Bank of Moundville v. Walsh

112 So. 438, 216 Ala. 116, 1927 Ala. LEXIS 47
CourtSupreme Court of Alabama
DecidedMarch 24, 1927
Docket2 Div. 910.
StatusPublished
Cited by11 cases

This text of 112 So. 438 (Bank of Moundville v. Walsh) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Moundville v. Walsh, 112 So. 438, 216 Ala. 116, 1927 Ala. LEXIS 47 (Ala. 1927).

Opinion

THOMAS, J.

The rules for giving or refusing affirmative instruction requested need not be repeated. Tbe same are stated and authorities collected in McMillan v. Aiken, 205 Ala. 35, 40, 88 So. 135; Jones v. Bell, *118 201 Ala. 336, 77 So. 998; McCormack Harvesting Mach. Co. v. Lowe, 151 Ala. 313, 44 So. 47.

The action was for rents hy a purchaser of land at a mortgage foreclosure; the same falling due after the foreclosure and transferred or assigned before that event. The defendant is not a tenant, but- a third person purchasing the rent notes, and the basis of the suit is for money received and which it is alleged ex requo et bono belongs to the plaintiff. Christie v. Durden, 205 Ala. 571, 88 So. 667; Rushton v. Davis, 127 Ala. 279, 28 So. 476.

The mortgage to Kelly by Owens, Shorter, White, and Bell, matured and was unpaid on March 10, 1915. The mortgagee died (March 8, 1923), and his personal representative, Walsh, on March 27, thereafter, came into possession of that mortgage as the personal representative of Kelly, and it was foreclosed; that date being adverted to in the argument of counsel as April 28, 1924.

Plaintiff offered in evidence the foreclosure deed effective as of date of April 28, 1924, which was excluded by the court on defendant’s objection. The evidence otherwise showed that the land described in the mortgage was sold under the power contained in the mortgage; that plaintiff (appellee) was the purchaser prior to the date the said deed was executed; that after said foreclosure, in May of said year, the several tenants were given notice of the foreclosure, and would be expected to pay rent to the purchaser; and that like notice was given to the defendant as the assignee of said rent notes. The evidence was to the effect that in the fall of the same year defendant bank collected on rent notes, maturing in October, 1924, $67.50 from Amos and $145 of Owens on said lands as rent for the year 1924, and the tenant Tooson testified he rented a part of the land from Owens for $110, and paid that sum to the Bank of Moundville. The officials of the -bank claimed to have purchased the notes from the mortgagors before the date of foreclosure.

In Wootten v. Vaughn, 202 Ala. 684, 81 So. 660, the observation is made:

“Rent is an incident of the reversion, and if land is conveyed before the rent falls due without a reservation, the party who owns it at the time is entitled to it, but rent may be reserved from the reversion by the owner if he assigns the rent note before sale of the land, either by his own conveyances or under legal proceeding, whereby the rent is severed, and-the purchaser does not acquire it.”

The decision in Hughes & Tidwell Supply Co. v. Carr, 203 Ala. 469, 83 So. 472, was the result of a bill for foreclosure and accounting, and the general observation is made that, after default of the mortgage, the mortgagor becomes a tenant, at the will of the mortgagee, who, by active assertion of his right, may have possession and rents and profits from the land.

The general rules obtaining in this jurisdiction as to leases on mortgaged lands are according to its facts (1) where the mortgage is subject to the lease; and (2) where the lease is subject to the mortgage. In the first instance (where the mortgage is subject to the léase) in this jurisdiction, where the mortgage gives the mortgagee a defeasible legal estate, it operates as a transfer of the reversion to the mortgagee (as the transferee of that reversion), who is entitled after law day, default, or forfeiture, to receive rent, income, and profits from the time when by proper entry on the land, by notice (as required by law), or proceedings to the tenant, the intention to claim it is specifically manifested. Jackson v. Farley, 212 Ala. 594, 103 So. 882; Gillespie v. Bartlett, 211 Ala. 560. 100 So. 858; Mansony v. Bank of United States, 4 Ala. 735; Coker v. Pearsall, 6 Ala. 542; Johnston v. Riddle, 70 Ala. 219; Coffey v. Hunt, 75 Ala. 236; English v. Key, 39 Ala. 113; Otis v. McMillan, 70 Ala. 46. See McMillan v. Otis, 74 Ala. 560, rule not applied fo'r by terms of the mortgage, the mortgagee not entitled to 'possession; Smith v. Taylor, 9 Ala. 633; Branch Bank v. Fry, 23 Ala. 770; Marx v. Marx, 51 Ala. 222; American Freehold Land Mortg. Co. v. Turner, 95 Ala. 272, 11 So. 211 (may be suit for use and occupation) the rule not applicable where the mortgage implies the right of possession in the mortgagor until default.

In the case where the lease is subject to the mortgage, the stated rule in this jurisdiction is that “a tenant is not liable, to a mortgagee out of possession, for rent accruing under a lease made subject to the mortgage by a mortgagor in possession, though the mortgage operates as a grant of legal title”; there being no privity of estate between the mortgagee and the tenant. The leading cases are Comer v. Sheehan, 74 Ala. 452, 457, and Drakford v. Turk, 75 Ala. 339. In the former, the opinion was by Mr. Justice Somerville and the facts may be concisely stated as an action to recover moneys alleged as due plaintiff for rent of real property, based on the fact that (a) he was the mortgagee in the mortgage conveying the premises and (b) that he was the purchaser, under power contained in the mortgage, at his own foreclosure sale. It is recited facts of the opinion that, after execution of the mortgage, the mortgagor leased the premises to defendants, payment made by arrangement of parties for the payment of rent on indebtedness of mortgagor; that, subsequent to foreclosure sale and his purchase of the premises, the plaintiff gave notice to the defendants of the fact of'purchase and demand for the rents or sums equal thereto. It is further recited and held that, as no demand had been made by the plaintiff in the capacity of mortgagee there could be no recovery, saying;

*119 “The plaintiff bases Ms right of recovery, as tve have said, both upon the fact of being mortgagee and purchaser, at Ms own sale, of the equity of redemption. The defense of the tenant is based on the theory, that the plaintiff is not entitled to the rents as mortgagee, because he has never demanded them; nor as purchaser, because there is no privity of contract between them as landlord and tenant, and, if liable at all, that he is liable only for mesne profits, or use and occupation from the time of notice given, which was on the 27th day of November, 1883. The rights of the mortgagor in the mortgaged premises are well settled. He is regarded as owner of the property, as against all persons except the mortgagee and those claiming under Mm. Allen v. Kellam, 69 Ala. 442. He has the power of conveying or leasing the premises, subject to the incumbrance, and is entitled to the rents and profits, until they are intercepted by some active assertion of claim to them by the mortgagee, made after law day of the mortgage, either by giving notice to the tenants in possession, or by filing his bill in a court of equity for the purpose of foreclosure. Johnston v. Riddle, 70 Ala. 219; Scott v. Ware, 64 Ala. 174; 1 Jones Mortg. § 670; Taylor’s Land. & Ten. §§ 118, 119. There is no evidence of any demand being made by the plaintiff for the rents, and it cannot be contended that there can be any recovery from the tenant by the plaintiff, in the capacity of mortgagee, without such demand.”

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Bluebook (online)
112 So. 438, 216 Ala. 116, 1927 Ala. LEXIS 47, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-moundville-v-walsh-ala-1927.