Court Opinion

ID: 3248186
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:19:51.971461+00
Date Added: 2024-06-11T12:47:27.265012
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 254 
The suit is by a mortgagee of certain bales of cotton against a purchaser from the mortgagor. The case went to the jury on the counts in the case for the destruction of the mortgage lien, and in assumpsit for money had and received.
The main issue of fact in the case was whether the mortgagee gave his consent to the sale. This issue, under the evidence, was for the jury. The testimony of the plaintiff that he agreed or promised the fertilizer man to see his bill paid was admissible in connection with his evidence that he agreed for the mortgagor to sell the first picking to pay that bill, but did not agree to the sale of later bales to this defendant. It was a circumstance tending to show a reason for the plaintiff making a difference as he claims. That the tenant was not a party to such understanding so as to give his landlord a lien for the fertilizer bill did not render the evidence illegal under the issues of this case.
No implied ratification of the sale, if made without consent of the mortgagee, arose from the fact that after the sale the mortgagor deposited one-fourth the amount of the proceeds due the plaintiff as landlord for rent, and that plaintiff, with knowledge that the deposit was proceeds of the cotton, accepted and used it.
The mortgage being given for advances, plaintiff, as landlord, had a separate lien against the cotton for the portion due him as rents. This lien extended to the proceeds of the cotton, wherever found, so long as they did not pass to a bona fide holder. The plaintiff, as landlord, had the right of recapture to the extent of his rent lien, whether these proceeds were derived from a lawful or a tortious sale. Code, § 8806: Ehrman v. Oats, 101 Ala. 604, 14 So. 361; Starke v. Bernheim, 102 Ala. 464, 466, 14 So. 770.
The doctrine of implied ratification by acceptance of the proceeds of sale rests upon acts or declarations inconsistent with a denial of the authority to sell. The plaintiff, having a lien upon proceeds as such, wholly apart from his mortgage, did not buy accepting them under his lien sanction a sale of his mortgaged property without his consent. The amount so recaptured went to lessen the damages recoverable from the purchaser for conversion or destruction of the mortgage lien. Hodges v. Westmoreland, 209 Ala. 498, 96 So. 573.
We find no evidence to support the view that the landlord waived his lien for rents and took the mortgage as sole security therefor. The face of the mortgage covered advances then made. The clause extending it to any other debt to become due before payment does not appear to cover rents payable in kind, and the parties, according to the evidence of both sides, treated the rent as a distinct demand from the mortgage.
The later note or mortgage for $155, given for corn and hay furnished after the giving of the main mortgage for $594, though not recorded, was properly received as evidence of a further demand covered by the first mortgage, which was duly recorded.
In a suit in detinue by a mortgagee against the mortgagor or one holding under him, wherein the defendant, upon suggestion, requires the amount of the mortgage debt to be ascertained, under Code, § 7400, the amount should be ascertained as of the date of the trial, not of date suit brought. The purpose is to determine the amount still due to be paid the mortgagee for the release of the property or its value from the judgment in detinue.
The proceeding to ascertain the value is "upon suggestion," need not be by formal pleading, and there is no need for a special plea setting up payments after suit is brought.
In the former suit in detinue between mortgagee and mortgagor, the plaintiff having taken the property under a replevy bond and foreclosed it under power of sale pending the detinue suit, it was proper for the judgment to show the balance on the mortgage debt ascertained by the verdict of the jury under instructions of the court, representing the amount due after applying the proceeds of the foreclosure sale.
Defendant's contention, that the judgment for plaintiff for the property sued for, or its alternative value, was conclusive that such property or value must be applied to the balance ascertained by the jury and operated a full satisfaction of the balance so found, is untenable. The judgment is construed as a whole.
Mere evidence of a sale of a mortgaged chattel without the consent of the mortgagee will not sustain an action on the case against the purchaser for destruction of the mortgage lien. A sale by the purchaser, concealment, removal, commingling so as to destroy identity, or other act placing the property beyond the reach of the mortgagee or obstructing his remedies against the property must appear in the evidence. Windham v. Stephenson, *Page 256 156 Ala. 341, 47 So. 280, 19 L.R.A. (N.S.) 910, 130 Am. St. Rep. 102; Pinckard v. Cassels, 195 Ala. 353, 70 So. 153; Richardson v. Sewell, 19 Ala. App. 399, 97 So. 678.
Likewise, to waive the tort and sue in assumpsit, the cotton must have been sold by the purchaser, and the reception of money, or things in lieu of money, as the price or value of plaintiff's property. Southern Ry. Co. v. City of Attalla,147 Ala. 653, 659, 41 So. 664.
There was an entire want of evidence of a sale by defendant or other disposition destructive of the mortgage lien of plaintiff. Dealing with articles like cotton, purchased for the market, a sale or consumption may be presumed or inferred after the lapse of considerable time. In this case, the two bales of cotton involved under the evidence were purchased on October 16th, two weeks before the law day of the mortgage. No sale by the purchaser within that period can be presumed.
The court erred in refusing written charges to defendant to the effect that the evidence did not warrant a verdict on the counts in case and assumpsit. The motion for a new trial should have been granted on like grounds.
Since the cause must be reversed, we deem it proper for a guidance of the court on another trial to mention the counts in trover, charged out at the instance of the defendant.
It is well-recognized law that to maintain trover the plaintiff must have a title, general or special, in the property and the possession thereof or the immediate right of possession at the time of the conversion. Pinckard v. Cassels,195 Ala. 353, 70 So. 153; Bank v. Burnett, 213 Ala. 89,104 So. 17.
So, when the suit for conversion is by the mortgagee, and by the terms of the mortgage the mortgagor is entitled to retain possession until the law day or other event named in the mortgage, a purchaser of the property before such date is not liable in trover. Johnson v. Wilson, 137 Ala. 469, 34 So. 392, 97 Am. St. Rep. 52; Tallassee Co. v. Bank, 159 Ala. 315,49 So. 246.
But, if defendant purchased the cotton without the consent of the mortgagee and retained it after the law day of the mortgage, claiming it under such illegal purchase, or thereafter disposed of it in disregard of plaintiff's title and right of possession, this would be a conversion. Conversion includes an unlawful dominion over property in exclusion of the rights of the owner entitled to present possession, although at the time possession was taken the owner's right to possession had not accrued so as to support the action of trover as of that date. The law forbids a sale of mortgaged chattels without the consent of the mortgagee; a purchaser participating in the wrongful act of the mortgagor is not a holder as of right. His possession being tortious, no demand is necessary before bringing suit in trover after the law day of the mortgage.
The controlling issue in this case is whether the mortgagee gave such consent to the sale of this cotton as will protect the purchaser from the mortgagor. If so, plaintiff has no case. If not, the purchaser disposed of the property in destruction of the mortgage lien before the right of possession accrued to the mortgagee, he is liable in case, and if he held it under his purchase until after the law day, he is liable in trover.
If sold in either case, and the proceeds came to the purchaser's hands, plaintiff may waive the tort and sue in assumpsit for money had and received. In all cases, the recovery to be limited to the amount of plaintiff's debt and interest, and not to exceed values after deducting amount collected by plaintiff on rents.
Reversed and remanded.
ANDERSON, C. J., and SAYRE and GARDNER, JJ., concur.