Bowdoin v. T. S. Faulk Co.

This bill was filed to enforce an equity of redemption as to certain property previously mortgaged by the husband S. B. Bowdoin, wherein these complainants set up usury in the mortgage debt, seek an accounting, etc. While the bill is by S. B. Bowdoin and his wife, N. B. Bowdoin, as joint complainants, it shows upon its face that previous to the filing of the same S. B. Bowdoin had conveyed all his right, title, or interest in and to the mortgage property to his wife, N. B. Bowdoin. Therefore S. B. Bowdoin has no right to maintain the bill for redemption. It is a well-established principle of law that a mortgagor who has conveyed his equity of redemption either in real or personal property, or both, cannot redeem. 3 Jones on Mortgages (7th Ed.) § 1056, p. 654; Cardwell v. Insurance Co.,186 Ala. 261, 65 So. 80. It is true that in the Cardwell Case, supra, this court held that the mortgagor there could redeem for the reason that, notwithstanding he had sold his equity of redemption, he retained an interest or lien upon the property, but which was not done in the present case.

It is also well settled that the right to plead usury is a personal defense to the debtor mortgagor, and may be waived, and is waived when he conveys the property to another, stipulating that the purchaser must assume the mortgage debt, to the extent that the purchaser must pay the full amount of the debt, usury and all, in order to effect a redemption of the property. Stickney v. Moore, 108 Ala. 590, 19 So. 76, and cases there cited. Indeed, the foregoing propositions are not seriously controverted in brief of appellant's counsel, but they contend that, notwithstanding usury is a personal defense to the debtor, these respondents are estopped from claiming that the husband mortgagor was cut off from his right to invoke this defense by virtue of the conveyance to his wife, for the reason that the mortgagee bank continued to deal with him, as its debtor under the mortgage, and without, for some time, recognizing the wife as the owner of the property. It is true they made him further advances under the terms of the mortgage after he had conveyed his equity to his wife, but we do not see how this could operate as an estoppel against them from setting up the fact that the husband had disposed of his property before filing the present bill to redeem, or how it could estop them from saying that the wife was not the debtor up to and prior to the time that they dealt with and treated her as such, and the trial court permitted her to plead usury as to all debts contracted with her, or her and the husband jointly, after the mortgagee bank recognized the conveyance and commenced to treat and deal with her as the owner of the property. We find no reversible error upon the part of the trial court upon the direct appeal.

Upon Cross-Appeal. We think that the trial court properly held that Mrs. Bowdoin could maintain the bill to redeem, notwithstanding her husband and correspondent could not do so. Section 3212 of the Code of 1907.

Nor are we disposed to disturb the conclusion of the trial court to the effect that the respondents, Faulk Co., had notice that their assignor the bank had been charging a usurious rate of interest.

As to the stock certificate, it has been transferred as part security for the mortgage indebtedness, and which said indebtedness Mrs. Bowdoin had to pay in order to redeem the property; and, if she had to pay the entire mortgage indebtedness, this should operate as a release of all the mortgage property, or property held as collateral security for said indebtedness. True, the original bill did not specify the warehouse certificate, nor does it seem to have been included in the injunction, but the bill was amended before the sale of the stock, asking for the redemption of same, and said sale was therefore within the lis pendens.

As to the J. F. Bowdoin 80 acres, we do not understand that it was given to secure a part of the original mortgage indebtedness, or that the mortgage held upon same was from S. B. Bowdoin to the bank, or formed a part of the debt for which the mortgages in question were given to secure. In other words, it seems to have been a separable transaction, and was not embraced nor included in the indebtedness for which S. B. Bowdoin gave the bank or Faulk Co. mortgages, and which Mrs. N. B. Bowdoin would have to pay as a condition precedent for redemption. It seems to have been for a separable and distinct debt, and was a conveyance by J. F. Bowdoin to the bank. We therefore think that the trial court erred in permitting the complainant N. B. Bowdoin to redeem said 80 acres of land under the present bill, and the decree of the trial court to this extent only is reversed, and one is here rendered denying relief as to the said J. F. Bowdoin 80 acres of land.

Affirmed upon direct appeal.

Affirmed in part, and reversed and rendered in part upon cross appeal.

McCLELLAN, SOMERVILLE, and THOMAS, JJ., concur.