Marks v. Robinson & Ledyard , 82 Ala. 69 ( 1886 )

STONE, C. J.

The present suit is an action of trover, and counts on an alleged tortious conversion of certain bales of cotton by Marks, the appellant, the pi@perty of the appellees. It is contended that, inasmuch as, to maintain trover, the plaintiff must show a legal right to the possession, the plaintiffs, Robinson & Ledvard, can net recover in this case, because their claim is, at most, but an equity. This contention is rested on the alleged fact, that before the mortgage of the crop was executed to Robinson ifcLedyard, Caffey, the mortgagor, had executed a prior mortgage to one Murray, on the same crop to be grown, which was duly and properly recorded ; that by this act he retained in himself only an equity, and that consequently he could and^td^convey to Robinson & Ledyar.d only an equitable title, nót capable of maintaining trover.

The effect of a mortgage is different from that of any other species of conveyance, in some particulars. It is treated differently in the two leading jurisdictions, equity and common law. In the former, it is but a security for money — an incident to the debt it secures, the debt being the principal. In the latter, it is, as between the parties, a transfer of the legal title, leaving in the mortgagor only a right to redeem, called in the books an equity of redemption. The mortgagor in possession holds in subordination to the right and title of the mortgagee and his transferree; and the latter may dispossess him at any time, by action at law, unless by the terms of the mortgage possession is reserved in the mortgagor, for a term not expired. A mortgagee in possession is, in a law forum, the legal owner, holding possession unde? a legal title. His holding is adverse to the mortgagor, and, if acquiesced in for the period of limitations for actions at law, it bars the mortgagor of all relief, legal and equitable. As to all persons, however, who can not connect themselves with the title of the mortgagee, the mortgagor in possession is the owner of the legal title; and, under such title, he can both maintain and defend an .action of ejectment. And as to all rights and privileges, both civil and political, of which the ownership of a freehold, is one of the conditions, the mortgagor is a free-holder, while the mortgagee, by the mere virtue of his mortgage title, can not claim to be such. — 1 Jones on Mort., §§ 11 to 16, inclusive ; Denby v. Mellgrew, 58 Ala. 147; Allen v. Kellam, 69 Ala. 442. Possibly, tbe principle may be briefly stated as follows : The mortgagor in possession, whether before or after forfeiture, is the general owner of the freehold, having the legal title; while the mortgagee, and those claiming in his right, whether the title be abstractly good or not, have, as against the mortgagor and all claiming in his right, all the attributes of a legal title, necessary to recover and hold the property mortgaged. We are speaking of the status of the payties before extinguishment of the mortgage lien. In these principles and their application, there is no material distinction between a mortgage of real and a mortgage of personal property, while the mortgage debts remains unpaid. In this State, payment of the mortgage debt destroys the mortgagee’s title to personal property; while, in the absence of statute, it does not, without more, annul his title to realty.

On the question we have been considering, the case of Gardner v. Morrison, 12 Ala. 547, is not distinguishable from this. We have no wish to overrule or impair the authority of that case, which simply declares a rule of practice. We hold, that the title conveyed to Robinson & Ledyard vested in them a title which will maintain trover against any one except Murray, and those claiming in his right. — Allen v. Kellam, 69 Ala. 442.

The cases of Childress v. Monette, 54 Ala. 317, and Atcheson v. Broadhead, 56 Ala. 414, contain expressions which can not be reconciled with what is said above. Neither of those cases presented the question as it is .raised by this record. In the first, Childress v. Monette, the land had been conveyed by trust deed, containing a power of sale, and appointing a trustee to excute the trust. The lands, having been duly advertised, were sold in May, 1868, by the trustee ; and Childress, tbe beneficiary, became the purchaser, received a deed, went into possession, and retained it until February, 1869, or 1870. The proceedings wer^1 regular, and no imperfection is noted in the chain of title under which Childress claimed. The title of Monette was as follows : Under a judgment against Brown, the mortgagor, the mortgaged lands were levied on and sold, and Tunstall became the purchaser, receiving a conveyance. Tunstall conveyed to Monette, who, by some means not shown, obtained peaceable possession, and the action — ejectment—was brought by Childress to dispossess him. Childress had the title of the mortgagee, while Monette had only the title of the mort gagor. Under all the authorities, the title of the mortgagee will dominate that of the mortgagor, in any contest between them, or their privies in estate. So, the title of Monette, being only the title of Brown, the mortgagor, was only an equity as against Childress, armed as the latter was with the title of the mortgagee. That was the question raised by the record, ánd tbe ruling was correct. If the language of the opinion took a wider tange, and asserted that the title of the mortgagor is only an equitable title, even before foreclosure, and as against outsiders, it is not supported by the authorities, but was expressly departed from in Denby v. Mellgrew, 58 Ala. 147, and Allen v. Kellam, 69 Ala. 442. The point raised was correctly decided, and any thing said beyond that can not be regarded as authority against the latter rulings.

