Bank of Odenville v. Union State Bank

This is an action in trover, brought by the senior mortgagee against the junior mortgagee of personalty. The case made by the evidence is briefly this: The junior mortgagee had constructive notice of the senior mortgage. After the law day of the junior mortgage, the mortgagor tendered the property to the junior mortgagee to make his debt. At the request of the junior mortgagee the mortgagor retained the possession and use of the property. Thereafter the junior mortgagee advertised the property for sale under the power of sale in his mortgage. Before the day of sale a third person applied to the junior mortgagee to purchase the property; a price was agreed upon, with terms of payment, in the event the mortgagor was willing to make such sale. The purchaser was referred to the mortgagor, who agreed; the purchase price was secured to the junior mortgagee, and the property was delivered by the mortgagor to the purchaser, who took possession under his purchase. The junior mortgagee had not the actual possession of the property at any time.

Under these facts, the junior mortgagee so participated in the sale and disposition of the property, joined in the exercise of such dominion over it, and so invaded the rights of the senior mortgagee, as to constitute a conversion. It is immaterial whether the mortgagor was holding possession as a mere bailee or agent of the junior mortgagee pending foreclosure or holding possession as mortgagor. Likewise it is immaterial whether the mortgagor or junior mortgagee closed the sale and delivered the property. Participation in the sale of the property, negotiating with the purchaser, receiving the proceeds, and thus actively joining in the disposition of the property and passing of the possession to the purchaser, made the junior mortgagee a party to the conversion. Henderson v. Foy, 96 Ala. 205, 11 So. 441.

The rulings of the trial court were in harmony with these views.

Affirmed.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.