Brooks v. Capps

The controverted question of fact is whether mortgagee had knowledge or notice of the existence of an unrecorded lease sale contract, and of the rights of complainants thereunder antedating the last mortgage to Mrs. Adler.

The bill by complainants had for its object the cancellation of Mrs. Adler's mortgage and that of respondent Bealle against the property. The property is worth more than $3,500; the mortgage of Mrs. Adler is $1,600; Brooks, or wife, paid $400 cash and certain installment payments of about $680. If the contention of complainants be sustained, they would secure the property for the amount of $1,080.

The rights of purchasers by conveyances, mortgages, etc., within the protection of the record statutes, as against unrecorded conveyances or contracts as to land, need not be repeated. Code, § 6887; Georgia Loan Trust Co. v. Butler,214 Ala. 390, 107 So. 863; Wiggins v. Stewart Bros., 215 Ala. 9,109 So. 101. The statute has effect in the absence of actual knowledge, or such as amounted thereto, for the lack of notice by the mortgagee, Mrs. Adler, of the rights of complainants under the terms of the lease sale contract.

The burden of the pleading is upon complainants of proceeding with the proof in the lower court as to knowledge or notice. This is imposed by law upon the complainants, the children of the only witness testifying to facts tending to show notice or knowledge on the part of Mrs. Adler or her agent. No part of the $1,000 indebtedness, evidenced by the first mortgage (by Eloise Bealle), has been paid to Mrs. Adler. If the minors had any rights under the unrecorded lease made in favor of their father, this was subject to this first mortgage, that was carried into the last mortgage, at complainants' request and convenience, and to accomplish or consummate the purchase of the land from Bealle. These sums are protected under the equitable rule of subrogation (Woodruff v. Satterfield,199 Ala. 477, 74 So. 948), in so far as they represented the purchase price, or the discharge of a lien as a part of the consideration or purchase price of the land (Cook v. Kelly,200 Ala. 133, 75 So. 953; Gibson v. Gibson, 200 Ala. 591,76 So. 949; Hampton v. Counts, 202 Ala. 331, 80 So. 413; McAllister v. Catchings, 210 Ala. 392, 98 So. 303; Hope of Ala. Lodge of Odd Fellows v. Chambless, 212 Ala. 444, 103 So. 54; Alabama Pub. Service Com. v. Mobile Gas Co., 213 Ala. 50, 104 So. 538).

To a full determination of the matter presented, we may observe the tendencies of evidence alleged by appellants, as to notice or knowledge of the unrecorded lease sale contract by A. B. Bealle to C. A. Brooks, are (1) the possession of the premises by complainants' mother and her custody of a domicile with them on the land; (2) the check of A. C. Brooks used in the payment of the second mortgage of $600 to Mrs. Adler; and (3) the alleged conversations with Mrs. Adler pending the renewed and extended loan of $1,000, evidenced by the first mortgage, and the additional sum of $600, thus making the indebtedness to Mrs. Adler the same as originally existed between Mrs. Adler and Eloise E. Bealle. We consider the insistence in order presented by counsel. The first insistence as to the possession of A. C. Brooks is not sustained by the evidence that Mrs. or Mr. Adler ever visited the premises after A. C. Brooks went into possession, or during his life. It is shown that Mr. Adler inspected the premises after Brooks' death and when Mrs. Brooks was applying to respondent for a first mortgage for $1,600 to "refinance the present mortgages" for that amount on the property, as agreed by Brooks with A. B. Bealle. This refinancing of the mortgages had the effect of releasing Bealle's mother from her obligations to Mrs. Adler. There is controversy as to the knowledge of Adler of said Brooks' contract that will be adverted to later.

Confining the present consideration to the possession of Mrs. Brooks, it was under a warranty deed from A. B. Bealle to her and consistent therewith. And the fact of the residence or domicile with the mother of the minor complainants raised no contradictory presumption of notice other than that shown by Mrs. Brooks' warranty deed from A. B. Bealle, and this was the notice given by her to mortgagee, Adler, when she gave the mortgage for $1,600 to "refinance" the former mortgages and improve the property. There was an approved abstract of title showing this conveyance.

The record fails to disclose how the Brooks' check for the $600 used in payment of the amount of the second mortgage reached Mrs. Adler. In the absence of more specific evidence, it is presumed to have been paid by her who was primarily liable, Mrs. Bealle, since the other evidence showed that the Adlers had no communication with Brooks before his death and did not know him. It was Mrs. Bealle's second mortgage that was thus paid to Adler, and not an obligation of Mr. Brooks. If not that of Mrs. Bealle, then the debt of her son, A. B. Bealle, who had theretofore obtained a deed to the property, subject to the said Adler mortgages. The indorsement and collection of the Brooks check by Mrs. Adler was about nine or ten months before the latter was approached by Mrs. Brooks for the "refinancing" of the mortgage indebtedness and for the new or additional loan of $600. This alone was not sufficient to provoke further inquiry than the disclosure of the warranty deed from Bealle to Mrs. Brooks. And if further inquiry was made, or the incident of the check was in fact remembered, it would have meant no more than that Brooks was acquiring title to the land from Bealle in the name of and for the benefit of his wife. This was the information or disclosure of the conveyance.

A woman, unlearned in the law, by the mere indorsement of the Brooks check, and nine months theretofore, was not required to deal with the property as that of the drawer of the check or otherwise than that of the property of Mrs. Brooks, as evidenced by her warranty deed from Bealle.

And in the last place, Mrs. Brooks and her children have failed to convince the court of the discharge of the burden of proof of actual notice given by Mrs. Brooks when she was negotiating the $600 loan of Mrs. Adler and refinancing the first mortgage. The lack of notice is specifically and positively asserted by Mr. and Mrs. Adler. And this issue of fact is in direct contradiction. The burden of the pleading was upon complainants, and the trial court held they had failed to meet such burden of proof imposed under the law and assumed by their pleadings. We are convinced the trial court was correct in this view and that the bill was properly dismissed in the court below. The ruling is in line with just and full payment for the property purchased and against the inequitable and unjust result that would defeat the purchase-money mortgages and effectuate acquisition of the property for a sum less than its real value.

It is a significant fact and in line with the ruling of the trial court that no such result was intended by Mr. Brooks when he agreed with Mr. A. B. Bealle to "execute to the party of the first part a second mortgage for the balance due the party of the first part, and make a first mortgage for $1,600 to refinance the present mortgages."

The view of the trial court, expressed by its order, renders unnecessary of consideration any estoppel that may be urged under the terms of the lease sale contract, had Adler been informed thereof, since by its terms A. C. Brooks assumed the obligation of refinancing the $1,600, or the consideration of subrogation as to the amount due and paid on purchase money, and the obligations assumed and respectively paid thereon by Mrs. Brooks.

The judgment of the circuit court, in equity, is affirmed.

Affirmed.

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