Court Opinion

ID: 6518985
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:29:20.26662+00
Date Added: 2024-06-11T15:55:06.048688
License: Public Domain

MoOLELLAN, 'O. J.
The testimony of Riddle that be “nnder stood the Southern Lumber Co. to be composed of James B. Allen and wife and R. L. Allen during 1887 and 1888” should have been excluded for illegality, and hence it is immaterial whether the further objection that it was not responsive to the' interrogatory was seasonably made or not.—Whilden & Sons v. Merchants and Planters’ National Bank, 64 Ala. 1, 31.
The testimony of Biddle “1 sold them goods in 1888 under the firm name of Southern Lumber Co. at New Decatur, Ala.” was responsive to the inquiry of the second interrogatory whether he was acquainted with the subject- matter of tire suit, and, not being objectionable in other respects, the court properly overruled the motion to suppress it.
The chancellor, in our opinion, ivas fully warranted by the testimony of Riddle, leaving out of view tlmt part of it -which should have been suppressed referred to above, and 'Considering it in connection with the record of the suit at law prosecuted by Riddle against James B. and Robert L. Allen, 'partners doing business under the name of the Southern Lumber Co., including the judgment therein rendered July 5, 1892, for debt and costs, in reaching the 'conclusion that James B. Allen was indebted to Riddle, the complainant here, prior to and at the dates of the deed from the Land Company to Sallie B. Allen and of the mortgage from Sallie B. and Jamos B. Allen (each conveyance covering the lots involved in this suit) to the respondents, the 'Southern Home Building and Loan Association.
It is clear also, we think, that the records of the several attachment and detinue suits 'prosecuted by persons as creditors of James B. Allen about the time of the conveyances attacked in this cause, and tlie mortgage made by him, were properly received in evidence on the question of his solvency at that time; and upon the whole evidence we concur with the chancellor in holding that he was then insolvent.
*575It follows upon t'lie foregoing considerations, tlie respondent Allens not having sufficiently alleged in their answer, nor even attempted to prove, that' the lots conveyed by the Land Company to Bailie B. were paid for with'her own money and not with the money of James B., her husband, that the conveyance to Mrs. Allen must be held to have been made upon a consideration moving from her husband to be a fraud upon the complainant and his other creditors; 'and so also, of course, in respect of the improvements put upon the lots: they, too, are or were held by Mrs. Allen, under the averments of the bill and the lack of averment and proof to the contrary on her part, in fraud of her husband’s creditors and subject to their demands.—Kelly v. Connell, Green & Co., 110 Ala. 543.
While these lots were thus held by Mrs. Allen she executed a mortgage on them to the Southern Home Building & Loan Association to secure a loan then mude to her of $800. This transaction was, it is conceded for appellant, the mortgagee, tainted with usury: It is ad: mitted the association charged, and in and by the terms of the mortgage and a bond evidencing the debt Mrs. Allen agreed'to pay, more1 than eight percent per annum for the use of the money she received. By the oft repeated and uniform decisions of this court, it has come to be thoroughly established in our jurisprudence that this stipulation for usurious interest so infects and taints the transaction as to preclude the respondent mortgagee from the defense of being a bona fide purchaser for value without notice of outstanding equities in third parties, and to let in the holders of such equities to the same measure of relief against the mortgagee as they would have had against the mortgagor had the mortgage not been executed (Building & Loan Association v. Culberson, 126 Ala. 682; Capital City Ins. Co. v. Quinn, 73 Ala. 558; McCullough v. Mitchell, 64 Ala. 250; Wailes v. Couch, 75 Ala. 134; LeGrand v. Bank, 81 Ala. 123, 131; Farley National Bank v. Henderson, 118 Ala. 441; Hart v. Adler, 109 Ala. 467; Peterson & Co. v. Steiner Bros., 108 Ala. 629; McCall v. Rogers, 77 Ala. 349); and upon these considerations and authorities we concur with the chancellor that the com*576plainant is entitled on the case submitted to him to have the Building & Loan Association mortgage declared void as to1 his claim and to subject these lots to- the satisfaction of his debt against James B. Allen.
The doctrine that a mortgagee whose debt is secured by the mortgage is usurious cannot he a bona /u/e purchaser for value is quite distinct from the principle declared in Lehman, Durr & Co. v. Greenhut, 88 Ala. 478, and reaffirmed in Harris v. Russell, 93 Ala. 59; Loucheim & Co. v. First National Bank, 98 Ala. 521, and McLendon, v. Grice, 119 Ala 513, that an Insolvent debtor may convey property in payment of an antecedent usurious debt, the usury being 'contracted for in the original transaction and not being added at the time of the sale for the purpose1; of equalization between the debt and the value of the property 'Conveyed. There are casos which seem to repudiate this principle (LeGrand v. Bank and Peterson & Co. v. Steiner Bros., supra); but, assuming its soundness, its operation is confined to the payment of a pre-ewisting debt infected with usury in recognition of the debtor’s right to pay usury in such debt, and it is 'without influence upon the status of a mortgagee as respects good or had faith 'in- contracting for usury upon the loan secured by the mortgage.
Bailie, B. and James B. Allen are respondents to the bill. They answered the original bill. Four or five amendments were filed and 'allowed. The record does not show that the Allens or either of them had any notice of these amendments. They did not answer them, nor was any decree pro confesso ever taken against thorn, nor did they join in the submission of the cause. It cannot be affirmed either that the amendments would not and did not affect rights of the Allens or that they have lost all interest in the. suit by reason of the fact that the mortgage to the association has been foreclosed for the amount of the 'debt secured by it and the'expenses of foreclosure. One of the amendments, for instance, alleges divers facts going to show that James B. Allen was insolvent. Of course both said Allen and his wife had an interest in controverting those averments. They might have been able to show that *577the facts did not exist, or to explain them so as that they would consist with solvency. And if by showing James B.’s solvency, the mortgage to the Loan Association wasi supported, they thereby clearly conserved their interests in having the lots satisfy the mortgage to their relief on the covenants therein, and this whether the mortgage had 'been foreclosed or not. It follows, that, in our opinion, the court below erred in rendering a final decree before the case was at issue as to Bailie B. and James B. Allen.—Alston v. Alston, 34 Ala. 15; Masterson v. Masterson, 32 Ala. 437;Vaughan v. Smith, 69 Ala. 92; Holly v. Bass, 63 Ala. 387.
For the error pointed oi$ the decree must be reversed. The cause is remanded.
Reversed and remanded.