Pepper & Co. v. George

51 Ala. 190

Opinion

PETERS, C. J.

The suit was commenced by the appellants, to enforce their rights under a mortgage, winch is made an exhibit to the bill. The learned chancellor sets out in his decree the material facts established by the evidence. After a careful comparison of this statement with the record, I am satisfied, that it is correct, and I therefore adopt it. It is as follows : [Vide supra.]

It is a well settled principle of our law, that notice, actual or implied, to an agent, is notice to his principal. Wiley, Banks & Co. v. Knight, 27 Ala. 336; Story on Agency, § 140. And it is also equally well settled, that whatever is sufficient to put a party on the inquiry, is enough to charge him with notice. Garrett v. Lyle, 27 Ala. 586; Bradford v. Harper, 25 Ala. 337; Burns v. Taylor, 23 Ala. 255; Center v. P. & M. Bank, 22 Ala. 743; McGehee v. Gindrat, 20 Ala. 95; Brewer v. Brewer & Logan, 19 Ala. 482; Herbert v. Hanrick, 16 Ala. 581; Scroggins v. McDougald, 8 Ala. 382; Harris v. Center, 3 Stew. 233. The principles announced in the cases above quoted are not denied by the learned counsel for the appellants, but it is insisted that they do not govern the present case; because the notice here relied on, or the facts from a knowledge of which notice is to be inferred, were not made known to the agent during his agency, and before the execution of the mortgage from Reynolds to the complainants ; in other words, that a knowledge of facts sufficient to put the agent on the inquiry, accruing before the agency was created, is not enough to bind the principal. Though, at first, I felt inclined to question the soundness of such a distinction, yet this has been sanctioned by our learned predecessors to be a settled principle of our law. In Mundine v. Pitts (14 Ala. 84), it is settled, that notice to an agent or counsel employed by another person, in another business, at another time, will not be constructive notice to his principal or client employing him afterwards. Worsley v. The Earl of Scarborough, 3 Atk. 392; Warrick v. Warrick, Ib. 294; Le Neve v. Le Neve, Ib. 650; Lowther v. Carlton, 2 Ib. 242; Lucas v. Br. Bank of Darien, 2 Stew. 321; Terrell v. Br. Bank of Mobile, 12 Ala. 502; Story on Agency, § 140; 7 Greenlf. R. 195; 10 Watts’s R. 397. This principle, though it seems to have been introduced for the convenience of professional lawyers, rather than in conformity with truth, has been now too long established to be abandoned. This is hardly reconcilable with the general rule, that the principal knows what the agent knows. Wiley, Banks & Co. v. Knight, 27 Ala. 336, 346. But-it is so determined, and it is precisely in point in the case at bar. Yet its application does not affect the result in this case, as the complainants do not show themselves to be bond fide purchasers for valuable consideration, which passed at the time of the grant and conveyance of the mortgaged premises, as will be hereafter shown.

2. The claim for a distribution of the funds realized from the sale of the lands to the extent of the value of the widow’s dower cannot be sustained. The wife joined in the husband’s conveyance, but this only amounts to a relinquishment of her dower right, should she be entitled to dower, in case her statutory separate estate is less than the value of her dower and interest in her husband’s lands. A relinquishment is not a sale of the right of dower. It is a mere abandonment of the wife’s right, and estops her from setting up her claim. It simply removes an incumbrance. For this the complainants gave her nothing, and they are not entitled to have anything restored to them on this account. Rev. Code, §§ 1624, 1626, 1629, 2380.

3. It is also insisted by the appellee, George, that the appellants have no standing in this court on the errors assigned; because they have not shown themselves to be bond fide purchasers for valuable consideration, which passed at the time of the grant and sale of the mortgaged premises. Their debts were unquestionably preexisting debts. There was no new debt created at the date of the conveyance, which the mortgage was given to secure. The vendees paid nothing for the land conveyed. Our statute requires something of this kind to be done. It is in these words: “ Conveyances of unconditional estates, and mortgages, or instruments in the nature of a mortgage, of real property, to secure any debt created at the date thereof, are void as to purchasers for valuable consideration, mortgagees, and judgment creditors, having no notice thereof, unless recorded within three months from their date.” Rev. Code, § 1557. There was no debt created at the time of complainants’ mortgage, which the mortgage was given to secure. Mere indulgence in prolonging the time of payment does not create a new debt. Where the consideration is the security of a debt already due, this must be converted into a new debt created at the date of the mortgage, which the mortgage is given to secure, else the subsequent purchaser or mortgagee does not bring himself within the relief afforded by the statute. Ledbetter v. Walker, 31 Ala. 175; also, Boyd v. Beck, 29 Ala. 703; and Hanrick & Powell v. Thompson, 9 Ala. 409. If the consideration of the mortgage is partly a preexisting debt, and partly a new debt created at the date of the mortgage, the mortgagee will only be protected as to the new debt. No such new debt is shown in this case. Wells v. Thompson, 38 Ala. 125.

The judgment of the court below is, therefore, affirmed, with costs of this appeal in this court, and in the court below.