Pruett v. Commercial Nat. Bank of Anniston
| Decision Date | 28 March 1935 |
| Docket Number | 7 Div. 300 |
| Citation | 230 Ala. 225,160 So. 540 |
| Parties | PRUETT et al. v. COMMERCIAL NAT. BANK OF ANNISTON et al. |
| Court | Alabama Supreme Court |
Appeal from Circuit Court, Calhoun County; R.B. Carr, Judge.
Bill to set aside mortgage foreclosure for redemption and accounting by Eva D. Pruett and others against the Commercial National Bank of Anniston and another. From a decree sustaining a demurrer to the bill, complainants appeal.
Affirmed.
Interest of subscribing witness when called to testify to fact of execution goes to credibility of his testimony.
This is a bill, filed by the widow and heirs at law of a deceased mortgagor, after foreclosure under the power of sale, the mortgagee becoming the purchaser, against the purchaser from the mortgagee and its tenant, to set aside the foreclosure and allow the complainants to exercise the equity of redemption, and to require the defendants to account for rents and for waste committed in the destruction of buildings on the mortgaged premises.
The mortgage was executed on May 15, 1928, by L.W. Pruett and his wife, Eva D. Pruett, now the widow and one of the complainants, to the Commercial National Bank of Anniston, as trustee for John M. Crook, Margaret Crook, and Agnes C. Bean to secure an indebtedness, as the mortgage recites, "in the sum of $6,000.00, being money this day loaned by the party of the second part, to L.W. Pruett," evidenced by one principal note of $6,000 and six interest notes for $189 each, payable semiannually. Said six notes being for interest at 6 per cent. per annum, "plus 5 per cent. of said account, being $9.00 commission to trustee for handling the loan." The principal note was due May 31, 1931, the first interest note falling due November 15, 1928, and the others each six months thereafter, the last maturing on the date of the maturity of the principal note.
The execution of the mortgage was duly certified before L.W Stanley, a notary public of Calhoun county, and certificate of acknowledgment in statutory form duly made and signed by said Stanley as notary public.
The bill alleges that the mortgage was foreclosed after notice of such foreclosure was given by publication in a newspaper, in accordance with the terms of the power of sale in the mortgage, on August 21, 1931, and the mortgagee, Commercial National Bank as trustee, became the purchaser at said sale "at and for the sum of Sixty-six Hundred Eighty-eight and 75/100 ($6,688.75) Dollars," and a foreclosure deed duly executed to it in the name of the mortgagors, by their agent and attorney in fact, as authorized by the mortgage that thereafter the said purchaser, the Commercial National Bank, as trustee, for a consideration of $6,780.16, conveyed to the Commercial National Bank of Anniston--the same corporate entity--said property, and the bill avers "that the consideration for the said sum of $6,780.16 recited in said deed as paid to the grantor therein, is the amount of the unsecured promissory notes claimed by said Commercial National Bank to be due from the said L.W. Pruett at and prior to the execution of the original mortgage herein referred to on May 15th, 1928."
It is also averred that said Stanley, the notary public who took and certified the acknowledgment of the signatures of the mortgagor, and his wife to the mortgage, "was at the time of such acknowledgment a cashier and a stockholder of the said Commercial National Bank of Anniston, Alabama, at that time a national banking corporation and operating as a national bank in said City of Anniston."
In paragraph 9 of the bill as originally filed it was averred:
"Orators further state and charge that for some years prior to the attempted foreclosure of the mortgage by said Commercial National Bank as Trustee, on August 21, 1931, orators' intestate, L.W. Pruett, had been actively negotiating with the Texas Company for the sale to said company of the said lands at the northeast corner of Tenth Street and Gurnee Avenue at a price in excess of $15,000.00, said company having offered to buy the property at $15,000.00, and offered to pay in cash to said L.W. Pruett the sum of $15,000.00, which offer was declined and the property was priced to the company at that time at $20,000.00."
The said ninth paragraph was amended so as to read as follows:
"Orators further state and charge that if they are mistaken in the allegation that the alleged mortgage is void as a conveyance, then they charge, in the alternative, that the power of sale in the mortgage was perverted by the said Commercial National Bank from its legitimate purpose and function and was used for the oppression of the debtor, orators' intestate, and to enable the actual creditor, holding unsecured notes for pre-existing indebtedness, to secure the property for itself; the said Commercial National Bank, its officers and agents acting in these transactions having knowledge, before the foreclosure of the mortgage, of the desire and intention of the Texas Company to buy the property at a price more than twice the amount of its unsecured notes; and said defendant proceeded to foreclose with knowledge that orators' intestate was then negotiating with the Texas Company, and without offering to the mortgagor the opportunity to benefit by such sale, nor co-operating with the mortgagor in closing such sale to the Texas Company, nor giving to the beneficiaries of the trust the profits from the foreclosure and sale to the Texas Company, the Commercial National Bank as such trustee conveyed to itself as a corporation and proceeded to consummate the lease and option to the Texas Company; and further charge that the entire transaction, beginning with the arrangement for the use of trust funds in said bank in the exact amount of unsecured promissory notes then due to the bank was arranged and carried through by the defendant bank, its officers and agents, participating in negotiations with the Texas Company and making necessary conveyance vesting title in the bank as a corporation, thus perverting...
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