O'Connor v. McHugh

CLOPTON, J. This appeal • is taken from an order of the City Court dissolving an injunction sued out by appellant, to restrain the defendants from prosecuting an action of ejectment against John O’Connor, the husband of complainant, to recover the land described in the bill. The facts on which the right to the injunction is based, as averred in the bill, are, that her husband mortgaged the land to Mary Murray, as security for a note for $2,528.90; who, in October, 1884, delivered the mortgage and the evidence of indebtedness to complainant, saying she wished her, complain ant, to have the land, adding, “And I now give you the mortgage debt.” She also stated, that she had made a will leaving the bulk of her property to defendants, telling complainant to keep the mortgage, and consider the land as her own property. The bill avers that the complainant has held the mortgage. debt ever since. After the death of Mary Murray, Michael McHugh, who is executor of her will, advertised the land for sale, and sold the same under the power of sale contained in the mortgage; at which sale James McHugh became the purchaser, and suit was instituted against the mortgagor to recover possession of the land. Mary Murray was aunt of complainant and defendants, who are brothers and sister. The -land was originally purchased by John O’Oonnor, the mortgagor, from J. C. Gibson, who conveyed to him. The answers deny all the material allegations of the bill, especially that complainant has had possession of, or has any right to the note whatever, and aver that the same has been continuously in" the 'possossion of Michael McHugh. Assuming the truth of the allegations of the bill, having no regard to the denials of the answer, what equity arises in [533] favor of complainant? A transfer of a note by delivery, secured by a mortgage of lands, will, in a court of equity, be deemed a transfer or assignment of the mortgage also, and effect will be given to it according to the intention of the parties. But, unless the mortgage is assigned with suitable words of conveyance, either on a separate paper, or indorsed on the mortgage, it does not operate to pass the legal estate in the lands. — Dacus v. Streety, 59 Ala. 183; Welsh v. Phillips, 54 Ala. 309. It is apparent from the bill that both note and mortgage were transferred by delivery merely. This entitled complainant to foreclose the mortgage for her benefit, either in equity, or under the power of sale contained therein; but she acquired no estate in the land. The legal title l’emained in the mortgagee, clothed with a trust for the benefit of complainant. — Prout v. Hoge, 57 Ala. 28. Complainant obtained thereby the beneficial interest in the note, and an equity to the mortgage as an incident. Mrs. Murray could not have given complainant the land, - had she attempted to do so, by a regular conveyance; all she could have done, would have been to assign to complainant her defeasible estate as mortgagee, with the right to enforce the payment of the debt by a foreclosure. If the executor sold the land under the power of sale, in violation of her rights, and to her prejudice, it may be that she has an equity to have the sale set aside, and the mortgage foreclosed in her interest, notice of her claim having been given at the time of the sale. A recovery of the land from her husband by the executor, or by the purchaser at the mortgage sale, can not prejudice her claim as transferree of the note and mortgage, nor impair her rights. They are the same, whether the land is in possession of the mortgagor, or of the defendant. Were the action of ejectment enjoined, this would not determine the real controversy between the 'parties, which relates solely to the ownership of the note and mortgage. If the facts be as averred in the bill, and the executor undertook to sell the land under the power in the mortgage, against the wish, and in disregard of the rights of complainant, her proper remedy was to enjoin the sale; but, having suffered it to be made, and having no title to the land, she can not enjoin the purchaser from prosecuting an action to recover possession from the mortgagor. She may elect to claim and take the proceeds of the sale, for the recovery of which she has a full and adequate remedy at law, or proceed in equity to have the sale annulled. Affirmed.