Palmer v. James

Decision Date31 January 1924
Docket Number6 Div. 49.
Citation99 So. 109,210 Ala. 641
PartiesPALMER v. JAMES.
CourtAlabama Supreme Court

Appeal from Circuit Court, Walker County; R. L. Blanton, Judge.

Bill in equity by H. C. James against R. G. Palmer, for foreclosure of an equitable lien or mortgage. From a decree for complainant, respondent appeals. Reversed and rendered.

Thomas Sayre, and Miller, JJ., dissenting.

Ray &amp Cooner, of Jasper, for appellant.

Coleman D. Shepherd, of Jasper, for appellee.

SOMERVILLE J.

The bill is filed for the foreclosure of an equitable lien or mortgage; the substance of its pertinent allegations being that complainant sold and delivered to respondent a sawmill and sawmill outfit for $500, on the understanding and agreement that complainant was to have a lien thereon as security for the purchase money, and that the property "was to stand good for the purchase price," and that "the title which passed to the defendant *** was to be subject to said lien and said agreement."

The undisputed evidence-in particular the testimony of complainant himself-is that the only agreement between the parties with respect to security for the purchase money was that, when respondent "got the mill moved over and set up" he would execute to complainant notes and a mortgage on the property for $400. Complainant specifically testified that there was no agreement that the property was to stand good for the purchase money, other than the agreement to execute a mortgage.

It is true that the witnesses Allred and Whitlaw testified that, on the occasion of the sale, the respondent James stated that "his property stood good for his debts," and also that "his property and mill stood good for his indebtedness-all he owed." And complainant himself testified that respondent said, "What I have got stands for my debts." But such general statements could only mean that his property stood liable for all of his debts in the ordinary way, and do not evidence an intent to make a verbal mortgage to secure a specific debt. Nor does it appear that those statements were terms of the sale, nor inducements thereto, for, indeed, the testimony of those witnesses expressly shows the contrary.

There is nothing, in short, to show a reservation of a lien by the vendor, but only his reliance upon the vendee's promise to execute a mortgage security after the mill was set up.

The witnesses were heard by the trial judge viva voce, and we would not reverse his findings of fact on conflicting testimony; but it does not appear that the trial court found that a lien was reserved from the title sold and transferred. On the contrary, we presume that relief was granted on the theory that the agreement to execute a written mortgage was in effect a valid parol mortgage, enforceable in equity. Nor does our own finding on this question involve the credibility of the witnesses, nor any conflict in the testimony.

On these facts, our conclusion in this case must be ruled by the case of Williams v. Davis, 154 Ala. 422, 45 So. 908 from which it is not distinguishable. After referring to section 2151 of the Code of 1896 (now section 4288 of the Code of 1907), the court in that case said: "It is not conceivable that the transaction between the complainant and the respondent amounted to anything more than a verbal agreement to make a mortgage, void in law and in equity. An agreement not in writing, to make a mortgage, is at most, in equity, a verbal mortgage."

See Morrow v. Turney's Admr., 35 Ala. 131. That a parol mortgage is void and conveys no title, legal or equitable, was declared also in Marlowe v. Rogers, 102 Ala. 510, 515, 14 So. 790.

It results that, on the case made by the evidence, complainant is not entitled to relief.

We are not called on to determine whether, under the principles laid down in Putnam v. Summerlin, 168 Ala. 390, 53 So. 101, the parol reservation of a lien for the purchase money, made at the time of and as part of the sale, would have created a valid and enforceable equitable mortgage, for that question, as above shown, is not presented. We note, however, in passing, that the case of Williams v. Davis, supra, was reviewed in Putnam v. Summerlin, and its correctness was not questioned.

The conclusion to which we are thus constrained may seem regrettable, but the Legislature has seen fit to inhibit verbal mortgages, and courts are bound to give effect to the statute (section 4288 of the Code), regardless of the hardships it may impose.

The decree of the circuit court in equity will be reversed, and a decree will be here rendered denying the relief sought, and dismissing the bill of complaint.

Reversed and rendered.

ANDERSON, C.J., and GARDNER and BOULDIN, JJ., concur.

THOMAS J. (dissenting).

The averments of the lien in the third paragraph of the bill are:

"That in said contract for the sale and purchase of sawmill and machinery, and as a part thereof, it was understood and agreed between complainant and defendant that said complainant was to have a lien upon said sawmill and machinery and outfit as security for the payment of said $500 purchase price, and that said sawmill and sawmill outfit hereinbefore described was to stand good for the purchase price, and that the title which passed to the defendant to said sawmill and sawmill outfit was to be subject to said lien and said agreement that the same should stand good for itself."

