Palmer v. James

The bill is filed for the foreclosure of an equitable lien or mortgage; the substance of its pertinent allegations being that complainant sold and delivered to respondent a sawmill and sawmill outfit for $500, on the understanding and agreement that complainant was to have a lien thereon as security for the purchase money, and that the property "was to stand good for the purchase price," and that "the title which passed to the defendant * * * was to be subject to said lien and said agreement."

The undisputed evidence — in particular the testimony of complainant himself — is that the only agreement between the parties with respect to security for the purchase money was that, when respondent "got the mill moved over and set up" he would execute to complainant notes and a mortgage on the property for $400. Complainant specifically testified that there was no agreement that the property was to stand good for the purchase money, other than the agreement to execute a mortgage.

It is true that the witnesses Allred and Whitlaw testified that, on the occasion of the sale, the respondent James stated that "his property stood good for his debts," and also that "his property and mill stood good for his indebtedness — all he owed." And complainant himself testified that respondent said, "What I have got stands for my debts." But such general statements could only mean that his property stood liable for all of his debts in the ordinary way, and do not evidence an intent to make a verbal mortgage to secure a specific debt. Nor does it appear that those statements were terms of the sale, nor inducements thereto, for, indeed, the testimony of those witnesses expressly shows the contrary.

There is nothing, in short, to show a reservation of a lien by the vendor, but only his reliance upon the vendee's promise to execute a mortgage security after the mill was set up.

The witnesses were heard by the trial judge viva voce, and we would not reverse his findings of fact on conflicting testimony; but it does not appear that the trial court found that a lien was reserved from the title sold and transferred. On the contrary, we presume that relief was granted on the theory that the agreement to execute a written mortgage was in effect a valid parol mortgage, enforceable in equity. Nor does our own finding on this question involve the credibility of the witnesses, nor any conflict in the testimony.

On these facts, our conclusion in this case must be ruled by the case of Williams v. Davis, 154 Ala. 422, 45 So. 908, from which it is not distinguishable. After referring to section 2151 of the Code of 1896 (now section 4288 of the Code of 1907), the court in that case said:

"It is not conceivable that the transaction between the complainant and the respondent amounted to anything more than a verbal agreement to make a mortgage, void in law and in equity. An agreement not in writing, to make a mortgage, is at most, in equity, a verbal mortgage."

See Morrow v. Turney's Admr., 35 Ala. 131. That a parol mortgage is void and conveys no title, legal or equitable, was declared also in Marlowe v. Rogers, 102 Ala. 510, 515,14 So. 790.

It results that, on the case made by the evidence, complainant is not entitled to relief.

We are not called on to determine whether, under the principles laid down in Putnam v. Summerlin, 168 Ala. 390,53 So. 101, the parol reservation of a lien for the purchase money, made at the time of and as part of the sale, would have created a valid and enforceable equitable mortgage, for that question, as above shown, is not presented. We note, however, in passing, that the case of Williams v. Davis, supra, was reviewed in Putnam v. Summerlin, and its correctness was not questioned.

The conclusion to which we are thus constrained may seem regrettable, but the Legislature has seen fit to inhibit verbal mortgages, and courts are bound to give effect to the statute (section 4288 of the Code), regardless of the hardships it may impose.

The decree of the circuit court in equity will be reversed, and a decree will be here rendered denying the relief sought, and dismissing the bill of complaint.

Reversed and rendered.

ANDERSON, C. J., and GARDNER and BOULDIN, JJ., concur.