Case ID: ala_107/html/0272-01.html
Source: Caselaw Access Project
Author: {"author": "McCLELLAN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Smith v. Hiles-Carver Co.
    
      Bill in Equity to enforce Equitable lien on land.
    
    1. A plea of nul tiel corporation must be verified. — A plea o£ nul tiel corporation, not sworn to, is bad.
    2. A plea setting up a material alteration in a note must be verified.— Under Code, § 2770, providing that a written instrument, purporting to be signed by defendant, and the foundation of the suit, must be received in evidence unless itw execution is denied by a sworn plea, a plea in an action on a note wetting up the defense of a material alteration must b? verified.
    3. Equitable licit on land’ —Where land on which there was a vendor’s lien securing a note was, with the vendor’s consent, exchanged by the vendee for another tract, and in place of the former note another íh given, which recites that it ia a land note, and that the land received by the vendee in exchange is bound for its paymentand describes the land; the note constitutes an equitable mortgage on the land.
    •1. Iiill to enforce rruiloc’c licit may be amended to equitable lien. — A. bill seeking to enforce a lien on land aw a vendor’s lien may be amended so as to enforce the lien as an equitable mortgage, the amendment making no change in the parties to the suit.
    Appeal from the Oh an eery Court; of Cleburne.
    Heard before the Hon. S. K. McSpadpen,
    Prior to Nov. 1, 1886, the1 appellant, A. J. Smith, purchased a-t-rac-t of land in Clay comity, Ala., from one Daniel S. Smith, executed his note to said Smith for the payment of the purchase'money, and wont into possession of the property, said Daniel S. Smith having executed and delivered to him a deed of conveyance thereto. On November 1, 1886, A. J. Smith exchanged the lands tints purchased from Daniel S. Smith with one J. J. Holland for lands owned by said Holland in Cleburne county , Holland executing a deed to A. J. Smith for the lands in Cleburne county, and A. J. Smith executing a deed for the lands in Clay county, purchased from Daniel S, Smith. This exchange was made by A. J. Smith, with the consent of Daniel S. Smith, and upon the receipt of the deed to the lands in Cleburne county, and his taking possession thereof, A. J. Smith executed and delivered to Danial S- Smith a note in lieu of the note given for the purchase of the Clay county lands, which was as follows; “$700. Seven hundred dollars. By the first day of November next, i promisé to pay Daniel S. Smith or bearer, the sum of seven hundred dollars, one hundred dollars a year, payable this Nov. first, 1886. This is a land note, and the following described land is bound for the payment of this note, to-wit, the north-east fourth of section sixteen township seventeen, R. nine, all in Cleburne county, Alabama.’’ This note was duly signed by A. J. Smith and attested. This note was transferred by Daniel S. Smith to one Stephen Nixon for a valuable consideration, and by said Nixon was transferred to the appellee, the Hiles-Carver Company. There was $200 paid on this note. Upon the failure of the maker of said note to pay the balance due thereon, the Hiles-Carver Company, on May 12, 1892, filed the bill in this case against A. j. Smith to enforce a vendor’s lien on the lands described in the note. The bill was afterwards amended so as to claim an equitable lien or mortgage on the land described as security for the debt evidenced by the note, and prayed for the foreclosure of the same in satisfaction of the debt, alleging that it was the intention of the maker and payee of the note, at the time of its execution, that it should operate as a lien or mortgage on the said lands as security for the debt evidenced by said note. The respondent demurred to the bill as amended, among others, upon the grounds that the bill as amended was a departure from the cause of action stated in the original bill, and that the prayer of the amended bill was inconsistent with the prayer of the original bill'. The respondent also filed, as pleas to the bill as amended, the plea ,of nvl tiel corporation, and also that the note had been altered since its execution, without the consent or authority of its maker. Neither of these pleas were verified. The respondent also moved to dismiss the bill for the want of equity. The complainant moved to strike the pleas from the file because they were not sworn to by respondent. The chancellor overruled the demurrers to the bill, and on the submission of the cause upon the pleadings and proof decreed to complainant the relief prayed ' for in the bill. The respondent appealed and assigns as error the decree overruling the demurrers and the final decree granting relief to complainant.
    A. A. Hurst and Aiken & Burton, for the appellant.
    —The note sued on, was not given for land, and stating that fact in the note does not make it so.; — Steiner Bros, v. (dishy, 95 Ala. 91. The bill can not be maintained as one to enforce a vendor’s lien as originally filed. The bill can not be amended from one to enforce a vendor’s lien, to one to enforce a contract lien. It is a new cause of action and a departiere. The demurrer to the bill, as amended, should have been surtained on this ground,— Kyle v. Beilin,ger, 79 Ala. 516.
    
