Morriss v. O'Connor

• Citation: 206 Ala. 542,90 So. 304
• Decision Date: 27 October 1921
• Docket Number: 1 Div. 194
• Court: Alabama Supreme Court
• Parties: MORRISS et al. v. O'CONNOR.

90 So. 304

206 Ala. 542

MORRISS et al. v. O'CONNOR.

1 Div. 194

Supreme Court of Alabama

Oct. 27, 1921

Appeal from Circuit Court, Mobile County; Joel W. Golsby, Judge.

Bill by Mary A. O'Connor against Mrs. E.H. Morriss and another to cancel mortgage because given to secure her husband's debt and because obtained under duress and coercion. From a decree granting the relief prayed, the respondent Morriss appeals. Affirmed.

Inge &amp Kilborne, of Mobile, for appellant.

Harry T. Smith & Caffey, of Mobile, for appellee.

MILLER J.

Mary A O'Connor, wife of Thomas J. O'Connor, files this bill against Mrs. Emma H. Morriss to cancel and annul a mortgage a note for $5,000 principal, and several interest notes, all secured by the mortgage, on her home and other real estate. She seeks their cancellation because they were given by her to secure her husband's debt; they were obtained by duress and without consideration. The defendant by answer avers she paid $5,000 cash for said notes and mortgage; that they were made and payable to a third person; and that she is a bona fide purchaser of them before they matured without any notice that they were given as security for her husband's debt or that they were obtained under duress or without consideration.

Notes and mortgages executed and delivered by a wife on her property to secure the debt of the husband, directly or indirectly, are violative of the statute and null and void. "The wife shall not, directly or indirectly, become the surety for the husband." Section 4497, Code 1907; Heard v. Hicks, 82 Ala. 484, 1 So. 639; Vinegar Bend Lbr. Co. v. Leftwich, 197 Ala. 352, 72 So. 538; Lamkin v. Lovell, 176 Ala. 339, 58 So. 258.

A mortgage obtained from the wife without consideration is invalid. Thompson v. Hudgins, 116 Ala. 93, 22 So. 632. When a wife executes a mortgage on her property to secure or pay debt under duress and threats that it is necessary to prevent her husband from being prosecuted, convicted, and sentenced to the penitentiary for a crime, and the wife is led to believe the act committed by her hubsand was criminal, but which was not, and she consented and executed the mortgage to prevent the prosecution, this would render the mortgage void. The consideration, to prevent the prosecution of her husband for an alleged crime, would be illegal and render the mortgage void. The mortgage would not be voluntary. It would have the form, but not the genuine substance, of a valid contract. Holt v. Agnew, 67 Ala. 361; Glass v. Haygood, 133 Ala. 494, 41 So. 973; Martin v. Evans, 163 Ala. 657, 50 So. 997.

These notes and mortgages are complete and regular on their face; the notes are payable to the Title Insurance Company, and it is named in the mortgage as mortgagee. If the defendant became the owner of them in good faith and for value, and before maturity, and at the time it was negotiated to her she had no notice of any infirmity or defect in the title of the person negotiating them, then she would be a holder in due course under the statute. As such, her rights would be protected, and the mortgage enforced to pay the notes secured by it, even if they were given under duress, or without consideration, or to secure a husband's debt, the defendant having no notice thereof before she purchased them. If she is a holder in due course, the instruments, notes, and mortgage are "free from any defect of title of prior parties, and free from the defenses available to prior parties among themselves." Sections 5007-5014, Code 1907; Bruce v. Citizens' Nat. Bk., 185 Ala. 221, 64 So. 82.

"It is well settled that, in order for the knowledge or information of an agent to be binding upon the principal, it must be acquired by the agent while transacting the business of his principal in the scope of his duties." Bruce v. Citizens' Nat. Bk., 185 Ala. 221, 64 So. 82.

The defendant claims and avers, if she is not a bona fide holder of the notes and mortgage, then the mortgage secures debts of complainant to the Bank of Mobile, owned by defendant as follows: One note for $472.49, and another for $1,210.13--and that she should be protected through the mortgage to the amount of said debts of complainant.

If these debts were bona fide due the bank by complainant, and the mortgage secured them, and defendant now owns them, the mortgage would be valid and binding as to this amount.

The evidence is conflicting on every material issue in some respects, stronger on some issues than others, some being strikingly strong on each side. There are always in the evidence blazes that direct the traveler trying to trail the path to find the place where truth resides. The earmarks of truth appear here and there in the testimony in all cases to direct the court or jury, searching for it, to find the facts on which a decree or verdict can safely rest. There is much testimony in this case. It would consume too much time, make this opinion too long, and serve no good purpose to refer to all of it, analyze it out, and show all of its bearings. So we will refer only to the "blazes on saplings" and "earmarks" in the testimony. The weight of evidence will be near or around them. The facts, when found, should be applied to the law hereinbefore stated, and a decree rendered in accord with both.

Were this mortgage and these notes given by complainant to secure her husband's debts directly or indirectly? Her husband was cashier of the Bank of Mobile. A.L. Staples was vice president. The husband owed the bank about $17,000. Staples was pressing for this mortgage, and directed that it be made to the Title Insurance Company, so it could be "transferred to whomever we designated after we found somebody who would lend the money." It was made to the Title Insurance Company. It paid complainant nothing for the notes or mortgage, and had no interest in it. The mortgage and notes were executed July 20, 1916. On August 24, 1916, the Bank of Mobile credited Thomas J. O'Connor's account with "dep. O'Connor mortgage $5,000.00," and on September 14, 1916, charged him, "check recording mortgage, $5.86." The complainant received no cash on this mortgage and no credit at the bank. It was also placed to the credit of her husband, and a statement of his account was mailed to him by Staples, the vice president, on September 19, 1916, showing total debits $17,877.97, and $17,877.97 total credits. Said items, "dep. O'Connor's mortgage $5,000.00" credit and "check recording mortgage $5.86" debit, were on the statement. The complainant saw the statement and made no objection to it to the bank. This mortgage and these notes remained in possession of the bank until after this suit was commenced on July 3, 1919, and in a few days thereafter they were transferred and indorsed without recourse by the Title Insurance Company to the defendant. These notes and mortgages were given to secure, directly or indirectly, her husband's debt.

Were these notes and mortgage executed under duress from the Bank of Mobile by the complainant? The husband of complai...