Walthall's Ex'rs v. Rives, Battle & Co. , 34 Ala. 91 ( 1859 )

A. J. WALKEB, C. J.

The complainants’ bill contained no equity, unless they were creditors of the defendant, Thomas H. Hill. In the absence of that fact, they have no ground whatever upon which to come into court. The bill does not aver that fact, and is, therefore, wanting in equity. This defect was available on the hearing, as are all defects which affect the equity of the bill. Because the bill was .thus wanting in equity, the decree of the chancellor in favor of the complainants was erroneous, and must be reversed.

Anxious to abridge, as far as we can, the litigation in this case, we proceed to consider the questions, which, are likely to arise in the court below, after the defect above noticed is remedied by amendment, so far as we can anticipate their form and shape.

[2.] There are two distinct alternative claims to relief, which the complainants set up. The first is, that the mortgages described in the bill are void, and should be declared void. The second is, that the mortgages, if not fraudulent, should be foreclosed, and the surplus, after the satisfaction of the secured debts, should be appropriated to the discharge of the complainants’ judgment. The granting of those two kinds of relief certainly pertains to the jurisdiction of the chancery court. — Dargan v. Waring, 11 Ala. 988; 1 Hilliard on Mort. 365, § 14, note c; 2 ib. 117, note d; Chambers v. Mauldin, 4 Ala. 477 ; Cullum v. Erwin, ib. 452; 1 Powell on Mort. 256, n.

The bill could not "authorize the grant of the latter relief--to the complainants, because it avers, in the 22d paragraph, that the mortgage debts are discharged, either by the receipts of Walthall, or of Hill as his agent, and for his benefit, out of the profits from the mortgaged property. Before the complainants can be let in to redeem, and be substituted to the right of the mortgagee in a foreclosure, it must appear that the mortgages were valid and outstanding. The complainants cannot, in opposition to the case made by the bill, have a foreclosure for their benefit of the mortgages. — Wiley, Banks & Co. v. Knight, 27 Ala. 336.

[3.] The mortgage of 22d February, 1845, contains a clause, authorizing and empowering the mortgagee to proceed in the manner, and as soon as he in his discretion shall deem best for his security in the premises, to sell and dispose of all the property conveyed. The instrument is a mortgage to Walthall,“designed to save him harmless and free from all loss or damage by reason of his liability as surety of the mortgagor, and his liability as co-surety of the mortgagor for the mortgagor’s share of common' debts. The mortgage contains a power of sale, and authorizes the mortgagee, to sell and payoff the debts without any prior subjection to their payment. A provision in such a mortgage, that, as soon as the mortgagee-in his discretion should deem it best for his security, he might sell and appropriate the proceeds to the payment of the specified liabilities-, was by no means a reservation for the benefit of the grantor. It was rather a stipulation, which excluded the mortgagee from a consideration of the mortgagor’s interest in fixing the time of sale, and directed him to look to his own protection in the exercise of his discretion. The investing of the mortgagee with such a discretionary power as to the time of the sale, does not, per se, vitiate the mortgage. — Shakelford v. P. & M. B’k of Mobile, 22 Ala. 238; Evans v. Lamar, 21 Ala. 333; Abercrombie v. Bradford, 16 Ala. 560; Ashurst v. Martin, 9 P. 566. Such a provision does not place the other creditors of the mortgagor at the mercy, or under the control of the mortgagee. Eor, if he should, fail to act bona fide, and exercise his discretionary power within a reasonable time, chancery would .afford an adequate-remedy.

Neither the recital that there are sundry judgments which have acquired a lien upon the property, and which the grantor has no desire to avoid, nor.the exception from the mortgage of the property exempt from execution, is-sufficient to sustain the imputation of fraud. It might be altogether proper to disclose in the mortgage the existence of any paramount liens; and certainly outside creditors cannot be prejudiced by the exclusion of property which the law places beyond their r'eaeh.

[4.] The answer of a defendant to an interrogatory, as to any matter relevant to the allegations or charges of the bill, is certainly evidence against the complainant. — Fenno v. Sayre & Converse, 3 Ala. 458-479; Br. Bank v. Marshall, 4 Ala. 60-64; Hogan v. Smith, 16 Ala. 600-602; Powell v. Powell, 7 Ala. 582 ; 3 Green, on Ev. §§ 284-285. Tested by tins principle, the answer of Iiill, as to the consideration of the debts named in the mortgage, was 'evidence against complainants, and threw upon them the onus of proof.

£5."] Upon the principle settled in Randolph v. Carlton, 8 Ala. 606, the mortgagee, Walthall, was not estopped by his acceptance of the mortgage from purchasing the property conveyed by the mortgage, under judgments having a paramount lien to the mortgage. And if it should appear, in the further progress of this, case, that he made such purchase, he would establish a title beyond the reach of the complainants.

The taking of other proof, and the making of amendments to the pleadings, may so far alter the other questions involved in this case, that it would be improper for us to attempt to decide them. Indeed, our anxiety to lessen the area of strife in the court below may already have induced us to venture too far, in anticipating the questions which will arise in the court below.

[6.] The want of an averment that the complainants were creditors of Hill, was made the point of an objection to the bill in the court below, and was overruled by the chancellor. If the objection had been sustained, the complainants could have made an application for leave to amend, and the chancellor would probably have allowed it. In such a case, we think it a proper practice to remand, in order that the complainant may have an opportunity to make the application for an amendment which was rendered apparently unnecessary by the ruling in his favor.

The decree of the chancellor is reversed, and the cause remanded.