Opinion
6 Div. 201.
June 15, 1933.
Appeal from Circuit Court, Marion County; Ernest Lacy, Judge.
Bolivar B. O'Rear, of Jasper, for appellants.
Counsel argues for error in the decree, but without citing authorities.
J. P. Middleton and Ernest B. Fite, both of Hamilton, for appellee.
One advancing money for discharge of a prior lien is entitled to subrogation. First Ave. C. L. Co. v. King, 193 Ala. 438, 69 So. 549; Bigelow v. Scott, 135 Ala. 236, 33 So. 546; Woodruff v. Satterfield, 199 Ala. 477, 74 So. 948; Arnett v. Willoughby, 190 Ala. 530, 67 So. 426; Amer. T. S. Bank v. Turner, 16 Ala. App. 602, 80 So. 176; Hampton v. Counts, 202 Ala. 331, 80 So. 413. The bill, alleging payment of the existing mortgage to Pearce, check evidencing advancement forming consideration of complainant's mortgage being made payable to Pearce, indorsed by him, and alleging fraud participated in by American Mining Company, one of the defendants, and notice of fact of payment of the original mortgage to Pearce, contains equity. Federal Land Bank v. Corinth B. T. Co., 214 Ala. 146, 107 So. 88. Where default is made in the payment of installments, and terms of mortgage authorized mortgagee to declare whole debt due, the mortgagee is authorized to foreclose. Hughes T. S. Co. v. Carr, 203 Ala. 469, 83 So. 472. Mortgagee, upon default, may bring bill to foreclose and have deficiency decree against mortgagor. Rountree v. Satterfield, 211 Ala. 464, 100 So. 751.
The appeal is from a decree overruling demurrers to a bill in equity.
The bill was filed by the Federal Land Bank of New Orleans for the foreclosure of a mortgage on real estate.
It avers a loan of money to respondents Caine O'Rear and C. W. Stubblefield, secured by mortgage on described lands, payable on the usual amortization plan; that default has been made in the payment of certain installments as well as for nonpayment of taxes on the property, which, by terms of the mortgage, made exhibit to the bill, gives a right of foreclosure.
Without further details, the bill has equity as a bill for foreclosure.
Further averments of the bill disclose that, at the time complainant's mortgage was executed, there was an outstanding mortgage on this and other lands given by the same mortgagors to Clovis Pearce for purchase money; that as a part of the transaction a release was to be obtained from Pearce releasing the lands covered by the Federal Land Bank mortgage as against such mortgage; that the check for the loan named Pearce as one of the payees, who indorsed the check in due course, and executed the required release, but such release was delivered to one of the mortgagors who never put the same to record, so that, as the record stands, the Pearce mortgage is a prior mortgage to that of complainant.
The bill further avers that some four years later an assignment of this first mortgage was made by Pearce in regular form to American Mining Company, a corporation in which one of the mortgagors is interested, and who negotiated the assignment and transfer; that this assignment has been recorded; that the assignee had knowledge or notice at the time that such mortgage had been released as against the mortgage of the Federal Land Bank.
The bill makes the American Mining Company a party respondent, and prays that its mortgage be decreed to be subordinate to that of complainant, and declared void as against the rights of complainant.
The American Mining Company is a proper party respondent, and on the above averments complainant is entitled to the relief stated.
Other averments claim the Pearce mortgage has been in fact paid and satisfied, and the assignment of same is a fraud on the rights of complainant. In the absence of averments of any intention on the part of the assignee to claim such mortgage to be a superior lien to that of complainant, the averments of fraud are insufficient. But there is no special prayer for relief on the theory of fraud.
Appellants argue that, because the mortgage to complainant recites an indebtedness of $15,000, and shows the amount of the check sent to the local association to be less than $10,000, presumably the proceeds of a $10,000 loan, the bill makes no case for foreclosure, or other relief sought.
Whatever equities between any of these parties may grow out of such situation is matter for answer or cross-bill.
The demurrers were overruled without error.
Affirmed.
ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.