Court Opinion

ID: 3236078
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:10:38.758504+00
Date Added: 2024-06-11T07:40:23.698551
License: Public Domain

A junior mortgagee has no separate or independent equity to compel the foreclosure of a senior mortgage. Lehman v. Gunn,124 Ala. 213, 27 So. 475, 51 L.R.A. 112, 82 Am. St. Rep. 159; Ware v. Hamilton Shoe Co., 92 Ala. 145, 9 So. 136; Kelly v. Longshore, 78 Ala. 203. The case of Davis v. Cook,65 Ala. 617, has been, in effect, overruled on this point by the cases supra.
But when the bill seeks an accounting and discovery and the ascertainment of the amount due on the mortgage to the end that the obstacle that it presented to the foreclosure of the second mortgage might be removed as the court might direct, it contains equity. Penny v. Miller, 134 Ala. 593, 33 So. 668, and cases there cited.
Moreover, under the facts disclosed by the bill the complainant would be entitled to redeem if the senior mortgage has not been foreclosed, or if foreclosed within less than two years before the bill was filed, notwithstanding the special prayer is to compel a foreclosure, as this relief, not being foreign to or inconsistent with the special relief sought, can be obtained under the general prayer, provided, of course, the complainant complies with the law as to tender, in case of statutory redemption, or offers to pay, in case of an equity of redemption — a point not raised by any of the grounds of demurrer interposed. As we understand the bill it sets up a mortgage from W. H. Montgomery to Worthy and Lynch and an assignment from Worthy, not joined in by Lynch, so far as the record disclosed, to C. J. Montgomery, and also the execution of a warranty deed from Worthy to C. J. Montgomery. It may be that the bill intended to aver that the deed was from W. H. Montgomery to C. J. Montgomery, instead of from Worthy, which may be surmised from the respondent's pleas, but a careful consideration of paragraph 6 of the bill discloses that it avers that the deed mentioned is from Worthy to C. J. Montgomery, and not from W. H. Montgomery. Therefore the bill does not show a foreclosure of the Worthy and Lynch mortgage by a conveyance from the mortgagor to the sole owner of the mortgage; or, if the deed in question was from the mortgagor to C. J. Montgomery, then the bill, in effect, denies the fact that C. J. Montgomery was at the time the sole owner of the mortgage, as it negatives the assignment of Lynch's interest in said mortgage.
Worthy was at least a proper, if not necessary, party. Nor was the bill bad for not making Northern a party thereto. While it mentions the fact that he had a prior mortgage, it expressly avers that the same had been fully paid.
It is undoubtedly the law that a mortgagee may foreclose his mortgage by accepting a deed from the mortgagor in lieu of a foreclosure by sale under the terms of the mortgage, or by proceeding to do so in a court of equity. Farrow v. Sturdivant Bank, 184 Ala. 208, 63 So. 973; Stoutz v. Rouse, 84 Ala. 309,4 So. 170. And when such is the case, the mortgagee and vendee to the deed occupies a position similar to a purchaser at a foreclosure sale. Dennis v. McEntire, 187 Ala. 314,65 So. 774.
This being true, it would seem that a junior mortgagee would have to proceed within two years to redeem, after receiving notice, actual or constructive, of such contractual foreclosure. Such a deed, however, cannot operate as a foreclosure when made to one who has only an interest in the mortgage as distinguished from the sole or entire ownership of same.
The respondent's pleas 1 and 2 would be a good defense to the complainant's bill but for the fact that they fail to take account of, or to traverse, that averment to the effect that the mortgage was made to Worthy and Lynch jointly, and that C. J. Montgomery *Page 190 
never received an assignment of the interest of said Lynch before the execution to him of the deed set up as a foreclosure of the mortgage. If C. J. Montgomery owned the entire mortgage when the deed was made to him, and which was recorded two years before the bill was filed, the complainant cannot now get a mortgage foreclosed that had already been foreclosed and as one to redeem; whether as to the statutory or equitable right, it comes too late. On the other hand, if the mortgage was made to Worthy and Lynch jointly, and C. J. Montgomery had assigned to him only the interest of Worthy, as charged in the bill, then the deed from the mortgagor to him could not and did not operate as a foreclosure so as to cut this complainant off from the right to maintain the present bill.
The trial court erred in sustaining the demurrer to the bill and in holding pleas 1 and 2 sufficient, and the decree is reversed, and the cause is remanded.
Reversed and remanded.
McCLELLAN, SOMERVILLE, and THOMAS, JJ., concur.