180 So. 667 | Ala. | 1937
Lead Opinion
This litigation concerns the equities between a senior and a junior mortgagee of real estate. In particular, the junior mortgagee challenges the senior mortgage as a subsisting lien upon the ground that the same is barred by prescription. Without dispute the senior mortgage was given some 40 years before the junior mortgage, and some 45 years before any rights were asserted in this cause by the holder of such senior mortgage.
The mortgagor remained in possession until his death some 24 years after the maturity of the senior mortgage, and thereafter possession has been continuously held by his widow and heirs at law, who executed the junior mortgage.
On the other hand the senior mortgagee, in pleading and proof, asserts that the senior mortgage was promptly recorded, and stands unsatisfied on the record, that the mortgagor made numerous payments on interest and principal within the prescriptive period, and continued to make partial payments until his death; and thereafter his widow and heirs, succeeding to the equity of redemption, continued to make partial payments, especially the annual interest, until 1929, 1 year before the original junior mortgage was given.
Without going into further detail the evidence of such partial payments is satisfactory and without dispute. The parties here concur in the view that the sole question is whether this senior mortgage is still in force and effect as to the balance due.
Appellee, the junior mortgagee, relies upon the now well-settled rule that the 20-year period of prescriptions creates an absolute bar, a conclusive, not a rebuttable *666
presumption; a rule of repose fixing a definite period beyond which courts will not inquire into matters permitted to sleep for 20 years, and which judicial experience has found more of injustice than of justice in entertaining them. Snodgrass v. Snodgrass,
But the fault of the argument is in failing to note when the prescriptive period of 20 years begins to run in the various classes of cases.
The basic principle of prescription is not the mere lapse of time, but the lapse of time within which no recognition of a subsisting and continuing right or obligation appears.
As applied to mortgage liens, the rule is quite well stated in Braun v. Pettyjohn,
"It is true that, according to numerous decisions of this court, 20 years has been fixed as the period of prescription, after which mortgages upon which there had been no payment, or other acknowledgment, will be presumed to have been paid, and claims of every kind will be presumed to have been settled. McArthur v. Carrie's Adm'r, 32 Ala. [75] 76, 89 et seq., 70 Am.Dec. 529; Harrison et al. v. Heflin, Adm'r, et al., 54 Ala. [552] 553, 563; Coyle v. Wilkins et al.,
"As will be seen from an examination of the cases, this prescription is predicated on the fact that there has been no payment on, or acknowledgment of, the mortgage during that period."
The same principle is recognized in the cases above cited, and many others cited therein.
A part payment on a mortgage debt, so intended by both parties, is a direct recognition on the part of the mortgagor of existence thereof, and that his possession is held in recognition of the interest of the mortgagee in the lands. Just as a partial payment before the bar of the statute of limitations is complete renews the obligation, and starts the running of the statute anew, so a partial payment on a mortgage debt as such starts anew the prescription period as to the mortgage lien.
While it does not seem to be insisted that the recorded mortgage may remain in force as between the parties, but not as to subsequent purchasers or mortgagees, we think well to make it clear that the constructive notice afforded by the record of a mortgage (Code, §§ 6860, 6887) is effective to protect the mortgagee as long as the mortgage remains a valid security between him and the mortgagor. There is no provision for a second recordation. The notice runs to all subsequent purchasers and mortgagees. Elsberry v. Boykin,
It is the right of mortgagor and mortgagee to let a mortgage run as long as they wish. As friends and neighbors, the mortgagor may be accommodated by accepting small payments at infrequent, intervals, or the mortgagee may prefer to have a long-time investment, receiving his interest payments.
Subsequent purchasers or mortgagees cannot ignore recorded mortgages, not indorsed satisfied, merely because more than 20 years have elapsed since maturity. If so, they act at their peril.
The decree denying relief to the senior mortgagees must be reversed. The cause will be remanded, with directions to so frame the decree as to recognize and enforce their superior lien for the balance due on the mortgage debt. For as much as the land covered by this mortgage is only a small part of that covered by the junior mortgage, the junior mortgagee should be permitted, at his election, to pay off the superior lien, and have foreclosure for his entire mortgage debt, including the sum paid to remove this superior incumbrance.
Reversed and remanded.
ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.
Dissenting Opinion
I am not in accord with the result announced. This suit is not between the original grantor and first mortgagee. If so, the result announced and rule applied would be that which I understand obtains.
It was a contest between the first and second mortgagee, which introduced the latter as a third party. The facts are thus stated in the opinion, Hendley et al. v. First National Bank of Huntsville,
"In particular, the junior mortgagee challenges the senior mortgage as a subsisting lien upon the ground that the same is barred by prescription. Without dispute the senior mortgage was given some 40 years before the junior mortgage, and some 45 years before any rights were asserted in this cause by the holder of such senior mortgage.
"The mortgagor remained in possession until his death some 24 years after the maturity of the senior mortgage, and thereafter possession has been continuously held by his widow and heirs at law, who executed the junior mortgage."
The recording statute comes to us in substantial form from the Code of 1852, § 1268 et seq., to section 6853 et seq., Code.
The statute of limitation of 20 years, as to judgments from the Code of 1852, § 2475 to § 8942, and its satisfaction conclusively presumed after 20 years, Hughes v. Howell,
I think we should consider the nature of prescription. In the recent decision of Oxford v. Estes,
"Prescription, as a bar to actions at law or in equity, is a rule of repose; aims at an end of controversies touching title to property; fixes twenty years as the absolute limit beyond which courts will not inquire; applies to express trusts which have lain dormant, unrecognized, and unasserted for twenty years; no disabilities, such as infancy, prevent or suspend the running of the twenty-year period. The rule is bottomed on the doctrine that demands unasserted for so long a time, either had no foundation in justice, or have been adjusted.
"Failure of memory, loss of evidence, death of parties, the probability that the whole truth cannot be ascertained and justice done, enter into the equation as a reason for the rule. It is not a presumption merely, but a rule of law, raising an absolute bar to ancient causes of action."
The reason for this rule is stated by Mr. Justice Foster in Wilkerson v. Wilkerson,
The rule has long prevailed and been applied in this jurisdiction. McArthur v. Carrie's Adm'r,
The rule is again stated in Hendley et al. v. First Nat. Bank of Huntsville,
It will be noted that each case cited presented a controversy between the immediate parties at interest, or their privies in estate by law or by blood. The case of Braun v. Pettyjohn, supra, was for foreclosure of a mortgage on lands, recognized by mortgagors and affecting the immediate vendee.
