Pollard v. American Freehold Land Mortg. Co.

• Decision Date: 17 December 1903
• Citation: 35 So. 767,139 Ala. 183
• Parties: POLLARD ET AL. v. AMERICAN FREEHOLD LAND MORTG. CO. OF LONDON, LIMITED. AMERICAN FREEHOLD LAND MORTG. CO. OF LONDON, LIMITED, v. POLLARD ET AL.
• Court: Alabama Supreme Court

35 So. 767

139 Ala. 183

POLLARD ET AL. v. AMERICAN FREEHOLD LAND MORTG. CO. OF LONDON, LIMITED.

AMERICAN FREEHOLD LAND MORTG. CO. OF LONDON, LIMITED, v. POLLARD ET AL.

Supreme Court of Alabama

December 17, 1903

Appeal from City Court of Montgomery; A. D. Sayre, Judge.

Bill by the American Freehold Land Mortgage Company of London Limited, against Rebecca M. Pollard and others. From the decree, both parties appeal. Modified and affirmed.

Rebecca M. Pollard and her husband, Charles T. Pollard, had executed a mortgage to the American Freehold Land Mortgage Company of London, Limited, and, upon default being made in the payment of the mortgage debt, said mortgage was foreclosed under the power of sale contained therein, and at said foreclosure the mortgage company became the purchaser, but there was no authority given in the mortgage for such purchase by the mortgage company. The prayer of the bill was that the respondents Rebecca M. Pollard and her husband, Charles T Pollard, be required to elect whether they would disaffirm and avoid the purchase by the complainant of the land embraced in the mortgage, or whether they would affirm said sale; and the complainant offered, in the event of disaffirmance, to do equity generally, and to account for rents. The bill further prayed that, in the event of a disaffirmance, the mortgage be foreclosed for the amount of the debt secured by the mortgage, and necessary expenses including attorney's fee for foreclosing the mortgage, as well as filing the bill. There was also a prayer for general relief. The respondent Mrs. Pollard filed an answer to the bill as amended, which she prayed to be taken as a cross-bill, in which she elected to disaffirm the sale, and prayed for a redemption and accounting.

This cause has been before this court on four other appeals, which will be found reported in 103 Ala. 289, 16 So. 801; 120 Ala 1, 24 So. 736; 127 Ala. 227, 29 So. 598; and 132 Ala. 155, 32 So. 630. Special reference is therefore made to the several reports of this case as cited above.

On the final submission of the cause on the pleadings and proof, the chancellor decreed that the complainant in the original bill the American Freehold Land Mortgage Company of London, Limited, was entitled to relief against the respondent Rebecca M. Pollard, and to have said Rebecca M. Pollard elect to affirm or disaffirm the mortgage sale made on March 3, 1889, and that, Rebecca M. Pollard having elected to disaffirm said sale, the complainant was further entitled to have the mortgage foreclosed. The chancellor further decreed that the cross-complainant Rebecca M. Pollard was entitled to the relief prayed for in her cross-bill, and, she having elected to disaffirm said mortgage sale, was entitled to redeem said property from under said mortgage. In accordance with this decree, a reference was ordered, which was as follows:

"The court doth order, adjudge, and decree that it be referred to the register to state an account between the complainant in the original bill, the American Freehold Land Mortgage Company of London, Limited, and the defendant and complainant in the cross-bill, Rebecca M. Pollard, of all matters and things properly arising out of the mortgage, a copy of which is attached as an exhibit to the original bill, and out of the relation existing between them as mortgagor and mortgagee, and for that purpose he will ascertain the amount due and unpaid on the said mortgage debt, or any balance over after payment thereof which may be due to the said cross-complainant Rebecca M. Pollard; and to that end the register will proceed as follows:

"(1) He will ascertain the amount of said mortgage indebtedness on the 7th day of January, 1889, carried into said amount as part of said debt; the interest note due December 1, 1888, with interest on said note to the 7th day of January, 1889, the date on which said mortgage company, the complainant, declared the principal sum due and payable; and from that date on he will allow interest on said principal sum, subject to the credits to be allowed to Rebecca M. Pollard as hereinafter decreed.

