Court Opinion

ID: 6514645
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:25:30.077847+00
Date Added: 2024-06-11T15:54:59.015154
License: Public Domain

CLOPTON, J.-
The principal question involved in the special pleas, replications, and demurrers to the replications, is, whether a tender of the amount due on a mortgage of personal property, after condition broken, operates, when kept good, to discharge the lien of the mortgage, and re-vest the title in the mortgagor, so that he may maintain an action of detinue against the mortgagee, who has taken possession after tender made, sold the property under the mortgage, and purchased at the sale. The contention of appellants is, that, as mortgages are governed in this State by the principles of the common law, a tender can not effectually extinguish the lien, unless made at the time of payment fixed by the contract of the parties- — an offer of strict performance of the condition.
In those States where mortgages are regarded as a mere lien or security for a debt, ana tlie title as remaining in the mortgagor until divested by foreclosure, the rule generally adopted is, that a tender at any time during the continuance of the right of redemption is the equivalent of payment as to things incidental and accessorial to the debt, and extinguishes the lien of the mortgage, though the tender is not kept good. Kortright v. Cady, 21 N. Y. 373 (78 Am. Dec. 145), though not the first, may be regarded as the leading *169case holding this view. A qualified and more conservative rule is adopted in those States where a mortgage is considered as immediately transferring the legal title to the mortgagee, subject to be defeated by the payment of the debt at the time and in the manner specified in the mortgage. In a few, the courts hold that an unaccepted tender after default will not, at law, re-invest the mortgagor with the title, and that his only remedy is in equity to redeem; but, in the others, the common-law rule, that after condition broken the title vests absolutely in the mortgagee, has not been applied so strictly, where the mortgage is of personal property, as to hold that a tender, after default, when kept good, can not, under any circumstances, operate the destruction of the lien.
There are dicta in some of our early cases, and probably the weight of authority is, that a tender after default, in order to effect the extinguishment of the title of the mortgagee, must be made before he has rightfully and peaceably taken possession for the purposes of foreclosure. This question, however, has never been decided in this State, though directly presented in Frank v. Pickens, 69 Ala. 369; the disposition of that case not calling for its decision. It is not presented in this case, the replications averring that the tender was made before the mortgagees acquired possession. . We shall, therefore, leave it, as it has heretofore been, undecided.
It may be conceded that, by the strict rule, of the common law, a tender after failure to perform the condition of the mortgage will not, at law, destroy the title, which has become absolute in the mortgagee by the forfeiture. In equity, however, a mortgage being regarded as incident to, and security for the debt, the rigor and harshness of the common-law rule has been greatly relieved by holding that the mortgagor has the right to redeem, if not barred by unreasonable delay, by payment, or tendering full payment at any time before foreclosure. But courts of equity will not enforce the equity of redemption so as to deprive the mortgagee of his security by discharging the lien of the mortgage; its enforcement is dependent upon payment of the debt by the mortgagor, or by a sale of the property. In many of the States, courts of law, while, not taking cognizance of the equity of redemption for the purpose of enforcing the right to redeem, but acting upon and applying equitable principles, have extended to a tender after default the effect of a tender made at the time and in the manner specified in the mortgage, modified so as to prevent the mortgagee’s depxi-*170vation of bis security without satisfaction of the debt. In Frank v. Pickens, supra, it was expressly held, that a tender of payment of the mortgage debt can not operate to extinguish the title of the mortgagee, unless the money tendered is kept ready to be paid to the mortgagee whenever he may manifest a willingness to receive it; and if the benefit of the tender is claimed in court, the money must be placed in the custody of the court, so that, if the tender be adjudged good, it may be awarded to the mortgagee — otherwise the mortgagor is regarded as having abandoned the tender. Recognizing the mortgagor’s right of redemption, and observing the principles upon which courts of equity enforce it, the current of the later decisions is, that an unconditional tender after default, of the full amount due on the mortgage, if kept good, and the money brought into court, discharges the lien of the mortgage. We cite a few of the cases: Crain v. McGoon, 86 Ill. 43; 29 Amer. Rep. 37; Know v. Williams, 24 Neb. 636; 8 Amer. St. Rep. 220; Matthews v. Lindsay, 20 Fla. 962; Musgat v. Pompelley, 46 Wis. 660; Jones, Chat. Mortg. § 635.