In Snodgrass v. Snodgrass,
In the case of McArthur v. Carrie's Adm'r,
It is believed that this distinction is recognized in Cook v. Castleberry,
Such was the case in Wilkerson v. Wilkerson, supra. No rights of third parties had intervened. The reason for the rule is again stated, as follows, in the last-cited case:
"In Snodgrass v. Snodgrass,
"The rule now creates a conclusive bar, Roach v. Cox, supra [
And in Courson v. Tollison,
This is sufficient to illustrate the nature and justice of the long prevailing rules of prescription, repose and laches.
In 41 Corpus Juris p. 503, § 431, under the title of "Duration of Lien" it is declared, that "The lien of a mortgage, once attached to land, continues in force until the mortgagee has received payment or satisfaction of the debt secured, unless he previously releases it, or a merger takes place by his acquisition of the legal title to the property mortgaged, or until the debt has become barred by the statute of limitations, (citing many authorities) or the mortgagee's interest defeated by an adverse possession, well founded and continued for the necessary time."
It is well observed in the original opinion that it is the right of the mortgagor and mortgagee to let a mortgage run as long as they wish. This, however, does not apply to, or should not be taken to effect a third person, who acquired his rights under the bar of the doctrine of prescription, or under the rule of presumption of payment or settlement after 20 years. The rule announced in the original opinion is to the contrary, and there is nothing in the recordation statute to this unjust effect, or to put the important question to the hazard of parol evidence after the period of 20 years from the due date of the mortgage.
In the case of Elsberry v. Boykin,
This is not the rule of the case set out above, under the undisputed facts. This case is governed by the doctrine of prescription, or rule for the protection of the rights of innocent third parties, who may act on the bar of that salutary rule of settlement, and who would be prejudiced by an unreasonable extension of the rule of constructive notice of recorded mortgage beyond that given other liens.
The facts of the Elsberry v. Boykin Case, supra, were that the mortgage was given by B. H. Elsberry to Frank Boykin on October 16, 1867, for moneys alleged to have been loaned on November 1, 1866; that complainant, mortgagee, did not learn of the execution or existence of the mortgage until after the death of the mortgagee in August, 1869; that the note for the debt was destroyed when complainant's house was burned and the mortgage was never in the possession of Boykin, the mortgagee, and it is alleged that mortgagor continued in the possession of the lands till his death, his widow thereafter until she surrendered possession in 1871 or 1872 to A. F. Elsberry, who claimed under conveyance from mortgagor subsequent to complainant's mortgage. *676
The answer by the grantee, in the Elsberry Case, denied delivery, the fact of loan or debt, saying the mortgage when recorded was merely for purpose of delaying creditors.
The respondent pleaded the statute of limitations for 10 years and staleness of demand and demurred to the bill because of the facts that appeared on its face, which showed the instrument set up as a mortgage had never been delivered. Answer by other defendants was to the effect that execution and validity of the complainant's mortgage was denied and pleading the statute of limitations of 10 years, demurring to the bill for want of equity. The chancellor overruled the demurrer and the plea and held that the complainant was entitled to relief, citing the case of Burt v. Cassety,
"It is insisted by solicitors of respondent Elsberry that the mortgage sued on by complainant was never delivered by the mortgagor and accepted by Boykin, and is therefore no deed as against said respondent's title.
"They are sustained by some of the authorities cited. But, of course, this Court must be governed by the decisions of our own Supreme Court. It appears to the Court that if the facts set forth in the case of Burt v. Cassety,
When the facts of the Elsberry v. Boykin Case, supra, are understood, it was a family affair, evidenced by the statement of facts, and the issue was not that now before us. That case is not decisive of the question of rights of a third party under the rule of prescription and the pertinent facts before us. Goodwyn et al. v. Baldwin et al.,
It would appear that this authority is decisive of the question to the contrary result from that reached and announced on the original hearing in the case at bar.
The case of Graham v. Graham,
Thus did that decision proceed between the parties and as bound privies in estate. Graham v. Graham,
In the second appeal, it is observed:
"On a former appeal in this case (Graham v. Graham,
"A majority of the court * * * are of the opinion that the evidence fails to show that the possession of the land was held by Mrs. Graham, or by her husband for her, and that the principles of law stated by the court on the former appeal are still applicable and of controlling effect. The conclusion is that the mortgage debt and title of Mrs. Graham were presumptively extinguished by the lapse of more than 20 years after the law day, without recognition thereof by the mortgagor, and that at the time of Mrs. Graham's death in 1908 the fee-simple title was vested in Mr. Graham, her husband." Graham v. Graham,
The effect of the ruling in Shockley v. Christopher,
On the second appeal, Christopher v. Shockley,
In Gay v. Fleming,
In Ohmer v. Boyer,
Mr. Justice Somerville observed, "This claim, as we have said, is based on the sole fact that the defendants, who stand in the shoes of their testatrix, have become the equitable assignees of the mortgage security. Against the enforcement of a mortgage no period of time will avail as a bar less than 20 years, in the absence of an actual possession by the mortgagor, or those claiming under him, adverse to the mortgagee, and brought home to his knowledge. 3 Brick.Dig. p. 622, § 303. And an equitable assignee has the same period of time in which to assert his claim in a court of equity as his assignor had, unless some special circumstances of the case call his diligence into extraordinary activity, so as to charge him withlaches."
Adverting to the case of Braun v. Pettyjohn et al.,
If it is necessary to consider other or earlier cases, it is observed in Black v. Pratt Coal Coke Co.,
In Harrison v. Heflin,
In the case of Solomon v. Solomon,
In Cook, Adm'r, v. Parham Blunt,
In Spencer v. Hurd,
"Under the decisions of this court, and under the fact presented, the mortgage will be conclusively presumed to have been satisfied. Snodgrass v. Snodgrass,
"In Snodgrass v. Snodgrass, supra, it was pointed out that this prescriptive period of 20 years is rested upon the principle of repose of society, and is a matter of public policy; that antiquated demands will not be considered by the court for there must be a time beyond which human transactions will not be inquired into. It was there said: 'The consensus of opinion at the present day is that such presumption isconclusive, and the period of 20 years, without some distinct act in recognition of the trust, a complete bar.' "
In Butt et al. v. McAlpine,
We have indicated that the contrary rule prevails to that contained in the original opinion, and, at the risk of repetition, we believe it may be said that the law of Alabama for more than 60 years, as shown by the opinion of Mr. Justice Stone in the case of Goodwyn v. Baldwin,
Goodwyn v. Baldwin, supra, has been cited with approval in the following cases: Philippi v. Philippi,
The last-cited case by this court, Philippi v. Philippi,
"The rule applicable to cases of this kind has been declared by the supreme court of Alabama, in the case of Nettles v. Nettles,
"The longest period prescribed by the law of Alabama within which actions may be brought is 20 years. Code Ala. 1876, sections 3223 to 3231, inclusive. And by the provision of section 3758, the same limitations apply to suits commenced by bill in equity.
