Effect of Persons in Possession of Real Estate Other Than The Owner/Vendor On A Buyer's Status As A Bona Fide Purchaser - Alabama State Court Cases

2 of 266 DOCUMENTS
Analysis
As of: Jul 10, 2014
Baldwin County Federal Savings Bank v. Central Bank of the South, et al.
No. 89-1457
Supreme Court of Alabama
585 So. 2d 1279; 1991 Ala. LEXIS 670
June 28, 1991
SUBSEQUENT HISTORY: [**1] Released for Publication September 18, 1991.
PRIOR HISTORY: Appeal from Baldwin Circuit Court, No. CV-88-500166; Thomas B. Norton, Judge.
DISPOSITION: AFFIRMED.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant savings bank sought review of judgment from the Baldwin Circuit Court
(Alabama) that declared that the interest and title of appellees, central bank and landowners, in and to the property,
respectively, were "paramount and superior" to the rights of the savings bank and its successors and assigns.
OVERVIEW: Appellees filed a declaratory judgment action against the savings bank to determine the status of two
liens against undeveloped beachfront property that was owned by the landowners. Appellees asked the trial court to
declare that their separate interests in the property were superior to any rights the savings bank might have had in the
property by virtue of its judgment against the grantor of the property. The trial court entered a judgment declaring that
the landowners' title to the property, as described in the deed from the grantor, and the central bank's interest in the
property, obtained through the mortgage from the landowners, were "paramount and superior" to the rights of the
savings bank and its successors and assigns. On appeal, the court affirmed the judgment. The court held that the trial
court's implicit finding that the savings bank had constructive notice of the landowners' deed and also of the central
bank's mortgage was not clearly erroneous, but it was supported by credible evidence.
OUTCOME: The court affirmed the judgment of the trial court that declared the central bank's and the landowners'
interest in the property and title to the property, respectively, were "paramount and superior" to the rights of the savings
Page 1
bank and its successors and assigns.
CORE TERMS: notice, deed, judgment creditor, certificate, recorded, mortgage, purchaser, conveyance, recording,
constructive notice, unrecorded, redemption, mortgagee, sufficient to put, tenus, ore, subject property, new trial, great
weight, actual knowledge, credible evidence, tax sale, undeveloped, beachfront, lienholder, probate, visited, void
LexisNexis(R) Headnotes
Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review
Evidence > Inferences & Presumptions > Presumptions > Presumption of Regularity
[HN1] Where evidence has been presented orally, a presumption of correctness attends the trial court's conclusion on
issues of fact, if these conclusions were based totally or in part on oral testimony. The court will not disturb the trial
court's conclusions unless they are clearly erroneous and against the great weight of the evidence.
Real Property Law > Deeds > General Overview
Real Property Law > Financing > Mortgages & Other Security Instruments > Mortgagee's Interests
Real Property Law > Priorities & Recording > Bona Fide Purchasers
[HN2] All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature of mortgages to
secure any debts are inoperative and void as to purchasers for a valuable consideration, mortgagees and judgment
creditors without notice, unless the same have been recorded before the accrual of the right of such purchasers,
mortgagees or judgment creditors. Ala. Code 35-4-90 (1975).
[HN3] The principle that recording first creates superior rights only when the recording party does not have actual
knowledge or constructive notice of prior unrecorded conveyances is an equitable principle of long standing that has
been consistently applied in cases involving judgment creditors.
Real Property Law > Nonmortgage Liens > Mechanics' Liens
[HN4] The character or quality of possession that is sufficient to provide notice has been described as whatever is
sufficient to put a party on inquiry concerning possible competing claims to the property.
Real Property Law > Estates > Present Estates > Fee Simple Estates
[HN5] An owner is not required to physically reside on property in order to establish possession. Instead, he need only
make use of the property in a manner that is consistent with its nature.
COUNSEL: For Appellant: Claude E. Bankester and Daniel T. Bankester of Wilkins, Bankester, Biles & Wynne, Bay
Minette, Alabama.
For Appellee: Daniel G. Blackburn of Stone, Granade, Crosby & Blackburn, Bay Minette, Alabama.
JUDGES: Almon, Shores, Adams, and Ingram, JJ., concur. Steagall, J., concurs in the result. Maddox and Kennedy,
JJ., dissent. Houston, J., recused.
OPINION BY: PER CURIAM
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585 So. 2d 1279, *; 1991 Ala. LEXIS 670, **1
OPINION
[*1280] Baldwin County Federal Savings Bank ("BCFSB") appeals from a judgment in favor of the plaintiffs,
Steve Odom, Diane Odom, and Central Bank of the South ("Central"), in a declaratory judgment action. The complaint
was filed by Central and the Odoms to determine the status of two liens against undeveloped beachfront property in
Baldwin County that is owned by the Odoms.
1
1 The complaint named an additional lienholder as a defendant. However, a default judgment was entered
against that defendant and it has not appealed. Therefore, only the lien asserted by BCFSB will be discussed.
[**2] On March 30, 1986, the Odoms bought the subject property from Gulf Sun Investments, Inc. ("Gulf Sun").
They did not immediately record their deed. On May 15, 1986, the Odoms mortgaged the property to Central. As with
the Odoms' deed, the mortgage held by Central was not immediately recorded. On June 4, 1986, BCFSB, which had on
May 22 obtained a judgment against Gulf Sun, recorded a certificate of that judgment. On July 16, 1986, the Odoms'
deed and Central's mortgage were recorded.
After learning that BCFSB had filed its certificate of judgment against Gulf Sun, Central and the Odoms filed a
complaint wherein they asked the court to declare that their separate interests in the property were superior to any rights
BCFSB might have in the property by virtue of its judgment against Gulf Sun. After an ore tenus hearing, the trial court
entered a judgment declaring that the Odoms' title to the property, as described in the deed from Gulf Sun, and Central's
interest in the property, obtained through the mortgage from the Odoms, were "paramount and superior" to the rights of
BCFSB and its successors and assigns. That judgment did not contain specific findings of fact. The court denied [**3]
BCFSB's motion for a new trial, and BCFSB appeals.
BCFSB argues that, because it recorded its certificate of judgment before the recording of the Odoms' deed and
Central's mortgage, its rights in the property are superior to those held by the Odoms and by Central.
2
Alternatively, it
argues that the court's implicit finding that the Odoms' possession was such as to give it notice of the Odoms'
unrecorded deed and Central's unrecorded mortgage before it filed the certificate of judgment is not supported by the
evidence.
2 There is no indication that BCFSB made any effort to have a lis pendens notice filed against this property
during the pendency of its action against Gulf Sun, see Ala. Code 1975, 35-4-131; neither has BCFSB made a
claim or defense in this action that Gulf Sun's conveyance to the Odoms was made with intent to defraud
creditors, see 8-9-6.
At the outset, we note that the scope of this Court's review regarding the resolution of fact questions in ore tenus
cases is restricted:
"It is the law in [**4] Alabama that [HN1] where evidence has been presented orally, a presumption of correctness
attends the trial court's conclusion on issues of fact, if these conclusions were based totally or in part on oral testimony.
This Court will not disturb the trial court's conclusions unless they are clearly erroneous and against the great weight of
the evidence. Cougar Mining Co. v. Mineral Land & Mining Consultants, Inc., 392 So. 2d 1177 (Ala. 1981); Raidt v.
Crane, 342 So. 2d 358 (Ala. 1977); Adams Supply Co. v. United States Fidelity & Guaranty Co., 269 Ala. 171, 111 So.
2d 906 (1959)."
First Alabama Bank v. Martin, 425 So. 2d 415, 425 (Ala. 1982). In addition, in cases such as this one, where the court
did not make specific findings of fact, this Court will assume that the court made the findings necessary to support its
judgment, unless such findings would be clearly erroneous [*1281] and against the great weight and preponderance of
the evidence. Hand v. Stanard, 392 So. 2d 1157, 1159 (Ala. 1980).
BCFSB's first argument concerns the provisions of Ala. Code 1975, 35-4-90(a). It contends [**5] that, pursuant
to that section, once a judgment creditor records its certificate of judgment, all subsequently recorded conveyances are
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585 So. 2d 1279, *; 1991 Ala. LEXIS 670, **1
void as to that judgment. It directs this Court's attention to Johnson v. Haleyville Mobile Home Supply, Inc., 477 So. 2d
328 (Ala. 1985), as support for its argument.
We do not agree. Section 35-4-90(a) gives judgment creditors, purchasers, and mortgagees priority over an earlier
executed deed that has not been recorded only when the judgment creditor, purchaser, or mortgagee records its
instrument without actual knowledge or constructive notice of the earlier conveyance. Therefore, simply winning the
race to the courthouse and recording first is not enough to give a lienholder priority. It is also necessary that the
judgment creditor, whose rights, if any, attach upon the act of recording, record its judgment without notice of the
earlier deed. Smith v. Arrow Transp. Co., 571 So. 2d 1003 (Ala. 1990); Department of Revenue v. Price-Williams, 545
So. 2d 7 (Ala. 1989); Gulf Oil Corp. v. Beck, 293 Ala. 158, 300 So. 2d 822 (1974).
The language of 35-4-90(a) [**6] indicates that it was drafted, at least in part, to prevent the result argued for by
BCFSB:
[HN2] "All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature of
mortgages to secure any debts are inoperative and void as to purchasers for a valuable consideration, mortgagees and
judgment creditors without notice, unless the same have been recorded before the accrual of the right of such
purchasers, mortgagees or judgment creditors."
Ala. Code 1975, 35-4-90 (emphasis added).
[HN3] The principle that recording first creates superior rights only when the recording party does not have actual
knowledge or constructive notice of prior unrecorded conveyances is an equitable principle of long standing that has
been consistently applied in cases involving judgment creditors. Smith v. Arrow Transp. Co., supra; Gulf Oil, supra; W.
T. Rawleigh Co. v. Barnette, 253 Ala. 433, 44 So. 2d 585 (1950); Burt v. Cassety, 12 Ala. 734 (1848). In Gulf Oil, this
Court noted:
"'It results from this view, that as the judgment creditor had, by the possession of the complainant, [**7]
constructive notice of her title, he acquired no lien upon the land, in virtue of his judgment.'"
293 Ala. at 160, 300 So. 2d at 823 (quoting Burt, supra, at 739; emphasis in original).
[HN4] The character or quality of possession that is sufficient to provide notice has been described as "whatever is
sufficient to put a party on inquiry" concerning possible competing claims to the property. Gamble v. Black Warrior
Coal Co., 172 Ala. 669, 672, 55 So. 190, 190 (1911); Jefferson County v. Mosley, 284 Ala. 593, 226 So. 2d 652 (1969).
Under 35-4-90(a), judgment creditors and purchasers are "on the same footing." Gulf Oil, supra; Burt, supra;
Therefore, the quantum of possession needed to put a judgment creditor on notice is no greater than that which is
deemed sufficient to put a purchaser on notice. Id.
In addition, BCFSB's reliance on our opinion in Johnson, supra, is misplaced. The sole issue addressed in Johnson
was whether a judgment creditor's rights had accrued upon the recording of the certificate of judgment [**8] even
though the judgment debtor thereafter filed a motion for new trial. 477 So. 2d at 328. That opinion mentioned only
summarily that the judgment creditor did not have notice of the deed that had been executed before it recorded its
certificate of judgment. Id., at 329-30. Thus, Johnson did not address the issue that is central to the instant case, i.e.,
whether the judgment creditor had notice of unrecorded conveyances before it recorded its certificate of judgment.
BCFSB also argues that the evidence does not support the trial court's implicit finding that there was sufficient
[*1282] evidence of the Odoms' possession of the property to put it on notice of the Odoms' deed and, by inference,
the subsequent mortgage to Central.
3
The determination of whether BCFSB was chargeable with notice of the
Odoms' possession was a question of fact within the equity jurisdiction of the court. Hodges v. Beardsley, 269 Ala.
280, 283-84, 112 So. 2d 482, 484-85 (1959). Because the ore tenus rule applies to this case, the court's resolution of that
question will not be reversed unless it is clearly erroneous or unsupported by [**9] credible evidence. May v.
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585 So. 2d 1279, *1281; 1991 Ala. LEXIS 670, **5
Campbell, 470 So. 2d 1188 (Ala. 1985).
3 Where a third party is in possession of property, a purchaser of that property or a judgment creditor is
charged with constructive notice of the nature of the third party's title. Smith, supra; Gamble, supra. Therefore,
if BCFSB had notice of the Odoms' claims, it also had notice of the Odoms' mortgage to Central.
The most important evidence supporting the trial judge's decision showed that the Odoms had redeemed the
property from a prior tax sale before BCFSB recorded its certificate of judgment. As a result, a certificate of redemption
in the Odoms' names, dated May 19, 1986, was issued by the Baldwin County tax collector's office.
