McKenzie v. Stewart

• Decision Date: 18 May 1916
• Docket Number: 5 Div. 600
• Parties: McKENZIE v. STEWART et al.
• Court: Alabama Supreme Court

72 So. 109

196 Ala. 241

McKENZIE v. STEWART et al.

5 Div. 600

Supreme Court of Alabama

May 18, 1916

Appeal from Chancery Court, Elmore County; W.W. Whiteside Chancellor.

Bill by J.R. Stewart and another against J.C. McKenzie to specifically perform a contract and satisfy a mortgage record. From a decree overruling defendant's demurrer to the bill, he appeals. Affirmed.

The bill shows that respondent, McKenzie, held a mortgage on certain lands of complainant Stewart, to secure Stewart's note upon which was due a balance of $1,500. McKenzie agreed with Stewart that, if Stewart would sell part of said land to complainant Storrs for 30 shares of stock in the Tallassee Oil & Fertilizer Company, McKenzie would accept 15 of said shares in full settlement and satisfaction of said mortgage indebtedness. Upon inquiry by Storrs as to this agreement McKenzie informed Storrs that he had so agreed with Stewart and told Storrs to accept a deed from Stewart, and that he (McKenzie) would accept the 15 shares of said stock in full payment and satisfaction of the mortgage indebtedness, and would thereupon cancel the mortgage. Storrs thereupon consummated his purchase of the land from Stewart, received a deed, and delivered to Stewart 30 shares of such stock of the par value of $3,000, and received possession of the land. Thereupon Stewart tendered to McKenzie 15 shares of the stock in full settlement of the mortgage indebtedness, and requested that the mortgage be canceled and delivered up, but McKenzie refused to accept the stock, and to cancel and deliver up the mortgage, and still refuses to do so. Complainant Stewart is, and has been, able, ready, and willing to deliver said stock to McKenzie as agreed, and now brings into court for disposition accordingly. Both complainants relied in good faith on respondent's agreement in the premises, but for which they would not have executed their transaction of purchase and sale. Besides the prayer for general relief, it is prayed that J.C. McKenzie specifically perform said agreement to accept 15 shares of stock in said Tallassee Oil & Fertilizer Company, in full payment and satisfaction of said mortgage, and that he be required to enter satisfaction on the margin of the record of the mortgage.

Frank W. Lull, of Wetumpka, for appellant.

T.G Hilyer, of Tallassee, and Holley & Morrow, of Wetumpka, for appellees.

SOMERVILLE J.

The bill of complaint in this case is nominally one for the specific performance of the respondent's agreement to accept 15 shares of corporation stock in lieu of $1,500 in money in satisfaction of a mortgage note for that amount. But it is, in substance and effect, a bill for redemption, and we shall so treat it.

If, upon a valid consideration, a mortgagee agrees with his mortgagor, or his privy, to accept certain property in payment of the mortgage debt, a due and seasonable tender of the property is, of course, the equivalent of a tender of the money originally due. Such an agreement merely arms the mortgagor with an option as to the mode of payment. The real question in this case therefore is: Does the bill of complaint show a valid consideration for respondent's promise to accept the stock in lieu of the money originally due him?

There is obviously no question here involving the statute of frauds, even conceding that the bill shows only a verbal agreement; for there was no agreement with respect to a conveyance of land. It is true that the result of respondent's acceptance of the stock would be the release of the land from the mortgage, but the same result would follow from his...