"It is well settled by the decisions of the supreme court of Alabama that, even in the absence of a statute of limitations, if 20 years are allowed to elapse from the time at which proceedings could have been instituted for the settlement of a trust without the commencement of such proceedings, and there has been no recognition or admission within that period of the trust as continuing and undischarged, a presumption of settlement would arise operating as a positive bar. Rhodes v. Turner,
"The same general rule has been laid down by this and other courts as the settled law of equity jurisprudence. Elmendorf v. Taylor, 10 Wheat. 152 [
This rule of "presumption of payment" in general is discussed and authorities collected in 1 A.L.R. 781-789, and in this court in Snodgrass v. Snodgrass,
Goodwyn v. Baldwin, supra, was necessarily a construction of the recording statute which was in force when the mortgage was recorded in May, 1844, on its effect of giving notice to subsequent purchasers. *680 The decision reads into the statute the well-established rule of law that after the lapse of 20 years from the maturity of the debt secured by the mortgage the debt is presumed to be paid. Goodwyn v. Baldwin, supra, was decided in 1877, and the judges no doubt had before them section 2153 of the Code of1876, which is identical with section 1543 of Code of 1867, andsection 1274 of Code of 1852. Since then the Legislature has readopted, without change, this section as section 1797 of theCode of 1886, section 991 of the Code of 1896, section 3373 ofthe Code of 1907, and section 6860 of the Code of 1923.
The re-enactment of a statute which has been judicially construed is an adoption of the construction, unless a contrary intent clearly appears.
"Such construction must be accepted as a part thereof," Mr. Justice Gardner said in Lindsey Lumber Export Co. v. Deas,
"We * * * feel bound by the re-enactment of the statute with that construction" observed Mr. Justice Foster in Alabama Produce Co. v. Smith,
"The re-enactment of the statute without change may be treated as a legislative approval of the departmental construction of the statute, quite as persuasive as the reenactment of a statute, which has been judicially construed." Such was the observation of Mr. Justice Bouldin in State v. Hobbie Grocery Co.,
In Bank of Columbia v. McElroy,
In Galloway Coal Co. v. Stanford,
The rule was applied by Mr. Justice Knight in Alabama, etc., Corp. v. Winters,
And the Chief Justice, in Bruce v. Sierra,
In reviewing decisions of courts in other jurisdictions, we find among other cases an opinion by Mr. Justice Taft (while a Circuit Judge) that an old mortgage, 51 years old, and more than 30 years past due, was not an encumbrance on the property, and that the general presumption of payment arising after the mortgage is 20 years past due prevents the title from being unmarketable. New York Life Ins. Co. v. Lord, 6 Cir.,
If a title is "marketable" notwithstanding such old uncanceled mortgages being of record and parties forced to consummate contracts to buy, surely purchasers can rely on the presumption of payment as was said by Mr. Justice Stone in Goodwin v. Baldwin, supra.
The rule as laid down in Goodwyn v. Baldwin, supra, works no hardship on either mortgagor or mortgagee. If a mortgage is not paid at maturity, then the mortgagee can easily record a "renewal document," as is frequently done in actual practice. If the mortgage has not been paid and no renewal document has been recorded, then should not a mortgagee be permitted to hold out to the world "a presumption that the debt has been paid?" If a mortgagee, by positive words, induces a subsequent purchaser, or mortgagee, to act to his harm, then the law estops the deceitful mortgagee from asserting the validity of the mortgage. Likewise, there should be some penalty against a mortgagee who, knowing that his conduct raises a presumption that he has been paid, takes no steps to warn subsequent purchasers. The doctrine of Goodwyn v. Baldwin, supra, gives *681 this penalty whenever the rights of purchasers have intervened, by protecting the purchaser without actual notice.
A careful reading of the cases will draw this distinction: As between mortgagor and mortgagee, 20 years will raise a rebuttable presumption of payment, although some cases say the presumption is "conclusive." However, as between mortgagee and a purchaser from the mortgagor, without actual notice of partial payments, the recording statute will not charge the subsequent purchaser with constructive notice of subsequent payments that might possibly have kept the mortgage alive.
In Spencer v. Hurd,
If there is no debt, there is no mortgage, Dewberry v. Bank of Standing Rock,
Considering, therefore, the rule coming to us from the common law, and the presumption that obtains, after the expiration of 20 years from the due date of the recorded mortgage of payment of the debt, and the rule of no debt no mortgage, third parties had the right to act on the presumptions that obtain, and, without other knowledge or notice, are protected as bona fide purchasers.
A careful consideration of the cases of Christopher v. Shockley, supra, and Goodwyn v. Baldwin, supra, will indicate, as we now propose to show, that these decisions do not in any way conflict with one another.
In the Christopher Case, the mortgage was made by Shockley in April, 1888, and recorded May, 1888 (maturity of debt not being shown by the report of the case). Wise bought from Shockley in December, 1898. The mortgage was then only 11 years old. Undoubtedly in 1898 the record charged Wise with constructive notice, being the equivalent to actual notice. At that time there was no presumption of payment, as 20 years had not elapsed. The only defense Wise could assert was "adverse possession" and this could not be proven. Such was the defense and failure, as we have shown above, which was dealt with in the opinion. The case of Goodwyn v. Baldwin, supra, did not apply to the Christopher Case. The doctrine of that case would have been applicable if Wise had bought after the mortgage was20 years past due. If 20 years had elapsed before the purchase, then Wise would take with notice of the presumption of payment, and not have been charged with notice. But, having purchased when the mortgage was only 11 years old, the fact that the foreclosure suit was brought after the mortgage was 20 years old, Wise was in the position of having only a rebuttable presumption in his favor, arising from lapse of time after the purchase. There was no presumption of payment at the time hepurchased. This is a decisive and distinct point between the two decisions.
In the Hendley Case the mortgage was made by Thomas W. Townsend in 1889. Townsend died 24 years after the date of the mortgage. In 1921, 1930, and 1931, his widow and heirs mademortgages to the Huntsville Bank. It will, therefore, be seen that, when the bank acted, the presumption of payment had come into existence by the lapse of 20 years. Under these facts, the principle of Goodwyn v. Baldwin, supra, is directly applicable to the instant case.
And may I be permitted to say again that the Christopher Case by Mr. Justice Somerville is not in conflict with the Goodwyn v. Baldwin Case, supra, by Mr. Justice Stone.
