Baker, Lyons & Co. v. Eliasberg & Bros. Mercantile Co.
Baker, Lyons & Co. v. Eliasberg & Bros. Mercantile Co.
Opinion of the Court
The bill was filed in the circuit court in equity on October 30, 1916, for the redemption of certain real estate sold under the power of a mortgage. The mortgage in question was executed by J. H. Andrews and wife on October 30,1908, to secure an indebtedness due the Monroe County Bank; and on January 4, 1912, the same was duly transferred by said bank to Baker, Lyons & Co. After the giving of this mortgage, and prior to the 13th day of May, 1914, the mortgagor husband died intestate, leaving as bis only heirs at law four children, one of whom was G. W. Andrews. On the 13th day of May, 1914, said G. W. Andrews and his wife, to secure an indebtedness owing to Eliasberg & Bros. Mercantile Company, a corporation, gave that concern a mortgage on tbe undivided one-fourth interest iu said lands vesting in him by descent upon the father’s death. On the 31st day of October, 1914, which was after default, said transferees foreclosed said senior mortgage by sale pursuant to tbe terms thereof, and at such sale became the purchasers of the lands so conveyed, and received an auctioneer’s deed thereto. Within two years after this foreclosure, said Eliasberg corporation, as a junior mortgagee of the undivided one-fourth interest in said lands, conveyed it by G. W. Andrews, served upon the purchasers at the foreclosure sale a written demand for a statement in writing of the debt, together with all lawful charges claimed by them as purchasers, as provided by section 5748 of the Code of 1907, as that section was amended by the Acts of 1911, p. 391. The purchasers failing to comply with such demand, the complainant,, after the expiration of ten days, filed its bill to enforce its rights under the statute. Respondents demurred on the ground that there was “no equity in the bill” and their demurrer was overruled. Complainant’s demurrer was sustained to respondent’s plea, which plea was as follows:
“The act of the Legislature of 1915, page 598, does not confer upon the circuit court jurisdiction to enforce a statutory right of redemption where land is sold under power contained in the mortgage; that said statutory right of redemption is not a ‘matter of equity.’ ” .
The cause was then .submitted for final decree upon the pleadings and an agreed statement of facts, which was, in short, as we have heretofore recited; and the circuit court found that complainant was entitled to ascertainment of the amount due upon the senior mortgage, and to redemption. Complainant having complied with the decree as to redemption by it, a deed was executed to it by the register of the court, and on report thereof it was confirmed by the court.
Pretermitting for the moment consideration of the ruling of the trial court sustaining demurrer to complainant’s plea to the jurisdiction of the circuit court to proceed in equity to a final determination of said cause, we will determine whether or not the Eliasberg corporation, as junior mortgagee, was entitled to redeem under the statute. Code, § 5746 et seq.
“The right was made assignable by the Code of 1907, but only by the mortgagor or owner thereof. It is not yet made subject to sale under execution. It still retains its character of a personal privilege to the mortgagor or owner, or to others mentioned in the statute. The statute does not authorize this right or privilege to be assigned by any one except the debtor; while it confers the right on others specified, it does not authorize such others to assign the *592 right, as it does the debtor.” Leith v. Galloway Coal Co., 189 Ala. 204, 206, 66 South. 149.
Appellants rely largely upon the Leith Case as- an authority that would deny the right of redemption sought by complainant. The question there for decision was whether or not the mortgagor’s statutory right of redemption passed to the purchaser from the trustee of the bankrupt court, “where the equity of redemption had been cut off by a foreclosure, before the mortgagor was adjudicated a bankrupt.” Therein lies the distinction between the facts of the instant case and the facts dealt with by Mr. Justice Mayfield in Leith’s Case. That decision was not an ascertainment and determination by this court of the various classes to whom the Legislature had granted the privilege or right of redemption. It is therein specifically stated that the purpose of the statute is “primarily for the benefit of the debtor, and secondarily fbr the benefit of his creditors and of others mentioned in the statute, by affording him first, and the others mentioned next, the advantage of any increase in the value of the lands during the two years next, after the sale of the property.” That decision does not attempt to define the “others mentioned in the statute,” intended to be included in the several classes to whom the right of redemption is accorded. As thus understood, the Leith Case, supra, is seen not to be in conflict with the decision here made.
Chief Justice Stone, dissenting in Powers v. Andrews, 84 Ala. 289, 4 South. 263, where section 1879 of the Code of 1886 was construed, expressed the view that this statute should be construed to be remedial. He said:
“I prefer to hold that the incident follows the principal, the ownership, whithersoever it may go; and that whoever owns the equity of redemption, or title, as the case may be, at the time of foreclosure or sale, has the statutory right to redeem, as an incident of that ownership.”
The statute there construed gave the right of redemption only to the “debtor” or to “his vendee.” Thereafter, by act approved February 27, 1889 (Acts, p. 764), said section was amended, as shown by the Code of 1896, by extending the right to the debtor, “his vendee, junior mortgagee, or assignee of the equity of redemption.”
The statute was again amended, as rewritten in the Code of 1907 (section 5746), by the extension of the class who may redeem to include the “wife, widow, child, heir at law, devisee, or his vendee or assignee.” These amendments of this statute are in harmony with the view expressed by Judge Stone, and with the general authorities on the question —that he who may redeem must have an interest derived mediately or immediately from, or through, or in the right of the mortgagor, so as to constitute him the owner of a part of the mortgagor’s original equity. 2 Jones on Mortg. § 1055; 11 Am. & Eng. Ency. Law, 214.
In Rothschild v. Bay City Lumber Co., 139 Ala. 571, 36 South. 785, the general rule is stated to be that:
“Any one who has an interest in mortgaged lands, derived through the right of the mortgagor, and subject to foreclosure, may redeem, though such interest extend only to a part of the equity which originally resided in the mortgagor.”
And in Butts v. Broughton, 72 Ala. 294, 298, Mr. Justice Somerville said, of the right:
“Any one who owns the mortgagor’s equity of redemption, or any subsisting interest in it, by *593 privity of title with him, whether by purchase, inheritance, or otherwise [may redeem].”
This principle would embrace not only the heirs of the mortgagor, but also his widow who had joined with him in the mortgage, so as to have released her dower. Rapier v. Gulf City Paper Co., 64 Ala. 330, 340; Howser v. Cruikshank, 122 Ala. 256, 264, 25 South. 206, 82 Am. St. Rep. 76; Jones v. Matkin, 118 Ala. 341, 24 South. 242; Pitts v. American F. L. M. Co., 123 Ala. 469, 473, 26 South. 286.
The Baker-Lyons mortgage had not been foreclosed before the death of the mortgagor, J. H. Andrews, nor before the execution and delivery" of the mortgage of G. W. Andrews to the Eliasberg corporation. By this junior mortgage the equity of redemption was conveyed to the Eliasberg Company; and thereafter the company was authorized by statute to exercise the right of' redemption, as it sought to do by filing the instant bill.
Chancery courts originally had jurisdiction to enforce the right of redemption. Code 1907, § 5748 et seq.; Acts 1911, p. 391. By the act of September 16, 1915, the jurisdiction of the chancery courts was conferred upon the circuit courts (Gen. Acts 1915, p. 598); and by that of September 17, 1915, all the powers and authority of chancellors were conferred on the circuit judges (Id. p. 608). It was also provided by legislative enactment the same year, to wit, on September 28,1915, that where any suit was improperly brought as a suit in equity, it should be transferred to the law 'side of the court, and vice versa. Id. p. 830.
The court properly sustained the demurrer to the plea to the jurisdiction, and the decree of the circuit court sitting in equity is affirmed.
Affirmed.
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