So, in the later case of Atcheson v. Broadhead, 56 Ala. 414, the contest was between the mortgagor’s title, and that of a transferree from the mortgagee. No authority, save that of Childress v. Monette, was cited in support of it, and the comments made on that case are applicable to this later ruling. Neither of them, in the point actually decided, antagonizes the anomalous peculiarity of a mortgagor’s title — only an equity as against the mortgagee and his privies; a legal title against all others. Marks, the appellant in this case, does not connect himself with Murrary, the older mortgagee. He acted as the agent of Caffey, the mortgagor, and can defend alone on his title. Having mortgaged the cotton to Bobinson & Ledyard, Caffey thereby clothed them with a legal right to the possession, against himself and all others claiming in his right.

It is not intended, in what is said above, to controvert the doctrine, that a title merely and simply equitable will not support trover, or any other action for a direct injury to property ; nor can one, seized of a title simply equitable, transfer to another a better title than he holds. — -You v. Flinn, 34 Ala. 409; 2 Brick. Dig. 484; Harrison v. Parmer, 76 Ala. 157. But parties may so fetter or pledge their property to others, or so place themselves under disabilities, as to authorize a suit against them by one who is, abstractly, without title. The relation of a tenant to his landlord is a familiar illustration of this principle.- — Farris v. McCurdy, 74 Ala. 162. Nor do we deny that, when there is nothing in the relation of the parties to prevent it, it is a good defense to the action of trover, that the plaintiff has no title to the property sued for. It is necessary to the maintenance of the action, that the plaintiff proves property in himself, general or special, and a right to immediate possession; and disproof of this by the defendant is not only, as a general rule, admissible, but it defeats the action. It may generally be proved by showing title in a stranger; called the ustertii. — Dermott v. Wallack, 1 Black, (U. S.) 96; Dickinson v. Lovell, 35 N. H. 9; Leake v. Loveday, 4 M. & Gr. 972.

When, however, as in this case, the suit' is by the mortgagee, against one who has only the title and authority of the mortgagor, conferred after the mortgage was executed, the rule is different. He can not defend on the outstanding title of a stranger, unless he connects himself .with such outstanding title. — Denby v. Melgrew, 58 Ala. 147; Scott v. Ware, 65 Ala. 174; Allen v. Kellam, 69 Ala. 442; Comer v. Sheehan, 74 Ala. 452; Folmer v. Copeland, 57 Ala. 588; Gafford v. Stearns, 51 Ala. 434; Street v. McClerkin, 77 Ala. 580; Gantt v. Cowan, 27 Ala. 582; Garrett v. Lyle, ib. 586; Burrows v. Waddell, 52 Iowa, 195; Darker v. Danent, 52 Amer. Dec. 670; 6 Wait Ac. & Def. 140-1.

Two other principles of law may be here stated, as bearing on the determination of this case.

First: #If there be an account composed of several items, bearing different dates, all due, and a partial payment is made without direction as to its application, or, in case of failure to make the application by the payor, without actual application by the payee, the law will apply such partial payment to the older of the items, in the order in which they were, contracted. — 2 Greenl. Ev. § 533; Bradley v. Murray, 66 Ala. 269.

Second: A mortgage of an unplanted crop conveys no legal title to the mortgagee. It does, however, convey an equity. And if, after said crop is grown, it is delivered to the mortgagee, in pursuance of the mortgage, this clothes the mortgagee with the legal title and right to the possession, which will prevail over the right of any third person, acquired from the mortgagor after such delivery. And to have such effect, it is immaterial whether such mortgage is regularly recorded, or even recorded at all. It is, before delivery, a valid executory contract to sell and buy, as between mortgagor and mortgagee; and when consummated by delivery, the.legal title becomes thereby vested in the mortgagee. — Rees v. Coats, 65 Ala. 259, and many authorities cited; Collier v. Faulk, 69 Ala. 58; Hurst v. Bell, 72 Ala. 336; Thompson v. Powell, 77 Ala. 391; Mayer v. Taylor, 69 Ala. 403.

