De Moville v. Merchants & Farmers Bank of Greene County

• Decision Date: 29 October 1936
• Docket Number: 2 Div. 71
• Citation: 170 So. 756,233 Ala. 204
• Parties: DeMOVILLE v. MERCHANTS & FARMERS BANK OF GREENE COUNTY et al.
• Court: Alabama Supreme Court

170 So. 756

233 Ala. 204

DeMOVILLE v. MERCHANTS & FARMERS BANK OF GREENE COUNTY et al.

2 Div. 71

Supreme Court of Alabama

October 29, 1936

Rehearing Denied Dec. 3, 1936

Appeal from Circuit Court, Greene County; Benj. F. Elmore, Judge.

Suit in equity by J.F. De Moville (by guardian ad litem and next friend) against Merchants & Farmers Bank of Greene County Alabama, and Banks & Company, a partnership, and the individual members of the firm. From a decree denying relief except in part, complainant appeals.

Affirmed in part, and in part reversed, rendered and remanded.

KNIGHT J., and ANDERSON, C.J., dissenting.

J.F Aldridge, of Eutaw, and Cabaniss & Johnston and K.E. Cooper, all of Birmingham, for appellant.

Knox, Acker, Sterne & Liles, of Anniston, and Harwood & McQueen, of Tuscaloosa, for appellees.

BROWN Justice.

Bill by mortgagor, debtor, against mortgagee, purchaser at foreclosure sale, and purchasers of collaterals from the mortgagee after foreclosure, seeking to set aside the foreclosure, an accounting and redemption under the equity of redemption, and, in the alternative, to exercise the statutory right of redemption and an accounting by the mortgagee for the value of collaterals and chattels appropriated.

The circuit court denied complainant relief under the first alternative of the bill, but upheld his right to statutory redemption.

Pending the taking of testimony, the complainant became non compos mentis, and was committed to the Government Hospital for the treatment of insane veterans of the World War, Augusta, Ga., and Keith Legare was allowed to intervene as next friend and continue the prosecution of the suit in the name of appellant. Kelen v. Brewer et al., 221 Ala. 445, 129 So. 23. K.E. Cooper was also appointed by the court as guardian ad litem to represent the non compos mentis. This appeal is prosecuted by the next friend and guardian ad litem in the name of the complainant, De Moville.

While there are some conflicts in the evidence as to minor details, the controlling facts appear without dispute, bringing the case within the exception to the general rule, that the findings of fact by trial courts on evidence given ore tenus are, on appeal, accorded the weight of the verdict of a jury, and will not be disturbed unless plainly contrary to the great weight of the evidence. Marsh v. Elba Bank & Trust Co., 205 Ala. 425, 88 So. 423; Bowling v. State, 204 Ala. 405, 85 So. 500; Scott v. McGriff, 222 Ala. 344, 132 So. 177; Duggan v. Duggan, 227 Ala. 92, 148 So. 844; Henderson v. Henderson, 228 Ala. 438, 153 So. 646; Murphree v. Hanson, et al., 197 Ala. 246, 72 So. 437.

Appellant's father, A.B. De Moville, up until his death in 1927, resided at Boligee, Greene County, Ala.; owned and operated the cotton plantation involved in this litigation, by letting parcels thereof to negro tenants and advancing to them from his store which he operated in one department of the block of brick buildings which he also owned. The complainant "grew up in this business," and the plantation, the mercantile business, the business property in which it was conducted, and some of the bills receivable, accounts and liens for advances, passed to him under his father's will. It also appears that the father had been a patron of the defendant Bank and had an account at said Bank, back as early as 1924, which passed to appellant with the business. On this account a liability, unsecured, had accrued against appellant by February 2, 1931, amounting to $11,000. And the Bank had procured from some source a like account for which he was liable amounting to $4,000. On the date above-mentioned, the respondent Bank loaned appellant $5,000, and procured the execution of the mortgage, the subject-matter of this litigation, by appellant and his wife for the aggregate of said sums--$20,000--payable October 1, 1931, covering said plantation, consisting of 600 acres, 50 per cent. of which was in cultivation, on which were situated several tenant settlements--eight to ten; and the business property in Boligee.

In addition to the real property covered by the mortgage, the appellant pledged with the Bank collateral, consisting of two or more blocks of gin stock of the par value of $6,000, several mortgages on real and personal property, specifically described in the mortgage, and upward of a hundred chattel mortgages given by tenants for advances, covering crops, personal property consisting of horses, mules, and cattle, and farming implements.

