Shields v. Pepper

• Decision Date: 18 October 1928
• Docket Number: 8 Div. 24
• Citation: Shields v. Pepper, 218 Ala. 379, 118 So. 549 (Ala. 1928)
• Parties: SHIELDS et al. v. PEPPER.
• Court: Alabama Supreme Court

118 So. 549

218 Ala. 379

SHIELDS et al. v. PEPPER.

8 Div. 24

Supreme Court of Alabama

October 18, 1928

Rehearing Denied Nov. 22, 1928

Appeal from Circuit Court, Limestone County; O. Kyle, Judge.

Suit by L.C. Hightower and others against C.A. Yarbrough, John W Shields, C. Pepper, and others, and cross-bills by respondents.From a decree overruling their demurrer to the cross-bill of respondent Pepper, respondents Shields and Yarbrough appeal, and apply for mandamus to vacate the decree in so far as it sustains demurrer of Pepper to the cross-bill of Shields and Yarbrough.Affirmed in part; mandamus granted.

E.W Godbey, of Decatur, for appellants.

Sanders & Woodroof and J.G. Rankin, all of Athens, for appellee.

BOULDIN J.

This is the fourth appeal in this cause.For former decisions, seeYarbrough v. Hightower,211 Ala. 262, 100 So. 126Shields v. Hightower,214 Ala. 608, 108 So. 525, 47 A.L.R. 506, andShields v. Hightower,216 Ala. 224, 112 So. 834.

E.C. Robison was tax collector.Judgment was recovered on his bond for default.L.C. Hightower and others, sureties on his bond, having paid the judgment, filed the original bill seeking reimbursement and to that end subrogation to the lien of the state and county on certain lands.Robison and certain of his vendees and subvendees are made partiesrespondent.

Among these are John W. Shields and C.A. Yarbrough, who filed their separate cross-bills, praying, among others things, for a sale of lands subject to the lien in the inverse order of alienation.

C.Pepper, Sr., a co-respondent, also filed a cross-bill.Yarbrough and Shields interposed demurrers to Pepper's cross-bill as amended.

The present appeal is from a decree of February 6, 1928, overruling these demurrers.

The case made by Pepper's cross-bill is this: Robison, pending his term of office, purchased certain lands from E.D. Whitt.This land was at the time subject to a purchase-money mortgage given by Whitt to George M. Hall.Robison assumed the payment of this mortgage.Later, while Robison was still in office, he applied to Pepper for a loan of $4,000 on the security of this land for the purpose of paying off the Whitt-Hall mortgage and making improvements on the property.The loan was made.Pepper paid to Hall the amount due on the mortgage, $2,322, and the mortgage was satisfied and canceled on the record.The balance of the money loaned, less $145.48 paid for commissions and expenses on the loan, was used in making improvements on the property.Pepper disclaims any knowledge or notice of Robison's default at the time of making the loan.

The prayer is that Pepper be subrogated to the lien of the Whitt-Hall mortgage; that it be foreclosed for his reimbursement, including attorney's fee as stipulated therein; that a further lien be declared and enforced in his favor to the extent the money loaned and used in improvements enhanced the value of the lands.There is prayer for general relief.

Demurrers going to the equity of this cross-bill as a whole and as to the right of subrogation to the Whitt-Hall mortgage for reimbursement to the amount paid thereon were overruled.

Demurrers going to the claim for improvements, commissions, and attorneys' fees were sustained.This latter ruling is not involved on this appeal.

Under the averments of Pepper's cross-bill, the Whitt-Hall mortgage was outstanding when the lands were purchased by Robison.He acquired only an equity of redemption therein to which the statutory lien attached.Pepper loaned the money to pay this mortgage, and paid it to the holder.Pepper took a mortgage for his loan, and the Whitt-Hall mortgage was satisfied and canceled.

Under these facts Pepper has a clear right of subrogation, a revival of the equitable lien of the Whitt-Hall mortgage for his protection against the intervening lien created by statute.He was not a volunteer merely paying off the debt of another.That the mortgage was satisfied was not kept alive by the parties, does not defeat, but furnishes the occasion for assertion of, the equitable right of subrogation.Shields v. Hightower,214 Ala. 608, 108 So. 525, 47 A.L.R. 506;Fidelity & Deposit Co. v. Richeson,213 Ala. 461, 105 So. 193;Faulk v. Calloway,123 Ala. 325, 26 So. 504;Hampton v. Counts,202 Ala. 331, 80 So. 413;First Ave. Coal & Lbr. Co. v. King,193 Ala. 438, 69 So. 549;Cook v. Kelly,200 Ala. 133, 75 So. 953.

Pepper's cross-bill is statutory; is incorporated in his answer to the original bill as amended.

The original bill lists this land as among those owned by Robison during his term of office, and shows the execution of the mortgage to Pepper.The answer admits these averments, but denies the several allegations of the bill going to the existence of a statutory lien and complainants' right of subrogation thereto.

The matter of Pepper's cross-bill is presented by way of further or additional answer.It is argued that Pepper's cross-bill is without equity, in that it is not complete within itself, and in that the same answer denies the facts upon which the cross-bill must rest.

The point is not well taken.The statutory provision authorizing a cross-bill to be incorporated in the answer does not inhibit a denial of the equity of the bill, casting upon complainant the burden of proof, and a further answer setting up special equities, the proper subject of a cross-bill.

Such averments are by way of avoidance on the face of them.There is no need to expressly show the relief is sought in the event complainants make out their case.

We think the relief sought by Pepper is the proper subject of a cross-bill.An affirmative defense, one setting up equities purely defensive in the sense that no specific relief is sought by the respondent other than to defeat complainants' demand, may be presented by answer alone.But where a decree granting affirmative relief to respondent, the actual recovery of property or money, is sought, a cross-bill is proper, if not essential.

Here Pepper shows he has parted with his money upon security which was subject to a statutory lien of which he had constructive notice; but that the money loaned went to remove an incumbrance superior to the statutory lien, that he may be reimbursed to that extent without injury to the holder of the statutory lien.

This result can be attained only under the equitable doctrine of subrogation, reviving the removed incumbrance for his protection, and so moulding the relief as to pay back to him the amount thus advanced.

While not specially raised by demurrer, we would not be understood as declaring that Pepper is entitled to a decree of foreclosure of the Whitt-Hall mortgage with accompanying counsel fees and additional costs.

If complainants...