Allison v. Cody, 89 So. 238

Allison v. Cody

89 So. 238 | Ala. | 1921

The Tri-States Realty Company executed, on different dates, three mortgages on the same real property, to secure respective indebtedness maturing on different dates. The first, superior mortgage was foreclosed, and the holder of the first superior mortgage became the purchaser at the foreclosure sale, this land being afterwards sold to other parties, "and," as averred in paragraph C of the bill, "finally passed into the ownership of the Mabry Securities Company, a corporation." On April 1, 1919, Michael Cody, to whom had been assigned the third mortgage (executed by the Tri-States Realty Company to J. C. Crowson), exercised the statutory right of redemption and effectually redeemed from the Mabry Securities Company the land sold under the foreclosure of the first, superior mortgage. On February 16, 1916, Allison, the complainant (appellant), became the assignee of the second mortgage executed to J. C. Crowson by the Tri-States Realty Company on December 2, 1915.

The special prayer of Allison's bill is this:

"* * * And that it be decreed that orator is entitled to the benefit of said redemption of said land described in orator's said mortgage by Cody on equitable terms, and that a receiver be appointed to take charge of said redeemed property, and to sell the same, and that the proceeds be applied first to the reimbursement of said Cody for his outlay in effecting said redemption, and then as is equitable between all the interested parties, according to their several rights, and that the amount due to orator and to said Cody on their respective mortgages be ascertained and paid out of said proceeds of said property according to their equitable rights severally, and that said Cody be charged with the rent of said lands since he recovered the same."

The question arising on demurrer to the bill is thus stated in brief for appellant:

"Whether a third mortgagee can redeem from a sale under the first mortgage and hold exclusively for himself against the second mortgagee claiming, without laches, on equitable terms, the benefit of the redemption."

The design of the bill and the effect of its allegations is thus defined in brief for appellee:

"To state the proposition in another way, the bill is filed by a second mortgagee after foreclosure of the first mortgage and redemption by the third mortgagee and the expiration of thetime within which the second mortgagee might have redeemed to hold the third mortgagee as a trustee for the benefit of himself and the second mortgagee. There is no contention that any express trust has ever been entered into. The only trust which is hinted at is supposed to grow out of the relations above stated." (Italics supplied.)

Upon familiar principles the valid foreclosure of the first, superior mortgage effected to completely extinguish the equity of redemption resulting from the mortgage, leaving in the mortgagor, or those claiming under or through the mortgagor, only the statutory right of redemption. Jackson v. Tribble,156 Ala. 480, 489, 490, 47 So. 310; and Lehman, Durr Co. v. Shook, 69 Ala. 486, 491, 492 (among others); 10 Michie's Dig. Ala. Rep. pp. 194, 195. In the purchaser at such foreclosure sale the legal estate vested; the equity of redemption being entirely cut off and barred. Authorities supra. The statutory right to redeem exists after the foreclosure, the act which creates it; and under the amended statute that is now, as always heretofore, a privilege only, not a property right or interest. Toney v. Chenault, 204 Ala. 329, 85 So. 742. This statutory right of redemption can only be exercised by those described in the statute and in the mode defined therein, and with the effects the statutory design prescribes. Beebe v. Buxton, 99 Ala. 117, 118, 12 So. 567. The effectual, seasonable exercise by Cody of the statutory right to redeem from the subsequent vendee of the purchaser at the foreclosure sale, as a junior mortgagee, operated to invest Cody, the redemptioner under the statutory system (Code, § 5746 et seq.), with the indefeasible legal title to the lands *90 thus redeemed. Jackson v. Tribble, supra; Lehman v. Shook, supra; Francis v. Sheats, 153 Ala. 468, 476, 45 So. 241, 127 Am. St. Rep. 61; Owen v. Kilpatrick, 96 Ala. 421, 11 So. 476. Our statutory system of redemption, creating and alone defining the right, the privilege to redeem, does not confer upon one junior mortgagee the right to redeem from another junior mortgagee who has exercised the statutory right to redeem. Owen v. Kilpatrick, supra. We may repeat what was there well said, nearly 30 years ago:

"Only legislative action can put the other classes of persons mentioned in the statute upon an equal footing with judgment creditors in the matter of redeeming from a redemptioner."

Subsequent Legislatures have not seen fit to clothe one erstwhile junior incumbrancer with the right to redeem from another erstwhile junior incumbrancer, or to share in the benefit of a redemption effected by another erstwhile junior incumbrancer.

According to the special prayer the complainant would invoke the application to the redemption by Cody of equitable principles appropriate to and resultant from relations of trust and confidence like that of tenancies in common or other communities of interest in properties. No such relation of confidence or trust exists in respect of or between mortgagees claiming under mortgages securing different indebtedness, whatever the rank of their respective priorities. The opinion and decision in Rothwell v. De Wees, 2 Black, 613, 67 U.S. 309, is referable to circumstances as well as relations from which the court deduced and applied equitable principles that result from wholesome notions of fidelity to confidence and trust whereby a trustee, or one in that relation, is denied the right to selfish benefits or advantages that accrue from a breach or prostitution of duty in the premises. That this is the accepted doctrine of the Rothwell v. De Wees Case is seen by reference to the decisions interpreting it as noted in 5 Rose's Notes (Rev. Ed.) pp. 672-675. It is without bearing or application to the status established by Cody's redemption — the exercise of a statutory privilege only — from the subsequent vendee of the purchaser at the foreclosure of the first, superior mortgage. Like considerations of principle and relation discriminate Troy v. Protestant Episcopal Church, 174 Ala. 380 (sixth headnote)56 So. 982, Ann. Cas. 1914B, 815, and Gearhart v. Gearhart (Mo.) 213 S.W. 31, 6 A.L.R. 291, and elaborate annotations, from the cause under review. They, too, are without bearing here. The doctrine of the text of section 1086 of 2 Jones on Mortgages (7th Ed.) is likewise without application. The doctrine of that text is referable to redemption where foreclosure has not been accomplished, and can have no recourse where statutory redemption, after completed foreclosure, is the right (privilege) in question.

The demurrer was properly sustained.

The decree is affirmed.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.