McMillan v. Jewett

• Decision Date: 08 December 1888
• Citation: 85 Ala. 476,5 So. 145
• Parties: MCMILLAN ET AL. v. JEWETT.
• Court: Alabama Supreme Court

5 So. 145

85 Ala. 476

MCMILLAN ET AL. v. JEWETT.

Supreme Court of Alabama

December 8, 1888

Appeal from chancery court, Mobile county; THOMAS W. COLEMAN, Judge.

Bill by John F. Jewett against M. M. McMillan & Son, to have a deed declared a mortgage, and for redemption of land therein conveyed. Decree for complainant, and defendants appeal.

Pillans, Torrey & Hanaw, for appellants.

Austill & Ervin, for appellee.

CLOPTON J.

Appellee seeks by the bill to have a deed, absolute in form, declared a mortgage, and to be let in to redeem one of the parcels of the real estate therein described and known as the "Water-Street Lot." The deed expresses, on its face, a consideration of $2,000 paid, $3,000 to be paid, and such further sums of money and lumber as might be delivered to the grantor by the grantees, and conveys the tract known as the "Creek Mill Property," and his right of redemption in the "Water-Street Lot" and the "Barlow Tract." The deed was executed under the following circumstances: On May 24, 1876, complainant borrowed of defendants their four promissory notes, payable respectively, 9, 12, 15, and 18 months after date, and, to indemnify defendants against loss on account of the notes executed two mortgages, one on the Water-Street lot and the other on the Creek Mill property. Defendants having paid the notes which had matured, and being liable to pay the others and also having agreed to pay a first mortgage on a part of the property, and complainant desiring future advances of money and lumber, the deed in question was executed December 1, 1877. It had its origin in a loan of notes, and an advance of money was made before all the notes had matured, and contemplated a future advance of money and lumber. The relation of debtor and creditor existed at the time of the execution of the deed, and it must be regarded as intended, when originally made, as a security for an existing and continuing indebtedness. Had there been no subsequent transactions between the parties, modifying or altering the character and effect of the deed, there could be no question of the right of complainant to be let in to redeem. Though it is a settled doctrine, from which it has been said a court of equity never deviates, that the debtor has, so long as the conveyance is intended for security, the equity of redemption, which cannot be waived or released by a contemporaneous agreement, expressed in the mortgage or otherwise, it is equally well settled that the mortgagor may, by subsequent agreement, release and transfer the equity of redemption to the mortgagee. Such release will be maintained in equity, if supported by a sufficient consideration, and there is an absence of fraud, oppression, and undue advantage. Stoutz v. Rouse, 84 Ala. 309, 4 South. Rep. 170; Peugh v. Davis, 96 U.S. 332. After the execution of the deed, some negotiations were had between the parties with a view to an erection of a mill on the Water-Street lot. On August 9, 1880, defendants sent complainant a full statement of his account and indebtedness, accompanied by a proposition that the books should be balanced to date, and future agreements should be in writing, with an assurance that, if no unseen accident prevented, they would be able to furnish the money to build the mill under a...