4
Documents that
show the payment of such taxes have been held to be competent evidence of the payor's claim of title. Gantt v. Phillips,
262 Ala. 184, 77 So. 2d 916 (1955). Mr. Odom testified that the property had been [**10] assessed in the Odoms'
names from the time of the redemption. Thus, it appears that BCFSB had notice through the tax assessor's records that
the Odoms claimed the property and had assessed it in their names.
4 Although there is nothing in the record on this point, we note that the redemption of property that had been
sold at a tax sale is a matter within the jurisdiction of the judge of probate. Ala. Code 1975, 40-10-120 et seq.
Records concerning such redemptions are kept by the judge of probate. 40-10-127.
There was also evidence of the Odoms' occupancy of the property that supports the trial court's determination that
they "possessed" the property in a manner sufficient to put BCFSB on notice of their deed. [HN5] An owner is not
required to physically reside on property in order to establish possession. Instead, he need only make use of the property
in a manner that is consistent with its nature. Hand, supra, at 1160; Turnham v. Potter, 289 Ala. 685, 271 So. 2d 246
(1972). [**11] The subject property is undeveloped beachfront property. Steve Odom testified that, during the period
between the date of the deed and the date that BCFSB recorded its certificate of judgment, he and his wife repeatedly
visited the property and walked its boundaries. They had it surveyed and had the corners marked with stakes. They also
visited the property with real estate agents to discuss how to develop it and used it for family outings, picnics,
swimming, and sunbathing.
This Court has recognized "that it is difficult, if not impossible, to lay down any general rule as to what facts will in
every case be sufficient to charge a party with notice or put him on inquiry." Jefferson County v. Mosley, 284 Ala. at
599, 226 So. 2d at 656. However, in light of the evidence set out above, we cannot say that the trial judge's implicit
finding that BCFSB had constructive notice of the Odoms' deed, and therefore also of Central's mortgage, Smith, supra,
was clearly erroneous or not supported by credible evidence. Therefore, the judgment is due to be affirmed. Hand,
supra.
AFFIRMED.
Steagall, J., concurs in the result.
[**12] Maddox and Kennedy, JJ., dissent.
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3 of 266 DOCUMENTS
Analysis
As of: Jul 10, 2014
Betty Ruth Smith v. Arrow Transportation Company, Inc., and Mel Bailey, as
Sheriff of Jefferson County
No. 89-572
571 So. 2d 1003; 1990 Ala. LEXIS 701
September 7, 1990
PRIOR HISTORY: [**1] Appeal from Jefferson Circuit Court; CV-88-503-987MC; Marvin Cherner, Judge.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff joint tenant appealed the decision of the Jefferson Circuit Court (Alabama),
which granted summary judgment in favor of defendant judgment creditor in an action to quiet title.
OVERVIEW: The joint tenant acquired property through marriage, but title was held in the name of her husband's
corporation. The joint tenant remained in possession of the property at all times. The judgment creditor obtained a lien
against that corporation. When the corporation filed for bankruptcy, the bankruptcy court entered an order of stay to
protect the judgment creditor. An execution on that judgment was issued and the sheriff scheduled a sale of the
property. The joint tenant filed an action to quiet title, and the property was sold to the highest bidder. The trial court
entered judgment for the judgment creditor. On appeal, the court affirmed. The court held that the judgment creditor
was entitled to judgment as a matter of law because the joint tenant's deed was recorded one year after the certificate of
judgment was recorded and the judgment creditor did not have constructive notice of the joint tenant's claim to the
property.
OUTCOME: The court affirmed the summary judgment in favor of the judgment creditor.
CORE TERMS: deed, recorded, certificate, notice, judgment creditor, constructive notice, purchaser, conveyance,
Page 6
grantee, summary judgment, visible, recordation, mortgagees, real property, substantial evidence, purportedly,
recording, conveyed, defeat, void, marriage, quiet, matter of law, record owner, subject to levy, executed deed, joint
possession, valuable consideration, change of possession, unambiguously
[HN1] Ala. Code 35-4-90(a), (b) (1975) provides: (a) All conveyances of real property, deeds, mortgages, deeds of
trust or instruments in the nature of mortgages to secure any debts are inoperative and void as to purchasers for a
valuable consideration, mortgagees and judgment creditors without notice, unless the same have been recorded before
the accrual of the right of such purchasers, mortgagees or judgment creditors. (b) Subsection (a) of this section includes
absolute conveyances of real property defeasible by a defeasance or other instrument, in which case such defeasance or
instrument must be recorded, according to its character, within the time limited in subsection (a) of this section or it is
void as to purchasers for a valuable consideration, mortgagees and judgment creditors of the original grantee without
notice. Ala. Code 35-4-90 (1975).
Contracts Law > Types of Contracts > Bona Fide Purchasers
[HN2] A deed that is unrecorded is good between the grantor and grantee, but is void against bona fide purchasers for
value, mortgagees, and judgment creditors without notice. Therefore, if a judgment creditor without notice perfects a
lien against the property, he is protected against subsequently recorded instruments, regardless of the date of execution
or delivery of those other instruments.
Commercial Law (UCC) > Secured Transactions (Article 9) > General Overview
Real Property Law > Nonmortgage Liens > Judgment Liens
[HN3] Ala. Code 6-9-210 (1975) sets out the procedure for recording a certificate of judgment.
Bankruptcy Law > Case Administration > Notice
Civil Procedure > Judgments > Entry of Judgments > Enforcement & Execution > Writs of Execution
Commercial Law (UCC) > Secured Transactions (Article 9) > General Overview
[HN4] Every judgment, a certificate of which has been filed as provided in Ala. Code 6-9-210, shall be a lien in the
county where filed on all property of the defendant that is subject to levy and sale under execution, and such lien shall
continue for 10 years after the date of such judgment. No insolvency proceedings or declaration of insolvency shall
affect or impair such lien, except bankruptcy proceedings instituted within four months after the filing of the certificate
of judgment for record as provided by law. The filing of said certificate of judgment, as provided in 6-9-210, shall be
notice to all persons of the existence of the lien thereby created. Ala. Code 6-9-211.
Real Property Law > Nonmortgage Liens > Lien Priorities
[HN5] The recording of a certificate of judgment creates a blanket lien on all of the property of the defendant that is
located in the county of recordation and is subject to levy and sale. The judgment creditor's rights in the property attach
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571 So. 2d 1003, *; 1990 Ala. LEXIS 701, **1
upon the act of recording the certificate of judgment and have priority over all rights arising out of subsequently
recorded instruments.
Civil Procedure > Judgments > Entry of Judgments > Enforcement & Execution > General Overview
Real Property Law > Nonmortgage Liens > Lien Priorities
[HN6] In order for a judgment creditor to have priority over a prior executed deed, it must be shown that the creditor's
rights accrued before the prior executed deed was recorded and that he did not have notice of the deed at the time of the
judgment. The burden of proof is on the person holding under an unrecorded deed to show notice in order to defeat the
rights of the judgment creditor.
[HN7] Where a third party is in possession of the premises, a purchaser of those premises or a judgment creditor is
charged with constructive notice of the nature of the third party's title. However, for possession to operate as notice, it
must be open, visible, exclusive and unambiguous, not liable to be misconstrued or misunderstood. Consequently, it is
uniformly held that where there is no open and visible change of possession, it does not operate as notice. Hence,
where the possession of the vendor and vendee is joint at the time of the sale and conveyance (or recordation of the
certificate of judgment), the rule does not apply. The joint possession does not operate as constructive notice, because
there would be no visible act that is calculated to put a stranger on inquiry as to the changed attitude or status of the
title.
Real Property Law > Deeds > Construction & Interpretation
Real Property Law > Deeds > Covenants of Title
[HN8] A basic rule of construction of deeds is that when subsequent words or markings are of doubtful import, they
cannot be construed so as to contradict preceding words that are certain.
COUNSEL: J. N. Holt of Holt, Cooper & Upshaw, Birmingham, Alabama.
Ralph H. Smith and Michael L. Hall of Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, Alabama.
JUDGES: Almon, Justice. Hornsby, C. J., and Maddox, Adams, and Steagall, JJ., concur.
OPINION BY: ALMON
OPINION
[*1004] This is an appeal from a summary judgment entered in favor of the defendants/counter-claimants, Arrow
Transportation Company, Inc. ("Arrow"), and Mel Bailey, sheriff of Jefferson County, and against the
plaintiff/counter-defendant, Betty Ruth Smith, in an action to quiet title.
1
1 Although Arrow's present corporate name is Merchants Transportation, Inc., we will refer to the corporation
as Arrow in order to maintain consistency with the trial record. Mel Bailey, the sheriff of Jefferson County, was
also named as a defendant in Betty's complaint in an additional count requesting a permanent injunction against
the levy and sale of the subject property. However, Bailey's involvement in this case was minimal, and he has
not filed an appellee's brief.
[**2] Facts
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There are a number of conveyances, alleged conveyances, and other transactions that directly affect each party's
interest in the subject property, which consists of a residential lot and house. Those events are briefly summarized
below. A table with the dates of the relevant transactions follows that summary.
Betty married Charles Ross Smith on April 15, 1982. Prior to that marriage she had purportedly executed a contract
to purchase the property. That contract was not recorded, and when a deed was executed purportedly pursuant thereto,
title to the property was not taken in Betty's name, but was instead taken in
the name of Trico [*1005] Fuels, Inc. ("Trico"), a corporation operated by Charles's family. Nonetheless, Betty
entered into, and remained in, possession of the property at all times relevant to this appeal. Betty alleges that title to the
property was put in Trico's name as a "safeguard" until she and Charles were sure that their marriage would be
successful. She also alleges that once the marriage proved to be a success the property was to be conveyed to her. She
contends that this agreement between her, Charles, and Trico was evidenced by the inscriptionof [**3] her initials
"B.R.H." next to Trico's name as grantee on the deed.
2
That deed was properly recorded.
2 Betty's maiden name was Betty Ruth Harper, hence the initials "B.R.H."
Trico remained the record owner of the property for more than two and one-half years after that deed was recorded.
During that period Arrow obtained a judgment against Trico and recorded a certificate of judgment in Real volume
2533 in the Jefferson County probate court. After the certificate of judgment was recorded, a deed that indicated that
Trico had conveyed the property to Charles was recorded. Six months later, another deed, showing a conveyance from
Charles and Betty to each other as joint tenants with right of survivorship, was recorded.
Trico later filed a bankruptcy petition. An order of stay was entered by the bankruptcy court to protect Trico's
assets from creditors. Arrow filed a motion in the bankruptcy court for relief from stay so that it could exercise its rights
against the property as a judgment creditor. Arrow's motionwas [**4] granted. An execution on Arrow's judgment
against Trico was issued and the sheriff scheduled a sale of the property. Betty filed this action to quiet title to the
property, and Arrow filed an answer and counterclaim to quiet title. The property was sold to Arrow as the highest
bidder and that corporation recorded a sheriff's deed. Summary judgment was later entered in favor of Arrow.
Transactions
Description Date Date Recorded
1. Contract of sale to Betty Ruth Smith
(nee Harper) 01/04/82 Not recorded
2. Deed to Trico as grantee 01/12/82 01/20/82
3. Entry of judgment for Arrow
against Trico 05/30/84 06/29/84
4. Deed from Trico to Charles 01/05/84 09/14/84
5. Deed from Charles and Betty
to each other as joint tenants 03/19/85 03/20/85
6. Petition in bankruptcy filed by Trico 05/06/85 N/A
7. Lift of stay in bankruptcy in favor
of Arrow 05/23/88 N/A
8. Execution on Arrow's judgment against
Trico delivered to Sheriff 06/28/88 N/A
Page 9
571 So. 2d 1003, *1004; 1990 Ala. LEXIS 701, **2
9. Sheriff's sale of property to Arrow 10/17/88 10/21/88
Issues
Betty argues that there was evidence that Arrow was not a judgment creditor or purchaser without notice of an
adverse claim to the property and, therefore, that [**5] summary judgment was not proper. She advances two
arguments to support that contention. In order for us to address those arguments, we must review the relevant statutes
regarding the recordation of deeds and other instruments affecting title to real property, as well as the effect that the
proper recordation of a certificate of judgment has on the defendant's property.
[HN1] "(a) All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature of
mortgages to secure any debts are inoperative and void as to purchasers for a valuable consideration, mortgagees and
judgment creditors without notice, unless the same have been recorded before the accrual [*1006] of the right of such
purchasers, mortgagees or judgment creditors.
"(b) Subsection (a) of this section includes absolute conveyances of real property defeasible by a defeasance or
other instrument, in which case such defeasance or instrument must be recorded, according to its character, within the
time limited in subsection (a) of this section or it is void as to purchasers for a valuable consideration, mortgagees and
judgment creditors of the original grantee without notice."
