Case ID: ala_98/html/0310-01.html
Source: Caselaw Access Project
Author: {"author": "\n      COLEMAN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Draper v. Walker.
    
      Trover and Case for Conversion or Destruction of Personal Property.
    
    1. When trover and cnee, will not lie. — An action of trover, or case, cannot be maintained, by one holding under a second mortgage, against a person who is in possession oí personal property by purchase from a first mortgagee.
    2. Same. — After default, the legal title passes to the mortgagee, nothing remaining in the mortgagor but the equity of redemption; a second mortgagee takes no greater title than the mortgagor has — a mere equity. As to a stranger, the mortgagor is regarded as the owner, and may maintain detinue or trover against him.
    3. Costs. — Where suit is brought by a second mortgagee against the holder of a third mortgage, for the wrongful taking by the latter of the property subject to the mortgage of the former, and after the commencement of the suit, the third mortgagee buys a first mortgage upon the same property, and thus invests himself with the legal title, he is liable for costs accrued prior to such purchase of the legal title.
    Appeal from Anniston City Court.
    Tried before tbe Hon. B. E. Cassady.
    Action by Draper, Matbis & Co. against Walker, Teague & Co. Tbe facts sufficiently appear from tbe opinion of tbe court.
    Mathews & Whiteside, for appellants.
    MethyiN & Kelly, and W. H. Smith, Jr., for appellees.
   COLEMAN, J.

Tbe action was by appellants against tbe appellees. Tbe complaint contains two counts, tbe first, in trpver, and tbe second, in case. Tbe count in case avers tbe destruction by defendants of plaintiffs’ lien upon certain personal property, created by mortgage to plaintiff, excuted by William Curry, April 7tb, 1887. Tbe count in trover is for tbe conversion of tbe same property. Tbe defendant pleaded tbe general issue, and by way of further defense pleaded specially, in pleas Nos. 2, 3 and 4. Tbe court overruled plaintiffs’ demurrer to defendants’ special plea No. 4. It is from tbis ruling of tbe court that tbe present appeal is prosecuted. Under tbe general law, an appeal could not lie from tbe judgment of tbe court upon tbe demurrer to a plea. —Collins v. L. & N. R. R. Co., 70 Ala. 533; Mabry v. Dickens, 31 Ala. 243. Tbe act of tbe legislature by which tbe City Court of Anniston was created, provided specially for appeals within thirty days from judgments rendered upon tbe pleadings. — Acts of 1888-9, p. 564. Tbe 4th plea of tbe defendant, shows that plaintiffs were second mortgagees, and that tbe mortgagor abandoned tbe property and that defendants took possession of, and converted tbe property under tbe authority acquired by a third mortgage. Tbis plea further shows that after tbe suit was instituted by plaintiffs, but before any order was made in tbe case, or plea filed, tbe defendants bought tbe property from tbe first mortgagee, whose mortgage bad been regularly recorded, the law day of wbicb bad transpired, before tbe commencement of tbe action, and that plaintiffs never bad possession of tbe property. The plea avers that a large sum was due and unpaid on tbe first mortgage, but does not state what amount, nor does it aver tbe value of tbe property. Tbe question presented is, whether tbe title and interest acquired by tbe purchase from tbe first mortgagees, and tbe facts averred present a complete defense, to both counts of tbe complaint. A distinction exists between matters of defense arising after issue joined, and when it arises pending suit, but before issue is joined. Tbe former must be pleaded puis darien continuance; the latter is a plea in bar to the further maintenance of tbe suit. This is the rule declared in Dryer v. Lewis, 57 Ala. 554; McDougal v. Rutherford, 30 Ala. 253. The general rule is, that to entitle recovery in trover, tbe plaintiff is required to prove property in himself and tbe right to possession at tbe time of tbe conversion.—Corbitt v. Reynolds, 68 Ala. 378. Possession may be sufficient evidence of ownership to sustain tbe action against a wrong doer. In a court of law, after default, tbe legal title passes to a mortgagee. Nothing remains in the mortgagor except an equity of redemption. Strictly speaking, a mere equity of redemption, unaccompanied by possession, will not sustain an action of trover, and many authorities hold that such an interest will not authorize the action—Reese v. Coats, 65 Ala. 258. In Ring v. Neale, 114 Mass., p. 112, was the case of a second mortgagee suing a purchaser from the mortgagor and in principle is directly in point. Colt, J.— “To maintain the action of trover, the plaintiff must have the legal title to the property in question and must show possession or the right to immediate possession. It is not enough that lie shows an equitable title, such as a right to redeem, or a reversionary interest subject to the present legal title of another. The whole legal title and right of possession passes to the mortgagee by a mortgage of personal property and is defeated only by the performance of the condition. The plaintiffs’ interest in this property is that of second mortgagee. The legal title and right of immediate possession at the time of the alleged conversion was in the holder of the first mortgage to whom alone the defendant is liable in this form of action. The defendant can not be held in two actions for the same tort, in favor of different persons. Nor can the rights of the holder of the first mortgage be defeated.” This decision is cited in the text of Jones on Chat. Mortg., § 499; see II). §448 and note. In this State it has been often declared that a mortgagor after the law day, owns no interest in the mortgaged property, except the equity of redemption, and that his vendee can acquire no greater interest.—Kelly v. Longshore, 78 Ala. 204; Ware v. Hamilton Brown Shoe Co., 92 Ala. 145 ; Bingham v. Vandegrift, 93 Ala. 283. These principles have been declared in cases arising between the mortgagor or his assignee or grantee and the mortgagee. As to all persons except the mortgagee, the mortgagor in possession is regarded as the owner of the legal as well as equitable interest whether there has been a forfeiture or not, and he may convey by mortgage or other conveyance such title or interest, as will be good against all other persons—Marks v. Robinson, 82 Ala 78; Allen v. Kellam, 69 Ala. 442; Denby v. Mellgrew, 58 Ala. 147; Cowley v. Shelby, 71 Ala. 122; Jones on Chat. Mortg. § 497; Gardner v. Morrison 12 Ala. 547. The rule in this State is that a second mortgagee after forfeiture, (or before, if there is no provision that the mortgagor may retain possession,) may maintain either detinue or trover, against a stranger or person claiming only through the mortgagor by a sale or conveyance of the property made subsequent to tbe execution of tlio second mortgage.—82 Ala. and 12 Ala. supra.

