Mullen v. First Nat. Bank

• Decision Date: 16 March 1933
• Docket Number: 3 Div. 27.
• Citation: 146 So. 802,226 Ala. 305
• Parties: MULLEN v. FIRST NAT. BANK OF MONTGOMERY.
• Court: Alabama Supreme Court

146 So. 802

226 Ala. 305

MULLEN v. FIRST NAT. BANK OF MONTGOMERY.

3 Div. 27.

Supreme Court of Alabama

March 16, 1933

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Creditor's bill by the First National Bank of Montgomery against W. P Mullen. From a decree for complainant, respondent appeals.

Modified and affirmed.

W. J Fuller and Wm. F. Thetford, Jr., both of Montgomery, for appellant.

R. S. Hill, Jr., of Montgomery, for appellee.

Lange, Simpson & Brantley, of Birmingham, amici curiæ.

KNIGHT Justice.

Bill by complainant to have the court declare two certain conveyances, executed by J. G. Mullen to appellant, general assignments for the benefit of the creditors of said J. G. Mullen. The first of the conveyances is a mortgage, executed on the 22d day of January, 1926, to secure a recited indebtedness of $7,000, evidenced by note, and due and payable one year after date, with interest at 8 per centum per annum. The property conveyed consisted of five vacant lots, and a house and lot, all situated in the city of Montgomery, Ala. The second conveyance is a deed, executed on the 12th day of March, 1928, by which the said J. G. Mullen undertook to convey all the property, included within the terms of the mortgage, except three of the lots which had been previously conveyed by said J. G. Mullen to his wife in settlement of a claim for alimony.

In its bill, the complainant averred that the said J. G. Mullen, by the mortgage and deed, conveyed to the said W. P. Mullen substantially all of the property then owned by him, subject to execution, in payment of a prior debt, and by virtue of which a preference or priority of payment was given to one creditor over the remaining creditors of the grantor. Copies of the deed and mortgage were made exhibits to the bill.

The said J. G. and W. P. Mullen were each made parties defendant to the bill, but after the filing of the same, the said J. G. Mullen died, and the bill was thereupon amended by "striking therefrom said J. G. Mullen, now deceased, as a party respondent in said cause." No question was made in the court below as to the nonjoinder of the personal representative of said J. G. Mullen in the bill, and the evidence shows that the said decedent left no surviving widow, and that the said W. P. Mullen is his only heir at law.

To the bill as amended, the defendant interposed a number of grounds of demurrer, and this demurrer was overruled by the court. This ruling of the court is assigned for error, but the only ground of demurrer here argued is the one which presents the question of laches, predicated upon the failure of the complainant to use due diligence in collecting its debts from one B. Lowry.

It is made to appear from the averments of the bill that on the 22d day of January, 1926, and prior thereto, the said J. G. Mullen was indebted to the Fourth National Bank of Montgomery by virtue of his indorsement of a note of one B. Lowry, payable to said Mullen, to said bank, and it is further made to appear that this note was from time to time renewed by Lowry, and each renewal thereof was indorsed by said Mullen and delivered to the bank when so indorsed; and that said debt and note evidencing the same were transferred, assigned, pledged, or hypothecated to the First National Bank, and, since it was so transferred and assigned to the First National Bank, the same was renewed on March 31, 1930, and indorsed by the said J. G. Mullen, and made payable to the First National Bank in the sum of $570, the balance due, and that the complainant was the owner of the same.

Thus it is made to appear from the bill that any delays that have occurred in the collection of the note have had the full acquiescence and consent of the indorser, J. G. Mullen.

We have been cited to no adjudged case supporting the appellant's contention that the complainant is barred by laches of its right to have the conveyances declared a general assignment for the benefit of the general creditors of said J. G. Mullen. Certainly it does not appear on the face of the bill that the complainant, or its predecessor in title to said note, has been guilty of any laches in the assertion of any of its rights, and to be availing, on demurrer, the bill must disclose laches, otherwise the defense must be made by answer or plea. Hogan v. Scott, 186 Ala. 310, 65 So. 209; Glass et al. v. Stamps et al., 213 Ala. 95, 104 So. 237; Gayle et al. v. Pennington, 185 Ala. 53, 64 So. 572; Fowler v. Alabama Iron & Steel Co., 164 Ala. 414, 51 So. 393; Greenlees v. Greenlees, 62 Ala. 330; Scruggs v. Decatur Mineral & Land Co., 86 Ala. 173, 5 So. 440; Montgomery Light Co. v. Lahey, 121 Ala. 131, 25 So. 1006.

In cases where the charge of laches is predicated upon delay only, and that delay appears on the face of the bill to have been short of the period of limitation, the reason of the rule of analogy obviously requires that special circumstances operating to destroy the right asserted should be brought forward by way of defense. In cases, however, where the bill shows a lapse in excess of the period of limitation, it would seem that special matters obviating the rule of analogy should be brought forward in the bill. The bill in the present case does not show a lapse in excess of the limitation, and there appears nothing upon the face of the bill to indicate lack of due diligence. Gayle v. Pennington et al., supra; Henry County v. Winnebago Swamp Drainage Co., 52 Ill. 299; Jarvis v. Martin's Adm'r, 45 W.Va. 347, 31 S.E. 957; Fletcher Eq. Pl. & Pr. § 92.

The demurrer to the bill was properly overruled.

It appears from the evidence in this case, that after the execution of the deed to said W. P. Mullen, that is to say some time in the year 1930, the said J. G. Mullen was adjudicated a bankrupt, and M. H. Stuart was duly appointed trustee of the bankrupt estate of said J. G. Mullen. After his appointment as such trustee, Stuart, as such trustee, filed a bill in the circuit court of Montgomery county seeking to have the identical mortgage and deed involved in this suit declared to be fraudulent and void as against the creditors of the said Mullen, and to declare the property conveyed by the said conveyances assets of the...