Richardson v. Stephens

• Decision Date: 18 January 1899
• Citation: 122 Ala. 301,25 So. 39
• Parties: RICHARDSON ET AL. v. STEPHENS.
• Court: Alabama Supreme Court

25 So. 39

122 Ala. 301

RICHARDSON ET AL. v. STEPHENS.

Supreme Court of Alabama

January 18, 1899

Appeal from chancery court, Barbour county; Jere N. Williams Chancellor.

Bill in chancery by E. E. Stephens against A. L. Richardson and another to remove a cloud from title and for other relief. From a decree for complainant, defendants appeal. Affirmed.

In 1888, J. W. Stephens, the husband of E. E. Stephens, made application to the British & American Mortgage Company Limited, for a loan of money. The loan was granted, and made to said J. W. Stephens, and to secure the payment thereof a mortgage was executed by J. W. Stephens and his wife, E. E Stephens, on certain lands which belonged to, and were owned by, the wife, E. E. Stephens. Default was made in the payment of the debt secured by the mortgage, and the British &amp American Mortgage Company, Limited, sold the lands embraced in the said mortgage under a power of sale contained therein. At that sale A. L. Richardson become the purchaser, and a deed to said lands was executed to him. Thereupon Richardson brought an action of ejectment against E. E. Stephens and J W. Stephens for the recovery of said land, and judgment was rendered in favor of the defendants. On appeal to this court said judgment was affirmed. 21 So. 949. Thereupon Richardson instituted a second action of ejectment for the recovery of said lands, and, pending said action, E. E. Stephens, the appellee, filed the present bill in chancery against the said A. L. Richardson and the British & American Mortgage Company, Limited, and prayed to have the mortgage executed by J. W. Stephens and his wife to the mortgage company canceled, and the deed to A. L. Richardson, as purchaser at the mortgage sale, canceled, and that said mortgage and deed be removed as a cloud upon the title of E. E. Stephens to said lands, and also for an injunction restraining said Richardson from the further prosecution of the ejectment suit. The bill avers the ownership of the land by the wife; the execution of the mortgage; its foreclosure by sale at public auction, for cash, under and in pursuance of the power of sale therein contained; the purchase by Richardson, and the execution of a deed to him, and the pendency of the suit in ejectment; and averring that complainant received no part of the money loaned; asks that the suit be enjoined, and the mortgage and deed be canceled as a cloud, wholly because the debt was that of the husband, for which complainant was only a surety. The answer denies that complainant was the surety of her husband, and alleges that she received all of the proceeds of the loan, and obtained full benefit of and from the same. It avers that complainant was required to draw a draft, and did draw, jointly with her husband, for the proceeds of said loan, and that the notes and mortgage given for the loan were signed by complainant, with her husband, and that all the money arising from the loan was used in the cultivation and improvement of complainant's lands, with her full knowledge and assent; and that it was well known to complainant at the time the loan was made that the proceeds thereof were to be so used for her benefit, and that, knowing this fact, she executed the said notes and mortgage. The answer insists that this is an estoppel against complainant, and that she is entitled to no relief without doing equity, by returning the money so borrowed and used. The answer further sets up that the defendant A. L. Richardson is a bona fide purchaser for value, without notice of complainant's equity arising out of her suretyship for her husband, if such be the case; that the mortgage did not disclose whose debt was secured by the same; and that defendants never heard of any controversy respecting the validity of said mortgage until after the purchase by Richardson under the foreclosure proceedings. J. W. Stephens, the husband, testified that he applied for the loan; that he received the money on the joint draft of himself and wife, on the faith of the mortgage executed by husband and wife; and that all the money, except a sum less than $75, was used on and for the benefit of the wife's land; and that his wife knew of the application for the loan, and that he knows of no notice being given, before the sale to Richardson, of any claim by the wife. E. E. Stephens testifies that she never borrowed any money, and that she got none from the loan company, and that she signed as surety for her husband; that she signed the mortgage and notes and draft for the proceeds of the loan; that her husband had no other money than this to make a crop with on said lands in 1889, and that she knew he borrowed it; that he had no other...