Dixie Grain Co. v. Quinn

SOMERVILLE, J. The material grounds of demurrer to the hill of complaint, so far as it is necessary to state them, are that it contains no equity; .that it is multifarious ; that its allegations are fatally self-repugnant; and that there is a misjoinder of parties defendant. 1. If the facts stated in the bill are true — and we so take them on demurrer — the respondent Dixie Grain Company did not acquire any interest in the timber by its purchase at sheriff’s execution sale, because the defendants in execution had no interest in the timber which could thereby pass. The mortgage executed by them to the Alabama Lumber Company, having been duly recorded, was notice to the world, not only of the mortgage deed itself, but also of the power of sale therein contained, and equally of any title that may have been acquired by a purchaser at a sale made in execution of the power and in accordance with its terms. And although the deed of foreclosure was not recorded prior to the rendition of the judgment on which the sheriff’s sale Avas founded, the notice resulting from the recorded mortgage deed was sufficient to deprive subsequent judgment creditors and purchasers of the protection of the registration statute. The foreclosure purchaser’s title is derived from the mortgage as its origin and source. It is but the stipulated result of the mortgagor’s default, plainly fore^ cast by the terms of his grant; and the purchaser’s omission to record his deed does not preserve the equity of redemption in favor of those whose claims have originated subsequently to the registration of the mortgage itself, though they are specifically ignorant of an actual foreclosure. — Jones on Mortgages (6th Ed.) § 1897, pp. 851, 852; Farrar v. Payne, 73 Ill. 82; Heaton v. Prather, 84 Ill. 330. See, also, Coles v. Allen, 64 Ala. 98. 107. — 214 — 2. In this view of the case it is clear that, as equity does not lend its powers for the accomplishment of what is useless, the hill is without equity as to the Dixie Grain Company, unless the general prayer may authorize relief by way of canceling the sheriff’s deed as a cloud on complainant’s title. The special prayer is for redemption and conveyance by the redemptee to the redemptor. Relief under the general prayer by cancellation of the sheriff’s deed would be in a narrow sense inconsistent with the theory of redemption, which concedes some validity to the purchaser’s title: But the clear purpose of the bill is to relieve complainant’s land of the incubus of the sheriff’s deed. Cancellation of that deed is as germane to that purpose as is redemption from it. And allegations which show its invalidity as against complainant, coupled with the general prayer for relief, are sufficient to warn respondent of such alternative relief, and to authorize the court to grant it. — Rosenau v. Powell, 173 Ala. 123, 55 South. 789. Nor would the actual insertion of such special prayer in the alternative render the bill multifarious. — Code, § 3095. 3. And if there is this equity in the bill as against the holder of the sheriff’s deed it has the same equity against all derivative claims; for that relief must needs be very incomplete which, while striking down the parent, would yet spare its ill-begotten offspring. Unquestionably Williams’ claim is invalid as against complainant, not only because of his grantor’s complete want of title, but because of that grantor’s inability in any case to convey something which the sheriff’s deed did not even pretend to carry; for certainly it is a far cry from cutting and removing timber to operating a turpentine orchard. We conclude, therefore, that in — 215 — this aspect of the bill it contains equity as to each of the respondents. 4. The bill sufficiently shows a recurrent or continuous trespassing by Williams, productive of irreparable injury to the land, and not adequately redressible by legal remedies, in accordance with the rules stated in Kellar v. Bullington, 101 Ala. 267, 14 South. 466, Nininger v. Norwood, 72 Ala. 277, 47 Am. Rep. 412, and other cases, to support the prayer for injunctive relief against him. It is worthy of note, however, that where such relief is merely incidental to some other primary equity asserted by the bill the conditions to its granting are far less stringent. 5. While the prayer for redemption is by implication inconsistent with the allegations of the invalidity of the sheriff’s deed, we discover no repugnancy in the allegations themselves. 6. It only remains to consider whether the joinder of these respondents and the relief sought against each of them render the bill multifarious. We are quite clear in our conclusion that it does not, so far as relief by cancellation is concerned. And, although the bill is demurrable as to the Dixie Company, in so far as it seeks redemption, a demurrer on that ground cannot be properly addressed to the entire bill. 7. It is not necessary to consider other grounds of demurrer going to • the asserted right of redemption, since, whatever their intrinsic merit may be, they are-addressed to the bill as a whole, and were, on that account at least, properly overruled. The decree of the chancellor is affirmed. Affirmed. Dowdell, C. J., and McClellan and Sayre, JJ.,, concur. — 216 — ON REHEARING. The bill of complaint avers that the mortgage from G. W. Powe to the Alabama Lumber Company was duly recorded, without specifically averring the date of such record. It is insisted that this is not sufficient to show that it was recorded prior to the inception of the Dixie Grain Company’s execution title. In January, 1906, when this mortgage was executed, the registration statute (section 1005, Code 1896) required that it be recorded within 30 days as against purchasers for value or judgment creditors without notice thereof; and the averment that it was duly recorded unquestionably means that it ivas seasonably recorded within the period allowed by law. The phrase is habitually used in this sense, and examples, casually noted, will be found in the opinions in Steele v. Adams, 21 Ala. 540, and Miller v. Griffin, 102 Ala. 613, 15 South. 