Rehearing
Granted April 17, 1930.
Appeal
from Circuit Court, Colbert County; Charles P. Almon, Judge.
Bill in
equity by J. C. Jourdan and others against E. W. McKinley and
A. J. Gray (composing the firm of Jefferson Lumber Company)
the Tennessee Coal, Iron & Railroad Company, J. C. Jordan
Jr., Henry C. Powers, Franklin R. Webber, and M. E. Coffin
with intervention by Howard Lamar and W. P. McCrossin, and
cross-bill by the Tennessee Coal, Iron & Railroad Company
against Gray, McKinley, and the Jefferson Lumber Company.
From the decree, defendants Tennessee Coal, Iron & Railroad
Company, Gray and McKinley (as Jefferson Lumber Company), and
Lamar and McCrossin appeal.
Affirmed
in part, and reversed and rendered in part.
Interest
on converted timber cut on mortgaged land over considerable
period was charged from date of bankruptcy of mortgagor's
assignee.
The
final decree is as follows:
"This
cause was submitted for final decree on pleading and proof
noted by the Register. The suit was filed by J. C. Jourdan
J. L. S. Rogers, and Mrs. E. A. Payne, residents of the
state of Mississippi, against Jefferson Lumber Company, E.
W. McKinley and A. J. Gray, parties composing the firm of
Jefferson Lumber Company, Tennessee Coal, Iron & Railway
Company, a corporation, J. C. Jourdan, Jr., Henry C.
Powers, Franklin R. Webber and M. E. Coffin, for the
purpose of foreclosing a mortgage, and to recover the value
of timber cut from the mortgaged premises, under authority
of Rountree v. Satterfield, 211 Ala. 464, 100 So.
751. Howard Lamar and W. P. McCrossin intervened, claiming
ownership of certain notes secured by three of the
mortgages involved in this suit.
"It
appears that J. C. Jourdan, J. L. S. Rogers, and E. A.
Payne purchased from Franklin R. Webber and M. E. Coffin
certain timber and timber lands in Colbert and Franklin
Counties, Alabama, for a consideration of $199,204.06, and
purchased from Franklin R. Webber, individually certain
other timber and timber lands for a consideration of
$5,172.75. A part of the purchase money was paid cash, and
the balance secured by three mortgages; two of these
mortgages were given on the land purchased from Webber and
Coffin, one to Franklin R. Webber, the other to M. E.
Coffin, which mortgages conveyed an undivided one-half
interest in the timber and timber lands, and each secured
an indebtedness of $74,701.52, part of the purchase price
of the land, payable in eight annual installments of
$9,337.69, each, evidenced by eight notes of date February
16th, 1920, with interest from date, payable annually. The
other mortgage was to Franklin R. Webber on the land
purchased from him individually, and secured an
indebtedness of $3,879.56, balance of the purchase price,
payable in eight installments of $484.94 each, evidenced by
eight notes dated February 16th, 1920, with interest at 5
per cent. from date, payable annually.
"The
notes provided for the payment of attorney's fee, and
all the mortgages provided that upon default in payment of
the indebtedness, or any part thereof, or the failure to
keep all taxes paid, the mortgagee is authorized to declare
all the indebtedness due and foreclose the mortgage. The
three mortgages were all duly recorded in the probate
office of both Colbert and Franklin Counties. The three
mortgages each provided specifically that no timber shall
be cut or removed from the land by the mortgagors, or those
claiming under them, until said timber is released from the
lien of the mortgages. Soon after the execution of the
three mortgages aggregating $153,482.60 the purchasers, J.
C. Jourdan, J. L. S. Rogers, and E. A. Payne, organized the
Maud Lumber Company, a corporation, as an operating
company, and through it began, as releases were obtained,
to cut and saw the timber into lumber.
"E.
A. Payne, one of the purchasers of the property, died,
leaving a will, which was duly probated, by the terms of
which all his interest in the property passed to his widow,
Mrs. E. A. Payne, one of the complainants in this cause.
"After
the Maud Lumber Company began operations the Tennessee
Coal, Iron & Railway Company on or about January 2nd, 1923,
through its chief lumber inspector, Mr. Wingate, inspected
the timber covered by the three mortgages. On that date,
January 2nd, 1923, during a visit to Iuka, Mississippi, E.
