Woolen v. Taylor

• Decision Date: 22 May 1941
• Docket Number: 2 Div. 173.
• Parties: WOOLEN v. TAYLOR et al.
• Court: Alabama Supreme Court

2 So.2d 413

241 Ala. 316

WOOLEN v. TAYLOR et al.

2 Div. 173.

Supreme Court of Alabama

May 22, 1941

Rehearing Denied June 5, 1941.

Appeal from Circuit Court, Hale County; John Miller, Judge.

M. B. Grace, of Birmingham, for appellant.

W. R. Withers and W. P. Gewin, both of Greensboro for appellees.

THOMAS Justice.

The appeal seeks a review of the decree of the court sustaining demurrers to the bill to redeem and set aside foreclosure deed and for an accounting. The amended bill is aided by the exhibit of mortgage and auctioneer's deed. Among other things it is averred:

"* * * default was made in the payment of said debts secured by said mortgage, at maturity of the same, and said property was advertised and sold in all respects as provided in said mortgage, on the 21st day of January, 1938, after notice thereof, as provided in said mortgage, for three successive weeks, in the Greensboro Watchman, a newspaper published in Hale County, Alabama, at which said sale said H. A. Taylor did become purchaser, at and for the sum of Seven Hundred Eighty & 57/100 ($780.57), this being the highest and best bid: * * *.

"Complainants further aver that before the expiration of the statutory period for redemption, H. A. Taylor agreed with Ivey F Lewis, attorney for complainants, he would accept the sum of $750.00 in redemption of said property, and on the last day before the time for redemption expired, complainant's attorney, Ivey F. Lewis, tendered to H. A. Taylor $750.00 which H. A. Taylor refused to accept, and as an excuse for not accepting said money claimed the time for redeeming the property had expired and for that reason refused to accept the said money and allow complainants to redeem said property.

* * * * * *

"Complainants further aver, if the respondent, H. A. Taylor gives complainants the amount of credits due them on the said indebtedness, complainants will not owe H. A. Taylor the sum of $750.00 or an amount approximating that amount, and complainants owe H. A. Taylor an amount far in excess of the amount of $750.00; that not withstanding complainants did not owe H. A. Taylor $750.00, or an amount approximating that amount, Ivey F. Lewis, as attorney for complainants agreed to pay said amount to H. A. Taylor in full for redemption of said property, and tendered said amount to H. A. Taylor within the time allowed by law for redemption of said property."

It is insisted by appellant that a valid foreclosure destroys the equity of redemption and creates the statutory right of redemption. To effectuate a valid redemption, it is incumbent upon the mortgagor to tender to the mortgagee the proper amount of money. If the mortgagee should be in need of the money invested in the purchase of the property, and agree with the mortgagor to accept less than what he paid for the property at foreclosure, that agreement is not an agreement with reference to the sale of real estate, but is one incident to the redemption of the property. It is the exercise of a personal right of contract. If the mortgagor accepts the proposal and duly tenders to the mortgagee the amount of money he agreed to accept in lieu of foreclosure, and the mortgagee refuses to accept it on any ground other than the insufficiency of the amount, in a bill to redeem the property, the averments of the oral agreement will be sufficient to give the bill equity, and without it, the bill will not contain equity.

This Court has held a parol agreement by a mortgagee, after foreclosure, to accept something else than money in payment of the indebtedness, is not an agreement with respect to a conveyance of land and is not void as being within the statute of frauds. Code of 1923, §§ 8032-8050, Code 1940, Tit. 20, §§ 1-17; Tit. 7, §§ 108, 109. See Abbeville Live Stock Co. v. Walden, 209 Ala. 315, 96 So. 237; McKenzie v. Stewart et al., 196 Ala. 241, 72 So. 109; Lehman, Durr & Co. v. Marshall, 47 Ala. 362. As to extending the time for redemption, we will examine the cases.

A bill in equity must contain allegations of all facts necessary to show complainant's right to redemption and to the relief that is sought in the prayer. The question of immediate importance, presented by the sustaining of demurrer to the bill as amended, is whether or not a parol agreement by a mortgagee after foreclosure to accept payment in other things than money or of a less sum of money than that which is actually due under the foreclosure and to effectuate redemption under the statute, is an agreement with respect to a conveyance or redemption of land that is void under the statute of frauds. Code of 1923, §§ 8032, 8034, Code 1940, Tit. 20, §§ 1, 3.

