Kirby v. Raynes , 138 Ala. 194 ( 1902 )

HARALSON, J.

What claim the defendants, Webb and Morgan, have in this case as creditors of the defendants has not been shown. It does not appear that they are the owners of the land embraced in the mortgage here sought to be foreclosed, by conveyance executed by the defendants to them, nor that they have a mortgage or other incumbrance on it, superior to the mortgage of complainants. It is true, reference is made, incidentally in the evidence, to a sale by defendants to them, but when it occurred is not shown, nor whether the sale, if made, was ever executed. So that, if they are creditors of defendants, there is no allegation or proof to that effect, nor are they making claim as prior or superior creditors to complainants as against their mortgage. The litigation is really between the complainants and the defendants, Kirby and wife. They set up, that they executed the mortgage to complainants to hinder, delay and defraud one W. Seibold in the collection of a debt which the defendant, F. M. Kirby owed said Seibold, and that complainants, Raynes and Hodge, participated in said purpose, with full knowledge thereof. It is well understood that conveyances or gifts made to hinder, delay or defraud creditors are operative between the parties when fully consummated and that neither can rescind nor defeat them. — Glover v. Walker, 107 Ala. 545; Williams v. Higgins, 69 Ala. 623.

It is alleged, that this mortgage was given to complainants by defendants for the purpose, known and participated in by complainants, to hinder, delay and defraud one Seibold, a creditor of defendants. If such were the case, a court of equity might not lend its aid to complainants to disturb the acquired rights of either at the instance of the other — both being in pari delicio. Hill v. Freeman, 73 Ala. 200; Clark v. Colbert, 67 Ala. 92.

The defendants’ evidence tends to show, that snch was the purpose of the mortgage. That' of complainants tends to show, that such was not its purpose, but that it was executed to secure a past due indebtedness and to secure future advances. The evidence, we take it, preponderates, as the court below seems to have held, to satisfactorily establish the contention of the complainants as to this question, and we are not inclined to disagree with its conclusion.

The note which the mortgage secures, was for $300, and neither it, nor the mortgage refers to future advances, but to an indebtedness generally, in that sum. It was not necessary that the mortgage should express on its face that it was given to secure future advances, to make it operate as a security for that purpose. It was competent to give it for a specific sum, and it would stand as a security for a debt to that amount. If not tainted with fraud or bad faith, such a mortgage is as valid as if made to secure past indebtedness, not only as between the parties, but also as against subsequent purchasers and incumbrancers, so far, at least, as respects advances made before the equities of such purchasers or incumbrancers attached. Parol proof is also admissible to show that the mortgage was given to secure advances. 1 Jones on Mortgages, §§ 374-377; Wilkerson v. Tillman, 66 Ala. 532, 537; Lovelace v. Webb, 62 Ala. 271; Collier v. Faulk, 69 Ala. 58; Lawson v. Ala. Warehouse, 80 Ala. 341; Huckaba v. Abbott, 87 Ala. 410.

That the defendants were indebted to the complainants in some $40 or $50 at the date of this mortgage, and that they traded with them and got advances for the year 1897, and continued to do so for the years subsequent thereto, up to and including a part of 1902, is not denied. The mortgage, meanwhile, was held by the complainants and no satisfaction or payment of it was pretended. An account of their dealings between them, from February 12th, 1897, to February 10th, 1902, shown, without dispute, to be correct, was introduced in evidence, which account contains the items of debit and credit during that time, leaving a balance, on April 1st, 1902, due from defendants to complainants, of $237.62. The court ascertained for itself, as Avas competent to be done, that the amount due on the date of the decree, Avas $248.47, and decreed foreclosure of the mortgage by a sale of the lands, for the payment of that sum, with costs and expenses of sale, if not paid within thirty days. Much has been said in briefs, on the doctrine of the application of payments as applicable to the account. But we take the same Anew that the chancellor evidently did, and hold that the mortgage Avas a security for the balance, and was so intended, and that the payments made, must be confined to advances in 1897, is not under the evidence, tenable, but that the mortgage stood as a valid security for all that was advanced up to the end of the transactions between the parties in 1902.

We discover no error in the decree, and it must be affirmed.

Affirmed.