By whatever application the efficacious rules may be called under particular facts (limitations, laches, prescription, or the presumption of payment or settlement from lapse of time), it is sufficient, after the prescribed period or warranting facts, to protect an innocent third party against frauds, perjuries, and unreasonable delays in the assertion of an antagonistic claim or right. The reason for the rule of the presumption of payment, from lapse of time, is well stated by the Supreme Court of Delaware in the case of De Ford v. Green, 1894, 1 Marv. 316, 40 A. 1120, 1122, as follows: *682
"This rule is founded on the common experience of the conduct of men in relation to the transaction of business, and was intended for the security and repose of society, by discouraging suits for stale demands, and discouraging the laches and negligence of parties, in delaying to prosecute their claim for an unreasonable length of time, when they had the means and opportunity of enforcing them. This rule was also intended for the protection of the debtor, whose receipts or vouchers may perhaps be lost, or witnesses be dead or removed, or the true state of the transaction be otherwise obscured by the lapse of time. It is better for the peace and repose of society, and the ends of justice, that the presumption arising from the lapse of time should be adhered to, and not be easily rebutted, although in many cases it may be contrary to the actual truth."
Such is the decision in the case of Goodwyn v. Baldwin, supra.
We have indicated that our decisions are harmonious when rightly understood and that there is nothing to qualify or overrule.
The case of Winner, Klein Co. et al. v. First Nat. Bank of Laurel, Miss.,
That such are the facts is apparent from the averments of the original bill, which reads, in part, as follows:
"That on towit: the 14th day of March, 1921, the said W. R. Wallace and wife, Vivian Wallace, did sell and convey the said land to W. T. Wallace by deed recorded in Deed Book 37, at page 163, and in said deed recognized the existence of said mortgagedebt. (Italics supplied.)
"That on towit: the 13th day of April, 1921, the said W. T. Wallace and his wife did sell and convey said land to Winner, Klein Company, reputed in said deed to be a partnership composed of Leo Winner, S. A. Klein and Mrs. Sarah Meyer, by deed recorded in Deed Book 37, p. 298, in the Probate Office of Sumter County, Alabama.
"That the indebtedness secured by said mortgage is still due and unpaid, the interest on said debt having been regularly paid up to and including January 1st, 1926. That there is now due on said mortgage debt the principal sum of one thousand dollars, and interest thereon from, towit, the 1st day of January, 1926, to the present time, together with the expenses of foreclosure, including a reasonable attorney's and solicitor's fee herein." (Supreme Court Records, Year 1930-31, 2nd Div. 976.)
The foregoing statement of facts indicates that Mr. Justice Sayre, the writer of the opinion, was in full accord with the wholesome doctrine announced in Goodwyn v. Baldwin, supra.
At the risk of repetition may we analyze the facts in the case of Winner, Klein Co. v. First Nat. Bank, etc., supra. In that case the mortgage conveyed certain lands owned by W. R. Wallace and wife to Mr. Kirkland. Said mortgage was dated January 8, 1907, and was due and payable on December 31, 1907, the mortgage being duly filed for record. W. D. Kirkland, the mortgagee, died on June 26, 1908, devising his property to his wife, Jennie R. Kirkland, who died August 11, 1928. The complainant, First National Bank, was appointed administrator with the will annexed of the Kirkland estate. On March 14, 1921, W. R. Wallace and his wife sold and conveyed the said lands heretofore mortgaged to Kirkland to W. T. Wallace, saidconveyance recognizing the existence of the above-mentionedmortgage indebtedness. *683 It should be observed that this conveyance was before the lapse of 20 years from the date of mortgage. On April 13, 1921, W. T. Wallace sold and conveyed the said lands to Winner, Klein Co. It was averred that the indebtedness secured by said mortgage was still due and unpaid and that interest on said indebtedness was regularly paid to and including January 1, 1926, and that there was still due on the mortgage, in January, 1926, the principal and interest to the time of the filing of the bill. This was likewise before (or less than) the lapse of 20 years from the due date of the mortgage, and before the application of the rule of presumption of payment. The averments of thebill showed recognitions of the indebtedness within the 20-yearperiod. So long as the status was between the same parties or privies in estate or by blood, it was immaterial that the bill was filed more than 20 years from the due date of the mortgage.
The learned associate justice, with whom I had the pleasure of long service in trial courts and in this court, did not intend to overrule the case of Goodwyn v. Baldwin, supra, as to the effect of the rule of presumption of payment under the recording statutes. Since appellant purchased before the mortgage had become 20 years past due, the Winner, Klein Co. Case comes within the category of Christopher v. Shockley,
The case of Winner, Klein Co. et al. v. First Nat. Bank, etc., supra, cites Goodwyn v. Baldwin, supra, with approval and not with disapproval. The vital question of notice to a bonafide purchaser is not discussed in the case of Winner, Klein Co. et al. v. First Nat. Bank, etc., supra. It will be further noted that the discussion in the case arose on demurrer by the privies in estate of the original mortgagors, who took the estate within the 20-year period.
The most that can be said of Justice Sayre's opinion is that it construed the bill as setting up facts sufficient to charge appellants with notice that bound them to recognition of the indebtedness. For further illustration may we say that, if the facts in the Winner, Klein Co. Case should have been that appellants had purchased the land more than 20 years after the maturity of the debt, as bona fide purchasers, without actual notice that interest had been paid within the 20-year period, then the Winner, Klein Co. Case would be inconsistent with the case of Goodwyn v. Baldwin, supra. Such are not the recited facts as the original record will show and as we have tried to indicate.
It is generally true that no legal question is finally settled until it is settled rightly. Chief Justice Stone declared the rule of "irrebuttable presumption (praesumptions juris et de jure)" for the protection of innocent third parties without actual notice in dealing with lands. That eminent Chief Justice declared this rule in Goodwyn v. Baldwin,
That the Legislative intent by the recent act of 1927, Gen. Acts, p. 503, was not to upset approved land titles and was to adhere to the ancient rule is evident by its inspection. That act deals with an "indebtedness" and its record only. If the rule of presumption of payment had absolved or declared nonexistent an indebtedness (and therefore no mortgage), there was no field of operation for said act in a case like this.
This statute, and the ancient rule enunciated many years ago in this jurisdiction by that eminent jurist, Justice Stone, were promulgated to properly protect land titles and to prevent injustice, perjuries, and fraud relating thereto. *684
To illustrate the injustice of the rule announced in the original opinion, the following example might well be considered: The mortgage on real estate is recorded. The law leaves the mortgagor in possession until after the law date, when he is permitted to remain therein by the indulgence of the mortgagee; mortgagor remains in possession until just before the expiration of the first 20-year period, when he makes a payment to the mortgagee, who thereafter allows him to retain possession until just before the expiration of a second 20-year period; mortgagor makes another payment to mortgagee, who again permits him to retain possession until just before the expiration of a third 20-year period. The mortgagor sells or mortgages the property, being in possession of same, to an innocent third party without actual knowledge of the status of the mortgage as to the payments made thereon, said purchaser acting upon the presumption of payment within the first 20-year period. Which of the two parties is to be protected — the overindulgent mortgagee, or the innocent third party purchasing without knowledge of the facts?