Ala. Code [**6] 1975, 35-4-90 (emphasis added). [HN2] A deed that is unrecorded is good between the grantor and
grantee, but is void against bona fide purchasers for value, mortgagees, and judgment creditors without notice.
Alexander v. Fountain, 195 Ala. 3, 70 So. 669 (1916). Therefore, if a judgment creditor without notice perfects a lien
against the property, he is protected against subsequently recorded instruments, regardless of the date of execution or
delivery of those other instruments. Johnson v. Haleyville Mobile Home Supply, Inc., 477 So. 2d 328 (Ala. 1985).
[HN3] Ala. Code 1975, 6-9-210, sets out the procedure for recording a certificate of judgment. Betty does not
contend that Arrow failed to comply with the requirements of that statute. The effect that properly filing a certificate of
judgment has on the defendant's property is set out in 6-9-211:
[HN4] "Every judgment, a certificate of which has been filed as provided in section 6-9-210, shall be a lien in the
county where filed on all property of the defendant which is subject to levy and sale under execution, and such lien
shall continue for 10 years after the [**7] date of such judgment. . . . No insolvency proceedings or declaration of
insolvency shall affect or impair such lien, except bankruptcy proceedings instituted within four months after the filing
of the certificate of judgment for record as provided by law. The filing of said certificate of judgment, as provided in
section 6-9-210, shall be notice to all persons of the existence of the lien thereby created."
(Emphasis added.) [HN5] The recording of a certificate of judgment creates a blanket lien on all of the property of the
defendant that is located in the county of recordation and is subject to levy and sale. Kiker v. Nat'l Structures, Inc., 342
So. 2d 746 (Ala. 1977); Shrout v. Seale, 287 Ala. 215, 250 So. 2d 592 (1971); Second National Bank v. Allgood, 234
Ala. 654, 176 So. 363 (1937). The judgment creditor's rights in the property attach upon the act of recording the
certificate of judgment and have priority over all rights arising out of subsequently recorded instruments. Johnson,
supra; Reuf v. Fulks, 219 Ala. 252, 122 So. 14 (1929); [**8] Goodbar & Co. v. Blackwell, 170 Ala. 232, 54 So. 532
(1911); Galloway v. State ex rel. Payne, 371 So. 2d 48 (Ala. Civ. App. 1979).
[HN6] In order for a judgment creditor to have priority over a prior executed deed, it must be shown that the
creditor's rights accrued before the prior executed deed was recorded and that he did not have notice of the deed at the
time of the judgment. Johnson, supra; Goodbar & Co., supra; Hall v. Griffin, 119 Ala. 214, 24 So. 27 (1898). The
burden of proof is on the person holding under an unrecorded deed to show notice in order to defeat the rights of the
judgment creditor. Wiggins v. Stewart Bros., 215 Ala. 9, 109 So. 101 (1926).
Page 10
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It is not disputed that Arrow recorded its certificate of judgment before the deeds that purportedly transferred the
property from Trico to Betty and Charles were recorded. Therefore, unless Betty could present evidence that Arrow had
actual or constructive notice of her claim to the property, Arrow would be entitled to a [**9] judgment as a matter of
law. Sadie v. Martin, 468 So. 2d 162 (Ala. 1985). Because Betty's complaint was filed after June 11, 1987, she must
have produced "substantial evidence" that showed the existence of a genuine issue of material fact in order to defeat
Arrow's motion for summary judgment. Ala. Code 1975, 12-21-12(d); Posey v. Posey, 545 So. 2d 1329 (Ala. 1989).
Betty puts forth two arguments in support of her contention that Arrow had at [*1007] least constructive notice of
her claim to the property: (1) she contends that her continuous possession of the property, from 1982 until the present,
gave Arrow actual or constructive notice that she claimed an interest in the property; or (2) she argues that the
inscription of the initials "B.R.H." on the 1982 deed to Trico gave Arrow actual or constructive notice that someone
other than Trico claimed an interest in the property.
As a general rule, [HN7] where a third party is in possession of the premises, a purchaser of those premises or a
judgment creditor is charged with constructive notice of the nature of the third party's title. Gamble v. Black Warrior
Coal Co., 172 Ala. 669, 55 So. 190 (1911). [**10] However, as this Court stated in Lightsey v. Stone, 255 Ala. 541,
547, 52 So. 2d 376, 381 (1951):
"For possession to operate as notice, it must be open, visible, exclusive and unambiguous, not liable to be misconstrued
or misunderstood. Consequently, it is uniformly held that where there is no open and visible change of possession, it
does not operate as notice.
"Hence, we have held that where the possession of the vendor and vendee is joint at the time of the sale and
conveyance [or recordation of the certificate of judgment], the rule does not apply. The joint possession does not
operate as constructive notice, because there would be no visible act which is calculated to put a stranger on inquiry as
to the changed attitude or status of the title."
(Emphasis added.) See Pake v. Lindsey Mill Co., 208 Ala. 569, 94 So. 573 (1922); Holly v. Dinkins, 202 Ala. 477, 80
So. 861 (1919); Autauga Banking & Trust Co. v. Chambliss, 200 Ala. 87, 75 So. 463 (1917); Sloss-Sheffield Steel &
Iron Co. v. Taff, 178 Ala. 382, 59 So. 658 (1912); [**11] Christopher v. Curtis-Attalla Lumber Co., 175 Ala. 484, 57
So. 837 (1912); Langley v. Pulliam, 162 Ala. 142, 50 So. 365 (1909); O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251
(1907); Kindred v. New England Mortgage Security Co., 116 Ala. 192, 23 So. 56 (1897); Munn v. Achey, 110 Ala. 628,
18 So. 299 (1895); Motley v. Jones, 98 Ala. 443, 13 So. 782 (1893); and McCarthy v. Nicrosi, 72 Ala. 332 (1882).
For more than two years before Arrow recorded its certificate of judgment, both Trico, as the record owner of the
property, and Betty, as the occupier of the property, were in joint possession of the property. Betty's possession was
attributable to the ownership of the property by the corporation owned by her husband's family and therefore did not
unambiguously serve as notice of a claim by her that was inconsistent with the recorded title in Trico's name. The only
deed conveying an interest [**12] to Betty was not recorded until almost one year after Arrow had recorded its
certificate of judgment. At the only relevant time, the date that Arrow recorded its certificate of judgment, there had
been no visible change of possession or "any visible act . . . calculated to put [Arrow] on inquiry" as to Betty's possible
claim. Therefore, her possession could not operate as notice. Lightsey, supra. See First Nat'l Bank of Birmingham v.
Culberson, 342 So. 2d 347 (Ala. 1977); Wiggins, supra; Autauga Banking & Trust Co. v. Chambliss, 200 Ala. 87, 75 So.
463 (1917); Harris v. Hanchey, 192 Ala. 179, 68 So. 276 (1915); O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251 (1907);
McCarthy v. Nicrosi, 72 Ala. 332 (1882).
Betty's second argument is based on the inscription of the initials "B.R.H." following the grantee clause in the 1982
deed to Trico. She contends that those initials gave Arrow notice that someone [**13] other than Trico had a claim to
the property. In his order, the trial judge rejected that argument, stating:
"To say that these initials should raise a question as to the name of the prospective purchaser is to indulge in
Page 11
571 So. 2d 1003, *1006; 1990 Ala. LEXIS 701, **8
unbridled speculation and conjecture. The placing of initials on a deed without anything more cannot be considered as
sufficient to put anyone on notice of a claim of title in the property conveyed contrary to or inconsistent with the terms
of the deed itself."
We agree. [HN8] A basic rule of construction of deeds is that when subsequent words or [*1008] markings are of
doubtful import, they cannot be construed so as to contradict preceding words that are certain. Johnson v. Harrison,
272 Ala. 210, 130 So. 2d 35 (1961); Kettler v. Gandy, 270 Ala. 494, 119 So. 2d 913 (1960). In the instant case the deed
unambiguously named Trico as the grantee. The handwritten initials following that clause are certainly of "doubtful
import" and cannot be used to contradict the clear meaning of the deed. Id. Those initials, standing alone, do not
constitute substantial evidence of Betty's [**14] claim to the property and could not defeat Arrow's motion for
summary judgment. Posey v. Posey, 545 So. 2d 1329 (Ala. 1989).
After reviewing the record, this Court agrees that Betty did not present sufficient -- i.e., "substantial" -- evidence
showing that Arrow had constructive notice of her claim to the property. Arrow was therefore entitled to a judgment as
a matter of law. The summary judgment is affirmed.
AFFIRMED.
Page 12
571 So. 2d 1003, *1007; 1990 Ala. LEXIS 701, **13
4 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
United Companies Financial Corporation v. Ella Wyers
No. 86-606
518 So. 2d 700; 1987 Ala. LEXIS 4540
September 25, 1987, Filed
PRIOR HISTORY: [**1] Appeal from Walker Circuit Court.
CASE SUMMARY:
PROCEDURAL POSTURE: The Walker County Circuit Court (Alabama) entered judgment in favor of appellee
widow in her action against appellants, a mortgage company and her boyfriend, alleging fraud, breach of contract, lack
of capacity, and duress. The company appealed.
OVERVIEW: After the widow's husband died, she met her boyfriend, who professed his love for the widow and
offered to marry her. Later, the boyfriend took the widow to a law firm's offices and she conveyed her home to the
boyfriend. Upon receiving the deed, the boyfriend attempted to obtain a loan from the company. The company learned
through a title search that the boyfriend had recently obtained a title by deed. As a result, the company had the widow
participate in the mortgage process by requiring her to attend the closing and to sign the mortgage along with the
boyfriend. Thereafter, the widow filed a lawsuit against the boyfriend, alleging fraud and breach of contract, and against
the company, alleging lack of capacity to contract and duress. The trial court set aside the mortgage. On appeal, the
court determined that the trial court's judgment setting aside the mortgage was supported by evidence of incapacity and
duress. The court also found that the company demonstrated its awareness of a potential problem in the conveyance
when it required the widow, who no longer had title to the property, to co-sign the mortgage. Therefore, the court
upheld the trial court's judgment.
OUTCOME: The court affirmed the trial court's judgment in favor of the widow in her action against the company and
her boyfriend alleging fraud, breach of contract, lack of capacity, and duress.
Page 13
CORE TERMS: mortgage, duress, notice, conveyance, deed, incapacity, default judgment, undue influence, bona fide
purchaser, bias, injunction, colorable, evidence presented, medication, burden of proving, oral evidence, best position,
abuse of discretion, extreme duress, sufficient evidence, mortgagor, mortgaged, voidable, grantor, abused, void, final
judgment, capacity to contract, foreclosure, professed
Civil Procedure > Judicial Officers > Judges > Disqualifications & Recusals > General Overview
Civil Procedure > Appeals > Reviewability > Preservation for Review
Criminal Law & Procedure > Appeals > Reviewability > Preservation for Review > Failure to Object
[HN1] Failure to object to bias at the trial level precludes that issue from being raised on appeal.
Evidence > Procedural Considerations > Rulings on Evidence
[HN2] When oral evidence is presented to the trial court, it is in the best position to weigh the evidence, judge the
credibility of witnesses and testimony, and make any findings of fact. Where such evidence is presented to the trial
judge, his findings have the effect of a jury verdict.
Civil Procedure > Judicial Officers > Judges > Discretion
Contracts Law > Defenses > Duress & Undue Influence > General Overview
[HN3] Duress involves improper pressure by another party which overcomes his will and coerces him to comply with
demands to which he would not yield if acting as a free agent.
Real Property Law > Financing > Mortgages & Other Security Instruments > Definitions & Interpretation
[HN4] A mortgage entered into under extreme duress may render the mortgage void. Less extreme duress may render
the mortgage voidable at the option of the mortgagor. However, a mortgage will not be voidable or void against a bona
fide purchaser, for value, and without notice.
[HN5] A purchaser has constructive notice if the facts surrounding the transaction give notice, or are such that a
reasonably prudent person would inquire further.
COUNSEL: Robert L. Austin, for Appellant.
Jeff Sacher of Legal Services Corporation of Alabama, for Appellee.
JUDGES: Adams, Justice. Torbert, C.J., Jones, Shores, and Steagall, JJ., concur.
OPINION BY: ADAMS
OPINION
[*701] United Companies Financial Corporation (hereinafter "United"), appeals from a final judgment setting
aside United's mortgage and divesting United of any interest in the property of appellee, Ella Wyers.
