People's Bank v. Barrett

• Citation: 219 Ala. 258,121 So. 910
• Decision Date: 02 February 1929
• Docket Number: 1 Div. 503.
• Court: Supreme Court of Alabama
• Parties: PEOPLE'S BANK ET AL. v. BARRETT.

121 So. 910

219 Ala. 258

PEOPLE'S BANK ET AL. v. BARRETT.

1 Div. 503.

Supreme Court of Alabama

February 2, 1929

Rehearing Denied May 2, 1929.

Appeal from Circuit Court, Mobile County; Claude A. Grayson, Judge.

Bill in equity by Kate W. Barrett against the People's Bank of Mobile, C. E. Thomas, as Superintendent of Banks of the State of Alabama, in charge of said People's Bank, and the First National Bank of Mobile, as liquidating agent under appointment of said Superintendent of Banks. From a decree for complainant, respondents appeal. Reversed and remanded.

Bouldin Sayre, and Thomas, JJ., dissenting.

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

George Bowen Cleveland, of Mobile, for appellee.

GARDNER J.

Complainant a married woman, seeks the avoidance of a conveyance to a one-sixth undivided interest in real estate situated in Mississippi, upon the ground that the deed purporting to convey the separate estate of the wife was intended as a mortgage, and given as security for the debt of the husband in contravention of the statutes of this state. Section 8272 Code of 1923. A general outline of the averments of the bill will be found in the report of the case on appeal from the decree overruling a demurrer thereto (People's Bank v. Barret, 216 Ala. 344, 113 So. 389), and needs no statement here.

As here appears, the real estate had been sold under a decree of the chancery court in Mississippi for division of the proceeds among joint owners, and respondent People's Bank (complainant's grantee) acquired a one-third undivided interest from the purchaser at said sale.

Among the alternative prayers for relief was one seeking a reconveyance to complainant by the bank of a one-sixth interest in the property, which, by way of dictum, it seems met the approval of this court on former appeal.

Upon consideration of the cause for final decree on pleadings and proof, the bill in all its material aspects was well established by the proof, and the chancellor, following the language of the opinion on former appeal, rendered a decree granting the special prayer requiring a reconveyance to complainant of said undivided interest in the property.

It is insisted that the dictum on the former appeal is incorrect, and that due account was not taken of former decisions of this court construing the above-noted statutory provision, prohibiting the wife from becoming surety for the husband's debt. Upon due consideration, we are persuaded the point is well taken, and that under the facts as here developed the dictum on former appeal, which was given application by the chancellor, leads to an incorrect result.

As here appears, the People's Bank acquired a one-third undivided interest in the property through the sale for division under the decree of the Mississippi court, which purported to pass all the title, but eliminating from consideration the one-sixth interest claimed by appellee, it is clear, as demonstrated by counsel for appellant and not controverted by opposing counsel, that said bank acquired a good title, free from any claim of appellee, to a 20/36 undivided interest.

Appellant insists the error in the former opinion as to the question now considered lies in the assumption that the title to an undivided one-sixth interest in the property passed to the bank under the deed made by complainant, and which is here sought to be declared void, while in fact under our decisions no title whatever passed; that as a result the decree is rendered divesting out of the bank from it 20/36 good title, an undivided one-sixth interest in the entire property, and investing it in complainant, although complainant still owns the original one-sixth interest, no title passing by her deed. It is without dispute that complainant sought to intervene in the proceedings in the Mississippi court, and have her title there adjudicated, but her petition to that end was denied, and dismissed. She was denied the right to become a party to that proceeding and was not bound thereby. National City Bank v. Barret, 217 Ala. 611, 117 So. 55; Christian v. Christian, 119 Ala. 521, 24 So. 844; Awbrey v. Estes, 216 Ala. 66, 112 So. 529; Lyons v. Hammer, 34 Ala. 197, 4 So. 26, 5 Am. St. Rep. 363; 20 R. C. L. 779.

As to the deed executed by complainant, and here sought to be declared void it is established without serious conflict that it was intended as a mortgage and for the purpose of securing the debts of the husband. As between the parties to such transaction, our decisions, in construing the above-cited statute, have uniformly held such conveyance absolutely void, incapable of ratification, inoperative to divest the title, and that the grantor could successfully recover in ejectment on her previous title. Patterson v. Simpson, 147 Ala. 550, 41 So. 842; Elston v. Comer, 108 Ala. 76, 19 So. 324; Richardson v. Stephens, 122 Ala. 301, 25 So. 39 (modifying in this respect) Rirchardson v. Stephens, 114 Ala. 238, 21 So. 949; Evans v. Faircloth-Byrd Mercantile Co., 165 Ala. 176, 51 So. 785, 21 Ann. Cas. 1164; Trotter Bros. v. Downs, 200 Ala. 158, 75 So. 906; Gafford v. Speaker, 125 Ala. 498, 27 So. 1003; Rollings v. Gunter, 211 Ala. 671, 101 So. 446; Interstate Trust & Banking Co. v. Nat. Stockyards Nat. Bank, 200 Ala. 424, 76 So. 356; Arnett v. Willoughby, 190 Ala. 530, 67 So. 426; Leath v. Hancock, 210 Ala. 374, 98 So. 274; Lunsford v. Harrison, 131 Ala. 263, 31 So. 24; Landsden v. Bone, 90 Ala. 446, 8 So. 65; Gibson v. Clark, 132 Ala. 370, 31 So. 472; Russell v. Peavy, 131 Ala. 563, 32 So. 492.

Where, however, a portion of the mortgage indebtedness is the joint or several indebtedness of the wife, the mortgage is valid to the extent it secures the payment of her indebtedness, and therefore passes the legal title. Bley v. Lewis, 188 Ala. 535, 66 So. 454.

The rights of innocent purchasers have been considered in the following, among others, of our cases: Scott v. Taul, 115 Ala. 529, 22 So. 447; Davies v. Simpson, 201 Ala. 616, 79 So. 48; Birmingham Trust & Savings Co. v. Howell, 202 Ala. 39, 79 So. 377; Fortson v. Bishop, 204 Ala. 524, 86 So. 399; Morriss v. O'Connor, 206 Ala. 542, 90 So. 304; Smith v. D. Rothschild & Co., 212 Ala. 276, 102 So. 206; Corinth Bank & Trust Co. v. Pride, 201 Ala. 683, 79 So. 255; Hatter v. Quina, 216 Ala. 25, 113 So. 47.

In the instant case, however, all the parties here concerned in any manner had knowledge of complainant's claim and insistence, and it is not pretended the right of any innocent third party is involved, or that of any bona fide purchaser for value. Such being the case, that question is not properly to be here considered, and is pretermitted. The reference in the former opinion to the case of Hatter v. Quina, supra, and quotation therefrom, is to be considered as dictum only. Complainant has litigated with others under facts similar to those here presented, and expressions are found in the opinions on appeal indicating a concession or assumption that the legal title passed. In National City Bank v Barret, 217 Ala. 611, 117 So. 55, title did pass, as a portion of the debt was that...