      Merrill & Bridges, for tlie appellee.
    Proof of corporation not required of complainant, unless that fact is denied by plea verified by affidavit. Acts of 1888-9, page 57.
    Written contract sued on can be impeached only by plea verified by affidavit. Code, § 2770. And this rule applies to suits in chancery as well as to actions at law. —Bonner et als. v. Young, 68 Ala. 35 ; Hooper, a,dmr., v. Strahan, 71 Ala. 75. To create a charge or trust which a court of equity will enforce as a mortgage, the form of the agreement is not material, and operative words of conveyance are not necessary ; if the intention of the parties appears from their agreement, when read in the light of the circumstances surrounding them at the time, to charge the particular property with the payment of the debt. — Nowlin, Ferule y A Go. v. McAfee, 64 Ala. 357.
   McCLELLAN, J.

The plea of nul tiel corporation was not sworn to, and was therefore bad. Acts 1888-9, p. 57.

For the same reason the pleas which averred an unauthorized alteration of the note which is the foundation of the suit after its execution were properly adjudged insufficient; and the evidence taken in support of them is not to be regarded. Without verification the note sued on was not open to impeachment, for alleged material alteration, at law or in chancery. — Code, 2770; Bonner et al. v. Young, 68 Ala. 35 ; Hooper v. Strahan, 71 Ala. 75; Barclift v. Treece, 77 Ala. 528, 532; Lesser v. Schulze, 93 Ala. 338.

The original bill in this case sought to enforce the payment of a note upon the theory that the debt it evidenced was secured by a vendor’s lien on certain land, by a sale of said land. The facts were that the payee of the note sold to the maker a tract of land in Clay county on a credit, and took from him a note for the purchase money which was a vendor’s lien on that tract. Subsequently the purchaser exchanged this tract with a third person for a tract in Cleburne county, and in substitution for the debt due for the Clay county .land he gave to his original vendor the note on which this suit is founded. In this note is the following stipulation : “This is a land note, and the following described land is bound for the payment of this note, to-wit: ” The tract lying in Cleburne county for which the maker of tho note exchanged tho land, purchased from the payee with said third person. On these facto, and stating them, the bill was amended so as to allege that the noto, as the paper itself evidences, was executed and accepted by the parties with the understanding that the debt should bo a charge or lien on tho Cleburne land ; and its amended prayer is for the declaration of such charge as an equitable mortgage or lien and the sale of the said land to satisfy the same. This amendment made no new parties to the bill, nor struck any parties already before the court. It did not vary essentially, or at all indeed, tho rights of the parties nor the character of the relief sought. It was clearly not a departure from the case made by the original bill, and was properly allowed.— Moore v. Alvis, 54 Ala. 356 ; Hurt v. Clark, 54 Ala. 490 ; Connor and Wife v. Smith, 88 Ala. 300, 308.

The note itself shows that this debt was to be a charge on the land described in it, and that this was the understanding of the parties is further shown by oral testimony as to the circumstances of the transactions out of which the note issued. Upon these facts, there can be no question that the note constituted an equitable mortgage or lien on the land described in-it; — Newlin v. Mc-Afee, 64 Ala. 357 ; and the decree of the chancery court which enforces it as such must be affirmed.