The recording statute was not intended to protect such negligent mortgagee, who permitted the unreasonable extension of possession by the mortgagor, thus causing unjust discrimination as against an innocent third party who purchased without actual knowledge of the facts in the case.
In Lewis v. Owen,
At the risk of repetition we wish further to illustrate as follows: A in 1860 made a mortgage to B due 1 year after date and the same was promptly placed upon record; in 1880, 19 years after the mortgage became due, A made a payment on the mortgage debt; and in 1899, 19 years after the first payment, A makes another payment on the mortgage debt; 10 years after the last date A dies; 5 years after his death A's heirs sell the property to C who buys in good faith for value and without actual notice of the two payments made on the debt by A. In the year 1918, 57 years after the mortgage became due, 4 years after the death of A, and 19 years after the last payment made by A on the debt, B demands of C the possession of the premises and seeks foreclosure of the old or first mortgage. All duringthe life of A he was in possession of the premises and afterhis death his heirs retained possession until they sold theproperty to C, who took possession. A's heirs would acquire no greater right than A possessed and hence were bound by A's act in the premises.
The question presented in this case by the bank, the assignee of the mortgagor, is, is the latter bound by the acts of A, of which he had no actual knowledge? Otherwise stated, could A by his acts intercept the running of the prescriptive period, or the presumption of payment after the long lapse of time indicated in the rule so as to defeat C's right in the premises? These questions, we believe, are answered under the recording statutes and the constructions given by our court to which we have adverted at great length.
The purpose of the pertinent recording statute, Code, § 6887, is to protect this assignee, to protect the person who deals with the mortgaged property after the mortgage is made. The statute says that such mortgages unless recorded "are inoperative and void, as to purchasers for a valuable consideration, mortgagees, and judgment creditors without notice." It thus appears that the statute sought to protect those who dealt with the property subsequent to the execution of the mortgage; to make a permanent monument or memorial as to the status of the title to this property so that those who thereafter dealt with the property would not be called upon to resort to parol to ascertain this status. The statute did not confer any rights whatever upon the mortgagor or his heirs for so far as they are concerned the mortgage is absolutely valid and binding whether recorded or not, but not so far as theirassignees are concerned. This being true, can the mortgagor byhis act or conduct unknown to his assignee interrupt the running of the prescriptive period or presumption of payment *685 so far as this assignee is concerned? In dealing with the property did not this assignee for whose benefit this statute was enacted, in the absence of actual notice to the contrary, have the right to look to the record and the record alone to determine the status of the title and act thereon? When the record affirmatively shows that the mortgage has been due for more than 20 years, and there was nothing to show any payment on the mortgage debt or renewal thereof, or any change in the terms of the mortgage contract, and when all during this time this mortgagor and not the mortgagee was in actual possession of the property, did not this assignee have the right to seek the protection given by the doctrine of prescription or the rule of the presumption of payment? Especially is this true in view of the fact that ordinarily before the mortgage debt becomes due the mortgagor, and not the mortgagee, is entitled to possession of the mortgaged property, and the mortgagee has no right to foreclose his mortgage and destroy mortgagor's equity of redemption. After the mortgage debt becomes due themortgagee and not the mortgagor has the right to the possessionof the mortgaged property, and has the right to foreclose his mortgage and destroy mortgagor's equity of redemption. In other words, the status of the mortgagor and mortgagee before thedebt becomes due is different front their status after the debtbecomes due. Hence the justice and reason for the rule.
"Possession is nine points of the law," is a saying based upon the principle that he who is in possession of property ispresumed by the law to be its owner, and to have the right of that possession. Now when C, the purchaser, knows that if the debt were not paid when it became due, as indicated and required by the record, B and not A would be entitled to possession of that property, and when he is informed by the record that the debt has been due for more than 20 years, and when he knows from other sources that all during that time A and not B was in the actual possession of the property, and when A by his warranty deed tells him the debt has been paid, did not the mortgage become "inoperative and void" as it affected C, and this by reason of the doctrine, to which we have adverted? C did nothing to intercept the running of the efficacious period. The statute, Code, § 6887, told the mortgagee, B, that his mortgage would be "inoperative and void" as far as C, the purchaser, was concerned, unless the mortgage was recorded. When B recorded his mortgage it spoke for itself to C, and no unrecorded agreement or understanding, verbal or written, between A and B, of which C had no actual knowledge, changing the terms of this mortgage, could affect C. No act on the part of A unknown to C could affect C, who had the right to view the mortgage as the mortgage appeared on the record with all the presumptions of law incident thereto. The mortgage told C when the debt that it secured would become due. It told C that if the debt was not paid when it became due B would beentitled to the possession of the property. C had the right to rely upon this record in the absence of notice to the contrary, and to presume that A did his duty, paid the debt as he promised to do, that A held possession of the property because he had the right to this possession, having paid the debt, and, after this status existed for the period of 20 years, thispresumption became conclusive.
The fault with the holding in the Hendley Case, supra, is this: It places purchasers for a valuable consideration, mortgagees, and judgment creditors, without notice or knowledge (those protected by the statute), in the same category as mortgagors and heirs of mortgagors (those not protected by the statute). It improperly binds those protected by the statute by the acts of those not protected by the statute. It leaves it within the province of the mortgagor and mortgagee by their acts, of which the subsequent purchaser has no knowledge, to change the terms of the mortgage and its effect as it appears of record, to the detriment of the purchaser whom the statuteseeks to protect.
It has been suggested, and in truth, to the writer that the original opinion in this case refers to the fact that there is no provision in the law for a second recordation of the mortgage. This is true, but it may be that, if the mortgagee had desired to make known to those who are protected by the recording statute the fact of partial payments having been made upon the mortgage debt, he could have done so by entering upon the margin of the record of the mortgage such partial payments. Code, § 9020 et seq., place a penalty upon the mortgagee for not making such entries if requested in writing so to do. This would seem to indicate that he would have the right to make such entries whether requested so to do or not, and if he had such right *686 and such entries were authorized by the law, then those who dealt with the mortgaged property thereafter would be fastened with notice of such payments, and notice of such payments might intercept the running of the prescriptive period.
Such is the effect of the just rule to which we have adverted and that in common parlance of banking institutions is sometimes termed the "out-law doctrine" that protects the innocent or the party less guilty of negligence in the premises.