We have stated, that in a court of law after forfeiture, the legal title vests-in the mortgagee, and the default goes to the whole property—Thompson v. Thornton, 21 Ala. 808. The mortgagee thus invested with the entire legal title may sell and convey the property, to a 'third person.—Downing v. Blair, 75 Ala. 218; Walsh v. Phillips, 54 Ala. 309; Scott v. Ware, 65 Ala. 174; Jones on Chat. Mortg., § 454.

In a court of law after default the mortgagee is the absolute owner of tbe property subject only to the equitable right of redemption and such rights as grow out of this equitable right of redemption. The mortgagor can convey no greater right than he owns. Consequently a second mortgagee could not maintain trover against a prior mortgagee or .the vendee of a first mortgagee.. The latter holds a superior title. This was expressly decided in the case of Landon v. Emmons, 97 Mass. 37. A mortgagor can mortgage his equity of redemption, and this was the estate acquired by the plaintiff by Iris second mortgage. He had an equitable lien by virtue of his mortgage upon the equity of redemption. Case will lie to recover damages for the conversion or destruction of property upon which a party has a mere equitable lien, upon the general principle that when there is a tortious act from which damage results, the law must furnish a remedy, rather than the wrong shall go unredressed.—Hurst v. Bell, 72 Ala. 340; Hussey v. Peebles, 53 Ala. 432; Lomax v. LeGrand, 60 Ala. 537; Elmore v. Simon, 67 Ala. 526; Thompson v. Powell, 77 Ala. 392. The count in case as that in trover was in legal form and not subject to demurrer. The defendant’s -plea showed an outstanding legal title in the first mortgagee, superior to that of plaintiff, with which by his purchase from the first mortgagee he connected himself. If the facts averred in the plea, were found to be true, they furnished a complete bar to the further prosecution of the suit in trover. By the purchase from the first mortgagee, the defendants acquired all rights and could make all meritorious defenses to an action on the case for the conversion of the property or the destruction of plaintiff’s equitable mortgage, that the first mortgagee might have made, had the suit been instituted against him, except perhaps as to a question of cost to be hereafter referred to. We have seen that after forfeiture the mortgaged property became vested in the first mortgagee. He was authorized to sell the same and convey the legal title and ownership of the property to a purchaser. His rights to the property fnd that of his vendee, were absolute, except as to the equity of redemption, left in the mortgagor or liis assignee or vendee. If the property mortgaged was of less value, was insufficient to satisfy the debt secured by the first mortgage, the holder of the equity of redemption sustained no damage. If the purchase price received by the first mortgagee, exceeded the amount of his debt, the surplus, ex equo et. bono, belonged to the holder of the equity of redemption, for which assumpsit would lie.—Troy v. May, present term. If the property was of more value, than sufficient to satisfy the debt secured by the first mortgage, and it was injured or destroyed or disposed of, not in accordance with the provisions of the mortgage, an action on the case would lie by the mortgagor or second mortgagee.

Prima facie a mortgagee who, after default, takes possession of the mortgaged property, and converts the same or in any manner disposes of it, is not liable for such action. Prima facie he lias done only what the law allows him to do. To make him liable in such a case, it is necessary to aver and prove, the act was wrongful and that damages were sustained ; and to show damage it is necessary to aver and prove, that the property was more than sufficient to satisfy the debt secured by the first mortgage. In such case the recovery would be the difference between the value of the property and amount of the debt for which the property was appropriated under the prior mortgage. The rule here declared does not militate against the principle that no one shall take advantage of his own wrong, but proceeds upon the principle that the plea shows prima facie no wrong lias been done to plaintiff, to his injury. We therefore hold the facts averred in the plea were a full answer in bar to the further prosecution of the suit under the pleadings. Plaintiff might have replied to the plea, and averred the facts necessary- to authorize a further maintenance of the suit, in accordance with the principles of law as we have declared them.—Ewing v. Blount, 20 Ala. 694. There is no objection made to the plea, because it fails to -offer to pay the cost which had accrued, before the purchase of the property and the filing of the plea. We are not permitted to consider any causes of demurrer not specially assigned. — Code 2690, and authorities cited.

The plaintiff was entitled to his cost accruing before plea No. 4 was filed.

There is no error in the record.

Affirmed.