Mobile Sav. Bank v. Burke

• Decision Date: 17 December 1891
• Citation: 10 So. 328,94 Ala. 125
• Parties: MOBILE SAV. BANK ET AL. v. BURKE ET AL.
• Court: Alabama Supreme Court

10 So. 328

94 Ala. 125

MOBILE SAV. BANK ET AL. v. BURKE ET AL.

Supreme Court of Alabama

December 17, 1891

Appeal from chancery court, Mobile county; W. H. TAYLOE, Chancellor.

This was a bill by the Mobile Savings Bank and William J. Hearin for the foreclosure of a mortgage. From a decree sustaining demurrers to the original bill as amended, and overruling demurrers to the cross-bill, complainants appeal. Affirmed.

Hamilton & Gaillard and Overall & Beston for appellants.

CLOPTON J.

The appeal being taken from a decree sustaining demurrers to parts of the original bill as amended, and overruling demurrers to the cross-bill, a proper understanding of the questions raised calls for a brief statement of the character, purposes, and substantial allegations of the original bill and amendment and of the cross-bill. The Mobile Savings Bank and William J. Hearin filed the original bill for the foreclosure of a mortgage on real estate in the city of Mobile, executed June 15, 1885, by Peter Burke and wife to Hearin, as trustee, to secure the payment of a note for $14,000 made by them to the bank. It having been ascertained that a part of the property was the statutory separate estate of Mrs. Burke, complainants abandoned any claim to subject that portion to the mortgage. After making appropriate allegations in respect to the mortgage, the bill avers that P.J. Lyons, one of the defendants, recovered, July 10, 1889 a judgment against Burke for over $15,000, upon which he had caused execution to be issued and levied upon the mortgaged property, and was threatening to sell it, claiming that the purchaser at the execution sale would be entitled to hold the property against complainants and any person purchasing at a sale of foreclosure. One purpose of the bill is to restrain Lyons from selling under his execution. His demurrer to the original bill having been overruled, Lyons fileld an answer, which he made a cross-bill. It avers that Burke, being indebted to the bank in a large sum,-$100,000,-was induced to execute, in October, 1884, a mortgage on the most valuable piece of his real estate to Hearin as trustee to secure the indebtedness, upon an agreement or understanding that it should not be recorded, but kept secret, and renewed at short intervals, until his indebtedness was paid, or until some complication in his affairs should arise which necessitated making the transaction public. The cross-bill further avers that this course of dealing was continued, and new notes and mortgages made, from time to time, every 60 or 90 days, the present mortgage being the last renewal, until the failure of Burke, July 25, 1885, on which day he made a deed of assignment; whereupon, and on the second day thereafter, the bank and Hearin caused the mortgage to be recorded. Also that the divers mortgages were withheld from record, and the indebtedness concealed for the purpose of enabling Burke to maintain his credit, and to obtain the indorsements of his friends upon paper, which, by pre-arrangement, was afterwards given to the bank as security for part of his indebtedness. The cross-bill prays that the mortgage be declared fraudulent and void, and that the property be condemned and sold, and the proceeds applied to the payment of his judgment. Upon the filing of the answer and cross-bill, complainants amended the original bill. The amendment avers that Burke owed the bank an indebtedness separate and distinct from the mortgage debt, on which it instituted suit, and recovered, July 29, 1887, a judgment against him for over $10,000, and that the judgment was filed in the office of the judge of probate in pursuance of "an act to provide for the registration and lien of judgments and decrees for the payment of money," approved February 28, 1887. It further avers that Little, Wilkinson & Co. recovered a judgment against Burke, July 10, 1889, for a large sum of money, upon which it is claimed there is still due and unpaid about $2,000, with interest; and that Little, as surviving partner, had filed the judgment in the office of the judge of probate in accordance with the provisions of the act above mentioned; and had also filed a bill in the chancery court, seeking to have the mortgage declared fraudulent and void as to him. It also avers that, even if the mortgage could be held for any cause invalid as against Lyons and Little, as surviving partner, or either of them, still the lien of their respective judgments is inferior to the lien of the recorded judgment of the bank. The amendment prays that the lien of the judgment in favor of the bank be decreed and declared superior to the lien of the judgments in favor of Lyons and Little, Wilkinson & Co., and that the mortgaged property be sold and the proceeds applied to the payment of the liens on the same according to the principles of law and equity. Lyons and Little each demurred to so much of the amended bill as sets up the existence of any lien arising upon the judgment of the bank, and as yrays for any relief based upon such lien. The grounds of demurrer are (1) that the allegations and prayer of the amendment are inconsistent with and repugnant to the allegations and prayer of the original bill; (2) tha...