238, in the headnotes to Troy v. Smith, 33 Ala. 469, and Turner v. McFee, 61 Ala. 468, and in the text of 2 Devlin on Deeds (3d Ed.) p. 1306. Certainly there is no better test of meaning than that of habitual use. “Duly” means in due time or proper manner; in accordance with what is right, required, or suitable.— Citizens* Bank r. Morse, 60 Kan. 426, 57 Pac. 115: “Duly” in legal parlance, means “according to law.” Brownell v. Town of Greenwich, 114 N. Y. 518, 22 N. E. 24, 4 L. R. A. 685. See 14 Cyc. 1119 for numerous definitions. It is true that, as used in the bill of complaint, the averment in question is but a conclusion of the pleader, and therefore, it may be subject to special demurrer. But in the absence of appropriate objection — and none was made — it must be held to sufficiently show a recordation of the mortgage within the time prescribed by law. — 217 — A vigorous attack is made upon the doctrine that the record of a mortgage or deed of trust containing a power of sale is notice to subsequent purchasers of the execution of the power of sale, although the foreclosure deed is not recorded. The basis for the rule is to be found, of course, in the general principles underlying the law of notice, and their application to this particular case is neither novel nor unjust. The rule seems to have been stated and accepted as sound law by the leading text-writers on the subject. — Jones on Mortg. (6th Ed.) § 1897; 2 Devlin on Eeal Est. (3d Ed.) § 711; 24 Am. & Eng. Ency. Law, 85. Mr. Devlin says: “Where a trust deed or a mortgage with a power of sale is recorded, subsequent purchasers are compelled to inquire if any sale has been made under the power. If a sale has been made by virtue of the power, although the deed has not been recorded, a subsequent purchaser from the mortgagor does not acquire the estate. The equity of redemption is cut off by the sale.” So, also, the Supreme Court of the United States, in a case arising under the Illinois laws, has followed, without criticism and with apparent approval, the Illinois decisions on this subject. — Mansfield v. Excelsior Refining Co., 135 U. S. 326, 10 Sup. Ct. 825, 34 L. Ed. 162. Of course, this rule does not conclusively fasten upon subsequent purchasers from the mortgagor knowledge of the foreclosure of the mortgage and of a derivative title in some purchaser. It does, however, give him due and sufficient notice of these things, by which he is bound, on the assumption that reasonable inquiry of the mortgagee, or his known assignee, would elicit the facts. “Means of knowledge may be equivalent to knowledge. Whatever is sufficient to put one on his guard and call for inquiry is notice of everything to — 218 — which the inquiry would lead.” — Gamble v. B. W. Coal Co., 172 Ala. 669, 55 South. 190. And: “If the purchaser fails to make due inquiry, the presumption of notice is conclusive.” — 2 Devlin on Deeds (3d Ed.) p. 1378, citing the authorities. Appellant insists that the rule declared will work great hardship to innocent purchasers, and will embarrass the acquisition of safe titles wherever outstanding mortgages are apparent upon the records. The obvious answer is that one who in such a case does not make reasonable inquiries is not an innocent purchaser, and is entitled to no protection; and that one who does make such inquiries, in good faith and with due diligence under the circumstances, and is informed by both mortgagor and mortgagee, or their assigns, that the power of sale has not been exercised and the mortgage title remains in statu quo, and in good faith acts upon that information, is an innocent purchaser, and is entitled to protection against any unrecorded title derived from a foreclosure sale. To this hazard is the holder of such an unrecorded title always subjected if he fails to record it. If appellant has in fact conformed to these requirements, this is a matter of defense to be presented by answer to the bill, and cannot be raised by demurrer. With respect to the sufficiency of the averments of the bill to support the prayer for a permanent injunction against the respondent Williams, a re-examination of the bill shows that the injury to the freehold by cutting and boxing the timber for turpentine purposes is an already accomplished fact; and mere recurrent entries by Williams for the operation of that business, though trespasses, are not sufficient to authorize the writ of injunction, in the absence of an averment of his insolvency. The bill is therefore insufficient in this — 219 — respect, and the original opinion will be modified accordingly. However, the grounds of Williams’ demurrer that point out this defect are addressed to the entire bill and were properly overruled, in view of the exhibition of another independent equity against him, viz., the right to a cancellation of the written deed or contract alleged to have been given him by the other respondent. The application for rehearing will be overruled. Dowdell, C. J., and McClellan and Sayre, JJ., concur.