to Mrs. Tate alone; and that he knew that Mr. Tate was then without funds, and unable to pay his wife the value of the note and mortgage. Mrs. Tate's indorsement on the note informed him that her husband held it under a transfer from her. Having this information, the law charged Lockwood with notice that the transaction between husband and wife was "subject to the rules of law as to contracts by and between persons standing in confidential relations." Code, § 2349. When Mr. Tate delivered the note and mortgage to Lockwood, the latter was informed of facts and circumstances sufficient to put him, if he...