Ehrman v. Alabama Mineral Land Co.

COLEMAN, J. Only such facts will be stated as are deemed necessary for a proper understanding of the questions raised by the demurrer to the bill. The Mineral Land Company sold and conveyed by deed to Or-man A. Duke a tract of land, and took from him his three promissory notes evidencing the debt due for the purchase money, and a mortgage on the lands to secure their payment. The mortgagee, the Mineral Land Company, sold and conveyed “a one-half undivided interest in the within 'mortgage and the notes described therein,” [483] which, one-half undivided interest' the grantee released and quitclaimed to the 'appellants, R. 'Ehrman and W. H. Merritt! Ehrman and Merritt then purchased the lands from Orman A.. Duke, and assumed, as a part of the terms of the purchase, “the amount that was still due on said Duke’s several promissory notes secured by the mortgage.” Ehrman and Merritt paid a part of the debt due the Mineral Land Company under their agreement, and made default as to the balance. By virtue of a power of sale contained in the mortgage, and authority to purchase, the mortgage was foreclosed as to a one-half undivided interest in the lands, and the mortgagee became the purchaser. The abstract fails to show whether the one-half interest of the mortgage debt transferred to Ehrmm and Merritt was satisfied, or whether they still hold'a claim against Duke for any part of the debt. Under these circumstances, The Alabama Mineral Land Company filed the present bill, the purpose of which is to obtain partition of the land, a lien declared upon such portion as may be partitioned and allotted to Ehrman and Merritt, and an accounting by them for timber which lias been cut and sold off the premises. The theory upon which the bill is filed is that by the foreclosure of the mortgage upon a half undivided interest in the land, and its purchase by complainant, a co-tenancy was created ; that, by assuming to pay the balance of the mortgage debt to complainant, a vendor’s lien was created in favor of Duke, which enures to the benefit of complainant, and may be enforced for its benefit. In determining the demurrer we will ascertain and declare the legal and equitable effect of the several transactions we have stated. At the time of the purchase of the land from Duke, Ehrman and Merritt were the owners of a one-half undivided interest of the mortgage and of the debt secured by the mortgage. A mere purchase by a mortgagee, or by the transferee of a mortgagee, of the mortgaged property does not necessarily produce a merger and an extinguishment of the mortgage lien. Under-some circumstances it may be necessary to preserve the mortgage lien as a protection against intervening liens. But the rule is different where there is an assignment of the mortgage to the grantee of- a mortga [484] gor who assumed to pay the mortgage debt. Under such circumstances the merger is complete, and the-mortgage lien is extinguished. 2 Pomeroy Eq. Juris. §§ 793, 797. Before their purchase from Duke of the mortgaged land, Ehrman and Merritt owned an undivided half interest in the debt secured by the mortgage, and complainant the other half. When Ehrman and Merritt purchased the mortgaged land from Duke and assumed to pay the debt due complainant, secured by the mortgage, their own mortgage lien was extinguished, and they became the principal debtors themselves to complainant. The entire land, and every part of it, was bound for the whole debt secured by the mortgage. The-payment or extinguishment of the lien which secured that pai’t of the debt due to Ehrman and Merritt did not relieve the land, or any part of it, as security for the debt due complainant. The whole land being bound for their debt, and complainant's foreclosure having embraced only a one-half undivided interest, when the mortgage provided for a sale of the land in case of default, the question arises whether such an execution of the power was absolutely void, or merely voidable. If void, the complainants are merely mortgagees, and not tenants in common, and of course are not entitled to partition, or-an accounting. The question is not one of sale of property in lots or parcels, as distinguished■ from a sale of the whole in a body. It presents the case of a sale of an undivided half interest. We have found no case-where the question has been adjudicated. Acting upon general principles, we are of opinion that the parties might agree to such a sale, or ratify it after it was completed, and such agreement or ratification would make it a binding foreclosure. We are clearly of the opinion that the mortgagor or his grantee could avoid such an irregular foreclosure' and defective execution of the power of sale, but, unless he saw proper to take some-appropriate steps to avoid the sale, or manifest his dissent in some proper way, the sale would stand. Many reasons might be adduced in support of this conclusion, and no convincing reason to the contrary occurs to us. The-foreclosure being merely voidable, and not void until avoided, we must treat it as valid and binding on the parties. Under this view, the facts averred in the bill show that the parties are tenants in common of the land, [485] •with, the right of partition. and accounting, and that complainants are mortgagees, with a mortgage lien upon the interest of the respondents who have assumed to pay the debt secured by the mortgage. The demurrer to the bill was properly overruled. The facts are set out in the abstract, and there is a prayer for general relief. The prayer would be more accurate and consistent with the case made by the bill, if amended so as to pray for a foreclosure of the mortgage upon the lands partitioned and allotted to respondents. Affirmed.