Case ID: ala_98/html/0608-01.html
Source: Caselaw Access Project
Author: {"author": "HEAD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

American Mortgage Co.of Scotland v. Inzer.
    
      Action by Personal Representatives of ■Deceased Mortgagor to Recover Surplus Proceeds of Mortgage Sale in the Hands of the Mortgagee.
    
    1. Demurrer upbn which, record shows no action. — Where the record shows that there was a demurrer to a plea, but fails to show any ruling upon it, this court will treat the demurrer as abandoned, and consider that issue was joined on the plea. Evidence admissible to prove such plea rejected against pbjection, is reversible error.
    2. Rights and- remedies of senior and jiotior mortgagees. — In an action by the mortgagor against a senior mortgagee for surplus proceeds remaining in his hands after the foreclosure of his mortgage, it is no defense to such suit that the defendant is liable in an action to the junior mortgagee, without showing payment or satisfaction of said junior mortgagee's debt.
    Appeal from St. Clair Circuit Court.
    Tried before tbe Hon. LeEoy E. Bos.
    This was an action of assumpsit brought by H. J. Inzer and Yarina Inzer, as executor and executrix of tbe estate of Joseph Y. Inzer, deceased, against tbe American Mortgage Company of Scotland, Limited, to recover of said defendant an alleged surplus remaining in its bands after tbe satisfaction by foreclosure, under tbe power of sale, of a debt secured by a mortgage executed by plaintiffs’ testator. Tbe defendant, by special plea, sought to defeat tbe action by showing an outstanding junior mortgage upon the same property, made by tbe mortgagor, to secure a debt due to one Skaggs, greater in amount than tbe alleged surplus claimed by tbe plaintiffs. To this plea the plaintiffs demurred, but the record does not show what action or ruling was had on the demurrer. Issue was joined on the general issue, and on said special plea. During the trial the defendant offered to introduce in evidence the junior mortgage named in his special plea, to which the plaintiff objected. The court sustained the objection and tbe defendant excepted, and assigns this ruling of tbe court as error on this appeal, together with the action of the lower court in sustaining the plaintiffs demurrer to his said special plea.
    
      Caldwell Bradshaw and Jas. E. Webb, for appellant,
    cited Webster da Wilson v. Singley, 53 Ala. 208; Eddy v. Smith, 13 Wendell, 489.
    INZER and Montgomery, for appellees.
    (No brief.)
   HEAD, J.

This is an action by tbe executors of a deceased mortgagor to recover from tbe mortgagee an alleged surplus of tbe proceeds of tbe sale of tbe mortgaged premises left in tbe bands of tbe defendant after full satisfaction of tbe mortgaged debt. Among others, tbe defendant interposed a special plea alleging tbat plaintiff’s testator executed a second mortgage on tbe premises to W. H. Skaggs to secure an indebtedness greater in amount tban tbe alleged surplus, wbicb mortgage is in force and creates a valid lien on tbe premises, and tbat defendant is liable to said second mortgagee for tbe surplus. There is copied in tbe transcript a demurrer to this plea, but tbe record fails to show any ruling upon it. We are, therefore, forced to treat tbe demurrer as abandoned, and consider that issue was joined on tbe plea. This being so, tbe defendant was entitled to prove its plea, and in tbe effort to do so offered to introduce in evidence tbe said Skaggs mortgage, tbe execution of which was admitted in an agreed statement of facts. Tbe plaintiffs objected to its introduction; tbe court sustained tbe objection, and tbe defendant excepted. This was error, for wbicb tbe judgment must be reversed.

We are persuaded tbat, in fact, tbe court sustained tbe demurrer on tbe special plea referred to, but for some cause tbe record failed to show it; and that tbe only controversy between tbe parties, on tbat plea, was whether, in law, tbe defendant can defend against tbe plaintiffs’ demand by showing its liability to tbe second mortgagee for tbe money in its bands, without an averment tbat the liability bad been discharged by payment of tbe money to such second mortgagee. So impressed, we will indicate our opinion upon tbat question, that tbe litigation may not be unnecessarily protracted.

It is not denied tbat the second mortgagee, under tbe facts stated in tbe plea, is entitled to an action against defendant to recover tbe money wbicb tbe plaintiffs seek to recover in tbe present action.—Webster & Wilson v. Singley, 53 Ala. 208, citing Hitchcock v. Lukens, 8 Port. 333; and Huckabee v. May, 14 Ala. 263; but, nevertheless, we are of opinion tbat tbe defense is not a good one. In Sharpe v. Wharton, 85 Ala. 225, following Cook v. Field, 3 Ala. 53, we held tbat a judgment against a garnishee, without satisfaction thereof, is uo defense to an action by tbe creditor. It was said that, “if an unexecuted judgment against tbe garnishee would be a bar to a suit against bim by tbe original creditor, it might happen that be would not be compelled to pay tbe debt at all, as tbe judgment of tbe attaching creditor might never be enforced.” We think tbe principle is tbe same here; indeed it applies with more force, if possible. Tbe estate of tbe plaintiffs’ testator is liable to Skaggs for tbe full amount of tbe mortgage debt, upon tbe personal obligation of tbe testator. Skaggs may, at any time, enforce this liability against the plaintiffs, to the extent of collecting tbe entire debt, without ever proceeding to collect from tbe defendant tbe said surplus arising from tbe mortgage sale, to be applied in diminution of bis claim. To allow the defense here attempted would be to create an effectual bar to a recovery of tbe surplus by tbe plaintiffs, although they may hereafter be compelled to discharge tbe entire Skaggs debt.

Reversed and remanded,