Simerson v. Branch Bank at Decatur , 12 Ala. 205 ( 1847 )

ORMOND, J.

The title of the claimants, is a purchase of the slaves in controversy, in March, 1844, upon a sale made upon a decree in chancery, rendered in his favor v. Roper. The title of the bank rests upon a levy made upon the same slaves, in November, 1846, upon an execution issued upon a judgment, obtained in September, 1845. It is evident from this statement, that as these parties derive their title from the same source, that of the claimant being prior in point of time, and of the same grade, with that of the plaintiff, is on its face the better title. Nor does this appear to have been directly controverted in the court below. The contest there, appears to have been, upon whom the burthen of proof was cast, to prove the consideration of the respective judgments.

The claimant, it appears, produced the mortgage, which was the foundation of the decree under which he claimed, and the notes recited in the mortgage, and insisted, they were prima facie evidence of the truth of the facts recited in them, as an admission of Roper, the common debtor of both the parties. The court required him to go further, and prove the fact, that the indebtedness actually existed, and had been discharged by the claimant, as surety, so as to entitle him to foreclose his mortgage.

In the actual posture of the case, this was error in the eourt below. It does not appear, that when the claimant obtained his decree against Roper, the debt upon which the bank afterwards obtained a judgment against Roper, existed ; and assuming that the debt did not exist until after-wards, the decree was evidence, prima facie, that the facts upon which it was founded existed. If the bank had shown, that at that time it was a creditor of Roper, the onus would then have been shifted to the claimant, who would have been required to show, that his decree was founded upon a debt actually due to him from Roper. This is the principle to be extracted from the case of Goodgame v. Cole & Co., at the present term.

The case of Blow v. Maynard, 2 Leigh, 49, decides nothing adverse to the principle settled in that case. The question there was, as to the effect of a recital in a deed, by one indebted at the time, and by which he conveyed his property to a member of his family, and the court held, that where this deed was set up, against one who represented a party, who was a creditor long anterior to the making of the deed, that the recital in the deed, was not evidence of the consideration there expressed. The admissibility of such testimony, under such circumstances, is not countenanced by the case of Goodgame v. Cole & Co.

It was doubtless also competent for the bank to impeach the decree, under which the claimant deduced his title, for fraud between him and Roper. The principal fact relied on to prove the transaction between Roper, and the claimant collusive, was the retention by Roper of the slaves after the forfeiture of the mortgage; ane the exercise of ownership by him, over the property. Upon this point, the court in substance charged the jury, that the retention of possession by the mortgagor, after the law day had passed, was precisely equivalent in its effects, to the vendor remaining in possession, after an absolute sale of personal property. This charge cannot be supported. There is a plain, and obvious distinction between the two cases. The purpose of a mortgage, is the security of a debt, and not the sale of property. Although as a consequence of the mortgage, the property may be sold for the payment of the debt. But that is not the primary intent of the parties, and the design being to secure the payment of a debt, and not to sell the property, there is not the same inconsistency in leaving it with the mortgagor, even after the forfeiture of the mortgage, as in the case of an absolute sale, purporting to transfer both the title and possession. Doubtless the retention of the possession by the mortgagor, for any considerable portion of time, with the assent of the mortgagee, after the forfeiture o.f the mortgage, would be a circumstance from which fraud might be inferred, if not .satisfactorily explained. But where the mortgagee proceeds with reasonable diligence, to foreclose his mortgage, no presumption whatever of fraud arises from the fact, that whilst the proceedings are in progress, the property is suffered to remain with the mortgagor^ as that is entirely consistent with the object of the mortgage — the security of the debt. If proceedings are not commenced within a reasonable time to subject the property to the payment of the debt, it then devolves on the mortgagee to show, that his conduct is consistent with fair dealing. The law was thus ruled in Willis v. The P. & M. Bank, 5 Ala. 781, where the general language employed by the court, in Magee v. Carpenter, 4 Id. 475, is restrained and limited.

The fact, that the mortgagor was suffered to retain the possession after the foreclosure of the mortgage, and sale under the decree, stands upon different principles. The notoriety of a public sale, which by giving notice to the public, that the title has passed out of the former owner, and thereby prevents him from obtaining a delusive credit, from the apparent ownership of property, which belongs to another, creates a distinction, between public and private sales, where there is no change of possession, as to the rights of creditors. [Kidd v. Rawlinson, 2 B. & P. 59; Watkins v. Birch, 4 Taunton, 823; Joseph v. Ingraham, 8 Id. 338; Leonard v. Baker, 1. M. & S. 251; Latimer v. Batson, 4 B. & C. 652; Bank of Alabama v. McDade, 4 Porter, 266; Abney v. Kingsland, 10 Ala. 363.]

In Latimer v. Batson, supra, the law is thus summed up, by -Mr. Justice Bayley, as the result of the adjudged cases: “ That if goods seized under an execution, are bona fide sold, and the buyer suffers the debtor to continue in possession of ithe goods, still they are protected against subsequent executions., if the circumstances under which he has the possession are known in the neighborhood. The jury in this case, were .therefore properly directed to give their verdict for the plaintiff, .or defendant, according as they should be of opinion, that ¡the transaction was fair or fraudulent.” This is clear, .and intelligible, and is doubtless the law upon this subject. In the ease then, of a public sale of goods, the purchaser may leave them with the former owner, upon a contract with him, or from mere, kindness or benevolence, and if this conduct is bona fide, and is not intended to delay, hinder or defraud creditors, he will hold the property against the other creditors of the debtor.

In Kidd v. Rawlinson, supra, Lord Eldon lays stress upon the fact, that Kidd, the purchaser, was not a creditor. In Watkins v. Birch, supra, Gibbs, Justice,-asserts, that „this makes no difference, if the creditor takes a regular bill of sale from the sheriff. In our judgment, the only difference in such a case would be, that the creditor, being also a pur- . chaser at execution .sale, would be required to establish the justice of the debt, against .one not a party, or privy to the judgment, under which he claimed title.

Reversed and remanded.