National City Bank of Mobile v. Barret

• Decision Date: 22 March 1928
• Docket Number: 1 Div. 472
• Citation: National City Bank of Mobile v. Barret, 217 Ala. 611, 117 So. 55 (Ala. 1928)
• Parties: NATIONAL CITY BANK OF MOBILE v. BARRET.
• Court: Alabama Supreme Court

117 So. 55

217 Ala. 611

NATIONAL CITY BANK OF MOBILE v. BARRET.

1 Div. 472

Supreme Court of Alabama

March 22, 1928

Rehearing Denied May 31, 1928

Appeal from Circuit Court, Mobile County; Saffold Berney, Judge.

Bill in equity by Kate W. Barret against the National City Bank of Mobile and another. From a decree for complainant, the named respondent appeals. Reversed and remanded.

Stevens McCorvey, McLeod, Goode & Turner, of Mobile, for appellant.

George B. Cleveland, of Mobile, for appellee.

BOULDIN J.

This is the third appeal in this cause. A statement of the case appears on first appeal. National City Bank v Barret, 214 Ala. 35, 106 So. 168.

Confining ourselves to such further statements as deemed proper to present discussion, we observe the suit is in Alabama between parties residing here, growing out of transactions in this state, touching lands located in Mississippi.

The bill is based on allegations that a deed made by Mrs. Kate W Barret and her husband, B.T. Barret, with option to repurchase taken in the name of Barret Bros. Shipping Company, Inc., and assigned to Mrs. Barret, was, in equity, a mortgage given to secure the debt of the husband. A cancellation of the mortgage, if void as claimed, or redemption, if valid, was sought in the alternative. On further allegations that respondent, National City Bank, standing in the shoes of the original grantee, Staples, had conveyed the lands to L.V. Pringle a resident of Mississippi placing the legal title beyond the jurisdiction of courts of this state, and that Pringle had proceeded to file a partition suit in Mississippi the bill prayed for further relief by way of a return of money alleged to have been paid by complainant's husband on the mortgage debt. Relief of this kind was granted in the first decree. The cause was reversed for failure to set aside a decree pro confesso on sufficient answer and let in respondent to defend, and because the case was not at issue as to Pringle, who had been added by amendment, and had not been served.

After the cause was remanded, a further amendment averred that this complainant had sought to intervene in the Mississippi court, but her petition was denied, on objection of Pringle, and the cause had proceeded to a sale for division and distribution of the proceeds.

The prayer was amended so as to call for an accounting and decree for the return of all sums received on the mortgage debt and for general relief.

The second appeal was from a decree overruling demurrers to the amended bill. Staples v. Barret, 214 Ala. 680, 108 So. 742, 46 A.L.R. 1084. A fuller outline of facts appears in the report on that appeal. The decision, so far as here pertinent, declared the bill sufficient in its showing that the transaction was a mortgage to secure the husband's debt; that the remedy by cancellation or redemption was shown to be inadequate; that, if proven to be a mortgage to secure the husband's debt, complainant would be entitled to a decree for the value of the land at the time it was sold by the bank, or, at her option, for her portion of the proceeds of the sale, if a valid mortgage, the recovery would be reduced by the amount of the mortgage debt remaining unpaid, or stated differently, the value of her equity of redemption lost to her by the doings of the bank. It was held that in no event was the measure of her recovery the sums paid by the husband on his own indebtedness. B.T. Barret, the husband, was held not a proper party complainant, and the decree was reversed for overruling the demurrer for misjoinder. We adhere to these rulings.

On final hearing upon pleadings and proof, the court below held complainant entitled to recover the value of her one-fourth interest in the 4,480 acres of land, with interest from the date of the deed to Pringle, aggregating $16,309.70, and decreed accordingly.

This decree can stand only on findings of fact as follows: First, that the deed with defeasance in the form of an option to repurchase, was in equity a mortgage; second, that it was void because given solely as security for the husband's debt; third, that respondent bank, the successor and holder, subject to all equities between the original parties, had so placed the legal title as to defeat or so embarrass complainant's remedies as to arm her with the equitable right to call the bank to account for the value of the property. Lamkin v. Lovell, 176 Ala. 334, 58 So. 258; Horst v. Barret, 213 Ala. 173, 104 So. 530; People's Bank v. Barret, 216 Ala. 344, 113 So. 389; National City Bank v. Barret, 214 Ala. 35, 106 So. 168; Staples v. Barret, 214 Ala. 680, 108 So. 742, 46 A.L.R. 1084; Van Heuvel v. Long, 200 Ala. 27, 75 So. 339.

The evidence supports the finding that the deed was a mortgage and the National City Bank occupied the same position as the original grantee. The right of B.T. Barret to pay the debt was fully recognized long after the expiration of the two years named in the option.

Was the mortgage given to secure the debt of the husband? The consideration for the mortgage was evidenced by memorandum attached to the option and offered by complainant, as follows:

Memorandum.

King notes and interest ................................... $6,675 51

Barret Bros. Co. notes ..................................... 1,447 35

Attorney's fees and costs in Barret Bros. and King suits ..... 300 00

Total .................................................. $8,422 86

The deed recited a consideration of $6,000 and the option $8,400, with interest.

The "King notes" mentioned in the memorandum were a series of notes executed by Barret Bros. & Co. to W.D. King. They were discounted to a bank, predecessor in title to the National City Bank, and each indorsed "W.D. King" and "W.D. King, Agt." The latter signature was made by W.D. King under general power of attorney from his wife. The written indorsement was in these words: "The undersigned indorsers assume the contract shown by the face of this note."

We accept the version of complainant that "Barret Bros. & Co." was merely the business name then employed by B.T. Barret in his individual business.

B.T. Barret went into bankruptcy. The indorsees sued the Kings as indorsers on these notes. At this stage negotiations were begun, resulting in giving this mortgage on Mrs. Barret's lands, the dismissal of the King suits, the payment by the indorsee bank of the $300 attorney's fees mentioned in the memorandum, and the surrender of the notes. The notes stipulated for payment of attorney's fees.

Without enlarging on the evidence, we are convinced a material, if not controlling, inducement to the giving of the wife's land as security was the release of the Kings as indorsers upon the notes given to W.D. King by B.T. Barret, the husband.

Under our law, a married woman is entirely relieved of the disabilities of coverture, save in a few cases. The husband must, with exceptions, join in the alienation of her lands, and she shall not, directly or indirectly, become surety for the husband's debt. All contracts of the wife must be construed, in view of her general power to contract, as well as the exception. In this day of freedom in the ownership of property and the conduct of business by a married woman, recognition of such freedom in her own interest and in the protection of those who do business with her becomes as imperative as her protection against transactions without her lawful power to contract.

It has often been declared by this court in general terms that to avoid the wife's contract the consideration must be solely by way of security for the husband's debt.

When items of the husband's indebtedness are included with other separate items, which may be readily ascertained, the transaction is avoided only as to items of the husband's indebtedness. In this there is a distinction between contracts avoided because of disability of coverture and those avoided as a whole because a part of the consideration...