U.S. Finance Co. v. Jones
| Citation | 285 Ala. 105,229 So.2d 495 |
| Decision Date | 11 December 1969 |
| Docket Number | 1 Div. 590 |
| Parties | , 7 UCC Rep.Serv. 204 UNITED STATES FINANCE COMPANY, Inc. v. Evelyn JONES. |
| Court | Supreme Court of Alabama |
Mayer W. Perloff, Mobile, for appellant.
No attorney on appeal.
This appeal is from a decree setting aside a mortgage given by appellee to one Bell and assigned by him to appellant, United States Finance Company, Inc. Bell does not appeal.
Appellee filed her bill of complaint to quiet title against William E. Bell, d/b/a The Bell Company, and the appellant Finance Company. An answer and cross bill was filed by the appellant which, in substance, stated its claim to the property was that it was the assignee of a mortgage from William E. Bell, which mortgage and assignment was recorded in the Probate Court of Baldwin County, Alabama, and in the cross bill it alleged the execution and assignment of the said mortgage and further that the mortgage was in default and prayed that the mortgage be foreclosed. To the cross bill the appellee filed an answer which, in essence, claimed that the appellant was not a bona fide purchaser for value without notice. This answer was filed on February 7, 1969, and another answer was subsequently filed by the appellee on February 20, 1969, which answer complains that William E. Bell did not do the things to the property which he had agreed to do at the time of the execution of the mortgage. A decree pro confesso was entered by the court against William E. Bell for failure to answer the bill of complaint.
The case was tried on January 24, 1969, and the court entered a final decree granting relief to the appellee-complainant.
The trial court made the following findings of fact:
The evidence tended to show that two salesmen from The Bell Company (hereinafter Bell), a Florida contracting company, visited appellee, an uneducated black woman and a widow, one night at her house in Baldwin County. They offered to perform certain repairs on her house. They persuaded appellee to sign a mortgage on her house and land securing a note providing for payments of $30.66 per month for 84 months ($2,575.44). Appellee could only read and write 'a little bit.' Three days later, Bell sold the note and mortgage to U.S. Finance.
The evidence was undisputed that Bell agreed to work on a back room of appellee's house, put aluminum siding on the outside and put a new roof on the top. It is also undisputed that Bell put tar paper on the sides of the house instead of aluminum, then sprayed it with aluminum paint, and did not adequately perform the work on the back room or roof. It is also undisputed that more harm than good was done to the house by Bell.
The undisputed evidence shows that Bell did not perform as he contracted to do, and did not provide adequate consideration under the contract, note and mortgage. It is also undisputed that the mortgage was executed in Baldwin County. The signature on the mortgage of Willie Jones was an obvious forgery. The acknowledgment of the notary on the mortgage shows that it was taken by Zack Watkins, a Notary Public of Mobile County, in Baldwin County where he had no authority under his affixed seal. He also certified 'that Evelyn Jones and Willie Jones whose name is signed to the foregoing conveyance, and who is known to me, acknowledged before me on this day that, being informed of the contents of this conveyance, she executed the same voluntarily on the day the same bears date.' He could not possibly have seen Willie Jones that day or could he have been known to him as a person signing the mortgage.
The note, secured by the mortgage here involved, is not in the record, but is described in the mortgage. When a mortgage securing a note is transferred along with the note, the mortgage follows and is of the same character as the note. Birmingham Trust & Savings Co. v. Howell, 202 Ala. 39, 79 So. 377; Davies v. Simpson, 201 Ala. 616, 79 So. 48.
The main question is whether appellant was a holder in due course. The Uniform Commercial Code, Tit. 7A, §§ 1--101 through 10--104, applied to this transaction since it became effective midnight December 31, 1966, and the note was signed on January 23, 1967. Section 3--302(1) provides, in part, that:
'A holder in due course is a holder who takes the instrument
'(c) without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person.'
Section 1--201(25) defines notice as follows:
'A person has 'notice' of a fact when
'(a) he has actual knowledge of it; or
'(c) from all the facts and circumstances known to him at the time in question he has reason to know that it exist.
'A person 'knows' or has 'knowledge' of a fact when he has actual knowledge of it. * * *'
Appellant's first witness, Bill Patterson, credit manager for appellant when the Jones transaction was handled, testified that appellant purchased the paper from Bell on February 2, 1967 for $1,360.00; that 'in order for us to purchase the contract and mortgage from any of these contractors they did have to tell me the work was completed and satisfactory'; that he called appellee on the day the work was completed and she said it was satisfactory, but he did not deny her previous testimony that she told him that it had not rained and was satisfactory but later it leaked when it rained; that he 'bought the mortgage, acting on her word.'
But he also testified that he examined the mortgage before purchasing it, and the discrepancy as to the signing in Baldwin County before a Mobile County Notary 'must have been' on the mortgage when he bought it, and that the assignment of the mortgage bore the date of January 26, 1967, but that he bought it on February 2, 1967.
Later in Patterson's cross-examination, the...
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Colburn v. Mid-State Homes, Inc.
...117 Ala. 468, 23 So. 157, and Davies v. Simpson, 201 Ala. 616, 79 So. 48. The following statement, from United States Finance Co. v. Jones, 285 Ala. 105, 107, 229 So.2d 495, seems to be our latest expression on this aspect of the law: '* * * When a mortgage securing a note is transferred al......
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Funding Consultants, Inc. v. Aetna Cas. and Sur. Co.
...alerted a prospective purchaser to a possible defense to which he may not wilfully close his eyes. See United States Finance Co. v. Jones, 285 Ala. 185, 229 So.2d 495, 498 (1969); Stewart v. Thornton, 116 Ariz. 107, 109, 568 P.2d 414 (1977); Security Central National Bank v. Williams, 52 Oh......
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...at a discount is thus not in itself a suspicious circumstance that triggers a duty of inquiry by the buyer. U.S. Finance Co. v. Jones, 285 Ala. 105, 108, 229 So.2d 495, 498 (1969); Credit Adjustment Co. v. McCormick, 198 Okla. 348, 350, 178 P.2d 610, 612 (1947); Overseas Credit Corp. v. Cal......
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Sherrill v. Frank Morris Pontiac-Buick-GMC, Inc.
...on good faith and notice, Dr. Sherrill contends that UMA was an agent of Bank of the Southeast, citing United States Finance Co. v. Jones, 285 Ala. 105, 229 So.2d 495 (1969). That case is not an authority in point, since there was no finding in Jones that the mortgagee-assignor was an agent......