A result different from that which we have shown under the ancient authorities is to be viewed with concern. "Remove not the ancient land-marks," are the words of wisdom and justice that come whispering to us across the centuries from Holy Writ.
Addendum
The soundness of the opinion in this cause, rendered at the present term, and published in
Upon a careful reconsideration, the writer is fully convinced the original opinion is sound; is the settled law of this state; sustained by the great weight of authority in other jurisdictions; by text writers; and by reason and justice.
With this conviction, and in view of the importance of the questions involved, this supplementary opinion is written.
It is important at the outset, to have a clear-cut statement of the legal and equitable principles involved. As stated in the original opinion the cause presents the question of priority as between a senior and a junior mortgagee of real estate.
The nature and duration of the constructive notice afforded by the record of the senior mortgage, and the nature and application of the presumption of payment from the lapse of 20 years after the maturity of such mortgage, as between senior and junior mortgagee, are the questions presented.
The first proposition asserted in the former opinion is that, as between mortgagor and mortgagee, and those succeeding to their respective equities, but no other or higher equities, the presumption of payment from the lapse of 20 years is overcome, or, as sometimes stated, has never arisen, if payments of interest or part payments on the principal have been kept up within the 20-year period. The fact of such payments, that a balance remained unpaid, that the original mortgage was still in the possession of the family of the assignee of record, that no satisfaction appeared of record, are without dispute in this case. As to this first and primary proposition there is no reasonable basis for doubt. The cases quoted and cited in the former opinion, as well as a host of others, show this to be the settled law of Alabama. All men are charged with a knowledge of the law in this regard.
The second proposition of the original opinion is that the record of a mortgage is constructive notice to subsequent purchasers and mortgagees; that the law provides for no other or additional notice; that, therefore, the mortgagor can convey no greater title than he has in the property, and purchasers or junior mortgagees, charged with constructive notice of the recorded mortgage, cannot acquire a better title than the mortgagor; that the presumption of payment after 20 years is the same rebuttable presumption whether asserted by a mortgagor or one claiming under him.
The opposing view, if we understand it, is that, after 20 years from the maturity of the mortgage, the record ceases to function as constructive notice to prospective mortgagees or purchasers for value; that, although the senior mortgagee has given all the notice required by law for the protection of purchasers, mortgagees, and judgment creditors (Code, § 6887), and by payments thereon the mortgage is still a subsisting lien as against the mortgagor, the 20-year presumption of payment is conclusive in favor of a junior mortgagee without actual notice that the senior mortgage is still in force: that the mortgagor may pass to him a title he does not own; and thus the junior mortgagee becomes the senior mortgagee, despite the record. In effect the contention is that such junior mortgagee has all the protection of a bona fide purchaser or mortgagee, for value without notice, just as if the senior mortgage had never been recorded.
We deal with this contention:
First. In the light of the decisions of this court declaring the law of Alabama, the governing law, if thereby settled.
Second. In the light of authority elsewhere. Decisions of other courts, and the works of eminent text writers, are highly persuasive if our own decisions are of doubtful import, or appear to be in conflict.
Third. The rule of reason and justice.
Goodwyn v. Baldwin,
The opinion sets out the averments of the bill seeking to avoid the effect of great lapse of time; on two grounds: first, admissions by the mortgagor of the existence of the mortgage as a valid security to the time of his death; second, all the while the mortgagor was in straightened financial conditions, and a foreclosure would have resulted in his absolute ruin. The decision then proceeds: "We do not think either or both of the above excuses are sufficient to overcome *668 the presumption of settlement or payment of the debt, from the lapse of time. Much more than twenty years — in fact, over thirty — had elapsed since the last payment on the debt, before this bill was filed. The bond, recited in and secured by the mortgage, is not exhibited to the bill, nor averred to be in existence. 'That said Raoul admitted up to his death the existence of said mortgage as a valid incumbrance on the lands therein conveyed,' is a very vague averment. When, where, to whom, and how often admitted, the bill fails to show. Such averment is too indefinite to overcome the presumption of payment, even if Raoul alone was adversely interested. By a much stronger reason is it insufficient to charge his vendees, who are impliedly admitted to be purchasers for value actually paid, and who are nowhere charged to have had knowledge that Raoul 'admitted the existence of said mortgage as a valid incumbrance on said lands.' If, by the registration of the mortgage they were constructively notified of the lien and incumbrance it created, it also notified them by its date and age that the law presumed the payment of the debt it was given to secure. — See Coyle v. Wilkins, supra."
This statement of the law must be viewed in the light of the case in hand, in the light of the decision cited by the learned justice as authority, and in the light of other decisions. The entire excerpt is dealing with the sufficiency of the averment of that bill. The learned justice specially notes that over 30 years had elapsed since the last payment on the debt, before the bill was filed. He does not say what would be the decision if partial payments up to shortly before filing the bill had been clearly averred, but citing the case of Coyle v. Wilkins,
This case, opinion by Chief Justice Brickell, Justice Stone sitting, was a bill to foreclose a mortgage against personal representatives of a purchaser of the lands from a former purchaser, who, in turn, had purchased at an administrator's sale, under order of court, as the property of the mortgagor.
The statement of facts shows a part payment on the mortgage debt 17 years before the bill was filed. Said the court:
"A mortgagee would not be barred of a bill to foreclose, unless twenty years had elapsed without the payment of interest, or an admission of the existence of the mortgage debt. * * *
"The mortgage to the appellant was properly recorded, and it is not necessary, therefore, to examine the evidence which has been offered to show actual notice to those entering subsequently into possession of the premises under the mortgagor. The registration is equivalent to actual notice, and the purpose of the statutes which authorize it, is to make it operate as direct notice to all persons deriving title from the mortgagor. Having notice, they are bound by the mortgage; and the evidence fails to show any disclaimer by them of the title of the mortgage. * * *
"The only principle available to the mortgagor, is the presumption of payment of the mortgage debt, after the lapse of twenty years. — Relfe v. Relfe, supra [
Elsberry v. Boykin,
The purport of the decision is sufficiently shown in second headnote, reading: "When a mortgage has been delivered and duly recorded, the subsequent possession of the mortgagor is in subordination to the title of the mortgagee, unless asserted as adverse and hostile so openly and notoriously as to raise the implication of notice; and a junior mortgagee, with full covenants of warranty, who is let into possession, can not set up the statute of limitations, or the staleness of the demand, in defense of a bill for foreclosure by the first, except under the same circumstances which would be available to the mortgagor himself."
