Wells v. American Mortg. Co. of Scotland

• Decision Date: 16 January 1896
• Parties: WELLS ET AL. v. AMERICAN MORTG. CO. OF SCOTLAND, LIMITED. [1]
• Court: Alabama Supreme Court

20 So. 136

109 Ala. 430

WELLS ET AL. v. AMERICAN MORTG. CO. OF SCOTLAND, LIMITED. ^[1]

Supreme Court of Alabama

January 16, 1896

Appeal from chancery court, Shelby county; S. K. McSpadden Chancellor.

Bill to foreclose a mortgage by the American Mortgage Company of Scotland, Limited, against H. R. Wells, administrator, and others. From a decree for complainant, defendants appeal. Reversed.

The bill in this case was filed in 1887 by the American Mortgage Company of Scotland, Limited, against the personal representative and heirs of Sarah Wells, deceased, to foreclose a mortgage executed by said Sarah Wells to the complainant, conveying certain property described therein and dated May 18, 1885. The administrator of Sarah Wells was C. C. Wells, one of her children, and subsequent to the filing of the original bill said C. C. Wells died, and the bill was amended by suggesting the death of said C. C. Wells one of the defendants to the original bill, and bringing in the administrator de bonis non of the estate of Sarah Wells deceased, as a party defendant, and a revival against the heirs at law of C. C. Wells, who were minors. By this amendment W. S. Cary was also made a party defendant by the averment that he "claims to have some interest in the lands described in the original bill of complaint, and is in possession of a part of said land, and receiving the rents and profits therefrom." The service of summons upon the heirs at law to answer the amended bill was made upon them personally. It was averred in the bill that at the time of the execution of the mortgage, Sarah Wells, the mortgagor, was in possession of the lands conveyed therein, claiming the same as her own, and exercising acts of ownership over it. In the answer of the original bill several defenses were set up, which may be summarized as follows: (1) Usury. (2) Sarah Wells was not the owner of the lands when she mortgaged the same, but that her husband, A. J. Wells, had been the owner thereof up to the time of his death. That on the 2d day of March, 1867, for the purpose of defrauding his creditors, he signed and caused to be recorded a deed, a copy of which is attached to the answer as an exhibit, and which purported to convey the greater portion of the land in controversy to Columbus Cunningham, in trust for said Sarah Wells. The deed not being delivered, as claimed in the answer, it was insisted that Sarah Wells never acquired any interest in the lands. (3) It was next contended in the answer that, even if the deed had been delivered, its sole effect was to convey a life estate, with power to dispose of the same by will or deed at any time, and that this power did not include the power to mortgage. (4) It was contended that, if said Sarah Wells did have any title to the lands described in the mortgage, she conveyed a part of the same by deed dated January 29, 1884, to Mary Etta Wells, one of her daughters, and one of the respondents to the original bill. It is alleged that said Mary Etta Wells was in possession of said lands, claiming to own the same, at the time said mortgage was executed to complainant. (5) The legal title to the lands in controversy was in dispute, and for this reason the chancery court had no jurisdiction of the case.

