West Huntsville Cotton Mills Co. v. Alter

• Citation: 164 Ala. 305,51 So. 338
• Parties: WEST HUNTSVILLE COTTON MILLS CO. ET AL. v. ALTER.
• Decision Date: 11 January 1910
• Court: Supreme Court of Alabama

51 So. 338

164 Ala. 305

WEST HUNTSVILLE COTTON MILLS CO. ET AL. v. ALTER.

Supreme Court of Alabama

January 11, 1910

Appeal from Law and Equity Court, Madison County; Tancred Betts Judge.

Bill by Franklin Alter against the West Huntsville Cotton Mills Company and another. From a decree overruling demurrers to the bill, respondents appeal. Affirmed.

The case made by the bill is: That in September, 1892, the West Huntsville Cotton Mills Company executed its mortgage or deed of trust upon certain real estate in the county of Madison to the Central Trust Company of New York to secure the negotiable bonds of the West Huntsville Cotton Mills Company. A copy of the deed of trust is made an exhibit to the bill. That the West Huntsville Cotton Mills Company issued $50,000 of negotiable bonds, becoming due in 1902, all of which are outstanding except $10,000, which has been paid and canceled but that the interest on the same has been paid regularly up to March, 1907. It is then alleged that after the execution of said mortgage or deed of trust complainant acquired title to certain described portions of the real estate covered by the mortgage or deed of trust. Here follows a description. It is then alleged: That the West Huntsville Cotton Mills Company released, quitclaimed, and conveyed to complainant the above-described lands, which conveyance is made an exhibit to the bill, and that the said Central Trust Company by an instrument in writing released said land from the operation of said mortgage or deed of trust, upon a deposit by complainant with them of the sum of $10,000 in lawful currency of the United States, which sum of money, with the interest that has accrued thereon, is still held by said trust company. That said sum of money was so received by said trust company in place of the land so released, or the amounts which it under article 7 of said mortgage or deed of trust was to receive of the proceeds of any of said lots which might be sold, which amounts by the terms of the mortgage were to be held by the said trustee until the maturity of the bond, and, if the assets of the said West Huntsville Cotton Mills Company should prove insufficient to pay the same, then such sum, not exceeding $40,000, should be used for liquidating any balance that might be unpaid, but if the assets should be insufficient, then as many of said lots as might be necessary to raise said $40,000 should be sold for that purpose, and, on the payment of all said bonds on the said cotton mills company, the lots remaining unsold should be reconveyed by said trustee to the Huntsville Land Building & Manufacturing Association, and said sum of money and the interest thereon is held by said trust company as trustee to indemnify said bondholders for said release to the extent that said block of land or the proceeds of the sale thereof could have been held for such release. It is then alleged that the indebtedness secured or deed of trust is long past due, and that the mortgage has long been subject to foreclosure, and that the parties holding the bonds and the trust company have refused and declined to take any proceedings for the collection of said indebtedness or the foreclosure of said mortgages or deeds of trust, and in the meantime complainants' said $10,000 and interest thereon are withheld from him, to his great loss and damage. It is then sought to require foreclosure, and that the complainant be let in to...