Wiley, Banks & Co. v. Ewing

PETEES, I. A deed in trust, for security of the payment of a debt, is to be treated as a mortgage. It is, in fact, a conveyance of an estate, by way of pledge, for the security of a debt, to become void on its payment. — 4 Kent, 147; 1 Hilliard, on Mort. 1, 2, 3; Adams’ Eq. 122 (126). Where there are several mortgages on the same land, all the mortgagees are entitled to the benefit of the security. The first (or senior) mortgagee may foreclose, and sell the land for the payment of his debt; but it is also the right of the second (or junior) mortgagee to redeem from the first, or pay off his debt, and then foreclose and sell the pledge, for the payment of his own debt; and so on to the end of any number of mortgagees. — Cullum v. Ewing, 4 Ala. 452. Hence, in'a Suit for foreclosure, all the mortgagees must be made parties, in order that they may, if they choose, exercise this right of redemption. — 2 Ala. 415, 420; Story Eq. Pl. 177, et seq. This is the legal purport of the contract. And every person who buys or sells property in this State, must be presumed to know the law governing the contract by which the title passes, and that in such case he buys a defeasible title. Ignorantia juris, quod quisque tenetur scire, neminem excusat. — 2 Bl. Com. — 424 — (Cooley’s Ed.) p. 313, at bottom; Broom’s Max. 190, et seq. The law of such contract enters into it, as if it were a stipulation of the contract itself. — 4 Wall. 535, 550. The common law, as modified by our constitution and our statutes, is a part of the law of this State, so far as applicable to our institutions and government. — Barlow v. Lambert, 28 Ala. 704; Shep. Dig. p. 475, and cases there cited under title, Common Law. At common law, the rule in reference to mortgages applies. And if the senior mortgage has been foreclosed by a decree and sale, and the junior mortgagee has not been made a |>arty to the foreclosure suit, he is not barred of his right to redeem. In such case, the junior mortgagee, notwithstanding the decree and sale under the senior mortgage, can file his bill against the purchaser to redeem. This is an equitable right, that has nothing to do with our statute of redemptions. — Haines v. Beach, 3 John. Chan. R. 459; Swift, Ex'r, v. Edson, 5 Conn. 531; 2 Hilliard Mort. p. 131, § 48; Judson v. Emanuel et al., 1 Ala. 598, 601; Ormond, J., arguendo, 2 Ala. 420, supra. In the case of Haines v. Beach (supra), Beach made two mortgages on the same lot of land: one to Gardner, in December, 1804; the other to Brazier, in March, 1811. In April, 1815, Gardner, the senior mortgagee, filed his bill for foreclosure and sale ; and a decree for sale was made in September, 1815; and the premises were sold by the master, under the order of the court, in November,' 1815, and Field became the purchaser, and took the master’s deed. Brazier died. Then a bill was filed by the executors and heir and devisee of Brazier,, the junior, mortgagee, against Field, the purchaser under Gardner’s foreclosure and sale. Field put in his answer and plea, admitting the senior mortgage to Gardner, and the bill and decree and sale of the premises to him by the master for $1,508, and the deed' of the master to him for the premises, of which he was put in possession, and pleaded the same in bar of the suit against him. This defense was deemed insufficient by Chancellor Kent, who presided on the trial, and the junior mortgagee was permitted to re — 425 — deem, notwithstanding the sale by the register, and his deed to Field. This case is almost precisely parallel with the case at bar. The purchase by Ewing from Hollingsworth, the mortgagor or grantor in the deeds in trust, does not alter the case. Both the trust deeds, in this case, were recorded long before the accrual of the right'of Ewing, under his purchase from Hollingsworth. — Rev. Code, § 1558; Gimon v. Davis, 36 Ala. 592, 589; Shep. Dig. p. 700, § 24, et seq. Besides, the proofs satisfy my mind that .Ewing had sufficient actual notice of these deeds, at the time of his purchase, to put him on his guard. This was enough. — Adams Eq. 158, and notes. Hollingsworth swears that he gave Ewing actual notice of the trust deed to Wiley, Banks & Co., at the time of the sale; Ewing admits, in his first answer, that he was told by Hollingsworth, “prior to the purchase of said lands, that the deed in trust upon said lands, held by the complainants, had been fully paid off and satisfied.” Cain’s, evidence corroborates this statement. Ewing’s amended answer and Ms own deposition can not be permitted to overturn -this deliberate admission and the testimony of two witnesses, who establish its truth. The evidence overbears his denial that he had no notice. The proofs show that the trust deed to Wiley, Banks & Co. was not a conveyance to secure a debt created at the date of the conveyance. Though the note and the mortgage bear the same date, it is very evident that the debt had been created and contracted long before, as a mercantile debt for goods purchased from the complainants. It is not, then, affected by the Code. — Rev. Code, § 1557. It is also insisted, that the right of Wiley, Banks & Co. to redeem is barred by the statute of limitation, or by the staleness of their claim. I do not think so. The claim under the deed is not barred short of ten years. It is an instrument under seal. — Rev. Code, § 2900. After deducting the period of tíme covered by the supremacy of the rebellion, ten years had not elapsed before the bill was filed. — Coleman