Court Opinion

ID: 7371595
Source: CourtListenerOpinion
Date Created: 2022-07-28 00:15:49.101397+00
Date Added: 2024-06-11T16:20:55.165804
License: Public Domain

On Rehearing
Appellant's counsel are intensely dissatisfied with our opinion and in brief filed in support of application for rehearing challenge every holding implicit in the opinion.
In regard to our refusal to reverse the trial court on its findings of fact counsel say: "We were convinced that the record is so replete with evidence of fraud and collusion between the two brothers (Amos, the mortgagor, and B. W., the mortgagee) as to have shocked the conscience of this court and to have required it to stamp the trial court's findings as contrary to the great weight of the evidence."
We said in our original opinion: "We are impressed that the evidence is of that character which is peculiarly addressed to the sound judgment and conscience of the trial court." We are still of that opinion and are unwilling in view of the applicable presumption in favor of the trial court's findings to substitute our judgment on the facts in question for that of the experienced trial judge before whom most of the testimony was adduced.
In brief filed on behalf of appellant on original submission it was contended that: "Farmers and Ginners' mortgage lien was entitled to priority over complainant's because complainant's mortgage secures a usurious loan, he is not a bona fide holder and his equity is inferior to that of Farmers and Ginners."
For the purpose of the opinion we conceded that B. W. Hogan's mortgage did secure a usurious loan but held that appellant's contention in regard to usury was without merit. In our holding we laid aside any consideration of the purported satisfaction of the B. W. Hogan mortgage and treated appellant's contention as being no more than an insistence of a junior mortgagee that its lien was superior to the lien of the holder of the first mortgage because the loan which the first mortgage secured was tainted with usury. We cited and quoted from our case of Stickney v. Moore, 108 Ala. 590, 19 So. 76, in support of our holding that appellant could not prevail simply because the B. W. Hogan mortgage secured a loan tainted with usury.
In brief filed on rehearing appellant's counsel say: "The writer of this opinion has missed the whole point on the question of usury," in that appellant recognized and raised no quarrel with the general rule that a junior mortgagee cannot assert usury against a prior encumbrance; that appellant took the position that the existence of the purported satisfaction witnessed by the probate judge made the general rule inapplicable because appellant had every right to rely on the purported satisfaction and since "the two mortgagees were equally innocent as regards any notice of encumbrances on the property (appellee, because the mortgagor had good record title; appellant, because it was entitled to rely on the satisfaction of appellee's *Page 257 
mortgage witnessed by the Probate Judge), then appellee, whose mortgage was tainted with usury, would be postponed to appellant, who had the better equity"; that, "The principle that usury is a personal defense has nothing whatever to do with the question of whether the junior mortgagee is entitled to priority by reason of having a better equity because the senior mortgage was tainted with usury. For in such a case the issue is not whether the junior mortgagee can defeat the senior mortgage, partially or in toto, by a defense of usury, but is whether the senior mortgagee is a bona fide purchaser"; that, "evidence of usury is admissible, not as a defense, but as showing that the senior mortgagee is not a bona fide purchaser and consequently the junior mortgagee has the better equity."
Appellant did make substantially those contentions in its brief filed on original submission and perhaps the writer of the opinion is justifiably criticized for not having treated them as argued rather than by merely observing that in treating the question of usury "we lay aside any consideration of the purported satisfaction and approach a determination of the rights of the parties as if there had been no effort to show that the mortgage had been satisfied."
The cases relied upon by appellant are those which hold, in effect, that where a contract debt is usurious the mortgagee is not a bona fide purchaser without notice of prior secret or latent equities of third parties and such equities will prevail over the mortgagee's title thus tainted. Wailes v. Couch,75 Ala. 134; Saltmarsh v. Tuthill, 13 Ala. 390; Clark v. Johnson,133 Ala. 432, 31 So. 960. To like effect see Smith v. Lehman, Durr Co., 85 Ala. 394, 5 So. 204; Meyer v. Cook, 85 Ala. 417,5 So. 147; Hoots v. Williams, 116 Ala. 372, 22 So. 497; Davis v. Ashburn, 224 Ala. 572, 141 So. 226; McCall v. Rogers,77 Ala. 349; Alston v. Marshall, 112 Ala. 638, 20 So. 850; Lewis v. Hickman, 200 Ala. 672, 77 So. 46.
We are of the opinion that the holdings in the cases cited above have no application to the instant case. Appellant had no prior secret or latent equity and the act or acts of those who wrongfully made the endorsements on the mortgage records for the purpose of indicating that the B. W. Hogan debt had been paid and the mortgage satisfied did not create a situation whereby B. W. Hogan had to show that he was a bona fide purchaser for value without notice in order to prevail It was that view which we still entertain that caused us to lay aside the consideration of the purported satisfaction when we came to consider appellant's argument as to usury upon original deliverance, since we had upheld the finding of the trial court from the evidence that B. W. Hogan was not in any wise a party to the purported satisfaction. We reaffirm our holding in the original opinion that the fact that the B. W. Hogan mortgage may have been tainted with usury cannot be of aid to appellant.
As we observed in the original opinion, the result in this case is hard, but we know of no equitable principle which would justify us in reversing the decree of the trial court in view of its findings on the facts, which we are unwilling to disturb.
The application for rehearing is overruled.
LIVINGSTON, C. J., and MERRILL and COLEMAN, JJ., concur. *Page 258