Ebersole v. Alabama Home Building & Loan Ass'n

96 So. 245, 209 Ala. 438, 1923 Ala. LEXIS 456

• Court: Supreme Court of Alabama
• Decided: April 5, 1923
• Docket: 6 Div. 762.
• Status: Published

Opinion

GARDNER, J.

Appellant had for a number of years been engaged in improving real estate and reselling the same, financing the transactions with the appellee loan association.

In 1916 the appellee held several mortgages on various real estate properties owned by appellants, which mortgages were past due, and in July, 1916, deeds were executed by appellants to appellee in lieu of foreclosure proceedings, and tbe effect of these deeds is here sought to he avoided by the hill filed in this cause upon the theory that the mortgagee had by fraudulent misrepresentation and by taking undue advantage acquired these conveyances of the mortgagors’ equity of redemption; and complainants have sought to bring their case within the influence of this principle as x’ecognized by the following among other authorities in this state: Pearsall v. Hyde, 189 Ala. 86, 66 South. 665; Stoutz v. Rouse, 84 Ala. 309, 4 South. 170; Peagler v. Stabler, 91 Ala. 308, 9 South. 157.

Upon submission of the cause upon pleadings and proof for final decree the chancellor .reached • the conclusion that the complainants had failed in the establishment of their case and the bill was dismissed. From this decree the complainants have prosecuted this appeal.

The evidence in this record has been most carefully examined, and there'is no occasion for a detailed discussion of the facts. We will therefore briefly state the conclusions which we have reached.

At. the time of the execution of these deeds the various mortgages were past' due for a period of from 8 to 36 months, and complainants were unable to pay; they were in business and owed other debts and preferred there be no foreclosure proceeding on account of tbe publicity as well as additional cost. It very clearly appears that these deeds were therefore executed to save this publicity and unnecessary expense, and 'the mortgagors were fully protected by a stipulation in the deed that they might repurchase within a period of 2 years by paying the amount stipulated therein, which represented in fact the indebtedness with accrued interest. At this time the real estate market was greatly depressed, and we are of the opinion there was not only no marked undervaluation, but that in fact the consideration of these deeds represented the fair market value of the property at that time. Within 2 or 3 months after the execution of these deeds the complainants did in fact exercise their right to repurchase, and three pieces of property were resold to them with a 4-year period within which to pay.

O. D. Ebcrsole was a man of education, of many years’ business experience, and was thoroughly familiar with the laws of Alabama in reference to the rights of mortgagors after foreclosure proceedings. He read the deeds and fully understood them, and we are persuaded that the mortgagors in executing these conveyances understood exactly what they were doing; that no undue advantage was taken of them and no fraudulent representations made, but that the deeds as written fully and completely expressed the agreement and intention of the parties.

Counsel for appellant make reference in brief to the maxim, “Once a mortgage always a mortgage,” but, as said by this court in Peagler v. Stabler, supra;

This maxim “was never intended, and has never been construed by our courts, to prevent a mortgagee, by contract subsequent to the execution of the mortgage, from purchasing from the mortgagor the equity of redemption, or obtaining a release of the statutory right of redemption, if fairly made, and for an adequate consideration.”

A careful review of this record has persuaded us complainants have entirely failed to bring their case within the influence of the principle noted in the authorities above cited, and that the chancellor correctly ruled in dismissing the bill.

Having reached this conclusion, a consideration of the ruling as to the sufficiency of the plea needs no treatment here.

It results the decree dismissing the bill will be here affirmed,

Affirmed.

ANDERSON, O. X, and SAYRE, and MILLER, JX, concur.