Page 14
518 So. 2d 700, *; 1987 Ala. LEXIS 4540, **1
Wyers is a 59-year-old woman whose husband died in January 1985, leaving her with no income. However, Wyers
did own her home free of any mortgage. A few months after her husband's death, Wyers met a 29-year-old man, Danny
J. Gilreath. Allegedly, Gilreath professed his love for Wyers and offered to marry her. Gilreath also offered to help
Wyers with her finances by obtaining a loan for her.
This case involves an allegedly fraudulent conveyance of Wyers's property to Gilreath and a subsequent attempt
by Gilreath to mortgage the property through United. Gilreath told Wyers that he needed her to sign some papers. On
October 28, 1985, Wyers was taken to a law firm's offices to sign some papers that she believed regarded [**2] a loan.
What Wyers signed was a deed conveying her home to Gilreath. There was allegedly no consideration for the
conveyance and Wyers alleged that she did not know or understand that she was deeding her home to Gilreath. Wyers
continued to live in her home.
Upon receiving the deed, Gilreath attempted to obtain a loan from United. He told United in his loan application
that he was a relative of Wyers's and had inherited the property. However, United learned through a title search that
Gilreath had recently obtained a title by deed and that Wyers was still in possession of the home.
Though there is some dispute about United's actual notice of the alleged fraud, the trial record indicates that United
expressed a concern that it "wanted to make sure that the person [Gilreath] acquired the property from was aware of
what was going on with the transaction." (R. 15.) However, the deed was in Gilreath's name and Wyers supposedly had
no interest in the property other than possession. To alleviate its "concern," United contacted Wyers and had her
participate in the mortgage process by requiring her to attend the closing and to sign the mortgage along with Gilreath.
A check for $ 13,775.00 [**3] was made out jointly to Wyers and Gilreath, but was given to Gilreath.
There is also testimony in the record indicating that Wyers has a limited ability to read and write, and that she had
been threatened by Gilreath. In addition, on the day she signed the mortgage she was taking three medications that
allegedly impaired her ability to think and reason. Furthermore, Wyers testified that she did not understand that she was
mortgaging her house when she was told by United to attend the closing. Finally, after Gilreath and four friends made
some threatening remarks and brandished loaded guns while Wyers was in Gilreath's apartment on the day of the
closing, Gilreath allegedly controlled [*702] Wyers's conduct by driving her to the closing and demanding that she not
give him any trouble at the closing or answer any questions and that she do as she was told.
In addition to the mortgage agreement, the record also includes evidence of some agreement between Gilreath and
Wyers whereby Gilreath was to pay $ 2,000.00 to Wyers upon obtaining the mortgage, and an additional $ 300.00 per
month for three years. It is unclear from the record whether that agreement was part of the agreement [**4] for the
initial conveyance or was entered into later and prior to the mortgage. After the check was cashed, Gilreath gave Wyers
$ 300.00. That was the only money received by Wyers. Wyers has since tendered to United the $ 300.00 that she
received.
United never received a mortgage payment from Gilreath or Wyers, and set March 26, 1986, as the date of
foreclosure on the property.
On March 21, 1986, Wyers filed suit against Gilreath, alleging fraud and breach of contract, and against United,
alleging lack of capacity to contract and duress, as grounds to set aside the mortgage.
A temporary injunction was granted on March 21, 1986, enjoining United from foreclosing on Wyers's property
pending a final hearing on the merits. A subsequent motion to dissolve the injunction was denied.
Gilreath filed a motion to dismiss, which was denied on June 23, 1986. Subsequently, Wyers filed a motion for
default judgment against Gilreath for failure to show for a deposition. The motion was granted on August 4, 1986.
Gilreath filed an answer on July 30, 1986, and moved to set aside default judgment. The motion was denied on
September 3, 1986. Gilreath has since disappeared.
Page 15
518 So. 2d 700, *701; 1987 Ala. LEXIS 4540, **1
After a hearing [**5] on the merits, United appealed from the judgment setting aside the mortgage. It bases its
appeal on the following grounds:
1. That the trial court erred in setting aside United's mortgage on Wyers's property based on the allegations in
Wyers's sworn complaint and on the evidence presented regarding Wyers's capacity to contract and regarding the duress
she was subjected to that led to her signing of the mortgage note.
2. That the trial court erred in not requiring Wyers to tender the sum of $ 13,775.00 given to Gilreath at the
closing, in return for cancellation of the mortgage.
3. That the trial court evidenced bias toward Wyers and had knowledge of the case acquired outside the pleadings
and evidence presented in court.
4. That the trial court erred in granting an injunction because it failed to adhere to Rule 65, A.R.Civ.P.
5. That the trial court erred in granting the default judgment against Gilreath.
Because the last three issues can be answered quickly, we will address them first.
Appellant, United, states in its brief that the trial judge notified counsel for United and Wyers, prior to the hearing,
that he had talked to Wyers's neighbor prior to the filing [**6] of the claim, but had come to no conclusions other than
that Wyers needed to obtain counsel. No party made any objection to the trial judge's continuing to sit in the case.
The law is quite clear that [HN1] failure to object to bias at the trial level precludes that issue from being raised on
appeal. Ross v. Luton, 456 So. 2d 249, 255 (Ala. 1984); Mowery v. Mowery, 489 So. 2d 1113, 1114 (Ala. Civ. App.
1986). If United had objected at trial, the judge might have recused himself. Since United did not raise the question of
bias at any time during the trial, issue 3 is precluded on appeal.
United also argues that the court erred in enjoining foreclosure until final judgment, on the grounds that the trial
judge did not comply with the security requirement of Rule 65, A.R.Civ.P. Though United recognizes that the issue is
moot, since the court has entered a final judgment setting aside the mortgage, United claims that failure to require a
bond further evidences the bias of the trial judge. Because the injunction issue is moot, and for the [*703] reasons
stated in regard to issue 3, we find no error in regard to issue 4.
Issue 5 regards the default judgment against Gilreath. [**7] United has no standing to appeal from a default
judgment against the co-defendant, Gilreath. Therefore, we find no error.
The remaining issues are central to this appeal. United's issue is whether Wyers failed to meet her burden of
proving that the medication and her education, as well as duress by Gilreath, made her incapable of entering into a valid
contract. Issue 2 is whether the trial court abused its discretion in setting aside the mortgage without requiring Wyers to
tender the entire sum of $ 13,775.00 to United.
[HN2] When oral evidence is presented to the trial court, it is in the best position to weigh the evidence, judge the
credibility of witnesses and testimony, and make any findings of fact. Where such evidence is presented to the trial
judge, his findings have the effect of a jury verdict. Chrisman v. Brooks, 291 Ala. 237, 279 So. 2d. 500 (Ala. 1973).
Regardless of how this Court might view the evidence, it must affirm the trial court's judgment if it is fairly supported
by credible evidence, unless it is plainly erroneous or there has been an abuse of discretion. Chrisman, supra. "This rule
has been applied in numerous cases where a deed was sought to be set aside [**8] because of the incompetency of the
grantors, or undue influence or both." Wyatt v. Riley, 292 Ala. 277, 293 So.2d 288 (1974), citing Chrisman, supra.
United argues that the trial judge abused his discretion because there was insufficient evidence of duress or
incapacity to justify setting aside the mortgage. Generally, [HN3] duress involves improper pressure by another party
Page 16
518 So. 2d 700, *702; 1987 Ala. LEXIS 4540, **4
"which overcomes his will and coerces him to comply with demands to which he would not yield if acting as a free
agent." Head v. Gadsden Civil Service Board, 389 So. 2d 516, 519 (Ala. Civ. App.), cert. denied, 389 So. 2d 520 (Ala.
1980). [HN4] A mortgage entered into under extreme duress may render the mortgage void. Less extreme duress may
render the mortgage voidable at the option of the mortgagor. Royal v. Gass, 154 Ala. 117, 45 So. 231 (1907). However,
a mortgage will not be voidable or void against a bona fide purchaser, for value, and without notice. Gass, supra.
Incapacity is tested by whether the mortgagor has sufficient capacity to understand, in a reasonable manner, the
nature and effect of her actions. Hall v. Britton, 216 Ala. 265, 113 So. 238 (1927); W. T. Smith Lumber Co. [**9] v.
Foshee, 286 Ala. 524, 243 So. 2d 361 (1970).
The evidence presented indicated that Wyers was a widow, with a limited education and reading ability, who had
been strongly influenced by a young man who professed his love for her and offered to help her with her financial
troubles. There was also evidence that Wyers's life was threatened by Gilreath, and that Wyers was on three different
medications that may have influenced her ability to make a choice. Furthermore, there was testimony that United never
attempted to explain to Wyers what was going on, and that when she was asked by United if she understood what was
happening, Gilreath hit her under the table, and she nodded in the affirmative.
On the other hand, there is evidence supporting United's argument that Wyers understood that there was going to be
a mortgage on her house and that she participated willingly. Not only did she nod in the affirmative when asked if she
understood, but she never said she was confused. In addition, in return for the conveyance, she was allegedly supposed
to receive $ 2,000.00 immediately and an additional $ 300.00 per month for three years from Gilreath, and Gilreath was
to pay off the mortgage. [**10] Wyers also testified that if she had received the money from Gilreath, "It would have
been fine." (R. 46.)
The trial court was in the best position to evaluate this oral evidence and make findings of fact. This Court has
previously held that one seeking to cancel a mortgage on grounds of mental incapacity has the burden of proving
incapacity by a preponderance of the evidence. Blair v. Jones, 201 Ala. 293, 78 So. 69 (1918). We find that there was
sufficient evidence, if believed, to meet that burden of proof, and [*704] we find no abuse of discretion by the trial
judge. Therefore, we cannot reverse on the appellant's argument that the judgment setting aside the mortgage was
unsupported by evidence of incapacity or duress.
United's issue 2 is whether the trial court could set aside the mortgage without requiring Wyers to return the full $
13,775 United had paid to Gilreath. It is undisputed that Wyers has tendered $ 300.00 to United.
Our decision on this issue primarily rests on a determination of whether United was a bona fide purchaser, acting
in good faith and without notice of any claim against the house that was to be mortgaged. First Alabama Bank v.
Brooker [**11] , 418 So. 2d 851 (Ala. 1982). In order to be a bona fide purchaser, United must have had no
knowledge that Gilreath's title to the mortgaged property was merely colorable, i.e., not genuine. United is not required
to have actual knowledge in order to have notice of colorable title. [HN5] A purchaser has constructive notice if the
facts surrounding the transaction give notice, or are such that a reasonably prudent person would inquire further.
Brooker, supra at 856; See Touchstone v. Peterson, 443 So. 2d 1219 (Ala. 1983). Knowledge that the grantor retained
possession of the conveyed property and received nominal consideration is sufficient to place the mortgagee on notice.
Touchstone, supra; Brooker, supra; Cumberland Capital Co. v. Robinette, 57 Ala. App. 697, 331 So. 2d 709 (Ala.
1976).
There are no allegations of bad faith on the part of United, only that it had notice of a potential problem in the
conveyance between Wyers and Gilreath and allowed the mortgage in spite of this knowledge. If United was not a bona
fide purchaser because it had notice, Wyers should not be required to tender more than the $ 300.00 she actually
received. It follows that United should not [**12] be able to protect itself merely by requiring Wyers to sign the
mortgage, because that does not avoid the problems of duress in the initial conveyance. In other words, if there was
duress or undue influence in the conveyance of the deed, then Gilreath might use undue influence and duress to obtain
Page 17
518 So. 2d 700, *703; 1987 Ala. LEXIS 4540, **8
Wyers's signature on the mortgage. In fact, there are facts presented, which, if believed, would support that theory.
Wyers testified that Gilreath had threatened her life and told her not to tell her sons about the transaction. Further,
Gilreath drove Wyers to the mortgage closing and allegedly told her on the way not to get upset during the closing, not
to answer any questions, and to do as she was told. At the closing, when United's agent asked whether Wyers
understood what was happening, Gilreath allegedly hit Wyers under the table, indicating to her that she should be
agreeable. Whether these factors were sufficient to constitute duress or undue influence was a question for the trial
judge.
The record also states that United conducted a title search and concluded that the property had recently been deeded
to Gilreath. This was discovered after Gilreath allegedly told United that he [**13] had received the property as an
inheritance, and that he was a relative of Wyers's. In addition, United knew that Wyers still maintained possession of the
property. Though the remaining facts are disputed, it appears other circumstances aroused United's suspicions enough
so that they contacted Wyers and required her to participate in the mortgage process. This is an unusual act, considering
that the deed to the property was only in Gilreath's name. Regardless of what factors aroused the suspicions, United
demonstrated its awareness of a potential problem in the conveyance when it required Wyers, who no longer had title to
the property, to co-sign the mortgage.
We hold that there was sufficient evidence before the trial judge, which, if believed, would support the factual
conclusion that United was aware that Gilreath had merely colorable title. For the foregoing reasons, we affirm the trial
court's judgment setting aside the mortgage.
