Pruett v. First Nat. Bank

• Decision Date: 06 December 1934
• Docket Number: 7 Div. 254.
• Citation: 229 Ala. 441,157 So. 846
• Parties: PRUETT v. FIRST NAT. BANK OF ANNISTON.
• Court: Alabama Supreme Court

157 So. 846

229 Ala. 441

PRUETT v. FIRST NAT. BANK OF ANNISTON.

7 Div. 254.

Supreme Court of Alabama

December 6, 1934

Appeal from Circuit Court, Calhoun County; W. B. Merrill, Judge.

Action for money had and received by Eva D. Pruett, as administratrix of the estate of L. W. Pruett, deceased against the First National Bank of Anniston. From a judgment for defendant, plaintiff appeals.

Affirmed.

Rutherford Lapsley and R. Clarence Williams, both of Anniston, and E. O McCord, of Gadsden, for appellant.

Knox Acker, Sterne & Liles, of Anniston, for appellee.

THOMAS Justice.

This suit is by a personal representative to recover on the common count money had and received by way of purchase money bid on foreclosure by the mortgagee as the purchaser under the power.

The foreclosure was by means of a deed from the mortgagor to the mortgagee, reciting the purchase price, and it is contended that the mortgage indebtedness was a less sum than the recited consideration and the suit is for the asserted excess.

The complaint and amended plea 3 constituted the pleading on which the trial was had. The trial court overruled demurrers to the plea as amended. There was a verdict and judgment for defendant pursuant to the general affirmative charge given in writing at the request of the defendant.

It has been held that in a proper case a mortgagor or his personal representative may recover, as a chose in action, the excess of a sum bid at foreclosure by the mortgagee and to which the mortgagee is not entitled in satisfaction of the mortgage indebtedness. Perry v. Seals, 186 Ala. 514, 65 So. 151; Costephens et al. v. Dean et al., 69 Ala. 385; Tompkins v. Drennen, 95 Ala. 463, 10 So. 638; Brown v. Copeland, 206 Ala. 124, 89 So. 274; Union Bank & Trust Co. v. Royall, 226 Ala. 670, 148 So. 399.

It is further established that where the parties effectuate a foreclosure by agreement, consummated by a conveyance, in lieu of a sale under the power, the title so acquired relates back to the execution of the mortgage, and such a foreclosure has, and will be given, the effectiveness of a foreclosure in equity. And the authorities are collected in Copeland v. Warren, 214 Ala. 150, 153, 107 So. 94.

In Union Bank & Trust Co. v. Royall, supra, the decision concludes with the observation of an effective foreclosure, that it cut off the equity of redemption in the property covered by the second mortgage, and plaintiff, standing in the shoes of the mortgagor, as assignee, was entitled to recover in assumpsit, excess of the bid over the amount due on the mortgage; notwithstanding the fact that no money actually passed by reason of response to bid made at the foreclosure sale.

It is further declared that the recitals in foreclosure deeds are primarily the recitals of the mortgagor, yet in a sense are the "recitals of the mortgagee," who conducts the foreclosure, conveyance and accepts the benefits of same; and that such recitals are prima facie evidence of the facts recited as against the parties and their privies.

In that case the foreclosure was under the power of sale; here it was by the solemn or contract agreement of the parties as exhibited by the pleading.

The defendant mortgagee seeks to avoid a statement of fact contained in the foreclosure deed, that the $8,257.28 was "indebtedness evidenced by a mortgage," when, in fact, it was a less sum indicated by three notes to the bank by the averment in its amended plea, that in the preparation of the deed given in the contract foreclosure, the consideration was incorrectly stated in amount. It is recited in the amended plea that the deed erroneously states that said sum is in payment of the mortgage indebtedness, whereas it was understood between the parties that it was in settlement and satisfaction of all the indebtedness then existing between the parties; and that the stated amount was that agreed upon as such indebtedness, and for which the property was taken by and conveyed to defendant by reason of such agreement of the immediate parties, there being no excess sum recoverable. It is further averred in that plea, "that the amount of indebtedness owing by plaintiff's intestate to it was calculated as of May 9th, 1932, but that the transaction between the parties, as evidenced by the deed referred to above, was not actually consummated until the second day of August, 1932, at which time the actual indebtedness owing by plaintiff's intestate to the defendant was $8,384.24; that in addition to the cancellation of said indebtedness above referred to as a consideration for the deed, the defendant also paid to plaintiff's intestate $300.00 in cash, and entered into a written agreement by the terms of which plaintiff's intestate was allowed to occupy the premises described in the mortgage and in the deed, free of rent, for the months of August, September and October, 1932. Hence, defendant says that it did not on the 2nd day of August receive any money for...