These several chattel mortgages and liens were in face amount upward of $15,000. Appellant's evidence tends to show the face value much higher--$34,000. These chattel mortgages and liens were described generally in the mortgage executed to the Bank thus: "*** And also all crop and personal property mortgages and liens and claims for advances and rents of every kind and description for the year 1931, or prior thereto." (Italics supplied.)

The mortgage recites "that, whereas, the undersigned J.F. DeMoville, is justly indebted unto the Merchants & Farmers Bank of Greene County, Eutaw, Alabama, in the sum of Twenty Thousand ($20,000.00) Dollars, which is evidenced by his promissory note, for that sum, bearing even date herewith, and payable to said Merchants & Farmers Bank of Greene County or order on the first day of October, 1931, which said note bears interest from date, waives all exemptions, provides for the payment of attorneys' fees, and is payable at said Merchants & Farmers Bank of Greene County, Eutaw, Alabama; and whereas, said indebtedness was contracted with the understanding and agreement of the parties hereto that this mortgage should be given to secure the payment of the same." (Italics supplied.)

The mortgage also embodied the following:

"But should we fail to pay said note, at maturity, then said mortgagee, its successors, assigns, and agents are hereby authorized and empowered to take immediate possession of the property hereby conveyed; and sell the real estate at public auction, for cash, before the court-house door of Greene County, Alabama, first having given twenty days' notice thereof by publication once a week for three successive weeks in any newspaper then published in Greene County, Alabama, and execute proper conveyance to the purchaser; and out of the proceeds of said sale, it shall first pay all of the expenses incident thereto, together with a reasonable attorney's fee; then retain enough to pay said note, and the balance, if any, pay over to us. In the event of such sale or of any sale hereunder, said mortgagee, its successors, assigns, and agents are hereby authorized and empowered to purchase said property or any part thereof, the same as if they were strangers to this conveyance, and the person making the sale is directed and empowered to execute and deliver a deed to the purchaser in our names. (Italics supplied.)

"No notice is required for the sale of the mortgages, crops and personal property, but the same may be sold at any time and place, with or without notice, public or privately, and the proceeds applied as herein directed."

Appellant failed to pay the debt on its due date, and in the light of the circumstances existing at the time the mortgage was executed, as the evidence shows, no other result could have been well anticipated.

The appellee Bank placed the mortgage in the hands of its attorney, who was also one of the Bank's directors, with instructions to cooperate with the mortgagor in reducing the indebtedness; the president of the Bank stating, in substance, that if the indebtedness was reduced to $10,000 the papers would be renewed and the balance carried over until the fall of 1932.

The Bank's attorney kept constantly in touch with De Moville from about October 10, 1931, up until late in December, 1931, and in that time De Moville collected and delivered to the Bank 206 bales of cotton which were immediately sold for less than the cost of production; and sold at a sacrifice the "cream" of the collateral mortgages: one of the face value of $1,400 was sold for $375, another of the face value of $524.62 for $150, and 22 head of cattle; this effecting the reduction of the debt by the sum of $7,500.

The Bank consented that the mortgagor might purchase the remaining collateral mortgages and liens for $2,000, and De Moville made every effort to raise the money or induce some of his friends or unsecured creditors to purchase them, but failed. Said remaining collateral mortgages of the minimum face value, in round numbers, of $14,000, were offered by the attorney of the Bank to every person in Greene county, except the defendant Banks & Co., who was thought to be able to purchase and handle the same; also to persons in Columbus, Mississippi, and Tuscaloosa, Ala., without finding a purchaser.

On January 8, 1932, the property covered by the mortgage including the collaterals, was advertised for sale on Friday, January 29, 1932, "before the court-house door" in Eutaw. The upward of a hundred chattel mortgages held as collateral were described in the foreclosure notice in these words: "*** also all crop and personal property mortgages and liens, and all liens and claims for advances and rents of every kind and description for the year of 1931 or prior thereto, due to said J.F. DeMoville in anywise." (Italics supplied.)

On the day of the sale, after "drumming up a crowd" by going around the block at the courthouse in Eutaw, 40 or 50 people came together, most of them through curiosity, as the evidence shows, the property was offered for sale, the Bank's attorney and agent crying the sale. The block of stores was first offered. No one bid except the mortgagee and the property was, conditionally, knocked down on its bid of $5,000. The...