AFFIRMED.
Torbert, C.J., Jones, Shores, and Steagall, JJ., concur.
Page 18
518 So. 2d 700, *704; 1987 Ala. LEXIS 4540, **12
8 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
J. M. Touchstone and Ben Touchstone v. Rosa Lee Peterson
No. 82-642
443 So. 2d 1219; 1983 Ala. LEXIS 5089
December 2, 1983
PRIOR HISTORY: [**1] Appeal from Washington Circuit Court.
DISPOSITION: REVERSED AND REMANDED.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant brothers challenged an adverse judgment from the Washington Circuit Court.
(Alabama) in an ejectment action brought by appellee individual. The brothers were in possession of a 10-acre tract of
land for over 20 years. Although the brother who owned the land sold it by warranty deed, intending to reserve for
himself a life estate, the deed did not reflect the oral understanding, and a correction deed was never executed.
OVERVIEW: The purchaser later married; upon their divorce the ex-wife was awarded the property. The court
reversed the judgment for the ex-wife, holding that the circuit court erred in denying the brothers' counterclaim for
reformation. It was clear from the testimony, taken together, that all of the parties to both deeds orally agreed and
understood that the brother retained a life interest in the 10-acre tract and had acted upon this understanding The
brothers met their burden of proving that the intention they sought to substitute was that of all parties to the deeds in
question. Because the ex-wife had both actual and constructive knowledge of the brothers' prior equity before acquiring
the legal title to the property, she could not be deemed a bona fide purchaser. Thus, the trial court erred in denying
reformation on the basis of prejudice to rights acquired by a third person in good faith and for value pursuant to Ala.
Code 35-4-153. Laches did not apply because the brothers were in peaceable, uninterrupted possession of the
property.
OUTCOME: The court reversed and remanded the judgment of the circuit court.
Page 19
CORE TERMS: deed, reformation, notice, purchaser, acre, bona fide purchaser, ejectment, divorce, laches, equitable,
divorce decree, disputed, life interest, good faith, register's, tract, continued possession, life estate, equitable right,
constructive notice, counterclaim, conveyance, omission, warranty deed, facts sufficient, executed and delivered, rights
acquired, actual knowledge, actual notice, chargeable
Contracts Law > Defenses > Ambiguity & Mistake > Mutual Mistake
Real Property Law > Deeds > Enforceability
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN1] Ala. Code 35-4-153 (1975) provides as follows: When, through fraud, or a mutual mistake of the parties, or a
mistake of one party which the other at the time knew or suspected, a deed, mortgage or other conveyance does not truly
express the intention of the parties, it may be revised by a court on the application of the party aggrieved so as to
express that intention, insofar as this can be done without prejudice to rights acquired by third persons in good faith
and for value.
[HN2] A written instrument is not subject to reformation as against the rights of a bona fide purchaser, without notice,
and for value. Reformation or correction of a written instrument will generally be granted, however, as against
subsequent purchasers who obtain their title or lien with notice of the existing equitable right to reformation.
[HN3] In order to constitute one a bona fide purchaser and entitle him to the protection of the rule, as against a prior
equity or conveyance, it is essential: (1) that he is the purchaser of the legal as distinguished from an equitable title; (2)
that he purchased the same in good faith; (3) that he parted with value as a consideration therefor by paying money or
other thing of value, assuming a liability or incurring an injury; (4) that he had no notice, and knew no fact sufficient to
put him on inquiry as to complainant's equity, either at the time of his purchase, or at, or before the time he paid the
purchase-money, or otherwise parted with value.
Real Property Law > Deeds > Covenants of Title
Real Property Law > Deeds > Types > Warranty
[HN4] In order that a purchaser of land shall be protected against equities of third persons, he must have acquired at the
time of such purchase the legal title by warranty deed. As a mere equity, that he acquires must be subordinate to older
equities.
[HN5] Generally, actual notice on the part of the subsequent purchaser of the error to be corrected in the deed is not
necessary in order to permit reformation of the instrument as against him, provided he had constructive notice, or the
facts were such as to put a prudent person on inquiry as to title, charging him with notice of all facts to which
Page 20
443 So. 2d 1219, *; 1983 Ala. LEXIS 5089, **1
diligent inquiry and investigation would have led him.
[HN6] A purchaser with sufficient information to stimulate inquiry which would lead to knowledge of adverse or
hostile and superior claim or title, and fails therein, the injury is the result of his own folly -- he is wanting in good
faith, an indispensable element of a purchaser (for value) without notice -- and a court of equity will not protect such
reckless purchaser.
[HN7] Whenever a party, dealing as a purchaser or encumbrancer with respect to a parcel of land, is informed or knows,
or is in a condition which prevents him from denying that he knows, that the premises are in the possession of a third
person, other than the one with whom he is dealing as owner, he is thereby put upon an inquiry, and is charged with
constructive notice of all the facts concerning the occupant's right, title, and interest which he might have ascertained by
means of a due inquiry.
[HN8] To put a purchaser upon inquiry and to operate as constructive notice, possession must exist at the time of the
transaction by which his rights and interest were created. Such possession must be open, visible, exclusive, and
unambiguous, not liable to be misconstrued or misunderstood. If the possession of the grantor, after making a
conveyance, is long continued, it may be more reasonable to refer it to his right to occupancy rather than to the
sufferance of the grantee. Possession, therefore, for an unreasonable period after a conveyance may well be sufficient
to put persons upon inquiry as to the occupant's rights.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Affirmative Defenses > Laches
[HN9] Lapse of time alone does not establish laches. To be affected by laches, the delay must have been with notice of
the existence of the right, resulting in disadvantage, harm, or prejudice to another, or have operated to bring about
changes in conditions and circumstances so that there can no longer be a safe determination of the controversy. Thus,
special facts which make the delay culpable must appear.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Affirmative Defenses > Laches
[HN10] Laches cannot be imputed to one who has all the while been in the peaceable possession of the property with
regard to which relief is sought.
COUNSEL: Marc E. Bradley, Fairhope, Edward P. Turner, Jr., Chatom, for Appellant(s).
S. J. Laurie, Chatom, for Appellee(s).
JUDGES: Beatty, Justice. Torbert, C.J., Maddox, Jones and Shores, JJ., concur.
OPINION BY: BEATTY
OPINION
[*1221] This is an appeal by J. M. and Ben Touchstone, defendants-appellants, from an adverse judgment in an
ejectment action brought by Rosa Lee Peterson, plaintiff-appellee. We reverse and remand.
In July 1953, appellant J. M. Touchstone purchased from Joe M. Pelham and his wife the ten-acre tract of land
which is the subject of this dispute and went into possession of the ten acres at that time. Appellant Ben Touchstone
Page 21
443 So. 2d 1219, *; 1983 Ala. LEXIS 5089, **1
began living with his brother, J. M., in August 1954, and both have continued in possession of the property since that
time. On October 5, 1955, J. M. Touchstone sold by warranty deed these ten acres of land to Randolph and Uhbern
Kirkland, intending to reserve for himself a life estate in the property. The deed, however, did not contain this
reservation as, it was later discovered by the parties, such omission being the result of an error made by the scrivener
who [**2] prepared the deed. Despite this fact, a correction deed was never executed, since J. M. Touchstone and the
Kirklands had orally agreed and understood at the time of the sale that J. M. Touchstone had reserved the right for
himself and Ben to live on the property for their lives. Accordingly, J. M. Touchstone, relying upon this oral
understanding, failed to have the deed corrected.
On February 13, 1956, Randolph Kirkland married Rosa Lee Peterson, the plaintiff-appellee in this case. On
March 13, 1969, Uhbern Kirkland and his wife conveyed all their interest in the disputed ten-acre tract by warranty deed
to Randolph Kirkland. Although this deed again failed to mention J. M. Touchstone's life interest in the property, there
was an oral reaffirmation of his rights between the Kirklands and J. M. Touchstone.
On January 10, 1977, Rosa Lee Peterson and Randolph Kirkland were divorced. Pursuant to the terms of the
divorce decree, she was awarded the disputed ten-acre tract; however, it was not until May 2, 1979, that the register's
deed conveying the property to Peterson was executed and delivered to her. Sometime in January 1977, after the
divorce decree was entered, Rosa Lee [**3] Peterson visited the home of J. M. and Ben Touchstone, advised them she
had been awarded the ten acres on which they resided, and requested that they move from the property. They refused to
do so. Two and one-half years later, on May 2, 1979, Peterson gave J. M. Touchstone notice by registered letter to
vacate the premises within ten days. When the Touchstones again failed to vacate, upon proper complaint filed by
Peterson, the District Court of Washington County issued a writ of ejectment on June 12, 1979. A hearing was held on
the ejectment complaint in the district court on October 23, 1979, after which judgment was entered against the
Touchstones. Thereafter, the Touchstones appealed to the Circuit Court of Washington County wherein they filed a
counterclaim against Peterson, seeking reformation of the deed given to Peterson's predecessor in title (her ex-husband
Randolph Kirkland) by J. M. Touchstone, so as to reflect the life interest in the ten acres reserved by J. M. Touchstone,
the original grantor. In Peterson's answer to this counterclaim, she set up the special defense of laches, among other
things. She also amended her complaint to add a claim for unlawful detainer.
[**4] At trial, on February 24, 1982, evidence on the counterclaim for reformation was presented ore tenus to the
circuit court. Thereafter, on March 11, 1982, the court entered an order denying reformation of the deed in question,
finding such reformation barred by the doctrine of laches, and also under Code of 1975, 35-4-153, that reformation
would result in prejudice to rights acquired by a third person in good faith and for value. The ejectment and unlawful
detainer claims were then tried to a jury on March 30, 1982, and, at the conclusion of trial, a verdict was returned in
favor of Peterson. Prior to the time the circuit court entered judgment on the verdict, [*1222] the Touchstones filed
motions for rehearing and for a new trial or, in the alternative, for judgment notwithstanding the verdict. Subsequently,
on January 18, 1983, the court entered judgment on the verdict for Peterson, and on February 24, 1983, after the
Touchstones refiled their motions for rehearing and for a new trial or, in the alternative, for judgment notwithstanding
the verdict, these motions were denied by the circuit court. It is from the denial of these motions that the Touchstones
appeal.
[**5] The controlling issue raised by the Touchstones on appeal is whether the circuit court erred in denying the
Touchastones' counterclaim for reformation. The first question presented is whether the circuit court correctly found
Rosa Lee Peterson to be a bona fide purchaser for value under 35-4-153, i.e., that she was a purchaser of legal title
without actual knowledge of the Touchstones' prior equity, or that she did not have knowledge of facts sufficient to put
her on inquiry regarding the Touchstones' prior equity before or at the time she was granted the property by the divorce
decree or when she later received the deed to the property.
[HN1] Section 35-4-153 provides as follows:
"When, through fraud, or a mutual mistake of the parties, or a mistake of one party which the other at
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443 So. 2d 1219, *1221; 1983 Ala. LEXIS 5089, **1
the time knew or suspected, a deed, mortgage or other conveyance does not truly express the intention of
the parties, it may be revised by a court on the application of the party aggrieved so as to express that
intention, insofar as this can be done without prejudice to rights acquired by third persons in good faith
and for value." (Emphasis added.)
In order to reform the deed to [**6] express the intentions of the parties thereto, under 35-4-153, the Touchstones
have the burden of proving with clear, convincing, and satisfactory evidence that the intention they seek to substitute
was that of both parties to the deed. Fidelity Service Ins. Co. v. A. B. Legg & Sons Burial Ins. Co., 274 Ala. 94, 145 So.
2d 811 (1962); Taylor v. Burns, 250 Ala. 218, 34 So. 2d 5 (1948); Hyatt v. Ogletree, 31 Ala. App. 8, 12 So. 2d 397
(1942).
All the parties to both deeds in question (the 1955 deed from J. M. Touchstone to Uhbern and Randolph Kirkland,
and the 1969 deed from Uhbern Kirkland to Randolph Kirkland) were properly joined and testified at trial. It is clear
from their testimony, taken together, that all of the parties to both deeds orally agreed and understood that J. M.
Touchstone retained a life interest in the ten-acre tract and have since acted upon this understanding. The testimony
was uncontroverted as to this intention and it was uncontroverted that a defect in the deed existed due to the omission of
the life estate. The only conflicting testimony had to do with when the defect in the original deed from J. M. Touchstone
to Randolph and Uhbern [**7] Kirkland was discovered. Thus, the Touchstones have met their burden of proving that
the intention they seek to substitute was that of all parties to the deeds in question. The only remaining issue, under the
language of 35-4-153, supra, is whether Peterson obtained bona fide purchaser status in acquiring her rights in the
subject ten acres.