The evidence on the part of the complainant showed that Sarah Wells, the mortgagor, had been in possession of the lands conveyed in the mortgage since the execution by her husband of a deed of trust, in which he conveyed the said lands to the trustee, for her benefit, on March 2, 1867, and that since this time she had claimed the lands to be her own. By the deed attached as an exhibit to the answer the recited consideration therefor was that A. J. Wells, the husband of Sarah Wells, had received several thousand dollars of the statutory separate estate of Sarah Wells, which he had converted to his own use, and for which he had not accounted to her, and had also received $2,000, which he used in payment of the lands conveyed in said deed of trust. There was introduced in evidence the tax assessment lists, which showed that the lands conveyed in said deed of trust had been assessed to Sarah Wells as her property by A. J. Wells, as her agent, and it was shown that Sarah Wells and her husband resided together upon said lands up to the time of the death of A. J. Wells, in 1880; that after that time Sarah Wells continued in possession of the lands, claiming them as her own, and exercising acts of ownership over them up to the time of her death, which occurred on September 8, 1886; that no administration was taken out upon the estate of A. J. Wells, but that, after the death of Sarah Wells, C. C. Wells was appointed as administrator of her estate, and as such administrator he went into possession of the lands involved in this controversy, and controlled them as such administrator. It was shown that the said deed of trust from A. J. Wells to Cunningham, as trustee for Sarah Wells, was duly executed, acknowledged, and was filed for record in the probate office of the county wherein the land was situate. The evidence for the defendants was that after the execution of the deed of trust to Cunningham by A. J. Wells said deed was never delivered, either to the trustee or to Sarah Wells, and that the said A. J. Wells remained in possession of the property, claiming it as his own, and that the deed of trust was found, after his death, among his papers; that in January, 1884, Sarah Wells executed a deed to a certain portion of the lands to her daughter Mary Etta Woodward, and that the grantee in said deed was put in possession of the lands conveyed therein. This deed was not recorded prior to the execution of the mortgage. It was admitted that W. S. Cary claimed some interest in a portion of the lands described in the original bill, and was in possession thereof; but the nature of his interest was not set forth by him or the other respondents, nor was there evidence tending to show that he had any interest save his possession, which possession accrued subsequent to the filing of the bill. It was further shown by the evidence for the complainant that at the time of the execution of the mortgage sought to be foreclosed Mrs. Mary Etta Woodward was present, and knew that the mortgage was being executed by Sarah Wells, and raised no objection thereto; and that her husband was instrumental in obtaining a loan from the complainant for Sarah Wells; that after the execution of the deed by Sarah Wells to Mrs. Woodward there was no visible change in the possession of the property, Mrs. Woodward residing with her mother in the dwelling house thereon; that prior to the execution of the mortgage to the complainant, C. Cunningham, the trustee in the deed from A. J. Wells to Sarah Wells, executed to Sarah Wells a quitclaim deed of all the lands conveyed in the mortgage, and Cunningham testified that he saw the deed of trust in the possession of Mrs. Sarah Wells prior to the execution of the mortgage. The other facts of the case necessary to an understanding of the decision on this appeal are sufficiently stated in the opinion. On the final submission of the cause on the pleadings and proof the chancellor decreed that the complainant was entitled to the relief prayed for, and ordered a foreclosure of the mortgage. The respondents appeal, and assign as error the decree of the chancellor granting the relief prayed for.

W. S. Cary, for appellants.

Knox, Bowie & Dixon, for appellee.

BRICKELL C.J.

The scope and purpose of a bill for the foreclosure of a mortgage on lands is to cut off the equity of redemption of the mortgagor, to obtain a decree for the sale of the estate created and passing by the mortgage, and the application of the proceeds of sale to the payment of the mortgage debt. Such being the scope and purpose of the bill, the general rule in a court of equity applies that all persons whose interests are to be affected or concluded by the decree must be made parties. If mortgagor and mortgagee are in life generally the rule will embrace them only, and those who may have acquired rights or interests under them. If, as in the present case, the mortgagor dies intestate, seised of the equity of redemption, his heirs are indispensable parties, for by descent the equity of redemption devolves upon them. And it has grown to be a settled rule in our system, varying from the general rule prevailing in courts of equity, that the personal representative is an indispensable party; not upon the theory that he succeeds to any estate or interest in the lands, but for the reason that he has statutory authority to rent the lands, and thereby may intercept the possession of the heir; and he has statutory power to obtain decrees from the court of probate for a sale of the lands, and thereby may intercept the descent to the heir; and for the further reason that he is the exclusive representative of the personal assets, having an interest in the ascertainment of the mortgage debt which may become a charge upon them if the sale should not yield a sufficiency to satisfy it. Wilkins v. Wilkins, 4 Port. 245; Dooley v. Villalonga, 61 Ala. 129; Bell v. Hall, 76 Ala. 546; Gardner v. Kelso, 80 Ala. 497, 2 So. 680; Moore v. Alexander, 81 Ala. 509, 8 So. 199; Jones v. Richardson, 85 Ala. 463, 5 So. 194. The death of the personal representative, the administrator in chief, pending the suit, necessitated a revivor against his successor in the administration, and, as he was an heir of the mortgagor, also against his heirs. When an abatement occurred in a suit, in the original practice of courts of equity the usual mode of reviving it and of continuing the proceedings was by bill of revivor. Story, Eq. Pl. § 354; 1 Brick. Dig. p. 709, § 999. The order or decree entered was that the cause...