English v. Huckaba , 219 Ala. 526 ( 1929 )

The foreclosure of mortgages is within the original jurisdiction of courts of equity. Burch et ux. v. Driver,205 Ala. 659, 88 So. 902; Vaughan v. Marable, 64 Ala. 60; Jackson et al. v. Prestwood et al., 211 Ala. 585, 101 So. 185; 42 C. J. 19, § 1508; note 68 Am. St. Rep. 354. And as a general rule, the estate or interest in the land which is drawn within the scope of the proceedings is only such as is created and passes by the mortgage, or interest subsequently acquired by the mortgagor, inuring by way of estoppel to the benefit of the mortgagee. Wells, Adm'r, v. American Mortgage Co. of Scotland, Ltd., 109 Ala. 430, 20 So. 136; 19 Rawle C. L. 529, § 331.

The bill avers that on July 28, 1923, complainants sold to the defendant the lot described in the bill, consisting of 1/2 acre, a part of a tract of 2 1/2 acres, which the complainants had purchased from the W. C. Hyde estate; that when said property was purchased it was vacant, but had been in the actual possession of complainants and their predecessors in title for more than ten years, and complainants erected a dwelling house on the part of the tract conveyed to the respondent before the same was conveyed to him; that defendant executed to complainants the mortgage which they are seeking to foreclose to secure the payment of the purchase money; that the defendant has made default in the payment of the purchase money, and subsequent to such default defendant discovered that through mistake the house was erected by the complainants on land belonging to the Florence Land Company, and thereupon defendant purchased from the Florence Land Company the lot upon which said house was erected, adjoining the lot sold to defendant, paying therefor $1,200.

The bill further avers: That at the time the complainants built the house, they were in the actual, peaceable, open, and adverse possession of the land on which said house was erected under claim of ownership, "the same being pointed out to them as the lands they had purchased; that they did not have the same surveyed, and did not know at the time the house was built and at the time they conveyed to English that there was a mistake in the lines." That after the said English had purchased said strip of land from the Florence Land Company, complainants caused the property to be surveyed and ascertained that the line that had been known as the half-mile line was not the correct line, and because of a mistake in the location of the boundary line the house which complainants had erected and sold to English was erected on the lands of the Florence Land Company. That English was placed in possession of the property by the complainants, including the house, and he still retains such possession, and has refused to pay the purchase money therefor.

Complainants offered to do equity.

Under these circumstances, the purchase of the land upon which the house was erected, lying between what was thought to be the true line and the line subsequently ascertained to be the true line, under the doctrine of estoppel, inures to the benefit of the mortgagee, and the mortgagor should not be permitted to assert this after-acquired title as a defense to the foreclosure of the mortgage, which was supposed to cover this strip on which the house was erected when the mortgage was executed. 10 Rawle C. L. 5757, § 76; Townsend v. Boyd, 217 Pa. 386,66 A. 1099, 12 L.R.A. (N.S.) 1148.

It is well settled that a purchaser of land who has gone into possession and accepted a deed and executed a mortgage to secure the purchase money, in the absence of fraud or eviction, is estopped from setting up a failure or defect of title as a defense to the foreclosure of the mortgage. McLemore v. Mabson et al., 20 Ala. 137; Yarbrough v. Thornton, 147 Ala. 221,42 So. 402; Walton v. Bonham, 24 Ala. 513; Gillham v. Walker,135 Ala. 459, 33 So. 537; Kelly's Heirs v. Allen, 34 Ala. 663; Wilkinson v. Searcy, 74 Ala. 243; 39 Cyc. 1927 (bb); 19 Rawle C. L. 543, § 348.

The bill avers that at the time the house was erected and the property was sold to the defendant, the complainants were in the peaceable possession of the property claiming up to what was pointed out to them as the half-mile line, and as between the parties the deed conveyed to the defendant such estate or interest as they held in the property, and the defendant accepted the deed and executed the mortgage and went into possession of the property under the deed; and the fact that the deed did not vest in the purchaser the fee-simple title to the strip lying between the supposed boundary and what was afterwards ascertained as the true line does not prevent application of the doctrine of equitable estoppel. In Wells, Adm'r, v. American Mortgage Co. of Scotland, Ltd., supra, the court speaking through Brickell, C. J., observed: "It results from the nature, scope and purpose of a foreclosure suit, as we have defined it, that parties claiming title paramount, adversely to the mortgagor and mortgagee, are not proper parties, and may not be drawn into the suit to litigate and settle their rights. The estate or interest in the lands which is drawn within the operation of the suit, which will be affected and bound by the decree, is the estate created and passing by the mortgage, or estates or interest subsequentlyacquired by the mortgagor, inuring by way of estoppel to thebenefit of the mortgagee." (Italics supplied.)

Under this authority, clearly, the Florence Land Company is not a proper party and cannot be drawn into this litigation, and it is equally as clear that the mortgagor is estopped to set up the after-acquired title as a defense to the foreclosure.

Without applying the doctrine of equitable estoppel, which assumes title in the mortgagor passing under the mortgage, a reformation of the mortgage and deed to cover lands which neither the mortgagor nor mortgagee owned at the time of their execution would be making for them contracts which they did not intend to make, and this is clearly not permissible. Gallilee Baptist Church v. Pallilla (Ala. Sup.) 123 So. 210;¹ 23 Rawle C. L. 309, § 2. If the doctrine of equitable estoppel is applied, a reformation is wholly unnecessary.

Moreover, the doctrine of the prevailing opinion requires the complainants to surrender more than one-third of the debt secured by the mortgage, because the defendant saw fit to purchase the entire tract of land from the Florence Land Company, when it was only necessary to purchase the strip of land lying between the supposed half-mile line and the true line, a result that is clearly inequitable.

As between the vendor and a purchaser who goes into possession under such purchase, it is clear that section 10355 of the Code has no application.

The complainants, on the principles above stated, were entitled to a foreclosure of their mortgage, and the general prayer was sufficient to authorize this relief. I am therefore of opinion that the bill was not subject to any of the stated grounds of demurrer, and that the decree should be affirmed.

¹ Post, p. 683.