The portion of the statute italicized above codifies the rule of law long recognized in this state: [HN2] a written
instrument is not subject to reformation as against the rights of a bona fide purchaser, without notice, and for value.
Reformation or correction of a written instrument will generally be granted, however, as against subsequent
purchasers who obtain their title or lien with notice of the existing equitable right to reformation. Gilmore v. Sexton,
254 Ala. 560, 49 So. 2d 157 (1950); Walling v. Moss, 240 Ala. 87, 197 So. 30 (1940); Copeland v. Warren, 214 Ala.
150, 107 So. 94 (1926). As explained by this Court in Lightsey v. Stone, 255 Ala. 541, 546, 52 So. 2d 376, 381 (1951):
[HN3] "In order to constitute one a bona fide purchaser and entitle him to the protection of the rule,
as against a prior equity or conveyance, [**8] it is essential: '* * * (1) [*1223] that he is the purchaser
of the legal as distinguished from an equitable title; (2) that he purchased the same in good faith; (3)
that he parted with value as a consideration therefor by paying money or other thing of value, assuming a
liability or incurring an injury; (4) that he had no notice, and knew no fact sufficient to put him on
inquiry as to complainant's equity, either at the time of his purchase, or at, or before the time he paid the
purchase-money, or otherwise parted with value * * *.' Craft v. Russell, 67 Ala. 9, 12, and cases cited. . .
."
Accord, First National Bank of Birmingham v. Culberson, 342 So. 2d 347 (Ala. 1977); Murphree v. Henson, 289 Ala.
340, 267 So. 2d 414 (1972).
The first element enumerated above is that the purchaser acquire the legal title to the property; this element, read
together with the fourth element, would require the purchaser to obtain legal title to the property before he had actual
knowledge of a prior equity, or learned of facts sufficient to put him on inquiry concerning the complainant's equity.
Peterson testified at trial that it was not until January 1977, after [**9] the divorce decree was entered granting her the
ten acres, that she learned of the Touchstones' claim to a life interest in the property. The following testimony by
Peterson to this effect was elicited at trial by her attorney on direct examination:
Page 23
443 So. 2d 1219, *1222; 1983 Ala. LEXIS 5089, **5
"Q. Did you have any discussions after you got the divorce with the Touchstones?
"A. Yes.
"Q. All right. Did ya'll ever have any discussions about this land?
"A. Yes.
"Q. All right. Can you tell me at what point in time you had the discussions?
"A. Well, it was in January of '77. I went and told them that I would like for them to move because
I was going to move the house from the property and have it torn down and moved because I planned to
have my land pushed off because I was building me a house and this house they lived in is between my
house and the road, and I planned to clear the land between my house and the road and I would like to
move the house.
"Q. In relationship to the divorce, was that after or before?
"A. That was after.
"Q. After the divorce.
"A. Uh-huh.
"Q. Had you got that deed yet?
"A. No.
"Q. How long a period of time was it from the time you got your divorce until you actually [**10]
got the deed out from Randolph?
"A. Wall, I got my divorce the tenth day of January and May the second of 1979, I finally got my
deed.
"Q. Better than two years later?
"A. Yes.
"Q. Now, when you went to the Touchstones on that occasion, did they make nay statements to you
concerning the deed from them to the Kirklands -- Randolph and Uhbern?
"A. No, not the deed.
"Q. All right. What did they tell you, if anything, on that occasion when you asked them to move,
that you wanted to push your land --
"A. They just said they had a right to live there.
"Q. They had a right to live there?
"A. That it was a verbal agreement that they had a right to live there.
"Q. That there was a verbal agreement. Was there any time in that conversation the subject of this
old deed that was made that was supposed to be a reservation of some sort of right to live or life estate
Page 24
443 So. 2d 1219, *1223; 1983 Ala. LEXIS 5089, **9
in?
"A. No, there was no such conversation.
". . . .
"Q. During your marriage, did you and Randolph ever have any discussions about an error in a deed
or about an oral agreement to allow them to live on the land?
"A. No, we never discussed it.
[*1224] "Q. When is the first instance, if [**11] there is any, when your husband might have
brought to your attention that there was some 'right' that the Touchstones had?
"A. Well, it was the week following the divorce. He called me.
"Q. Are you talking about January of '77.
"A. Right.
"Q. All right. Who called you?
"A. He called me and informed me that --
"Q. Who called you?
"A. Randolph.
"Q. Okay.
"A. The water pump at the house where I was living was on his property.
"Q. Where were you living at the time?
"A. I was living in the house that I got, on the five-tenths of an acre, right down under the hill from
where he lived.
"Q. All right. Would that be in a different location?
"A. That's a different location.
"Q. All right. What else if anything did he tell you?
"A. And then he told me, and by the way, I guess you know that J. M. and Ben are supposed to live
there. And I said, no, I didn't. And he said, well, that's your problem.
"Q. Is that the first occasion you had ever become aware of any right from your husband that the
Touchstones had?
"A. Yes."
It is significant to her status as a bona fide purchaser that she learned of the Touchstones' claim prior to the [**12]
time the register's deed to the ten acres was executed and delivered to her on May 2, 1979. It is also significant to point
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443 So. 2d 1219, *1223; 1983 Ala. LEXIS 5089, **10
out that it was not until after she received the deed on May 2, 1979, that approximately one week later, on May 7, she
served the Touchstones notice to vacate on the Touchstones, and subsequently petitioned the district court for a writ of
ejectment on June 12, 1979 -- an action which can only be brought by the record owner of the disputed property.
Therefore, when the divorce decree was entered, Peterson acquired only an equitable title to the subject ten acres; it was
not until the register's deed was executed and delivered to her that her equitable title "ripened into a full legal title as
against all equities and claims not known to her or notice of which she was not legally chargeable." Larkins v. Howard,
252 Ala. 9, 39 So. 2d 224 (1949) (emphasis added). In Mallory v. Agee, 226 Ala. 596, 600, 147 So. 881, 883 (1932),
this Court explained:
[HN4] "In order that a purchaser of land shall be protected against equities of third persons, he must
have acquired at the time of such purchase the legal title by warranty deed. . . . 'As a mere equity, that
[**13] he acquires must be subordinate to older equities. . . .' Shorter v. Frazer, [64 Ala. 74 (1879)]"
(Citations omitted.)
And, in the earlier case of Manning v. House, 211 Ala. 570, 574, 100 So. 772, 775 (1924), this Court, in applying the
foregoing principle to the facts in that case, stated:
"W. E. Manning cannot be considered a bona fide purchaser of lot No. 7 without notice of its
dedication. Beside the physical evidences of public use, it sufficiently appears that before his purchase
he was advised of the controversy by his vendor, and that the landowners protested to him before he
acquired a deed to the property." (Emphasis added.)
Thus, since Rosa Peterson had actual knowledge of the Touchstones' prior equity before acquiring the legal title to the
property, she cannot be deemed a bona fide purchaser.
Beyond the element present here of actual notice of prior claims before acquiring legal title, it is apparent that Rosa
Lee Peterson would further be deprived of bona fide purchaser status under the constructive notice doctrine as well.
[HN5] Generally, actual notice on the part of the subsequent purchaser of the error to be corrected in the [**14] deed
is not necessary in order to permit reformation of the instrument as against him, provided he had constructive [*1225]
notice, or the facts were such as to put a prudent person on inquiry as to title, charging him with notice of all facts to
which diligent inquiry and investigation would have led him. See generally, 79 A.L.R.2d 1180 (1961); Holly v.
Dinkins, 202 Ala. 477, 80 So. 861 (1919). See also, Leslie v. Click, 221 Ala. 163, 165, 128 So. 170, 172 (1930), where
this Court stated as follows:
[HN6] "A purchaser with sufficient information to stimulate inquiry which would lead to knowledge
of adverse or hostile and superior claim or title, and fails therein, the injury is the result of his own folly
-- he is wanting in good faith, an indispensable element of a purchaser (for value) without notice -- and
a court of equity will not protect such reckless purchaser. Taylor v. A. & M. Ass'n, 68 Ala. 229. . . ."
Accord, Adams v. Adams, 346 So. 2d 1146 (Ala. 1977); First National Bank of Birmingham v. Culberson, supra;
Murphree v. Henson, supra; Lightsey v. Stone, supra.
Furthermore, it is settled law in this state that, where a purchaser [**15] buys land and has knowledge that a third
person is in possession thereof, he is charged with notice as to the nature of that party's title, including the occupant's
equitable rights. This principle is stated in Holly v. Dinkins, supra, as follows:
[HN7] "Whenever a party, dealing as a purchaser or incumbrancer with respect to a parcel of land, is
informed or knows, or is in a condition which prevents him from denying that he knows, that the
premises are in the possession of a third person, other than the one with whom he is dealing as owner, he
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443 So. 2d 1219, *1224; 1983 Ala. LEXIS 5089, **12
is thereby put upon an inquiry, and is charged with constructive notice of all the facts concerning the
occupant's right, title, and interest which he might have ascertained by means of a due inquiry. 2 Pom.
Eq. Jur. 615. . . ." 202 Ala. at 479, 80 So. at 863.
Accord, Lightsey v. Stone, supra; Walling v. Moss, supra; Sulzbacher v. Campbell, 219 Ala. 191, 121 So. 706 (1929);
Copeland v. Warren, 214 Ala. 150, 107 So. 94 (1926). In Gilmore v. Sexton, supra, reformation of deeds was upheld as
against third parties who had purchased the disputed land with notice that it was occupied and possessed by the
complainant. [**16] There, this Court said that such continued possession is notice of all the equitable and other rights
of the possessor. See also, Cumberland Capital Corporation, Inc. v. Robinette, 57 Ala.App. 697, 331 So. 2d 709
(1976); Hill v. Taylor, 285 Ala. 612, 235 So. 2d 647 (1970).
However, [HN8] to put a purchaser upon inquiry and to operate as constructive notice, possession must exist at
the time of the transaction by which his rights and interest were created. Holgerson v. Gard, 257 Ala. 579, 60 So. 2d
427 (1952). Such possession must be open, visible, exclusive, and unambiguous, not liable to be misconstrued or
misunderstood. Lightsey v. Stone, supra. Nevertheless, in Evans v. Bryan, 202 Ala. 484, 485, 80 So. 868, 869 (1919),
this Court said:
"If the possession of the grantor, after making a conveyance, is long continued, it may be more
reasonable to refer it to his right to occupancy rather than to the sufferance of the grantee. Possession,
therefore, for an unreasonable period after a conveyance may well be sufficient to put persons upon
inquiry as to the occupant's rights." (Emphasis added.)
See also, A. Shiff & Son v. Andress, 147 Ala. [**17] 690, 40 So. 824 (1906), holding that where the complainant
continued in possession of land after having been induced to convey the same such possession constituted notice of her
equitable rights to purchasers from her grantee.
The evidence in the present case shows the continued possession by the Touchstones of the property in question
from 1953 to at least 1979, when the writ of ejectment was issued. During this time, they resided on the property, raised
gardens, kept dogs, cut firewood and some timber, and did other acts not inconsistent with their equitable rights in the
property.
[*1226] Rosa Lee Peterson, by her own testimony, admitted that in 1956, the year of her marriage to Randolph
Kirkland, she learned that Ben Touchstone had conveyed the disputed ten acres to her husband, Randolph Kirkland, and
his brother Uhbern in 1955. She further testified that she knew the Touchstones had continued to live on the property
since before her marriage to Randolph Kirkland through 1977, the year their divorce was granted, and up to the present
time, although she never inquired as to the nature of the Touchstones' interest in the property. Apparently she did not
inquire as to [**18] the Touchstones' rights in the property even during the divorce settlement negotiations when she
expressed her interest in receiving the ten-acre tract.
Accordingly, it is clear that she had notice of the continued possession of the property by the Touchstones, and,
under the foregoing authorities, she was under a duty of inquiry as to their interest in the property, at least during the
divorce settlement negotiations when she assumed the posture of "purchaser for value." Having failed to do so, she is
chargeable with an implied notice of everything to which her inquiry would have led, especially the nature of the
possessor's interest in the property. Consequently, it cannot be concluded that Peterson, either upon the granting of the
divorce decree or upon her subsequent receipt of the register's deed, acquired the rights of a bona fide purchaser. Thus,
the trial court erred in denying reformation on the basis of "prejudice to rights acquired by [a third person] in good
faith and for value," pursuant to 35-4-153.