Respondent's answer to said paragraph of the bill was:

"*** That the alleged agreement, as set out in said bill, and particularly as set out in paragraph 3 thereof, wherein it is claimed that the complainant was to have a lien upon the said sawmill and machinery and outfit as security for the payment of the said $500 purchase price, and that said sawmill and sawmill outfit described in said bill was to stand good for the said purchase price, and that the title which passed to the defendant to the said sawmill and sawmill outfit was to be subject to the said alleged lien, and said alleged agreement that same was to stand good for itself was not in writing as required by law, but was in parol, and that said agreement was and is void under the laws of Alabama, and particularly under section 4288 of the Code of 1907, and under the case of Williams v. Davis, 154 Ala. 422, 45 So. 908, and other cases."

The rights of third parties are not involved in the suit. As between the instant contracting parties, the lien sought to be enforced by the bill cannot be sustained for a mechanic's lien under the common law, without the retention of the possession of the property, which was not done. Alexander v. Mobile Auto Co., 200 Ala. 586, 588, 76 So. 944. The possession was required to be surrendered to Palmer by the complainant per the terms of their contract, which was done.

The reservation of title, in what are termed conditional sales, is more than a lien. The reserved title does not vest in the party contracting to purchase until the purchase price is paid. With such a provision in an executory contract, the idea of security for debt is incomplete with legal title. Warren v. Liddell, 110 Ala. 232, 243, 20 So. 89; Haynie v. Robertson, 58 Ala. 37; Dowdell v. Empire Fur. & Lbr. Co., 84 Ala. 316, 4 So. 31. The fact that the personal property was to be removed from the lands of the vendor, and to be affixed to the lands of the party contracting to buy would not prevent or defeat a retention of title, had this been the contract; and the fact that the property was to be set up on the lands of the purchaser and could be removed without material detriment to the lands would be consistent with a retention of title. Warren v. Liddell, 110 Ala. 232, 20 So. 89. And it has been held that a conditional sale may be created by a verbal agreement, as between the contracting parties. L. & N. R. Co. v. Miller, 209 Ala. 378, 96 So. 322; Gen. Acts 1911, p. 115.

It will be noted by reference to paragraph 3 that the bill was not filed on the theory of a conditional verbal sale-retaining the title to the personal property in the party contracting to sell (James) until the purchase price was fully paid by Palmer. And it is shown by the preponderance of the evidence that the mill and outfit was sold and was to stand for the purchase price.

As between the parties, what was the nature of this lien created by the verbal contract? There can be no verbal mortgage conveying the legal title under the statute. Code 1907, § 4288; Abbeville Live Stock Co. v. Walden, 209 Ala. 315, 96 So. 237. It was not a pledge for the purchase price, since the possession was parted with by the seller. Oden v. Vaughn, 204 Ala. 445, 450, 85 So. 779; Bradford v. Proctor,

209 Ala. 299, 96 So. 203.

In Warvelle on Vendors, vol. 2 (2d Ed.) § 771, p. 914, it is said:

"But whatever may have been the ancient rule, the law at the present time has firmly established the doctrine that where the labor or money of one person has been expended in the permanent improvement and enrichment of another's property under a parol contract or agreement which cannot be enforced because, and only because, it is not in writing, the party repudiating the contract, as he may do, will not be allowed to take and hold the property thus improved and enriched without compensation for the additional value which those improvements have conferred upon it; and it rests upon the broad principle that it is against conscience that one man shall be enriched to the injury and cost of another, induced by his own act."

The reason of the rule of enforcing certain parol contracts partly executed is thus stated by Mr. Story in his work on Equity Jurisprudence, vol. 2 (14th Ed.)§ 1045, p. 422:

"In the next place courts of equity will enforce a specific performance of a contract within the statute where the parol
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2 cases
  • Moore v. Culpepper
    • United States
    • Supreme Court of Alabama
    • April 10, 1981
    ...equity either by way of specific performance or as an equitable lien. Downs v. Downs, 257 Ala. 643, 60 So.2d 686 (1952); Palmer v. James, 210 Ala. 641, 99 So. 109 (1924); Williams v. Davis, 154 Ala. 422, 45 So. 908 (1908). If we admit testimony of the alleged oral agreement in the present c......
  • Downs v. Downs, 6 Div. 329
    • United States
    • Supreme Court of Alabama
    • October 9, 1952
    ...to execute a written mortgage is unenforceable in equity either by way of specific performance or as an equitable mortgage. Palmer v. James, 210 Ala. 641, 99 So. 109; Williams v. Davis, 154 Ala. 422, 45 So. 908; Code 1940, Title 20, § Affirmed. LIVINGSTON, C. J., and FOSTER and GOODWYN, JJ.......

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