Edwards v. Scruggs

46 So. 850, 155 Ala. 568, 1908 Ala. LEXIS 365

• Court: Supreme Court of Alabama
• Decided: April 16, 1908
• Status: Published

Opinion

DOWDELL, J.

Tbe bill in this case is not, as counsel for appellee seem to consider it as being, for tbe specific performance of a contract, but is one to declare an equitable mortgage or lien upon tbe land described, and to enforce tbe same for tbe satisfaction of the debt, which it is claimed that it was tbe intention of tbe parties to be secured. We recognize tbe well-settled and familiar principle in equity that where it is clearly shown that the intention of the parties to a transaction is to give a security for a debt or obligation upon some particular- property, but for some reason there is a failure to carry out such intention in the contract, a court of equity will in an appropriate proceeding declare an equitable mortgage or lien to exist, and by its decree enforce the same against such property in satisfaction of the debt or obligation. This principle, however, according to the weight of authority, will not operate to defeat the defense of the statute of frauds, where such defense is applicable and is pleaded. The bill in the present case shows an express promise on the part of the respondent to give a mortgage on the particular land described, and in this the intention of the parties that the land should be security for the debt is clearly shown. But the bill also shows that the promise was not in writing, but a verbal one.

In 3 Pomeroy’s Eq. Jurisprudence (Bd Ed.) § 1235, the general doctrine is thus stated: “The doctrine may be stated, in its most genera] form, that every express executory agreement in -writing (italics ours), whereby the contracting party sufficiently indicates an intention to make some particular property, real or personal, or fund, therein described or identified, a security for a debt or other obligation, or whereby the party promises to convey or assign or transfer the property as security, creates an equitable lien upon the property so indicated, which is enforceable against the property in the hands, not only of the original contractor, but. his heirs, administrators, executors, voluntary assignees, and purchasers or incumbrancers with notice. Under like circumstances, a merely verbal agreement may create a similar lien on personal property.’’ It is to be observed, according to this eminent text writer, that, where real estate or land is the subject of the intended security,' tbe contract must be in writing. In the case, of Coster’s Ex’rs v. Bank of Georgia, 24 Ala. 37, where the contract or agreement between the parties was in parol, an equitable lien was decreed as to- 'both real and personal property; but, ás was .said in Morrow v. Turney, 35 Ala. 136, in referring to that case: “But the question of the statute of frauds is not shown by the record to have been pleaded, and was not noticed by the court.”

A review of the Alabama cases along this line will disclose that where an equitable mortgage or lien has been established on a verbal promise or agreement showing an intention to give a security, either personal property was the subject of the agreement, or, if land, then in that case something was done, as, for instance, the payment of the purchase money and a letting into possession, thereby taking the case without the statute. Such are many of the cases of our own cited in brief of appellant’s counsel.

The demurrer sufficiently raises the question and the decree of the chancellor in sustaining it will be affirmed.

Affirmed.

Tyson, C. J., and Anderson and McClellan, JJ., concur.