v. Holmes, 44 Ala. 124. The right to re — 426 — deem, in this case, depends upon the mortgage or trust deed, not upon the statute, and it subsists as long as the mortgage is not barred. The note was not barred, as there were partial payments made upon it as late as July, 1860, and by Hollingsworth himself in March, 1858. These payments remove the bar of the statute. — Revised Code, § 2914. The limitation of two years, which applies to redemptions under the statute, does not apply to such a case as this. The two - cases are not at all the same. Under the statute, only judgment creditors can redeem. — Rev. Code, §§ 2513, 2515; Thomason v. Scales et al., 12 Ala. 309. Here, the mortgage creditor only can redeem, because the right is dependent on the mortgage. — 4 Ala. 452, supra. Under the statute, a tender of the bid of the purchaser and ten per cent, thereon per annum, together with all lawful charges, and an offer to credit the debtor with ten per cent, on the original bid, upon some subsisting judgment against him, is required to perfect the right to redeem. This may be a very small sum, as it is admeasured by the bid of the purchaser, and not by the whole debt of the mortgagor. — Revised Code, §§ 2509, 2513, 2515. But here, the second or junior mortgagee must pay off the whole mortgage debt of the senior mortgagee, if the re- • demption is from him, with costs and charges; and if from the purchaser, then the sum paid by him on his purchase, at the register’s or master’s sale under the decree of foreclosure, and interest thereon up to the offer to redeem and tender, with his costs, and also the value of the permanent and useful repairs made by such purchaser (Ewing) on the mortgaged premises, since his purchase and prior to the offer to redeem and tender'. This is quite different from the proceedings under the statute. Tbe statutory remedy is, therefore, only cumulative, and not intended to repeal the remedy in chancery at common law. Both are intended to favor the debtor, and prevent the sacrifice of his property at much less than its real value. And the right is dependent on the contract of mortgage. An offer to redeem and tender in the legal-tender treas — 427 — ury-notes of the United States is sufficient. — Legal Tender Cases, 11 Wall. 682. [Note by Reporter. — The following application for a modification of the foregoing opinion was made by appellees’ counsel:] Nothing' is intended to be 'said about the validity or. the invalidity of the decree of the rebel court, under which Ewing purchased, nor of the irregularities of the salé or its confirmation. These are questions that need not be considered in this case. It would have been equally the right of the complainants in the cotírt below to redeem from Ewing, had the court been legal and the proceedings regular. On the facts of this bill, and the foregoing authorities, there can be no reasonable doubt that the complainants in the court below, who are the appellants in this court, have the right, in this ease, to redeem. The learned chancellor will make the proper orders in the court below to enable them to do so, and proceed, in the future disposition of this cause, in conformity with the 'principles laid down in this opinion. — 5 Johns. Ch. R. 459, 466; Abbott’s Forms, p.573. The judgment of the court below is reversed, and the cause is remanded. The said Ewing, appellee, will pay the costs of this appeal in this court and in the court below. Ewing had two distinct rights- in this case — 1st, as the purchaser and owner of the Shehan deed of trust; 2d, as the purchaser at the register’s sale. It is obvious justice, and also decided law, that to a redemption, it is necessary that redemption should be had from both rights ; and sueh redemption is accomplished by tendering the bid made at the purchase, and also the balance of the senior mortgage debt remaining after deducting the net proceeds of the bid remaining upon judgment of costs and expenses. The law is so settled in Gliddon v. Andrews, 14 Ala. 733. I do not suppose that the court intended to decide that there could — 428 — be a redemption upon tbe mere tender of tbe amount bid at tbe sale, but I fear tbe opinion is susceptible of that construction. I therefore respectfully request that the court set forth distinctly in the opinion, that in taking the account Ewing shall be allowed the amount of the net proceeds of the bid, and the balance of the mortgage debt. PETERS, J. I have carefully examined the application of the appellee, Ewing, for a modification of the opinion in this-case, but I am not able to discover any necessity for it. Ewing is the owner of the decree in favor of Mrs. Shehan, and as such he is entitled, on redemption by Wiley, Banks & Co., to have the full amount of his debt, principal and interest, paid to him, up to the offer to redeem and tender, and- his costs. He is also entitled, as purchaser at the register’s sale, to the value of all permanent and useful repairs made by him upon the premises after his purchase at the register’s sale and his possession under it, and prior to the offer to redeem and tender. 5 Johns. Ch. R. 459, 466. And Ewing should be charged with rents after the offer to. redeem and tender. — Powell v. Williams, 14 Ala. 476. And if Wiley, Banks & Co. fail to pay Ewing his debt and costs, and for value of repairs, within the time that they shall be ordered to do so by the chancellor — a reasonable time to do so being allowed— then their bill should be dismissed with costs. — 2 Abbott’s Forms, p. 573.