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443 So. 2d 1219, *1225; 1983 Ala. LEXIS 5089, **15
The circuit court further based denial of reformation on its finding that the Touchstones were barred by the doctrine
of laches. [HN9] Lapse of time alone does not establish [**19] laches. Darden v. Meadows, 259 Ala. 676, 68 So. 2d
709 (1953); Ellis v. Stickney, 253 Ala. 86, 42 So. 2d 779 (1949). To be affected by laches, the delay must have been
with notice of the existence of the right, resulting in disadvantage, harm, or prejudice to another, or have operated to
bring about changes in conditions and circumstances so that there can no longer be a safe determination of the
controversy. Thus, special facts which make the delay culpable must appear. Lipscomb v. Tucker, 294 Ala. 246, 314
So. 2d 840 (1975), McCary v. Treadway, 289 Ala. 334, 267 So. 2d 410 (1972); Merrill v. Merrill, 260 Ala. 408, 71 So.
2d 44 (1954). Although the evidence shows the Touchstones knew earlier of the mistaken omission from J. M.'s deed, it
cannot be said that prejudice has resulted due to their delay in seeking reformation, nor is there any difficulty in
determining the controversy in this case.
First, Rosa Lee Peterson cannot be said to have been prejudiced by the Touchstones' delay in seeking reformation,
because she does not qualify as a bona fide purchaser. She had ample notice of their continued possession of the
property when she acquired the equitable [**20] title to the property by way of the divorce decree, and she had actual
notice of their equitable claim to a life estate in the property when she acquired the legal title to the property by way of
the register's deed. The evidence further indicates that, prior to taking legal title to the property, she was offered other
property in lieu of the ten acres encumbered by the Touchstones' claim. Second, since all parties to the deeds in
question gave testimony and agreed on the facts surrounding the mistaken omission from the deed of the Touchstones'
life interest in the property, and their oral understanding thereof, no doubt is case over the determination of that
controversy.
Moreover, it is a well-settled rule that [HN10] laches cannot be imputed to one who has all the while been in the
peaceable possession of the property with regard to which relief is sought. Hicks v. Huggins, 405 So. 2d 1324
(Ala.Civ.App. 1981); Craig v. Root, 247 Ala. 479, 25 So. 2d 147 (1946); Fowler v. Alabama Iron & Steel Co., 164 Ala.
414, 51 So. 393 (1910). This Court in Fowler, supra, held that where one was in possession of land and asserting his
equitable title, or, even if there was no actual [**21] possession, was asserting general acts of ownership, he was not
guilty of laches in [*1227] not resorting to equity to obtain the legal title before being sued in ejectment. Accord,
Woodlawn Development & Realty Co. v. Hawkins, 186 Ala. 234, 65 So. 183 (1914). Thus, one who is in peaceable,
uninterrupted possession of property is at liberty to wait until his rights in title are attacked without being chargeable
with laches. Tarver v. Tarver, 258 Ala. 683, 65 So. 2d 148 (1953); Ammons v. Ammons, 253 Ala. 82, 42 So. 2d 776
(1949).
In the present case, the Touchstones sought reformation of the deeds in question after they had been sued in
ejectment. As stated above, they had been in peaceable, continued possession of the presently disputed property for over
twenty years prior to the ejectment proceedings. Therefore, their delay was excused and their suit for reformation not
barred by laches.
We are mindful of the presumption indulged in favor of the findings and decree of the trial court. Fidelity Service
Ins. Co. v. A. B. Legg & Sons Burial Ins. Co., supra. However, where, as here, this presumption of correctness is
overcome by both the law and the evidence, [**22] the decision below is due to be set aside as being plainly and
palpably wrong. It is clear that the trial court erred in denying the Touchstones' claim for reformation. Accordingly, we
must reverse the judgment and remand the case for further proceedings not inconsistent with this opinion. This being
the dispositive issue on appeal, we do not consider that aspect of the appeal relating to the ejectment complaint.
The judgment is reversed and the cause is remanded.
REVERSED AND REMANDED.
Torbert, C.J., Maddox, Jones and Shores, JJ., concur.
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443 So. 2d 1219, *1226; 1983 Ala. LEXIS 5089, **18
10 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
Willie Fleming and Julia C. Fleming v. Homer Watson and Mae Hughes
No. 80-922
416 So. 2d 706; 1982 Ala. LEXIS 3249
June 25, 1982
PRIOR HISTORY: [**1] Appeal from Escambia Circuit Court.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff buyers appealed from the decision of the Escambia Circuit Court (Alabama),
which vested title, ownership, and possession of certain real property in defendant owner by virtue of prescriptive
adverse possession, and rendered null and void a mortgage foreclosure deed that purported to convey title to the same
property to the buyers in their action against her.
OVERVIEW: The property's prior owner sold it to the predecessor, who signed a mortgage to him. The deed and the
mortgage were recorded. The predecessor sold the property to the owner, recording the deed. Over 30 years later, the
prior owner foreclosed on the predecessor's mortgage by publication. At the foreclosure sale the buyers bought the
property, recording the mortgage foreclosure deed. The owner filed a petition to quiet title in the property in herself.
The owner filed a motion for summary judgment, which was denied. Partial summary judgment was entered in favor of
the predecessor on the cross claim. The trial court vested title in the property to the owner, ruling that the foreclosure
deed issued to the buyers was invalid. The buyers filed a motion for a new trial, which was denied. The buyers appealed
and the court affirmed. The court held that the doctrine of caveat emptor had been correctly applied, that the trial court
had been correct in quieting title in the owner because she had acquired title to the property by virtue of adverse
prescriptive possession, and that her continuous possession was the constructive notice necessary for the buyers to
investigate her claim.
Page 29
OUTCOME: The court affirmed the decision of the lower court, which vested title, ownership, and possession of
certain real property in the owner by virtue of prescriptive adverse possession, and rendered null and void a mortgage
foreclosure deed that purported to convey title to the same property to the buyers.
CORE TERMS: mortgage, recorded, notice, purchaser, deed, foreclosure sale, foreclosure, caveat emptor, real
property, new trial, indebtedness, quieting, vendor's, years old, conclusively presumed, registration, constructive,
dispositive, conveyance, notorious, specially, mortgagee, mortgagor, possessor's, prudent, null and void, cross claim,
bona fide purchasers, summary judgment, adverse possession
Real Property Law > Financing > Mortgages & Other Security Instruments > Foreclosures > General Overview
[HN1] The doctrine of caveat emptor is properly applied to mortgage foreclosure sales. It is not unreasonable to
presume that the purchaser at such a sale is aware of the condition of the title of the property on which he bids. The
notice with which the purchaser at a mortgage foreclosure sale is charged is that notice that would have resulted from a
careful and diligent inquiry into the recorded history of the mortgaged property. These sales would be impossible if a
purchaser were not allowed, in good faith, to accept, as presumptively true, the mortgagee's recital, as contained in his
deed, as to the regularity of his procedure in accordance with the terms of the mortgage.
Real Property Law > Financing > Mortgages & Other Security Instruments > Mortgagor's Interests
[HN2] Purchasers at foreclosure sales have been treated as bona fide purchasers for value, and protected against secret
claims or equities, whether existing in favor of third persons against the mortgagor, or in favor of the mortgagor against
the mortgagee. Where the mortgage appears of record to be valid, a purchaser without notice does acquire title. The
elements of a bona fide purchase include a purchase of the legal title to the property in good faith, for an adequate
consideration, and without notice of any claim of interest in the property by any other party. Notice of a claim of
interest in real property can be inferred from knowledge of facts sufficient to put a reasonably prudent person on
inquiry, which if followed up, would lead to the discovery of the title asserted by some other party. Knowledge of facts
that would lead an ordinarily prudent person to further inquiry of the title of the vendor.
Real Property Law > Title Quality > Marketable Title > General Overview
[HN3] Possession of the property to be sold at a foreclosure sale by one whose name does not appear on the mortgage
document is an obvious fact that would lead an ordinarily prudent person to further inquiry, which inquiry would
reveal the claimed interest of the possessor.
[HN4] A purchaser of land must search the records, for they are the primary source of information as to title and he is
charged with knowledge of the existence and contents of the recorded instruments affecting the title. He must also make
inquiry as to the rights or title of the possessor, for possession is equivalent to registration, in that it gives constructive
notice of the possessor's rights. The rationale seems to be, that as the occupant's title is a good one, and as his
Page 30
416 So. 2d 706, *; 1982 Ala. LEXIS 3249, **1
possession is notorious and exclusive, a purchaser would certainly arrive at the truth upon making any due inquiry.
The purchaser cannot say, and cannot be allowed to say, that he made a proper inquiry, and failed to ascertain the
truth. The notice, therefore, upon the same motives of expediency, is made as absolute as in the case of a registration.
COUNSEL: Edward T. Hines for Garretts, Thompson & Hines, Brewton, for Appellants.
William R. Stokes, Jr. for Stokes, Jernigan & Stokes (for Appellee Homer Watson), Brewton.
Billy Earl Cook (for Appellee Mae Hughes), Brewton, for Appellees.
JUDGES: Jones, Justice. Maddox and Beatty, JJ., concur. Torbert, C.J., and Shores, J., concur specially.
OPINION BY: JONES
OPINION
[*707] This is an appeal from an order of the circuit court vesting title, ownership, and possession of certain real
property in Appellee Mae Hughes by virtue of prescriptive adverse possession, and rendering null and void a mortgage
foreclosure deed which purported to convey title to the same property to Appellants Willie and Julia Fleming.
The disputed property consists of 4 lots in the town of Dixie, Alabama. On August 28, 1948, Appellee Homer
Watson and his wife conveyed the land to A. H. Worley; Worley and his wife, in turn, executed a purchase money
mortgage to Watson. The deed and the mortgage were recorded. On November 5, 1949, Worley and his wife (the
stepfather and mother of Appellee Hughes) conveyed the same property to Appellee Hughes, which deed [**2] was
also recorded.
On March 6, 1980, Appellee Watson foreclosed on the Worley mortgage by publication. At the mortgage
foreclosure sale on [*708] April 2, 1980, Appellants were the successful bidders and purchased the property for
$1,400.00. Appellants recorded the mortgage foreclosure deed conveying title to them.
On September 29, 1980, Appellee Hughes filed a petition to quiet title in the property in herself. That petition
alleges that Hughes is now 76 years old and that she is the rightful owner of the property by virtue of the recorded
warranty deed executed by her mother and stepfather. The petition also alleges that Hughes has resided on the property
since 1949, and that she has paid taxes on the property until she became exempt from such tax liability because of her
age. Appellee Hughes contends that she has been in "actual, open, continuous, peaceable, exclusive, adverse, and
notorious possession" of the property for more than 30 years, and that the mortgage in question is "more than twenty
years old before the foreclosure sale and thus raise[s] a conclusive presumption by statute and case law that the
mortgage [can] not be enforced because of a twenty year [**3] prescription right that ripens in favor of Mae Hughes,"
which "render[s] the mortgage null and void." The petition also states that, because of the age of the mortgage, the
equity defense of laches should have prevented foreclosure. The final averment of the petition is that Mae Hughes "has
receipts of payments made on said mortgage" and that the mortgage "has been paid, thus making [Mae Hughes] the
rightful owner" of the property.
Appellants' and Appellee Watson's answers to the petition alleged that because a recorded mortgage existed at the
time of the conveyance of the land to Mae Hughes, she had notice of that mortgage and, therefore, her possession of the
property was permissive rather than adverse.
Appellants also filed a counterclaim against Hughes and a cross claim against Watson alleging, in both instances,
that, because they were bona fide purchasers of the property, title should be quieted in them or, alternatively, that
Appellants should be reimbursed for the purchase price of the property if the court were to find that the foreclosure deed
is void.
Page 31
416 So. 2d 706, *; 1982 Ala. LEXIS 3249, **1
Appellee Hughes's motion for summary judgment was denied; but partial summary judgment was entered in favor
of [**4] Appellee Watson on the cross claim.
After a hearing on all pending issues, the court entered its order vesting title to the property in Hughes and ruling
that the foreclosure deed issued to Appellants was null and void.
Appellants filed a motion for a new trial, attacking the order on the grounds that 1) the evidence was insufficient to
grant summary judgment to Watson on the cross claim and the court erred in its application of the doctrine of caveat
emptor to that issue; 2) the evidence was insufficient to support an order quieting title in Appellee Hughes; and 3) the
evidence did not support a finding that Hughes had disclaimed subordination to the mortgage, either expressly or by her
actions (thereby indicating an intention of hostile possession), because of the sworn statement in Hughes's petition
which acknowledged the existence of the mortgage and claimed that payments had been made thereon, and because of
Hughes's later affidavit which denied any acknowledgement of either the mortgage or the payments.
The trial court, denying the motion for new trial, held that the doctrine of caveat emptor had been correctly applied,
and that the court had been correct in quieting [**5] title in Hughes, because she had acquired title to the property by
virtue of adverse prescriptive possession.
We affirm.
