Oliver v. Ala. Gold Life Insurance , 82 Ala. 417 ( 1886 )

CLOPTON, J.

— When this case was before us on a former appeal (78 Ala. 158), the general issue was the only plea shown by the record ; and the defense relied on was, that the rent as incident to the reversion passed by the sale and conveyance of the land to one of the makers of the rent note, such conveyance having been made by the lessor after the making of the rental contract, and before the term commenced. We then held, that the note being assignable, its transfer to the plaintiff, on a valuable consideration, before the sale and conveyance, vested in the plaintiff the ownership of the note, which was not divested by the subsequent conveyance of the land, the grantee having notice of the rental contract. No plea was interposed setting up the statute of frauds, or a want of consideration ; and the record raised no question as to the validity of the contract, or [its capability of enforcement against tbe lessor. Tbe sole contention was, which party was entitled to the rent. After the cause was remanded, special defense of want or failure of consideration was made, both by plea, and by requesting charges, which present other and additional questions.

The statute declares void every agreement which, by its terms, is not to be performed within one year, “ unless such agreement, or some note or memorandum thereof, expressing the consideration, is in writing, and subscribed by the party to be charged therewith, or some other person by him thereunto lawfully authorized in writing.” — Code, § 2121. A parol agreement for a lease of land for the term of one year, to commence at a future day, is within the statute. No agreement, nor note or memorandum thereof in writing, was subscribed by Mrs. Smith, from whom the land was rented, nor by any one lawfully authorized in writing. On this ground, the first proposition of the defense is based, that the parties were never brought into reciprocal binding relations, and there was no mutuality of contract. The proposition rests on a mistaken view of the contract, and of the operation of the statute. The consideration of the promise of defendants to pay rent is not a parol promise to lease, but a parol lease of the land, with an implied covenant that the premises shall be open to the entry of the lessee. Mutuality.of contract exists, though it may rest in parol. It is capable of enforcement against the party to be charged, if he has subscribed the agreement, or note or memorandum thereof, expressing the consideration, in writing, though there may have been a failure to obtain the signature of the other party. The purpose of the statute is to prevent fraud and perjury, by excluding the contract from the operation of verbal testimony. The defect of mutuality relating to the remedy, and to the evidence requisite to the enforcement of the contract, it does not arise at law, where the statute only requires the signature of the party to be charged. — Beed on Stat. Frauds, § 365. The general expressions in Flinn v. Barber, 64 Ala. 193, cited by counsel, must be referred to and qualified by the case under consideration, which is a suit brought by the vendee to recover money paid on a purchase of land, the contract of sale being wholly in parol as to both parties. In the subsequent case of Heflin v. Milton, 69 Ala. 354, the rule is regarded as well settled, that the agreement, or note or memorandum, need not be subscribed by both parties ; and if subscribed by the party to be charged, he is estopped to deny the execution or validity of the instrument, because it is not subscribed by the other party. The then Chief-Justice, who also rendered the opinion in the former case, says : “ The agreement or contract is mutual, but the party, seeking its enforcement has neglected to take- from the party against whom it is to be enforced, the evidence which the statute required must exist before it can be enforced. Though he may have given such evidence, and rendered it possible that the contract may be enforced against him, he has but his own folly or laches to blame, that he has. not taken the character of evidence which will enable him to demand performance of the contract. The difficulty is,.not that the contract or agreement is not mutual, but that each party has not corresponding evidence of it.”

The negotiations for the rent of the land were conducted by correspondence between H. L. Oliver, the lessee, and Fowler, the agent of Mrs. Smith. The memorandum subscribed by Oliver consists of the note, and a letter in which it was inclosed, written and sent to Fowler. It is true, that when the memorandum consists of two or more' writings, parol evidence is inadmissible to connect them; there must be a reference in the one to the other. But, while the contract must all be collected from the writings, without the aid of parol evidence, when there is a clear reference in the one to the other, such evidence is admissible to identify the writing referred to. — Beckwith v. Talbot, 95 U. S. 289; Reed on Stat. Frauds, § 341. The note and. the letter, combined, express the consideration sufficiently. — Smith v. Freeman, 75 Ala. 285.

