Lyon v. Powell

CLOPTON, J. A conveyance, though absolute on its face, will be considered and treated, in equity, as a mortgage,' when it is intended and understood by both parties to be a security for a debt, either contemporaneously contracted or pre-existing, the debt continuing in force. The agreement may be in parol, or expressed in a separate writing. In whatever form it may exist, when such appears to be the celar intention, all the incidents of a mortgage attach to the deed, and the rights and lia [355] bilities of the parties are determined by the rules applicable to formal mortgages. The grantor possesses an equity of redemption, which he may enforce by proper proceedings ; and the grantee is entitled to all the remedies of a mortgagee. lie may bring suit on the debt; maintain an action of ejectment, and possess himself of the rents and profits; or bring his bilí to foreclose the equity of redemption, and to sell the property for the satisfaction of the debt. The bill avers that the deed, made by Powell and wife to the testator of complainant, was understood and intended to operate as a security for a debt due the testator ; and his receipt, a copy of which is made by exhibit a part of the bill, makes evident the intention of the parties. The averments of the bill show an original mid special ground of equity jurisdiction — a clear right of complainant, as administrator, to come into equity for the purpose of foreclosure, and to sell the land conveyed for the payment of the debt. The rule, as to parties, that prevails in a suit for the foreclosure of an ordinary and regular mortgage, is the same in the present case. The mortgagee and mortgagor, and privies who have acquired interests subsequently to the execution of the mortgage, are, generally, the only proper and necessary parties. There being no privity between the mortgagee and a stranger having an adverse title anterior to the mortgage, the mortgagee can 'not make him a party to the foreclosure proceeding, for the purpose of litigating his right. The court will not usurp jurisdiction to try the validity of a legal title, which is independent of the mortgage, and accrued prior to its execution. The rule, however, applies only when the adverse right or title is acquired from the parties to the mortgage, or from one of them, prior to its date, or from a stranger, whether prior or subsequently. Any person asserting a claim that affects the equity of redemption, is not only a proper, but a necessary party, if it is desired to conclude his claim. The Georgia Banking and Trust Company, the only demur-rant, claims the land conveyed by the deed, under a tax-title, having its origin in a sale of the íand for taxes made in 1876. This claim of the company accrued subsequently to the creation of the lien of complainant’s testator, and is not derived from a stranger. It is the claim of an interest in, and affects the equity of redemption. The court having assumed jurisdiction for the purpose of enforcing, the mortgage lien, can try the validity of the tax-title, and remove it as a cloud on the title, and an obstruction to the complete enforcement of the lien. In Randle v. Boyd, 73 Ala. 282, where a vendor filed a bill to enforce a vendor’s lien, and purchasers at a tax-sale, subsequent to the origin of the vendor’s lien, who were made par [356] ties, demurred for multifariousness and misjoinder, it was held they were proper parties. Without considering the rights and liability of the company, and its relation to other parties having an interest, in consequence of having become the purchaser of the entire land for taxes, being at the same time a mortgagee of an undivided interest, we hold that, on the averments of the bill, the company is a proper party. Partition of lands between tenants in common and coparceners is an acknowledged head of equity jurisdiction, and is generally said to have its origin in the inadequacy of a proceeding at law, on account of the nature or complication of the title, and the adaptation of the flexible procedure of a court of equity to the exigencies of the particular case, and its ability to compensate in money, or otherwise, for any inequalities that may occur. In the absence of legislation, it was also an established rule, that courts of equity have no original jurisdiction to decree a sale of the lands of an adult for partition, without his consent. This rule has been incorporated and repeatedly affirmed in our system of equity jurisprudence.— Wilkinson v. Stuart, 74 Ala. 198 ; Bragg v. Beers, 71 Ala. 151; Deloney v. Walker, 9 Por. 497. Appreciating the in justice and difficulties, which are frequently serious, and sometimes insurmountable, in making strict partition, several of the States have, by legislation, extended to courts of equity the power of sale; and by the Partition Act of 1868, the jurisdiction has been increased in England to direct sales. In this State, the authority to order a sale is vested by statute in the court of probate, which, on account of the nature of its proceedings and its limited powers, is incapable of adjusting difficulties and complications that may arise. A court of probate can not take cognizance of the equity of any of the parties because of improvements made, or rents received, by one of the tenants in common.