Court Opinion

ID: 3239475
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:13:07.718762+00
Date Added: 2024-06-11T13:58:59.955530
License: Public Domain

The fault in the opinion of the majority is that it proceeds on the false assumption that Mrs. Walsh, the purchaser at the foreclosure sale, acquired an estate in reversion from the mortgagors. This of course would be true if the mortgage had been executed subsequent to the lease, because in such case the mortgage would be of the reversion only, and would not affect the leasehold interest of the mortgagor's tenant, which was superior to the mortgage.
Such was the case presented in Coffey v. Hunt, 75 Ala. 238. The right of the defendants in that case to the rents was rested on the subsequent mortgage. The court, speaking through Chief Justice Brickell, observed:
"The mortgage operating as an immediate transfer and conveyance of all the estate of the mortgagor, though its purpose was the security of debts falling due at a future day, included a present right of entry and possession, in the absence of a stipulation that the mortgagor should remain in possession, or should enjoy the rents and profits, until condition broken, and carried with it, necessarily, the rents subsequently accruing. The assignment of the rent to the complainant, subsequent in point of time to the mortgage, was subordinate to, and can not prevail against the prior grant of the reversion. Kimball v. Pike, supra [18 N.H. 419]; Otis v. McMillan, 70 Ala. 46. The mortgage was a conveyance of, and binding upon the whole realty, of which the rent accruing was a part. It was optional with the mortgagees whether they would take such rent or not; as it is always matter of election with a mortgagee whether he will enter and take possession, before or after condition broken. It is with him matter of election, because, if he enters, or if he demands and receives rents, he is subject to account; and he may prefer standing upon the security of the mortgage, rather than to incumber himself with a liability to account for rents and profits. Therefore it is that, ordinarily, before condition broken, the mortgagor is left in possession, and suffered to enjoy rents subsequently accruing. But the right of the mortgagee to enter, or to demand and receive from a tenant having a prior lease, whose possession he can not disturb, rents subsequently accruing, remains optional, and he may exercise it cum onere. Burden v. Thayer, supra [3 Metc. (Mass.) 76, 37 Am. Dec. 117]; Newall v. Wright,3 Mass. 138, 3 Am. Dec. 98. It is not of consequence whether the mortgagees claimed the rent as purchasers under the prior mortgage to Hurt, or in their right as mortgagees. In thelatter capacity they had the right to demand and receive the rent, superior to the right asserted by the complainant, and payment to them extinguished the rent and the liability of the tenant." (Italics supplied.)
It is interesting to note that, although the defendants in that case asserted their right to the rents under the purchase at foreclosure of the prior mortgage, as the statement of facts will show, the learned Chief Justice declined to rest their right on that ground, and placed it on their right as mortgagees of the reversion under the subsequent mortgage.
In Kirkpatrick  Co. v. Boyd  Boyd, 90 Ala. 449, 7 So. 913, the land was sold under execution, and, at the time the lease was entered into, the legal title to the property was in the judgment debtor incumbered by the execution lien, with the result that the letting to the tenant created a leasehold with reversion in the judgment debtor — both estates *Page 169 
incumbered by the lien — and through the sale under the execution the purchaser acquired the reversion as well as the leasehold estate, making applicable the doctrine that rent is an incident to the reversion and follows it.
In that case it was held that the execution in the hands of the sheriff operated as a lien upon the entire interest in the land, and the defendant in execution could not, after the lien had attached, impair its value by assigning the rent.
An assignment before judgment lien attached was sustained in Young et al. v. Garber, 149 Ala. 196, 42 So. 867, for the reason that there was nothing to prevent a severance of the rent from the reversion by assigning the rent notes.
In English v. Key, 39 Ala. 113, the tenant was evicted pending his term by a paramount title, and this relieved him from liability to pay rent to his landlord whosereversionary interest was sold under execution. The holding in that case was not that rent or mesne profits for use and occupation could not be apportioned in any case, but that, "in conformity to the principle that an entire contract cannot be apportioned, there is, in such cases, no apportionment of rent in reference to the length of time of occupation." 39 Ala. 116.
So much for the cases relied on by the majority.
It is axiomatic that, unless Mrs. Walsh by her purchase at a foreclosure sale acquired an estate in reversion, the principles upon which the majority opinion is rested have no application. What interest did she acquire?
For more than a half of a century it has been the settled law of Alabama that: "Whatever may be the theory of a mortgage of lands elsewhere recognized, it is settled in this State, by a line of decisions which have become essential to the safety of titles, that it is more than a security for a debt, or a mere chattel interest. 'It creates a direct, immediate estate in lands; as against the mortgagor, and those claiming in his right, a fee simple, unless otherwise expressly limited. The estate is conditional — annexed to the fee is a condition which may defeat it. The mortgagee, if in the conveyance there is not a reservation of possession to the mortgagor, until default in the performance of the condition, has the immediate right of entry, and may eject the mortgagor or his tenants. If the mortgagor is permitted to remain in possession, he is the mere tenant at will of the mortgagee. After the law-day, and default in the performance of the condition, at law, the estate is absolutely vested in the mortgagee — the estate is freed from the condition annexed to it. Nothing remains in the mortgagor but the equity of redemption, of which courts of law take no notice.' " Farris  McCurdy v. Houston, 74 Ala. 169; Thompson  Co. v. Union Warehouse Co., 110 Ala. 499,18 So. 105; Hughes  Tidwell Supply Co. v. Carr, 203 Ala. 469,83 So. 472.
The sole and only effect of the foreclosure was to cut off the equity of redemption and vest in the purchaser, who was not the mortgagee, not a reversion, but the unconditional fee-simple title to the property, with the right to immediate possession from and after the date of the sale, subject only to the statutory right of redemption. Her title was not incumbered by any tenancy created by the mortgagor subsequent to the execution of the mortgage. Comer v. Sheehan, 74 Ala. 452.
What then was the right of the purchaser at the foreclosure sale? This is answered by the able opinion of Mr. Justice Coleman in American Freehold Land Mtg. Co. v. Turner, 95 Ala. 272,11 So. 211. The purchaser may either oust those in possession or recover of them mesne profits for use and occupation from the date of his purchase. He is not entitled to recover rents unless he can show that those in possession have attorned or agreed to attorn to him. Drakford v. Turk, 75 Ala. 339.
In the instant case the tenants refused to attorn or recognize Mrs. Walsh as their landlord. There was therefore no privity of contract between Mrs. Walsh and the tenants of the mortgagor; nor can it be said, under the facts of this case, that the money paid by said tenants in satisfaction of their note held by the bank ex æquo et bono, as upon implied contract, belonged to the plaintiff. She was only entitled to recover mesne profits as for use and occupation in a suit against the tenants from the date of her purchase at the mortgage sale. That is the effect of our holding on the former appeal, and in my opinion the result then announced was in accordance with the law as settled in this state, and the rights of the parties, and that decision should not be disturbed. Bank of Moundville v. Walsh, 216 Ala. 116,112 So. 438.
I therefore respectfully dissent.