The second proposition of the defense is, that Mrs. Smith, by the sale and conveyance of the land, disabled herself to perform the contract on her part, whereby the lessee was authorized to abandon or withdraw from it, and that he was compelled to rent a portion of - the premises from her grantee, under whom he entered into possession, and to whom he paid rent. It maybe conceded, that if Mrs. Smith disabled herself to perform the agreement, and the lessee was thereby compelled to rent from her grantee, there is a want or failure of consideration. The argument is, that by the conveyance the grantee became entitled to immediate possession, and that Mrs. Smith disarmed herself of the power to eject him, or to put her lessee in possession, or to continue him in possession. If there was no valid reservation, express or clearly implied, the legal effect of the conveyance would be to transfer the right of possession. But the purchaser executed to Mrs. Smith a mortgage on the land, to secure the purchase-money, which was delivered cotemporaneously with the deed. By the deed and mortgage, the legal estate passed instantaneously in and out of the grantee. By our settled rulings, a mortgage conveys the legal estate, and operates a transfer of the right of possession ; and the mortgagee may enter, or recover in ejectment, unless by express stipulation, or inconsistent reservation, or reasonable implication arising from expressed conditions, the mortgagee’s right to possession is postponed until default, or some future time.— Woodward v. Parsons, 59 Ala. 625; McMillan v. Oti, 74 Ala. 560; Heflin v. Slay, 78 Ala. 180. When a lease has been made, a subsequent mortgage, which . conveys the legal estate, and operates to transfer the right of possession, binding the whole realty, carries- with it, there being no effectual severance, the subsequently accruing-rents, but with a liability to account. Coffee v. Hunt, 75 Ala. 236. The mortgage is silent as to possession, and - contains no express provisions for a postponed or future entry. The law-day. of the mortgage is the time of the maturity of the notes secured, and confers power of sale on default of payment, unaccompanied by any provision to enter or take possession. Whether from these mere provisions, in ■ the absence of special circumstances discovering the understanding of the parties, any inference may be drawn that right of possession was intended to be postponed, it is unnecessary to decide.,

Such being the character of the conveyances, their effect and operation should be considered in the light of the attendant facts and circumstances, and the intention of the parties ascertained; and if, when so considered, the deed was accepted in subordination to the lease as valid and operative, and the mortgage back executed, the deed does not operate to disable Mrs. Smith to perform her contract of lease, and the right of possession of the purchaser is postponed until its expiration. A potent fact is, that the grantee of Mrs. Smith was a surety on the rent note at the time of the purchase, and of the making of the conveyance. To this extent, he was a party to' the contract of lease, knew of its existence, and was bound for thepayment of the rent. The first note for the purchase-money was made payable January 1, 1881, without interest, and the notes maturing thereafter bore interest from that date; which Fowler testified, without being contradicted, was done because, the land being leased for 1880, possession could not be given to the purchaser, and, in consequence thereof,- he agreed that no money or interest should be paid, or begin to accrue, until the expiration of the lease. If these be the facts, the purchaser took the conveyance subject to the lease, and in recognition of its validity, — a conveyance of the reversion. Comer v. Sheehan, 74 Ala. 452. In such case, the grant of the reversion does not abrogate the lease. — Otis v. McMillan, 70 Ala. 46. Having accepted the conveyance, subordinated to the lease, and in recognition of it as valid, the purchaser is now estopped to dispute its validity; nor can he avoid it because not in writing subscribed by Mrs. Smith, so long as she declines to take advantage of the statute. - Kennedy v. Brown, 61 Ala. 296; Shakespeare v. Alba, 76 Ala. 351. The conveyance to the smety on the rent note, with such mortgage back, does not, under the circumstances, operate to arm the purchaser with power to legally prevent the performance of the contract of lease. The only question in respect to the rent, which can arise on the conveyance and ■ mortgage, the rent note having been previously transferred, is, whether the purchaser or the transferree is entitled to the rent; which brings the case within the operation of our ruling on the former appeal. If Mrs. Smith was liable, as ¡mortgagee, to account to the mortgagor, he can not satisfy the mortgage debt without holding her to account, after notice of the transfer of the rent note, and successfully resist its payment in the hands of the transferree.

The other postulate of the proposition of the defense, that the lessee was compelled to rent the premises from the vendee, being dependent on the position that Mrs. Smith had disabled herself by her voluntary act, falls with the proposition of disability. An attornment of the tenant to a stranger, in the absence of circumstances rendering the attornment effectual, does not operate to destroy the possession of the landlord. — Kennedy v. Reynolds, 27 Ala. 364. There can be no question, that the rent note was supported by a sufficient consideration at the time it was made and sent to the agent of Mrs. Smith. Of course, without the cooperation of some effectual act on her part, the consideration can not be impaired or defeated by a subsequent agreement or arrangement, uncommunicated to her, and of which she had no notice, between the principal in the note and his surety thereon.

On the undisputed evidence, and admitting the material facts as testified to by defendants and their witnesses, the defense of want or failure of consideration is not sustained. Conceding that the matters in avoidance of the special plea should have been presented by replication, and that the demurrer was improperly sustained, it is error without injury, as the defendants had, under the general issue, without objection, the full benefit which could have been derived from the special plea.

Affirmed.