— Wilkinson v. Stuart, supra. Whilst it is difficult to assign any sufficient reason, why courts of equity, following the analogies of the law, should not also direct a sale, when partition can not otherwise be fairly and equitably made, and all the equities adjusted and satisfied, a conservative regard for settled rules suggests that the jurisdiction should be conferred by statute, rather than judicially assumed. It is also well settled, that jurisdiction having once attached, a court of equity will proceed and adjust all the rights of the parties, and adjudicate all questions of litigation involved, so as to make the jurisdiction effectual for the granting of complete relief, and not subject the parties to a double suit at law. When the court assumes jurisdiction of the administration of an estate, and a sale of the lands becomes necessary for distribution, it will decree a sale, though some of the heirs are [357] adults, if the court of probate would have jurisdiction to order a sale under the same circumstances. In such case, the court will do whatever is necessary and proper to effect the complete administration and distribution of the estate.— Wilson v. Crook, 17 Ala. 59; Stewart v. Stewart, 31 Ala. 207. It seems that, on like principle, when the court has rightfully acquired jurisdiction for the enforcement of a lien on an undivided interest in land of one of several tenants in common, and a sale of the entire land is necessary to a final adjustment of all existing lights and equities — to complete relief — and will operate no detriment to any of the parties, it may exercise the jurisdiction to decree such sale. But, as this case is before us on an appeal from a decree on a demurrer to the bill, and as the necessity for a sale may not be raised on the final hearing on the merits, 'we shall refrain from expressing any definite and positive opinion, until a decision of the question becomes necessary. If, when jurisdiction has attached for the foreclosure of a mortgage on the undivided interest of a tenant in common, the court may, under proper or compulsory circumstances, make partition in the same suit, the demurrer was improperly sustained. In 1 Jones on Mortgages, § 705, it is laid down,, that a mortgagee of an undivided half of a lot of land, upon a completed foreclosure, may have partition of the land against the owner of the other half; but, until foreclosure is complete, he can not maintain a petition for partition. In support of the rule as stated, the author cites decisions of the Supreme Court of Massachusetts, resting, as it appears, on the construction, that by the statute of that State, a mortgage to two or more persons creates a joint tenancy ; and on the theory, that until foreclosure, a mortgage is a pledge, or hypothecation for the payment of a debt, or the performance of some obligation, and rather a right to acquire an estate in the land, than an actual estate. We have repeatedly held, that a mortgage creates an immediate estate in the mortgagee, with a condition, by strict performance of which it may be defeated,, and that he is entitled to present possession, in the absence of a reservation to the contrary, express or by clear implication; and joint-tenancy and its consequences have been abolished by statute. — Dunn v. Bank of Mobile, 2 Ala. 152. In Watkins v. Williams, 3 Mac. & G. 622, the Lord Chancellor said: “A partition appears to me not to be properly incident to a foreclosure or redemption suit, in such a way that the owners of the equity of redemption can be allowed to insist on it against the will of the mortgagee, who has no interest in the question. In the present case, with the consent of the mortgagee, the parties interested in the equity of redemption may [358] have a partition ; but I can not regard the omission of a direction for a partition as constituting ground for an appeal.” A mortgagee may also have partition, the mortgagor not objecting.- — Green v. Arnold, 11 R. I. 364. In such case, a court of equity may make partition, the mortgagor and mortgagee both being parties to the proceeding, and representing the estate created in the mortgagee and the equity of redemption, as one of the tenants in common; but a partition, where one of them only is a party, would not conclude the interests of the other. ¥e have said, that where a court of equity has taken jurisdiction of a case under any established head of equitable cognizance, it will settle the litigation, and do complete justice. The parties will not be remitted to a court of law, although, as to some of the matters involved, the re'medy at law is clear and adequate. — Stow v. Bozeman, 29 Ala. 397. If it be conceded that a mortgagee can not, before foreclosure, institute proceedings for the primary and original purpose of partition, when the jurisdiction attaches for foreclosure, the court may make partition, so as to allot and segregate from the interests of the other tenants in common the part to be sold for the satisfaction of the inortnage. In Fall v. Elkins, 9 W. N. 861, it was held, a mortgagee of an undivided share may file a bill for foreclosure and partition, and may move for a receiver of the rents of the undivided share of the mortgagor. — 2 Leading Cases in Equity, 811. Where the complainant’s title is clear, or admitted, partition is a matter'of right; and by a decree of foreclosure and sale, the foreclosure is completed for the purpose of making partition. The averments of the bill, as to the qucmtum of the inter-, ests of some of the tenants in common, may not be sufficiently direct and explicit; but this is not assigned as a cause of demurrer, and the defect, if any, can be cured by amendment. All the necessary parties appear to be before the conrt. Neversed and remanded.