The statute of frauds comes to us from the common law and was incorporated in our earliest statutes. Sichel v. Mosenthal, 30 Beav. 371, 8 Jur.N.S. 275, 18 Eng. Rule.Cas. 282; Aikin's Digest, p. 206, § 1. Under this statute, this court declared at an early date that the time of redeeming may be extended by parol agreement beyond that expressed in the mortgage. Deshazo v. Lewis, 5 Stew. & P. 91, 24 Am. Dec. 769; 19 R.C.L. p. 306, § 82.

There are several decisions by this court relative to the question presently before us. In Abbeville Live Stock Co. v. Walden, 209 Ala. 315, 96 So. 237, the facts were that the action was by a mortgagee in detinue for a mule against the purchaser thereof from mortgagor, who had sold the animal pursuant to the verbal instruction of mortgagee. There was conflict in the evidence as to the terms of mortgagee's consent to the sale, and the mortgage contained the provision that "none of the property conveyed herein shall be disposed of by the mortgagor without the consent in writing of the mortgagee or its assignee." The general rule of contract and stipulations solely for the benefit of one party may be waived by such party, and in the absence of statutory provisions may be modified by a subsequent oral agreement, is applied. The statute was adverted to that a mortgage of personal property is not valid unless made in writing and subscribed by the mortgagor, and that the statute of fraud as to real property and that prohibiting parol mortgages of personal property forbid "that the same be varied by parol." It is said that the general rule that obtains in such matters is that, "if the subsequent agreement in itself constitutes a contract within the statute it must be in writing to be valid; if it does not in itself constitute a contract within the statute, it will operate to modify the first contract. McKenzie v. Stewart, 196 Ala. 241, 72 So. 109; 20 Cyc. 287-F. * * *"

In the case of Abbeville Live Stock Co. v. Walden, supra, 209 Ala. 315, 316, 96 So. 237, 238, the earlier decisions in Lehman, Durr & Co. v. Marshall, 47 Ala. 362, 369, 376, are adverted to, as follows: "In Lehman, Durr & Co. v. Marshall, 47 Ala.

362, 369, 376, it was permitted to be shown that, though there was a note evidencing the debt, payable in money and secured by a mortgage, by verbal contract between the mortgagee and the mortgagor, if the latter delivered in the name of the former, at a warehouse to be named by him, a sufficient quantity of cotton at the agreed price per pound to pay the note secured by the mortgage, the mortgagee would accept the cotton in payment of the note; held, that such verbal agreement did not destroy the legal effect of the note, and that the mortgagee was bound by this agreement as to the nature of payment. The effect of this decision was that it was competent for the parties to a mortgage by parol agreement to change the time, mode, or the medium of payment, without in any way impairing the mortgage security. Lehman, Durr & Co. v. Marshall, supra (agreement to pay in cotton rather than money, as stipulated in the mortgage); Belloc v. Davis, 38 Cal. 242 (agreement to pay in gold, instead of legal tender notes); Contributors to Pennsylvania Hospital v. Gibson, 2 Miles (Pa.) 324 (agreement to accept part of principal before it was due); Williams v. Starr, 5 Wis. 534 (agreement to change the time and mode of payment). See, also, Morse v. Clayton, 13 Smedes & M. (Miss.) 373; Davis v. Maynard, 9 Mass. 242; Hadlock v. Bulfinch, 31 Me. 246; Burdett & Co. v. Clay, 8 B. Mon. [Ky.] 287, 295; Pond v. Clarke, 14 Conn. 334."

It will be noted that in McKenzie v. Stewart, 196 Ala. 241, 72 So. 109, that a mortgage on real estate, payable in money, was the subject of the controversy and the specific agreement of performance as to payment was fifteen shares of corporation stock in lieu of the $1,500 in money in satisfaction of the mortgage and note for that amount, and such was held to be without the statute of frauds, Code § 8034, when treated as a bill for redemption.

The subject of the modification of a contract by parol is treated at great length in 17 A.L.R. p. 7, and touching the phase of the subject as to payment, it is stated that:

"An agreement by a mortgagee to accept payment of the mortgage debt in other than money is held not an agreement with respect to a conveyance in land, hence is not within the Statute of Frauds. McKenzie v. Stewart, 1916, 196 Ala. 241, 72 So. 109. It is stated that it is true that the result of the mortgagee's acceptance of the property agreed to be accepted in payment would be the release of the land from the mortgage, but the same result would follow from his acceptance of money also, and in either case the release of the land results incidentally from the operation of law and, not from any agreement of the parties.

"Other examples of facts held not to present a case within the Statute of Frauds appear in the cases. An agreement by vendors who were under obligation to remove clouds upon their title, with the vendee, to remove the clouds, has been held an original undertaking, which...