Court Opinion

ID: 3239474
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:13:07.712209+00
Date Added: 2024-06-11T13:58:59.952592
License: Public Domain

As stated in the majority opinion of the court, the principle applicable on this appeal is the rule well settled that the person who owns the reversion when the rent of land falls due is entitled to it, unless it was reserved or was severed before the reversion was transferred. Coffey v. Hunt, 75 Ala. 236; Tubb v. Fort, 58 Ala. 277; English v. Key, 39 Ala. 113.
The reversion here referred to is the right remaining in the lessor of land after the execution of the lease. A transfer of land therefore before the execution of the lease is not, in the nature of things, a transfer of the reversion effected by such lease. For the principle to have operation the lease must have created the reversion before the execution of the transfer.
A mortgage executed by the lessor after the execution of the lease is a transfer to the mortgagee of the reversion. Mortgage Co. v. Turner, 95 Ala. 272, 11 So. 211; Coffey v. Hunt, supra; Drakford v. Turk, 75 Ala. 339; Comer v. Sheehan, 74 Ala. 452. But it is also distinctly held in the same cases that a mortgage executed before the lease is not a conveyance of the reversion, and, by such mortgage, the mortgagee does not acquire any right to the rent stipulated in the lease, nor to other rights as a landlord under it. I do not understand that any of the authorities take a different view of the effect of such situation.
The only matter which I think has difficulty is whether the foreclosure deed executed after the lease is of itself a transfer of the reversion then remaining in the mortgagor under the lease executed prior to the foreclosure and subsequent to the mortgage. I think this question is directly involved in the case of Mortgage Co. v. Turner, supra. The court was dealing with a mortgage executed prior to a lease, which was in turn prior to a foreclosure under the power of sale in the mortgage. Under such circumstances the court held that the purchaser, who was also the mortgagee, acquired no privity with the tenant, and could not enforce the statutory remedies of a landlord under the contract, but only had a claim for use and occupation after giving notice if he elects to make such claim. That decision treats the purchaser as being in the same position as the mortgagee was before foreclosure.
In the case of Coffey v. Hunt, supra, the mortgage was given after the lease, but the mortgagee was also the purchaser at a foreclosure sale under an old mortgage given before the lease. The court confined its discussion of his rights to those as mortgagee, and pretermitted the question of whether the foreclosure conferred any claims upon him to the rents under the lease.
The exact question has been decided, I take it, in the Turner Case, supra, which adopted for Alabama what may be otherwise an uncertain question.
In 14 A.L.R. 664, et seq., there is shown to be a difference of opinion upon the effect of a foreclosure in equity as a transfer of the reversion in respect to a lease executed after the mortgage. The majority hold that there is such a transfer effected unless the lessee is made a party and his rights annulled by the decree. For a discussion of that question, I refer to the above annotation.
This is in accord with the further conclusion pointed out in the majority opinion on this appeal and elsewhere that the transfer of the reversion may be either voluntary or involuntary or by operation of law. 36 Corpus Juris, 366.
Referring to this situation the Court of Appeals of New York says that the situation "is precisely the same so far as the estate granted was concerned as if the lease had been prior to the mortgage." Metropolitan Life Ins. Co. v. Childs, 230 N.Y. 285,130 N.E. 295, 297, 14 A.L.R. 658. The annotations in 14 A.L.R. 676, point out that a foreclosure under the power of sale is held in many cases cited there not to convey the reversion nor the rights of the landlord under the subsequent lease. A contrary opinion is not there shown to exist, but the Turner Case, supra, and Phillips v. Birmingham, etc., Co.,171 Ala. 445, 54 So. 603, are cited as supporting the view of the text. Such is undoubtedly the effect of these cases.
But it seems to me that the argument is sound that, if such foreclosure is by virtue of a power of sale in the mortgage, executed by the attorney in fact authorized therein to do so, just as if the mortgagor had himself by his own hand executed a transfer of the land on the occasion of the foreclosure, it would be a conveyance of the reversion, just the same as a foreclosure sale in equity.
But it is claimed that, even though this be true, it is not effective here, because before such transfer there was a severance by an assignment to the bank of the rent notes. Undoubtedly such an assignment creates a severance unless the rights of others intervene. Young v. Garber, 149 Ala. 196,42 So. 867; Ala. Gold Life Ins. Co. v. Oliver, 78 Ala. 158.
In response to the effect of that claim on this situation, it may be suggested that the foreclosure sale was under a power and by authority of a right granted before the alleged severance, and which operated upon the reversion *Page 168 
under the lease as soon as the lease came into being, and before the notes were assigned, and that, therefore, it took precedence over an attempted severance by an assignment of the rent notes to one with notice of the terms of the recorded mortgage. That appears to me to be sound reasoning, and sufficient to justify the final conclusion reached by this court, as an abstract principle. But I think it is in conflict with the opinion in the Turner Case, supra, and a large number of cases cited in the foregoing annotations. That opinion has been considered as controlling on the question, and has been followed on this point. Phillips v. Birmingham Industrial Co.,171 Ala. 445, 54 So. 603. As long as it remains without qualification, I think, the rights of parties which accrued in accordance with the principles then asserted should be protected in court. When the notes were transferred to the bank, it may have been advised by counsel, and could, I think, have relied upon the pronouncement of this court that it thereby acquired rights not affected by those of the mortgagee or a purchaser at foreclosure sale thereof.
When this court on former appeal in this case adhered to that conclusion, I think it thereby enforced a doctrine supported by at least the two decisions of this court, and, also, those shown in the annotations above cited. Where a decision is long acquiesced in and acted upon, and, perhaps, many transactions rest upon it, including, perhaps, the one here in controversy, it should be treated as controlling in this case, even though it may now be changed as affecting future transactions. Shelby County v. Farson, 197 Ala. 375, 72 So. 613; Bibb v. Bibb,79 Ala. 437; Matheson's Heirs v. Hearin, 29 Ala. 210; Field's Heirs v. Goldsby, 28 Ala. 218, 65 Am. Dec. 341; McVay's Adm'r v. Ijams, 27 Ala. 238.
My judgment is that the opinion pronounced on former appeal should be adhered to on this. I cannot therefore agree with the result reached by the majority, though it may be sound as an abstract principle.