Christopher v. Shockley et al.,
After finding a want of notice to the mortgagee of any repudiation of her lien by the purchaser, a notice essential to an adverse possession, the opinion concludes: "The record presents no issue of either laches or estoppel. The evidence shows that the mortgage debt was kept alive by the mortgagor's recognition thereof, although more than 20 years had elapsed since its creation. Shockley v. Christopher,
This case is in effect a direct holding that the only duty of a mortgagee is to record his mortgage; that, this being done, a purchaser or junior mortgagee can acquire no greater interest than that of the mortgagor; that the presumption of payment after 20 years is available to neither, if kept alive by the payment of interest or other partial payments within the 20-year period.
Winner, Klein Co. et al. v. First Nat. Bank of Laurel, Miss.,
The bill was for foreclosure of a mortgage by the administrator of estate of a holder of the mortgage as devisee under the will of the original mortgagee. The mortgage was on record. Respondents were purchasers of the lands from a vendee of the mortgagor.
The bill disclosed the mortgage debt matured more than 22 years before the bill was filed.
The fifth, sixth and eighth grounds of demurrer were:
"5th. Said bill shows on its face that said mortgage indebtedness was due more than 20 years before filing of said bill.
"6th. Said bill shows on its face that the said Leo Winner, S. A. Klein, and Mrs. Sarah Meyer had constructive notice that the debt said mortgage was given to secure was presumed to have been paid.
"8th. For aught that appears from said bill there was nothing on the record of said mortgage in the Probate office showing the recognition of said debt since its creation."
The appeal was to review a decree overruling the demurrer.
The report of the case shows appellants relied in their brief upon Goodwyn v. Baldwin, supra, as authority for the proposition that respondents were protected by the presumption of payment.
The decision reads: "A presumption of the payment of a mortgage debt arises after the lapse of twenty years, nothing to the contrary appearing. Goodwyn v. Baldwin,
Here is a clear-cut statement of the applicable law, the point being clearly raised.
Moreover, it is a direct interpretation by this court of the holding in Goodwyn v. Baldwin, hereinabove quoted.
Justice Sayre, with that case before him, and also with a citation of Coyle v. Wilkins, supra, as well as other cases, concluded the presumption of payment referred to in the closing words of Justice Stone was the same presumption defined in Coyle v. Wilkins. Justice Sayre does not differentiate the one case from the other, although the demurrer definitely raised the point. If Justice Stone had regarded the presumption of payment an absolute bar in the Goodwyn Case, would he not have so declared in unequivocal language? Instead, he points out the vague and indefinite averments of the bill intended to avoid the prima facie presumption of payment after the lapse of 20 years, and specifically notes that no payments *670 were made on the mortgage for 30 years. In citing Coyle v. Wilkins, we think he intended to direct attention to the presumption therein defined, a rebuttable presumption, applicable to the case then in hand.
By statutes in force from our early history no acknowledgment will suspend the running of the statute of limitations save partial payments on the debt or an unconditional promise in writing. Code 1923, § 8964.
While this statute has not been applied to the equitable rule of repose, it does recognize part payments, the very thing the mortgage is intended to secure, as stronger evidence than mere declarations in recognition of the mortgage as a continuing security.
Nor do we question the wisdom of a holding that there is stronger reason for specific unequivocal averments of recognition where the bill is directed against a purchaser who has no knowledge of what has occurred between the mortgagor and mortgagee, but the facts are within the knowledge of complainant. For like reasons stronger and clearer proof of part payments may well be required where the mortgage is very old as in this case.
That the averments of the bill in the Goodwyn Case could not be strengthened by the fact that the mortgage remained unsatisfied on the record, which also disclosed a presumption of payment, is a correct holding, giving "presumption of payment" the meaning employed throughout our judicial history, viz.; absolute only in the event no recognition, such as part payments, was made within the 20-year period preceding the filing of the bill.
The cases in which the Goodwyn v. Baldwin Case has been cited disclose, so far as we have found, no citation as authority for the point now raised. On the contrary, with singular unanimity they emphasize that the presumption of payment, settlement of trusts, etc., does not obtain or is overcome, if there be part payments, or clear recognition of the trust etc., within the 20-year period.
Turning to other authority, research discloses that Hughes v. Edwards, 9 Wheat. 489, 497,
That case, arising in Kentucky, was a bill to foreclose a mortgage some 23 years over due. Respondents were purchasers from the mortgagor without actual notice and had made valuable improvements on the property.
After dealing with the 20-year rule in that state as affecting redemption from a mortgagee in possession, the opinion proceeds:
"In respect to the mortgagee, who is seeking to foreclose the equity of redemption, the general rule is, that where the mortgagor has been permitted to retain possession, the mortgage will, after [same] length of time, be presumed to have been discharged, by payment of the money, or a release, unless circumstances can be shown sufficiently strong to repel the presumption, as, payment of interest, a promise to pay, an acknowledgment by the mortgagor that the mortgage is still existing, and the like. Now, this case seems to be strictly within the terms of this rule. The two letters from the mortgagor to the female plaintiff, in 1803 and 1808, admit that the mortgage was then subsisting, that the debt was unpaid, and they contain promises to pay it, when it should be in the power of the writer. In addition to these circumstances, credits were indorsed on the bond, for payments acknowledged to have been made, which, though blank, the court below ascertained to have been made on the 15th of January 1798, the 15th of May 1803, and the 2d of August 1808. The mortgagor, then, cannot rely upon length of time, to warrant a presumption that this debt has been paid or released, the circumstances above detailed having occurred from eight to thirteen years only prior to the institution of this suit.
"But it is insisted, that, although these acknowledgments may be sufficient to deprive the mortgagor of a right to set up the presumption of payment or release, they cannot affect the other defendants, who purchased from him parts of the mortgaged premises, for a valuable consideration. The conclusive answer to this argument is, that they were purchasers, with notice of this incumbrance. It must be admitted, that it was but constructive notice; but for every purpose essential to the protection of the mortgagee against the effect of those alienations, it is equivalent to a direct notice, and such is unquestionably the design of the registration laws of Kentucky. A purchaser, with notice, can be in no better situation than the person from whom he derives his title, *671 and is bound by the same equity which would affect his rights. The mortgagor, after forfeiture, has no title at law, and none in equity, but to redeem upon the terms of paying the debt and interest. His conveyance to a purchaser with notice, passes nothing but an equity of redemption, and the latter can, no more than the mortgagor, assert that equity against the mortgagee, without paying the debt, or showing that it has been paid or released, or that there are circumstances in the case sufficient to warrant the presumption of those facts, or one of them."
