Hayes v. Southern Home Building & Loan Ass'n
124 Ala. 663
Ala.
1899
Check Treatment
SHARPE, J.

— Sо important is it to the security of titles that reliance may be placed upon the facts stated in a proper certificate of acknowledgment' to a conveyance, that the law holds the certificate conclusive to establish those facts subject to impeachment only by рroof of fraud or imposition in the -procurement of the acknowledgment or conveyance. — Grider v. Am. Freehold clc. Co., 99 Ala. 281; Shelton V. Aultman & Taylor Co., 82 Ala. 315.

Because of the probative force so accorded to the certificate as well as the usually important consequences of the conveyance itself, public policy forbids that the act оf taking and certifying the acknowledgment shall he exercised hv an officer who is financially interested in the conveyance. — Devlin on Deeds,'§476; Smith v. Clark, 100 Iowa 605; Miles v. Kelly, 40 S. W. Rep. (Tex.) 599; Amick v. Woodworth, 58 Ohio St. 86.

Such is the doctrine in respect of ordinary conveyances and the reason is more cogent for its application when the separate exаmination of the wife is to lx; taken upon the alienation of the homestead since by the statute, the examination and acknowledgment are neсessary to the operation of the conveyance and are essential's which no attestation or other form of acknowledgment can supply. Without substantial compliance with the statutory requirements in respect to the separate examination, no title passes and no rights attach by which a conveyance can he established. — Stripling v. Cooper, 80 Ala. 256; Strauss et al. v. Harrison, 79 Ala. 324; Grider v. American etc. Co., supra.

The acknowledgment in question Avas taken by a notary ‍‌​‌​‌​‌‌​​​​​‌‌‌‌‌‌​‌​​​‌‌‌​​‌​‌‌​‌​​​‌​​‌‌​​‌‌​‍Avho Avas a stockholder in the mortgage association *668and as suclx under the plan of the association he was entitled to participate in the profits arising from loans and from other sources. He had therefore a substantial interest in upholding the attempted mortgage security which disqualified him to conduct or certify the separate examination and acknowledgment of Mrs. Hayes.

As. bearing upon the effect of the officer’s incompetency we are referred to the case оf Oooper v. Hamilton etc. Building Association, 97 Tenn. 285, where it was held that such acknowledgment taken by an interested officer was not Amid but Avas voidable only upon proof of fraud, or undue advantage with rеsultant injury to the complaining grantor. If such be the rule, incompetency becomes competency to nearly the same extent as aa hеre the officer has no objectionable interest for even in the latter case equity will usually take cognizance to relieve from the cоnsequences of fraud and imposition, and from the conclusiAm character attributed by our courts to the certificate, the result would be to declаre that A'oidable AVhicli it would be most difficult to avoid.

Besides a married Avoman is without capacity to elect Avliether to avoid the transactions. ‍‌​‌​‌​‌‌​​​​​‌‌‌‌‌‌​‌​​​‌‌‌​​‌​‌‌​‌​​​‌​​‌‌​​‌‌​‍Exсept to the extent that the statute has enlarged her capacities she is civilitcr mortua as at common laAv. The statutes of this State haAre not empoAvered her to waive incompetency on the part of the officer taking the separate examination required in the alienation of a hоmestead. It is a general rule that Avitlxout statutory or judicial authority a married AA'oman cannot elect to affirm or disaffirm a transaction Avhich she Avas without legal capacity to engage in. High v. Worley, 33 Ala. 196.

Upon these considerations it must be held that the acknoAvledgment to the mortgage is void and that the mortgage itself is of no. Aralidity as a conveyance or security for the loan in question. The power of sale being only one of its incidents fails Avith the mortgage and is subject to be perpetually enjoined.

Since the facts creating the invalidity of the conveyance rest in parol, complainant may hаve relief in equity to enjoin the sale and to decree the cancellation of the mortgage as a cloud upon his title. But the power of thе court Avill only be exercised upon the condition that *669the complainant will do equity by returning any unpaid portion of ‍‌​‌​‌​‌‌​​​​​‌‌‌‌‌‌​‌​​​‌‌‌​​‌​‌‌​‌​​​‌​​‌‌​​‌‌​‍the money borrowed or its equivalеnt with interest at our legal rate. — Grider v. Am. Freehold etc. Co., supra.

It is one of the agreed facts that the contract is not usurious under the Iuav of Georgia. The bond given by complainant for the repayment of the loan is by its terms payable in that State and it recites that the loan or advance was obtained by complainant as a member of the association under its by-laAvs and the by-laws provide that all contracts with the association shall be deemed to have been made at thе home office in Atlanta, Georgia.

Under established rules a note or bond made payable at a particular place or AAdiich is expressly made with reference to the law’s of a particular State is governed in respect to its obligation as to interest by the law of the placе so stipulated as the place of performance. — Hanrick v. Andrews, 9 Port. 387; Dickenson v. Br. Bank of Mobile, 12 Ala. 54; Hunt v. Hall, 37 Ala. 702; 3 Am. & Eng. Ency. Law (1st ed.) 516, 543 and 561.

An exception to these rules- is where such stipulations are found to be a mere device to evadе the usury law's, in w’hicli case they AA’ill be held void as against public policy. No such sinister purpose appears in this contract. The association being operated for the joint bene-, fit of its members it is essential to equality and fairness as betAveen them that each member .should abide and perform thе mutual obligations imposed by its charter and by-laAvs upon all standing in similar relations. The conclusion follows that this loan was not usurious.

The same profit-sharing feature of the association in connection AA’itli other terms of the contract is conclusive to show’ that complainant is not entitled to have payments made on account of his stock, credited as payments upon the loan. The agreed facts sIioav that his ten shares of stock Avere transferred to the association only ‍‌​‌​‌​‌‌​​​​​‌‌‌‌‌‌​‌​​​‌‌‌​​‌​‌‌​‌​​​‌​​‌‌​​‌‌​‍as part security for the loan; that the rules as Avell as the terms of the transfer endorsed on the stock requirеd payments thereon to be continued, and it is further agreed that complainant is entitled to , have the AvithdraAval value of tin* stock applied in part payment of the loan. Under such conditions the relations in *670which he stands to the association as a borrower and as a-stockh older are separate and the accounts pertaining to each relation are distinct. That payments made on stock so transferred are not upоn the loan Avas expressly held in So. Building & L. Asso. v. Anniston etc. (Co., 101 Ala. 582, and the same principle was recognized in Sheldon v. Birmingham B. & L. Asso., at present term.

Having acquired jurisdiction for relief from the mortgage the court Avill if desired settle the whole controversy; and the defendаnt association having elected to treat the Avhole contract as ended, an account may be taken to ascertain the amount due upon the loan including interest and premiums according to the terms of the contract and of the agreement upon Avliich the cause was submitted. The attempted mortgage though void, as a conveyance may be looked to if necessary for the purpose of ascertaining other tеrms of the contract. ' '

The AvithdraAval value of the stock may also be ascertained and credited upon the amount found due on the loan. If cоmplainant’s credits are not thereby found sufficient to extinguish the loan' described in the attempted mortgage Avith 8 per centum per annum thereon to the time of the trial, then complainant should be required to pay the balance ‍‌​‌​‌​‌‌​​​​​‌‌‌‌‌‌​‌​​​‌‌‌​​‌​‌‌​‌​​​‌​​‌‌​​‌‌​‍of such loan and interest as a condition to relief respecting the mortgage.

The decree appealed from not being in accordance Avith this opinion it will be reversed and the cause will be remanded at the cost of the appellee.