"(2) He will charge complainant, said mortgage company, with the rents it actually received, or which by the exercise of reasonable care and diligence it could have received, from the date of its entry into the possession of the property the subject of said mortgage (that is, from the 7th day of January, 1889, to the date when the conveyance to said property by complainant, the said mortgage company, to E. S. Armistead, took effect as such); and he will credit complainant, said mortgage company, as against said rent, for any expenditures made by it during said period for the necessary repairs and for taxes duly and legally assessed against said property, and paid by it, as well as for such reasonable and necessary expenditures in renting said property as it may have incurred; but, in estimating such expenses for renting or collecting rent during said period, the register will not consider the fact, to the prejudice of Mrs. Pollard, that the complainant, the mortgage company, was a nonresident corporation.

"(3) He will also charge complainant, said mortgage company, from the time its said conveyance to E. S. Armistead took effect, to the 1st day of January, 1902, with such rent of said property as it could have received if it had exercised reasonable care and diligence, and had remained in possession of said property either by itself or its tenants; but no allowance during this period must be given or credited to said complainant, said mortgage company, on account of any sums expended by E. S. Armistead or his vendees for improvements, repairs, or taxes, unless made for and on account of the original complainant; nor will the register charge the complainant, said mortgage company, for any increase in the rental value of said mortgaged property during this time occasioned by any improvement that may have been made thereon by the said Armistead or his vendees.

"(4) The register will also credit complainant, said mortgage company, with any reasonable sum that may be found due it for attorney's fees incurred in accordance with the stipulations contained in said mortgage, which said sum shall be computed as due at the time of the reference; but no such services rendered in resisting the redemption of the mortgaged property by Mrs. Pollard shall be allowed, except in so far as such services were necessary to collect any sum that may be found to be really due on said mortgage indebtedness.

"(5) He will allow to the defendant and cross-complainant R. M. Pollard, as against the mortgage debt, any damages for waste, either committed or permitted, by the complainant, the mortgage company, while in the possession or control of the said lands, or permitted by it after its said conveyance to E. S. Armistead; and the cutting and taking of timber, if any, from the premises without the consent of the mortgagor, Mrs. R. M. Pollard, will be treated as waste permitted by the mortgage company, the complainant. In estimating the damages arising from waste, the register will consider the value of the lands before and after the commission of such waste, and not the profits received by the complainant.

"(6) In stating said account, the register will make and allow annual rests, and the credit allowed Mrs. Pollard will be first applied to the payment of the interest on the mortgage indebtedness, and any balances will then be applied to the principal sum.

"(7) The register will also ascertain what is a fair and reasonable rental value for the lands described in the bill for the current year, in accordance with the principles declared in the third section or paragraph of this decree, and will include the same in the balance which shall be struck by him between the parties as of the date of the reference.

"(8) The register, in executing this decree, will, when necessary, look to the pleadings and proof in this cause, and receive all legal evidence offered, including testimony of such witnesses as were examined on the former reference."

It was shown by the facts of the case that in September, 1894, after the purchase at the foreclosure sale by the American Freehold Land Mortgage Company of London, Limited, of the lands conveyed in the mortgage, said mortgage company entered into a contract with E. S. Armistead for the sale of said lands, and from that time Armistead exercised ownership over them up to 1902.

The register held a reference in accordance with the directions of the decree of the court, and at this reference examined many witnesses, and had before him the testimony taken on the former reference. He made his report, which was substantially as follows: There were about 1,500 acres of tillable land in the Pollard Plantation. The reasonable annual rental value of the place for the years 1889, 1890, 1891, 1892, and 1893 was $3,000. He did not credit the complainant with any repairs as distinguished from improvements, for any of said years; the evidence failing to show what repairs were made, if any, and the value of the same. The complainant was allowed credit for taxes paid in 1892 for the years 1889, 1890, 1891, and was also credited with the amount paid in 1893 for the taxes of 1892. He reported that improvements were made on the place as follows: In 1892 the improvements made amounted to $1,015; in 1895, to $1,405; in 1896, to $175; in 1897, to $675; in 1898, to $310; making a total for the improvements upon the place of $3,580. These improvements were not credited to the complainant, except so far as they affected the annual rental value of the plantation for said years. The register found that, during the years the improvements were made, the lands were in a better...