The bill of exceptions informs us, that the act of sale, which is relied on as a conversion in this case, took place in October, 1882, but does not inform us on what day it took place. There is in it an itemized copy, debit and credit, of Caffey’s account with Bobinson & Ledyard, giving date of each item. No question is raised as to its correctness. Caffey’s crop lien and mortgage first given to Bobinson & Ledyard, bears date March 4, 1882, presumably before the crop was planted. This mortgage stipulates security on the crop and other named property, for one thousand dollars advances, and other advances they might make to him. Before June 9, 1882, they had advanced to him to the extent of fourteen hundred dollars. On June 9, 1882, Caffey executed to them another crop lien and mortgage on the crop, to secure another six hundred dollars, and any further advances they might make to him. Each of these mortgages was certified and recorded properly as to time and place. Before October 1, 1882, according to that account, advances had been made under the two mortgages amounting to twenty-four hundred and fifty dollars, while the credit to which Caffey shows himself to have been then entitled(amounted to only eight hundred and thirty-four dollars, leaving more than sixteen hundred dollars then unpaid. Of this sum, one thousand dollars was obtained after June 9, 1882, when the second mortgage was executed. The recovery in this action was seven hundred and eight dollars. Placing the credit, eight hundred and thirty-four dollars, to which Caffey was then entitled, on the item of debit first incurred, it leaves an indebtedness on October first of one thousand dollars, secured by the second mortgage, — much more than enough to uphold the .recovery in this case, if the alleged conversion took place on October 1.

The next payment shown to have been made by Caffey was nine hundred and forty dollars, on October 19, 1882. His credits, up to that time, were thus increased to about seventeen hundred and eighty dollars. No other credits are shown on the account, or in the transcript. Suppose we place the alleged conversion after that time. This will not help the appellant. The debits against Caffey for advances had then reached thirty-one hundred and ninety-four dollars, — more than fourteen hundred dollars in excess of all credits. This was more than enough to uphold the recovery in this action.

We have presented the statements and calculations above, as the shortest, perhaps the simplest method, of answering many objections urged before us. It is manifest, as between Bobinson & Ledyard on the one side, and Caffey on the other, the former, under the facts shown in this record, had the right to receive and appropriate the cotton they did receive, and that the effect of such receipt was a payment, )3')o tanto, of the oldest items of' Caffey’s account, including those secured only by the mortgage of March 4. It is equally manifest that Marks has shown neither interest nor right to object to such appropriation.

Caffey’s mortgage to Murray was irrelevant to this transaction, and, under the rules laid down above, it should not have been received in evidence. Nor should the fact that some of the laborers worked on shares, in the present state of this record, exert any influence in this litigation. It will be time enough to consider their rights, when they, or some one claiming under them, asserts them.

The defendant asked fourteen charges, which were severally refused, and exceptions were reserved to each refusal. The principles stated above prove that the Circuit Court did not err in refusing charges 1, 2, 5, C, 7, 8. Charges 3, 9, 10, 13, 14 were abstract, immaterial, and confusing, and were rightly refused on that account. We will defer the consideration of charges 4, 11, and 12, until we dispose of what we consider the main question in this cause. The question arises under the general charge given at the instance of the plaintiffs.

Testimony for plaintiffs showed “ that thirteen or fourteen bales of cotton, in October, 1882, had been hauled from said place so cultivated by J. P. Caffey (mortgagor), by his direction, to the warehouse of the defendant in the city of Montgomery, and there stored in his name; that defendant was requested by Caffey to sell it for him, and that he did so, and turned the money, less 50 cents per bale for selling it, and less storage, over to Caffey, in two hours after the cotton was stored. . . . The evidence shorved that the warehouse business was conducted by Marks & Fitzpatrick, of which defendant was a member, and that the cotton was stored in this warehouse; and that defendant alone was engaged in a commission business; and that the sale of the cotton was made by Gayle, a clerk of defendant, and the money, less 50 cents a bale, was paid by Lowe, another clerk of defendant, to Caffey — the commissions being credited to S. C. Marks’ commission account. But plaintiffs introduced an admission in writing, made by defendant Marks, showing that Caffey was present at the time the cotton was brought to the warehouse, and requested him (Marks) to sell it; and that it was by his (Marks’) direction that the cotton was sold and the money turned over to Caffey.”

