Espalla v. Touart

COLEMAN, J. -The facts of the case are as follows: In September, 1888, Matilda Campbell being the owner of an undivided one-sixth interest in certain real estate executed a mortgage to Joseph Espalla, Jr. This mortgage was not [138] recorded until tbe 24th of August, 1889. After tbe execution .of tbe mortgage to Joseph Espalla, Jr., and before tbe registration, slie executed a second mortgage upon tbe same property to Lienkauff & Strauss. Tbe mortgagees of tbe second mortgage bad no notice of tbe prior mortgage given to Espalla. As between Espalla and Lienkauff & Strauss, tbe interest of tbe former was tbat of a junior mortgagee with tbe right to redeem. Tbe second mortgage, tbe one made to Lienkauff <& Strauss, contained this provision: “It is further understood and agreed tbat if said property be lawfully sold for a division . . on tbe proceedings taken by any of tbe part owners thereof, tbat then, this mortgage shall attach to and become a lien only on tbe share of the said Matilda Campbell in tbe proceeds of said sale, and tbe title made to tbe purchaser shall be free and discharged from this lien.” On tbe 12th of July, 1889, tbe tenants in common filed a petition in tbe Probate Court praying tbat tbe lands be sold for partition, and a decree was rendered in tbat court on tbe 13th of August, 1889, for tbe sale of tbe land. No others than tbe tenants in common were parties in tbe Probate Court for a partition. On tbe 17th of August, 1889, Matilda Campbell made a general assignment to one Baker of all her property for tbe benefit of her creditors generally. On tbe 11th. of November, 1889, tbe lands were sold under tbe decree of tbe Probate Court on partition, and Louis Touart, tbe complainant, became tbe purchaser. Tbe purchase money having been paid, tbe sale was confirmed and titles made to Touart. On tbe 13th of September, 1889, Lienkauff & Strauss filed their bill in tbe Chancery Court of Mobile, for tbe enforcement of their mortgage, and after tbe purchase money for tbe lands sold under tbe decree of tbe Probate Court was paid over by tbe purchaser and tbe sale confirmed, they amended their bill by ¡rraying tbat their lien be enforced upon so much of tbe purchase money as was realized from the share of Matilda Campbell. Matilda Campbell and Baker, tbe assignee, were made parties defendant to tbe foreclosure bill of Lienkauff & Strauss, and at tbe close of tbe bill it was averred, “tbat Joseph Espalla, Jr., claims to have some lien or mortgage on tbe property, prior to tbat of tbe complainant, and that it is necessary tbat be should be made a party for tbe purpose of propounding bis claim.” Louis Touart was not a party to the foreclosure suit by Lienkauff & Strauss. Joseph Espalla, Jr., answered tbe bill of Lien-kauff & Strauss, setting up a prior mortgage and attached bis mortgage as an exhibit to bis bill. Upon tbe coming in [139] of this answer, complainants amended tbeir bill and averred that, although respondent’s (Espalla’s) mortgage was of prior date, he had failed to have it recorded until after the execution of their mortgage and that complainants were mortgagees without notice. Bespondent, Espalla, answered, averring personal notice of the mortgage to complainants before the execution of their mortgage. This was an issue in that proceeding. Baker, the assignee, moved the court for an order directing that the purchase money for Matilda Campbell’s share of the land be paid into the Chancery Court for distribution. The decree of the Chancery Court upon this motion shows that “by consent of all parties involved in interest, it is ordered and decreed . . that the money be paid into this court for distribution.” &c. After the evidence was taken, on final decree the Chancery Court adjudged and decreed that complainants, Lienkauff & Strauss, had a prior claim to the money, and it was decreed to the payment of their mortgage. Upon the final disposition of that case against him, Joseph Espalla, Jr., proceeded to advertise the property for sale, under a power of sale contained in his mortgage. To enjoin the foreclosure sale by Espalla and to remove the cloud upon his title created by the mortgage of Espalla, Louis Touart, the purchaser at the sale for partition made under the decree of the Probate Court, filed the present bill, setting up the facts substantially as we have stated them. The Chancery Court granted him relief, and from that decree the present appeal is taken. A recurrence to the facts will show that the mortgage of Espalla was recorded on the 24th of August, 1889, and Touart became the purchaser in November, 1889. He was, therefore, chargeable with legal notice of the existence of the Espalla mortgage at the time of his purchase and payment of the purchase money. The rule is that “the right of an incumbrancer can not be affected by a sale of lands in partition. If the lands are sold the purchaser will take the premises cum onere, subject to the lien upon the undivided share.” — Knapp on the Law of Partition, p. 266; Ereeman on Cotenancy, § 479; 1 Jones on Mortgages, § 475. Code, § 3247, makes provision that, if the lands are partitioned, the “lien on an undivided interest is thenceforth a charge only on the share assigned to such party.” There is no statutory provision to the effect that when the lands are sold for distribution such lien shall be a charge upon the proceeds of the share or interest of the incumbrancer. We do not think it necessary to determine whether the [140] sale for partition, under tbe decree of tbe Probate Court, should stand, in a court of equity, as a legal foreclosure of tbe mortgage to Lienkauff & Strauss, wbicb cut off all tbe equities of Espalla, except tbe statutory right of redemption ; as, according to tbe view we take of tbe case, Espalla is concluded upon other grounds. A mortgagee or alienee may ratify a sale made of encumbered property and sue for tbe purchase money, and we see no reason why be may not elect to ratify a sale of lands for partitions. — Colton v. Smith, 22 Amer. Dec., 376, 11 Pick. 311. Espalla was a party to tbe Chancery Court suit for tbe foreclosure of tbe Lienkauff & Strauss mortgage. Tbe decretal order of tbe court which ordered tbe purchase money to be paid into court for distribution in that suit was made with tbe consent of all parties in interest. It may be possible, ■ that if Espalla bad preferred, be might have relied upon bis mortgage security for whatever it was worth, and bad himself dimissed as a party to that suit out of court. By voluntarily remaining as a party to that suit and setting up bis claim to tbe purchase money, and contesting tbe claim of Lienkauff & Strauss, upon tbe grounds that bis mortgage lien was superior to that of Lienkauff & Strauss, be must be-held to have elected to ratify tbe sale of tbe land, and as 'having proceeded for tbe purchase money, in lieu of tbe land. After that contest was determined against him, and tbe purchase money decreed to Lienkauff & Strauss, be can not now proceed under bis mortgage. If tbe Chancery Court, in tbe contest for tbe purchase money, bad decided that the Espalla mortgage was superior to that of Lienkauff & Strauss, and decreed tbe purchase money to him, there could be no plausable pretext for bis resorting to a sale of tbe same land a second time under tbe power contained in bis mortgage. Tbe legal effect of tbe ratification is tbe same whether be was successful or unsuccessful in that contest. We find no error in tbe record, and tbe case is affirmed. Affirmed.