Court Opinion

ID: 6513108
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:24:10.551782+00
Date Added: 2024-06-11T15:54:56.544138
License: Public Domain

CLOPTON, J.
By the bill as amended, complainant’s case is presented in two aspects — one in which complainant seeks to be let in to redeem, on the ground that the surviving mortgagee purchased at his own sale; and the other in which he seeks to have'the sale vacated on the allegations, that the essential requisites to the power of sale were not complied with; that the debt secured by the mortgage had been paid; and nothing was due at the time of the sale. On the former appeal the equity of the bill in the first aspect was considered, when it was said: “If the mortgage sale under the power was in all things regular, save the one pointed out, it must be declared that it has become valid and binding by the lapse of time.” The irregularity pointed out was that the mortgagee was the purchaser. The evidence satisfactorily shows that notice of the time, place and terms of sale was given by posting the same in two or more public places as required by the mortgage. This being true, the original bill, which was filed nine years and ten months after the sale, no satisfactory explanation of the delay being shown, comes *357too late as a bill to redeem, and to avoid tbe sale on tbe mere ground, tbat tbe mortgagee purchased at bis own salé. Sanders v. Askew, 79 Ala. 433.
A different rule o£ limitation applies if tbe debt,. secured by tbe mortgage under wbicb tbe land was sold, bad been fully paid before tbe sale. Tbe payment of a mortgage on real estate, did not operate to reinvest tbe legal title in tbe mortgagor, prior to tbe passage of tbe act of November 28, 1884, which constitutes section 1870 of tbe Code of 1886. Tbe doctrine wbicb prevailed in this State was tbat after tbe payment of tbe debt secured by sucli mortgage, tbe legal title remained in tbe mortgagee, without an equitable interest, wbicb be held in trust for tbe mortgagor, who was entitled to a re-conveyance. Tbe power of sale is regarded as a part taf tbe security, wbicb tbe mortgagee can exercise only for tbe purpose of paying tbe debt. The payment of tbe debt terminates tbe relation of tbe parties as mere mortgagor and mortgagee, and removes tbe encumbrance of tbe mortgage as such, and tbe contingency for tbe exercise of tbe power cannot thereafter arise. Payment extinguishes tbe power, and tbe mortgage becomes tbe same as if no such power bad been included in it. If tbe mortgagee sells tbe property after tbe debt has been satisfied, be thereby offends tbe equitable rights of the mortgagor, wbicb a court of equity will intervene to protect, by its injunctive power if invoked before tbe sale, or by vacating it if already made. Tbe mortgagor, not having tbe legal title, bad no adequate remedy at law. It may be tbat if be fails to institute proceedings to enjoin tbe sale, be would be afterwards estopped from asserting payment to defeat tbe title of a bona fide purchaser without notice. But when tbe mortgagee himself is the purchaser, tbe court will vacate tbe sale as against him, and all claiming under him with notice of tbe state of tbe accounts betweeen tbe mortgagor and mortgagee. Cameron v. Irwin, 5 Hill 272; Redmond v. Packenham, 66 Ill. 434. Tbe limitation, wbicb bars tbe right to relief in such case, is tbe same within wbicb an action for tbe recovery of lands may be bought, — ten years — wbicb limitation was not complete when the bill was filed.
As requisite notice of tbe sale was given, and as complainant is not entitled to avoid the sale on tbe ground, tbat tbe mortgagee was tbe purchaser, but is entitled to relief only on satisfactory proof of the averments of tbe bill, tbat tbe debt secured by tbe mortgage bad been paid and nothing *358was due at the time the power was exercised, a decree setting aside and vacating the sale without the preliminary ascertainment o£ payment, is premature. The chancellor decreed that the mortgage sale be set aside and vacated, that the purchaser be declared a mortgagee in possession; and ordered a reference to the register to ascertain and report the state of the accounts between the mortgagor and mortgagees, charging the purchasers with the rents and waste of timber.
As we interpret the decree, relief was granted the complainant as on a bill to be let in to redeem. It is evident from the reference to the register, as to the manner in which, and the time at which, the state of accounts should be ascertained, that the chancellor did not pass on the question of payment val non. If there was nothing due on the mortgage debt when the power of sale was exercised, the purchaser cannot be regarded a mortgagee in possession, but a party in possession having the naked legal title, which he holds in trust for the mortgagor, and accountable as such for the rents and profits and waste. In this re-aspect of the case, an inquiry as to the amount due on the second mortgage is immaterial, unless the sale under the first mortgage is set aside.. In such event, the bill may be further entertained as a bill to redeem from the second mortgagee, under which no sale has been made, and the court may proceed to settle the entire litigation and do complete justice between the parties. But if the debt secured by the first mortgage was not paid before the sale, the litigation must terminate upon the ascertainment of that fact. We have examined the evidence with the view of determining, whether we could reach a satisfactory conclusion on the decisive question of payment, so as to enable us to render a decree; but find it so indefinite and uncertain, that we deem it best to remand the cause, that a reference may be made to the register for this distinctive purpose, before whom the evidence may be made more certain and satisfactory.
We have not passed on the question of parties; but that the litigation may not be further embarrassed or unnecessarily delayed, will simply observe, that if no conveyance was made to the purchaser at the mortgage sale, the legal title still resides in the surviving mortgagee and the heirs of the deceased mortgagee, M. G. Askew, and they are necessary parties, in order that the entire legal title may be before the court.
Reversed and remanded.