W. McKinley witnessed a sales contract between complainants
and the respondent Henry C. Powers, wherein complainants
agreed to sell the property to Henry C. Powers. Later all
the timber and timber lands were conveyed by complainants
to Henry C. Powers, who assumed the payment of the unpaid
notes and the mortgages to Franklin R. Webber and M. E.
Coffin, and on the 22nd day of February, 1923, executed
three mortgages on the property to secure a balance of the
purchase price, evidenced by three series of ten notes, one
series of notes payable to J. C. Jourdan, one to J. L. S.
Rogers, and one to Mrs. E. A. Payne. All of these mortgages
were duly recorded in the office of the Judge of Probate in
both Colbert and Franklin Counties. Each of said three
mortgages have the same stipulations relative to the
cutting of timber as in those executed by J. C. Jourdan, J.
L. S. Rogers and E. A. Payne to Franklin R. Webber and M.
E. Coffin.
"After
the execution of the last mortgages, and on or about the
24th day of February, 1923, Henry Powers and wife conveyed
all the timber and timber lands to the Tishomingo Land &
Lumber Company for an expressed consideration of $10.00;
and the assumption by the grantee of payment of the several
notes and mortgages on the property. On or about the 16th
of April, 1923, the Jefferson Lumber
Company, E. W. McKinley and A. J. Gray, entered into a
contract with the Tishomingo Land & Lumber Company, a
corporation, Henry C. Powers, George W. Randall, and W. R.
Young, its sole stockholders, wherein the Tishomingo Land &
Lumber Company, and its stockholders, obligated themselves
to cut the timber on the lands covered by said mortgages,
involved in this suit, saw it into lumber, and to perform
and discharge in strict accordance with all directions and
instructions pursuant to a contract between the Tennessee
Coal, Iron & Railway Company, Jefferson Lumber Company, a
partnership composed of E. W. McKinley and A. J. Gray,
wherein the Tennessee Coal, Iron & Railway Company agreed
to purchase large quantities of lumber to be manufactured
out of the timber on certain tracts in Colbert and Franklin
Counties, Alabama, then belonging to Tishomingo Land &
Lumber Company. A copy of the contract between Tennessee
Coal, Iron & Railway Company and Jefferson Lumber Company,
without date, was made a part of the contract between the
Tishomingo Land & Lumber Company and Jefferson Lumber
Company, A. J. Gray and E. W. McKinley. It further appears
that in compliance with those contracts sawmills were
erected on the land involved in this suit, and a planing
mill was erected at or near Tishomingo, in the State of
Mississippi, on the lumber yard which the Tishomingo Land &
Lumber Company and its stockholders leased to Tennessee
Coal, Iron & Railway Company. That practically all of the
lumber sawed from timber cut on the land involved in this
suit was delivered to the Tennessee Coal, Iron & Railway
Company at said planing mill.
"It
further appears that during the operation of the sawmill
located on the land involved in this suit, only a small
portion of the timber rights and land covered by the
mortgages were released; that during the operation of the
sawmill 13,733,990 feet of timber were cut from unreleased
lands involved in this suit, and delivered to the Tennessee
Coal, Iron & Railway Company and Jefferson Lumber Company.
It further appears that Tennessee Coal, Iron & Railway
Company refused to answer interrogatories filed to it under
the statute by complainant seeking to develop the exact
number of feet of timber cut from unreleased lands that
went into its possession. That Company refused to answer
those interrogatories, and complainant moved the Court to
render such judgment or decree against it as seemed
appropriate, in accordance with the provisions of section
7770 of the Code of Alabama.
"It
further appears that the lands covered by the several
mortgages, including that part of the timber not cut and
removed, was sold on the 16th of August, 1926, by the
Register, under a former decree of this Court, for
$51,000.00 and $500.00 of the proceeds applied to the
payment of court cost and expenses of sale, the balance of
$50,500.00 paid to F. R. Webber and M. E. Coffin. That
after making said payment there was a balance due them of
$53,394.90, which with interest to this date at 5 per cent.
is $59,500.00.
"It
further appears that at the time of the execution of the
contract of sale by complainants to Henry C. Powers on
January 2nd, 1923, $6,000.00 was added to the sale price of
the property to cover fees Howard Lamar and W. P. McCrossin
charged Henry C. Powers for services rendered him. That the
notes numbered 2, 4, 6, 8, and 10, of each of said
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