Steed v. Bailey

• Decision Date: 31 January 1946
• Docket Number: 7 Div. 780.
• Citation: 247 Ala. 407,24 So.2d 765
• Parties: STEED v. BAILEY.
• Court: Alabama Supreme Court

24 So.2d 765

247 Ala. 407

STEED v. BAILEY.

7 Div. 780.

Supreme Court of Alabama

January 31, 1946

A L. Crumpton, of Ashland, for appellant.

W C. Dempsey, of Ashland, for appellee.

PER CURIAM.

This cause originated in a suit by Jeff Steed against Sallie Bailey in the Justice Court in Lineville, Alabama, in which Steed sought to recover possession of the lands involved, as landlord, from Sallie Bailey, as tenant under written contract of lease.

The cause was appealed to the circuit court and on the trial the judge ruled there was an equitable question involved concerning the execution of the lease contract, and transferred the cause to the equity side of the docket.

In restating her pleading Sallie Bailey filed her bill and averred that Jeff Steed executed a mortgage to Pruet and Glass on an undivided one-half interest in the property involved to secure an indebtedness to said firm, and said mortgagee foreclosed said mortgage after its due date purchasing said land at foreclosure sale, as they were authorized to do. That Jeff Steed, being unable to pay the same, approached Sallie Bailey to loan him the money to redeem the same, which she agreed to do, and in confirmation of such agreement Pruet & Glass executed to Sallie Bailey a deed to an undivided one-half interest in said land and other lands, which said deed is set out in full as an exhibit. That at the same time and as a part of the same transaction Sallie Bailey and Jeff Steed entered into a contract by which Steed was to pay Sallie Bailey the money she had paid, plus interest, to recover said property, which agreement is set out in full in the transcript and prayed that the rental contract referred to be declared null and void.

For answer Jeff Steed averred that the transaction by which the deed was executed to Sallie Bailey from Pruet & Glass and the contract between Sallie Bailey and himself constituted security for a loan, and was in effect a mortgage. That as such contract was executed the said Bailey took possession of said property by agreement with Steed under the terms of which the rents were to be applied on the indebtedness, which was done. That on the 14th of December, 1938, the rents had paid off a part of the indebtedness. That than the said Steed and Bailey entered into a written contract by which she was to pay him $18 rent for the next year's crop, which sum represented the full payment of the indebtedness. Said Steed prayed that the land be decreed to be his and not hers, as he had fully paid the indebtedness, Sallie Bailey owing him $18 more than the amount he owed.

It is insisted by appellant that the issue is a question of the legal principles involved. That the two transactions together amounted to a mortgage or instrument to pay the debt; that Sallie Bailey went into possession of the property, lived on it and received rents. That Steed paid the taxes on the property, made payments to the Federal Land Bank on a first mortgage on the land, and in 1938, when she and he agreed that the rents up to that time had practically paid the debt to Sallie Bailey. That for the year in question the rents were overpaid $18, and that the parties signed a written contract as landlord and tenant by which Sallie Bailey was to pay him $18 rent in excess of the amount that he owed to pay off the indebtedness.

It is averred by appellee in her restated pleading that, there was a mortgage to the Federal Land Bank on said lands executed by Jeff Steed and his brother A. Steed. That on or about the 14th day of December, 1938, Jeff Steed, by fraud, deception and deceit, induced her to enter into a contract purporting to be for payment of the loan to the Federal Land Bank, but which was, in fact, a rental contract, of which she was ignorant, being unlearned, alleging Jeff Steed as landlord and Sallie Bailey as tenant of said lands; said alleged contract is set out as an exhibit. Appellee prayed that said alleged contract be cancelled and removed as a cloud on her title to this land for and on account of the fraud practiced by the said Jeff Steed in obtaining her signature to the same.

It is apparent from the pleadings that the two theories advanced for determination of this cause are: (1) That the deed and contract amount to an equitable mortgage. (2) That the transactions amounted to a sale of the lands from Pruet &amp Glass to appellee and the subsequent agreement or contemporaneous agreement entered into between appellant and appellee on...