On this state of facts, two questions are sought to be raised: First, that if there was any conversion, it should have been left to the jury to determine whether it was by Gayle or by Marks. Charge 12 sought to raise this question. If the testimony bearing on this question was at all indeterminate, we would hold this charge ought to have been given. We think, however, that the testimony, as shown in the bill of exceptions, leaves that question uncontroverted. If the facts, which we must treat as undisputed, amount to a conversion in law, then the Circuit Court would not have erred in charging upon that feature of the case, without hypothesis. There is no occasion to leave to the jury the ascertainment of any fact, which the record affirmatively shows was clearly proved, and not controverted. Carter v. Chambers, 79 Ala. 223.

It is contended, in the second place, that the sale of the cotton, and the payment of the proceeds to Oaffey, under the circumstances disclosed in this record, do not, in law, amount to a conversion. Charge 11, asked by defendant, presents this question.

“The vendor is equally liable, whether he sells the property as his own, or as officer or agent.” — Cooley on Torts, 451. “If a bailor has no title at the time of the bailment, the bailee can have none, for the bailor can give no better title than he has himself.” — 1 Add. on Torts, § 475; 2 lb. § 1198. “An auctioneer who sells stolen goods is liable to the owner in an action of trover, notwithstanding that the goods were sold by him, and the proceeds paid over to the thief, without notice of the felony.” — Hoffman v. Carow, 22 Wend. 285; Coles v. Clark, 3 Cush. (Mass.) 399. “Even an auctioneer or broker, who sells property for one who has no title, and pays over to his principal the proceeds, with no knowledge of the defect of title or want of authority, is held to be liable for its conversion to the real owner.” — Hills v. Snell, 104 Mass. 173; Williams v. Merle, 11 Wend. 80; Saltus v. Saltus, 20 Wend. 266; McGoldrick v. Willitts, 52 N. Y. 612; Pease v. Smith, 61 N. Y. 477; Pool v. Adkisson, 1 Dana, 112; Bristow v. Burt, 7 Johns 254; Doty v. Hawkins, 6 N. H. 247; Perkins v. Smith, 1 Wilson, 328; Adamson v. James, 4 Bing. 69; White v. Spitigen, 13 Mees. & Welsby, 603.

The mere receiving of goods, and restoring them to the bailor before notice that his possession was wrongful, is not a conversion. — Nelson v. Iverson, 17 Ala. 216. And some authorities are scarcely reconcilable with those cited above. 1 Pars. Contr. 520; Moak’s Underhill on Torts, 575; Roach v. Turk, 9 Heisk. 708; s. c., 24 Amer. Rep. 360; Parker v. Lombard, 100 Mass. 405; Spooner v. Holmes, 102 Mass. 503; Spooner v. Manchester, 43 Amer. Rep. 514. The weight of authority is in favor of the position asserted. The Circuit Court did not err in refusing charge numbered 11.

A single question remains — that raised by the fourth charge asked, in the following language; “That advances made by complainants (plaintiffs) after the sale of the cotton by Marks, are no lien on such cotton.” The mortgages given by Caffey to Robinson & Ledyard each provides security for any future advances, and does not bind Robinson & Ledyard to make them.— Collier v. Faulk, 69 Ala. 58; Lovelace v. Webb, 62 Ala. 271; Diver v. McLaughlin, 20 Amer. Dec. 655, and note; Nicklin v. Betts Spring Company, 50 Amer. Rep. 477.

We have shown above that, according to the account of Caffey with Robinson & Ledyard, as presented in the transcript, there was, irrespective of after advances, no time while cotton was being delivered, that the former was not indebted to the latter, for advances made under the June mortgage, in a greater sum than the value of the cotton in controversy, as shown by the recovery in this cause. Hence, if that account truly sets forth the facts, there was neither occasion nor field for operation of charge No. 4. The proof of that account was offered by defendant, and tbe account furnishes the only evidence on which the charge could become pertinent. The account, as we have seen, shows that the question sought to be raised by the charge was immaterial. In other words, the defendant, in proving the requisite facts on which to base charge 4 asked by him, proved other facts which show there was nothing for the charge to operate on. All the proof bearing on the question was introduced by defendant, is free from ambiguity and from conflict, and shows that the charge, if given, could have had no other effect than to confuse the jury with an immaterial inquiry. He must stand or fall on the case made by his own uncontroverted testimony. Charge 4 was rightly refused, whether correct in point of law or not.

The present case is manifestly one of hardship, and requires of factors, brokers, and auctioneers great circumspection, lest they incur a liability where they least suspect it.

Affirmed.