See, to like effect, Cook v. Union Trust Co.,
In 2 Jones on Mortgages, 8th Ed., § 1540, the law is written: "A purchaser with actual notice of the mortgage, or constructive notice by means of a registry, can avail himself of the presumption of payment from lapse of time only when the mortgagor could avail himself of it under the same circumstances. The grantee succeeds to the estate and occupies the position of his grantor. He takes subject to the incumbrance; and his title and possession are no more adverse to the mortgagee than was the title and possession of the mortgagor. The purchaser is bound by the acts and declarations of the mortgagor in respect to the mortgage while he retains the equity of redemption or any part of it; as, for instance, the purchaser of a part of the mortgaged premises can not claim a presumption of payment of the mortgage from lapse of time when this presumption is repelled by payments of interest made by the mortgagor within twenty years, or by his admission within this time that the mortgage was then subsisting. A purchaser from the mortgagor stands in no better position than the mortgagor himself as to gaining title by possession and lapse of time, if the mortgage be recorded. The record is notice of the mortgage to a subsequent purchaser; and the mere fact that he has had actual possession under his purchase for the statute period of limitation is no bar to a foreclosure of the mortgage."
This statement of the law has run through earlier editions, which were followed by the courts. See Kaiser v. Idleman,
The same statement of the law in substance appears in 2 Jones Law of Real Property, §§ 1482, 1484.
5 Thompson on Real Property, contains an extended chapter on Recording Acts. Sections 4015, 4117, 4127, state the law in substance as the above-quoted authorities.
The text of 41 Corpus Juris, p. 557, § 514, contains the following: "Although one taking a deed or mortgage of land has no actual notice of a prior mortgage upon it, yet, if such mortgage is duly recorded at the time, he will be charged with notice of the existence and terms of the mortgage, and of the lien which it creates, and will take subject thereto, unless the mortgage has been canceled, released, or discharged on the record, or unless the mortgagee has in some way waived his rights or estopped himself to claim them, * * * the mortgagee may rest upon his rights under the recording acts; and he is under no obligation to give personal notice of his mortgage to one who purchases the premises from the mortgagor, even though such purchaser, having no actual notice of the mortgage, buys in the belief that the property is unencumbered and proceeds to erect improvements on the land."
48 Corpus Juris p. 691, § 199, defines the presumption of payment here involved thus: "The presumption of payment arising from lapse of time is one of fact, and differs essentially from the bar of the statute of limitations. This presumption is usually drawn from the evidence in support of the claim, and amounts to nothing more than a rule of evidence affecting the burden of going forward with the evidence on the issue of payment or non-payment."
And in § 200, p. 692, it is said: "The presumption prima facie obliterates the debt, and is conclusive in the absence of any evidence tending to show payment. It does not, however, create an absolute bar or conclusively extinguish the debt, and, indeed, the presumption does not arise, or is completely destroyed, where the fact of nonpayment is admitted or proved."
This overlong review of authorities has been made to demonstrate how universal is the rule that the constructive notice given *672 by the record of a mortgage is the same as actual notice of status of the mortgage as between the parties thereto, and that in the absence of some act or omission of legal duty on the part of the mortgagee misleading subsequent purchasers or mortgagees, operating on the principle of estoppel, such subsequent vendees or mortgagees take no better title or claim than was held by their vendor or mortgagor.
But it is now insisted that where the record discloses the mortgage is more than 20 years overdue, although not indorsed satisfied on the record, the presumption of payment should be held conclusive in favor of the junior mortgagee. That status has been often dealt with in the authorities above cited, or in close connection therewith.
By the great weight of authority the rule in such case is, that, while the junior mortgagee is charged with notice of the actual state of the title or lien of the senior mortgage, if, in fact, more than 20 years have elapsed without payments of interest, or other recognition, so that foreclosure is barred as against the mortgagor when the junior mortgage is taken, the senior mortgagee and mortgagor may not thereafter revive the mortgage lien by renewal in any form, so as to reinstate it against the junior mortgagee.
Thus, in 2 Jones on Mortgages § 1540, immediately following excerpt above quoted, is the following: "But when a note and mortgage are once barred, although the mortgagor may, by a subsequent part payment, promise, or acknowledgment, revive the mortgage, so far as it affects his own interest in the premises, he can not revive it as against his grantee, or any other parties who have acquired interest in the premises prior to such revivor."
Some states, like California and Arkansas, have enacted statutes requiring notice of extension or renewal to be entered on the record. These statutes proceed on the hypothesis that in the absence thereof the record of the mortgage is effective to protect the mortgagee so that no one can acquire from the mortgagor a better title than he has.
A full discussion of authorities sustaining the rule stated by Mr. Jones, and the import of these statutes is found in Kaiser v. Idleman,
In some states the lien is barred when the debt is barred. See, also, 5 Thompson Real Property § 4135.
We submit there is no logical basis for any stronger presumption in favor of one who invests in the property with constructive notice after the mortgage is 20 years overdue, than obtains in favor of an investor charged merely with constructive notice, who invests within the 20-year period, and remains unmolested, making improvements, etc., until the 20-year period has expired.
Here is a prospective investor in property on which the records show a mortgage more than 20 years overdue. He has notice of the presumption of payment, not a special presumption of payment in his favor, because he has never acquired an interest in the property; but a presumption of payment has arisen in favor of the mortgagor from whom he proposes to acquire title. The law charges him with knowledge of the rebuttable nature of such presumption. To say that in the face of such knowledge he can go ahead and invest and acquire a superior title to him who has already invested, is to write an exception into our recording statute which only the lawmakers are authorized to do; and which, we respectfully insist, is to favor one who wants to invest in property over him who has already done so, and shift to the latter the burden of taking action by foreclosure or otherwise, which the law does not require of him. *673
Our statute, Code 1923, § 9023, empowers a mortgagor, or his successor in title, judgment creditor, or junior mortgagee, to demand satisfaction of the record of a mortgage which has been paid, and imposes a penalty for noncompliance.
Why such penal statute? Because the record constitutes a cloud on the mortgagor's title.
Anyone seeing the record is charged with knowledge of this statute. Seeing the mortgagor has never caused it to be marked satisfied, suggests to a prudent man that inquiry be made. A prospective purchaser or mortgagee has but to require of the mortgagor, or other person in like position, that he cause the record to be satisfied, or furnish other satisfactory evidence that the recorded mortgage is satisfied before investing in the property. Else he takes his chances.
We are firmly convinced the rule of property in Alabama as elsewhere is that the record of a mortgage is constructive notice to everybody; that no one can acquire a better title from the mortgagor than he has; that the presumption of payment after 20 years is the same whether set up by the mortgagor or junior mortgagee; that so long as the mortgage is in fact a live security the holder is protected.
Rehearing denied.
ANDERSON, C. J., and GARDNER, BROWN, FOSTER, and KNIGHT JJ., concur.
THOMAS, J., dissents, upon grounds stated in his dissenting opinion.
