Fulgham v. Morris

BRICKELL, O. J. 1. A mortgage of chattels passes the legal title to the mortgagee, and if he assigns the mortgage debt, without an assignment of the mortgage, the legal title remains in him. In a court of equity the assignment of the debt, if not otherwise expressed, operates an assignment of the mortgage, entitling the assignee to proceed to its foreclosure. But the mortgagee, having the legal title, is an indespensable party, in whose absence the court will not proceed to a decree, for the reason that the decree would not bind the legal title, and could not, without the peril of future litigation, be performed safely.—Prout v. Hoge, 57 Ala. 28; Story’s Eq. Pl. § 118. The mortgagees not being parties, the bill was defective, and no decree of foreclosure could have been properly rendered thereon. 2. A mortgage in equity is a mere security for a debt, and if the debt is payable by installments, in the presence of such stipulations as are found in this mortgage, or in the absence of stipulations to the contrary, it is forfeited pro tanto by default in the payment of any installment as it falls due, and the mortgagee may proceed to foreclose. If before final decree, other installments become due, they should be embraced in the decree. The court may decree a sale of the entire property, or a sale of so much as will satisfy the installments due and unpaid, or a sale subject to the payment of the installments falling due in the future. If a sale of the entire property is decreed, and it is not made subject to the payment of the installments falling due in the future, the court should direct that the decree should stand as a security for the payment of future installments, and that any surplus of the proceeds of sale should be brought into court, to await further orders and decrees when the remaining installments are due and payable.—Mussina v. Bartlett, 8 Port. 277; Levert v. Redwood, 9 Port. 79 ; Walker v. Hallett, 1 Ala. 379 ; McLean v. Presley, 56 Ala. 211. The mortgagor, by paying the installments which are due, is entitled to put a stop to further proceedings.—Mussina v. Bartlett, supra; Saunders v. Frost, 5 Pick. 259. There is no power in the court, if he make such payment, to render a conditional or provisional decree of foreclosure, to take effect if there should be default in the payment of the installments falling due in the future.—Smith v. Smith, 32 Ill. 198. The decree of the chancellor is erroneous and must be reversed, and a decree will be here rendered dismissing the bill at the costs of the complainants and the defendant Fulgham 248 equally, without prejudice to the right to file a new bill, if there should be default in the payment of such of the installments as were unpaid, and falling due in the future, when the decree was rendered by the chancellor.