The effect of a plea of tender, accompanied by bringing the money into court, came incidentally before this court in the case of Foster v. Napier, 74 Ala. 393. In that case, the suit was founded on a bond executed by Foster in the institution of a statutory action for the recovery of mules and a wagon. The record of the proceedings, pleadings and judgment in the action of detinue brought by Foster against Napier was read in evidence. In the action of detinue, Foster claimed the property under two mortgages, executed by Napier. A special plea was filed by Napier, averring payment of the mortgages, except one hundred and seventy-five dollars, which, the plea alleged, had been tendered to the mortgagee before action brought; and the money was brought into court. It is said: “The issues being thus formed, if the defendant proved the truth of his second plea, he was entitled to a verdict; but the money tendered would become the property of the plaintiff. In such case, the issue is confined to the debt, or its payment, for which the mortgage was given as security. . ■. . The defense set up in that suit, and the verdict and judgment thereon, taking into the account the pleadings and charge of the court on the trial, settled conclusively that Napier did not, at the commencement of that suit, owe Foster exceeding-one hundred and seventy-five dollars on the debts secured by the mortgages, and that before suit was brought he had tendered that sum, and haej. it in court for Foster.” The *171principle of tbe decision is, tbat a tender before suit brought by tbe mortgagee to recover possession, wben tbe money is brought into court, and tbe truth of tbe plea of tender is established, is tantamount to, and has tbe same effect as actual payment, in extinguishment of tbe lien and title of tbe mortgagee — in fact, it was treated as a payment.
Section 1870 of tbe Code declares: “The payment of a mortgage debt, whether tbe mortgage is of real or personal property, divests tbe title passing by tbe mortgage.” Under section 2685, a plea of tender of money must be accompanied by a delivery of tbe money to tbe clerk of tbe court. If tbe money is deposited in court, and tbe truth of tbe plea established, tbe effect is to stop tbe running of interest from tbe time of tender. Tbe money became tbe property of plaintiff, by relation, at tbe time wben tbe tender was made. Tbat such is tbe intention and effect of tbe statute, is manifest from tbe further provision, tbat if tbe tender be of personal property, the plea must aver readiness to deliver it to tbe plaintiff, and judgment for tbe defendant upon tbe plea vests tbe title to the thing tendered in tbe plaintiff, subject to any claim the defendant may have for bis trouble in keeping it. A tender so made, and kept good, and tbe money brought into court, so as to be tbe equivalent of payment, if tbe tender be adjudged sufficient, comes within the spirit, equity and policy of section 1870 of tbe Code. On tbe foregoing principles, and in line with tbe current of the decisions of those States where mortgages are governed by tbe principles of tbe common law, we adopt as a safe and wholesome rule — conserving tbe ends of justice, protecting tbe mortgagor against oppression or undue advantage, and preventing injustice to tbe mortgagee —tbat a tender of full payment of the mortgage debt after default, and before tbe mortgagee has taken or demanded possession for tbe purpose of foreclosure, if kept good, and tbe money brought into court, operates to discharge tbe lien of tbe mortgage and extinguish tbe title of tbe mortgagee.
True, only tbe first replication avers tbat tbe money is brought into court; but tbe omission of this averment in tbe others is not assigned as a ground of demurrer. While we have left undecided, whether a tender after tbe mortgagee has taken or demanded possession will be effectual to discharge tbe lien of tbe mortgage, we bold tbat possession acquired after tbe tender is made, does not affect its operation. Tbe replications not being obnoxious to any of tbe objections assigned as grounds of demurrer, tbe demurrers were properly sustained.
' Affirmed,