1
1 While our affirmance is grounded on the issues and contentions as framed and argued below, and in the
context of the trial court's ruling, we perceive no reason why Code 1975, 35-10-20, is not dispositive of this
case. See the specially concurring opinion per Chief Justice Torbert.
Most authorities agree that [HN1] the doctrine of caveat emptor is properly applied to mortgage foreclosure sales.
It is not unreasonable [*709] to presume that the purchaser at such a sale is aware of the condition of the title of the
property on which he bids. It is important, however, to keep in mind that the notice with which the purchaser at a
mortgage foreclosure sale is charged is that notice which would have resulted from a careful and diligent inquiry into
the recorded history of the mortgaged property. C. Wiltsie, Real Property Mortgage Foreclosure 734 (1939).
"Indeed, these [**6] sales would be impossible if a purchaser were not allowed, in good faith, to accept, as
presumptively true, the mortgagee's recital, as contained in his deed, as to the regularity of his procedure in accordance
with the terms of the mortgage." G. Glenn, Mortgages 109.1 (1943).
Further, [HN2] purchasers at foreclosure sales "have been treated as bona fide purchasers for value, and protected
against secret claims or equities, whether existing in favor of third persons against the mortgagor, or in favor of the
mortgagor. . . against the mortgagee;" and "the mortgage appearing of record to be valid, a purchaser without notice
does acquire title." L. Jones, Law of Mortgages of Real Property 2441 (1928). See, also, 92 C.J.S. Vendor and
Purchaser 326 (1955).
This Court, however, has held:
"The elements of a bona fide purchase include a purchase of the legal title to the property in good
faith, for an adequate consideration, and without notice of any claim of interest in the property by any
other party. [Cites omitted.] Notice of a claim of interest in real property can be inferred from
knowledge of facts sufficient to put a reasonably prudent person on inquiry, [**7] which if followed
up, would lead to the discovery of the title asserted by some other party. [Cites omitted.] or as otherwise
stated, knowledge of facts which would lead an ordinarily prudent person to further inquiry of the title
of the vendor. [Cites omitted.]" (Emphasis supplied.)
Page 32
416 So. 2d 706, *708; 1982 Ala. LEXIS 3249, **3
Murphree v. Henson, 289 Ala. 340, 352, 267 So. 2d 414, 425 (1972).
[HN3] Possession of the property to be sold at a foreclosure sale by one whose name does not appear on the
mortgage document is an obvious "fact [which] would lead an ordinarily prudent person to further inquiry," which
inquiry would reveal the claimed interest of the possessor.
In Strong v. Strong, 128 Tex. 470, 98 S.W.2d 346 (1936), although dealing with facts distinguishable from those of
the instant case, the Texas commission of appeals correctly summarized the legal principles which guide our resolution
of the issue now before us:
[HN4] "A purchaser of land must search the records, for they are the primary source of information as
to title and he is charged with knowledge of the existence and contents of the recorded instruments
affecting the title. [Cites omitted.] He must also make inquiry as to the [**8] rights or title of the
possessor, for possession is equivalent to registration, in that it gives constructive notice of the
possessor's rights. [Cites omitted.] 'The rationale seems to be, that as the occupant's title is a good one,
and as his possession is notorious and exclusive, a purchaser would certainly arrive at the truth upon
making any due inquiry. The purchaser cannot say, and cannot be allowed to say, that he made a
proper inquiry, and failed to ascertain the truth. The notice, therefore, upon the same motives of
expediency, is made as absolute as in the case of a registration.' Pomeroy's Equity Jurisprudence (4th
Ed.) 615, Vol. 2, pp. 1166, 1167.
"The value and effectiveness of the registration statutes are to an extent impaired by the rule that
possession gives constructive notice of title, but the rule is justified, or at least supported, as suggested
by Mr. Pomeroy, by the fact that ordinarily the truth as to title may be readily obtained from the person
in possession."
Strong v. Strong, 98 S.W. 2d at 348.
Mae Hughes's continuous and notorious possession of the property at issue for over 30 years was the constructive
notice [*710] necessary [**9] to cause Appellants to make further inquiries as to the source, extent, and duration of
Hughes's claim to the land. Indeed, the recorded conveyance of the property to Hughes and her recorded tax
transactions add strength to our conclusion that notice to Appellants of Hughes's claim was readily ascertainable.
The burden of a diligent search into the history of property one purposes to buy is not an onerous one, nor is it
unfair to apply the doctrine of caveat emptor to mortgage foreclosure sales. The purchaser at a mortgage foreclosure
sale should be in no better position than buyers in all situations who claim to be bona fide purchasers for value without
notice of unascertainable defects or secret equities.
We hold, then, that the trial court was correct in its denial of Appellants' motion for a new trial and in quieting title
to the property in Appellee Hughes. The judgment appealed from is affirmed.
AFFIRMED.
Maddox and Beatty, JJ., concur.
Torbert, C.J., and Shores, J., concur specially.
CONCUR BY: TORBERT
CONCUR
Page 33
416 So. 2d 706, *709; 1982 Ala. LEXIS 3249, **7
TORBERT, CHIEF JUSTICE (concurring specially).
I agree that the trial court was correct in quieting title to the property in the appellee Mae Hughes and [**10] in
denying the appellants' motion for a new trial. It is my view, however, that the trial court's judgment should be affirmed
for the reason that the provisions of Code 1975, 35-10-20, are dispositive. That section provides in pertinent part:
"As to third parties without actual notice or knowledge to the contrary, the indebtedness secured by any
recorded mortgage, or reservation of vendor's lien, either in deed of conveyance or note, bond or contract
of purchase covering real estate 20 years past due according to the original maturity date, or some new
date fixed by a duly recorded extension agreement, shall be conclusively presumed to have been paid
unless the record of such mortgage or lien shows a credit by the mortgagee, or lienee, or owner of the
debt, or his assignee of one or more payments upon such indebtedness within the 20 years last passed.
And if the final maturity date of the debt is not shown by the mortgage or lien, or a recorded extension
agreement, or cannot be determined by calculation from the recitals contained therein, then the time shall
run from the date of the mortgage or lien.
"The notation of credits mentioned in the next preceding paragraph may [**11] be made upon the
record of any such mortgage, or vendor's lien, by the owner of the indebtedness, or someone holding a
duly recorded power of attorney authorizing it. Such notation must show the date of the payment made,
the date the entry was made upon the record, and be witnessed by the probate judge of the county, or his
duly authorized clerk."
Code 1975, 35-10-20.
Several cases have construed this section to mean exactly what it says: that is, "that the indebtedness secured by
any recorded mortgage is conclusively presumed to have been paid if 20 years past due, unless the record shows some
payment by a mortgagor within the 20 year period." Bonner v. Pugh, 376 So. 2d 1354 (Ala. 1979). In Staten v. Shumate,
243 Ala. 261, 9 So. 2d 751 (1942), the Court, in addressing this issue, likewise stated that without further evidence to
the contrary the mortgage would be conclusively presumed paid.
When it is shown that the mortgage is over twenty years old, thus raising the presumption, the complainant has the
duty to allege facts to show that payments had been made within the twenty-year period or some facts that would
overcome the presumption and show [**12] that the mortgage was still in existence. Kilgore v. Gamble, 253 Ala. 334,
44 So. 2d 767 (1950). No such facts were shown in this case. Thus, the burden was not met and the twenty-year
presumption would control.
[*711] Several other cases have also construed this statute in the same manner. While the trial court did not focus
on the applicability of this statute, the appellee did call it to our attention in brief. Since it is my view that 35-10-20 is
clearly dispositive of the issues of this case, I would forego a discussion of the more complex issues involving the
doctrines of caveat emptor and adverse possession. For this reason I agree that the judgment of the trial court is due to
be affirmed.
Shores, J., concurs.
Page 34
416 So. 2d 706, *710; 1982 Ala. LEXIS 3249, **9
14 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
The FIRST NATIONAL BANK OF BIRMINGHAM, a National Banking
Corporation v. William Turner CULBERSON, Jr., et ux.
No. SC 1588
342 So. 2d 347; 1977 Ala. LEXIS 1985
January 21, 1977
SUBSEQUENT HISTORY: [**1] Rehearing Denied February 25, 1977.
DISPOSITION: REVERSED AND REMANDED.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellant mortgagee sought review of a decision by the trial court (Alabama), which
granted summary judgment for appellee equity owners in an action to determine priority to real property that both
parties claimed.
OVERVIEW: The equity owners contracted with the developer for the construction of a custom-built home on what
they thought was lot five of the development. In fact, the equity owners' home was built on lot four. Due to the
confusion, the developer acquired a mortgage using lot four as collateral. The developer defaulted and the mortgagee
foreclosed the mortgage. The equity owners brought an action for an injunction to halt the foreclosure. Both parties filed
motions for summary judgment. The trial court granted the equity owners' motion, finding that the mortgagee was not a
bona fide purchaser for value of lot four because it had sufficient facts to put it on notice of the equity owners' prior
interest. The mortgagee sought review and the court reversed. The court found that there was at least a scintilla of
evidence that the mortgagee did not have notice of the equity owners' interest. The court found that the deposition of the
mortgagee's witness called into question the equity owners' claim that their possession of the property was open,
visible, and obvious. Also, the court said, there was evidence that the equity owners' possession was not exclusive, but
was shared with the builder.
Page 35
OUTCOME: The court reversed a grant of summary judgment for the equity owners in an action to determine priority
to certain real estate as between the equity owners and the mortgagee.
CORE TERMS: deed, mortgage, recorded, summary judgment, builder, deposition, purchaser, visible, workmen,
incorporation, corrective, issue of material fact, evidentiary, inspected, genuine, night, specifications, constructed,
conveyed, warranty, bona fide purchaser, genuine issue, adverse party, unambiguous, opposing, morning, locked,
notice, site, doors
Contracts Law > Consideration > General Overview
[HN1] Elements of a bona fide purchase include (1) a purchase of legal title, (2) in good faith, (3) for adequate
consideration, (4) without notice of any claim of interest in the property by any other party. The law of Alabama
charges a purchaser with notice of the contents of instruments by which he takes title and of all facts which would be
disclosed by reasonably diligent search.
Real Property Law > Construction Law > Contracts
Real Property Law > Estates > General Overview
[HN2] A joint possession with the vendor is not unambiguous, but equivocal for purposes of determining whether a
purchaser had knowledge of facts that would have put it on notice of the possessor's interest in real property.
Civil Procedure > Summary Judgment > Opposition > General Overview
Civil Procedure > Summary Judgment > Standards > Genuine Disputes
Civil Procedure > Summary Judgment > Standards > Materiality
[HN3] In determining whether a summary judgment is proper, the ultimate question is whether there remains a genuine
issue of material fact, and if there is one, summary judgment is inappropriate, Ala. R. Civ. P. 56(e). Put in another way,
where the evidentiary matter in support of the motion does not establish the absence of a genuine issue, summary
judgment must be denied even if no opposing evidentiary matter is presented.
COUNSEL: W. Gerald Stone of Stone, Patton & Kierce, Bessemer, for Appellant.
Norman K. Brown, Bessemer, for Appellees.
JUDGES: Beatty, Justice, wrote the opinion. Maddox, Faulkner and Embry, JJ., and Frank B. Embry, Supernumerary
Circuit Judge, sitting by designation of the Chief Justice, concur.
OPINION BY: BEATTY
OPINION
[*347] Appellant, The First National Bank of Birmingham, appeals from a summary judgment granted in favor of
appellees, Mr. and Mrs. Culberson. The issue on appeal concerns the priority to real property which each party claims.
We reverse and remand.
George Griffin was a real estate developer in the Jefferson County area. He incorporated two companies to aid
Page 36
342 So. 2d 347, *; 1977 Ala. LEXIS 1985, **1
him, Residential Planners, Inc., designed to be the area developer, and Planned Homes, Inc., the builder of homes.
Residential Planners' certificate of incorporation was filed on November 25, 1970 in the Probate Judge's Office of
Jefferson County. Planned Homes' certificate of incorporation was filed on December 14, 1970 in the Probate Judge's
Office of Jefferson County. The charter and by-laws of these corporations were practically identical, [**2] as the
record shows. Appellees assert that they were so identical that they were in legal effect one corporation with two
names.
The real property to be developed was a tract of land lying entirely within the Bessemer [*348] Division of
Jefferson County. It was conveyed to George Griffin from Otis D. Coston and wife by warranty deed dated November
22, 1971, and recorded in the Birmingham Division on December 1, 1971 in real volume 772, page 839. On that same
November 22, 1971, Residential Planners, Inc. conveyed this same property to Cobbs, Allen & Hall Mortgage
Company and this mortgage was recorded in the Birmingham Division simultaneously with the deed from the Costons
to Griffin.
Later, a corrective warranty deed of the same property from the Costons to George Griffin, undated but
acknowledged on January 31, 1972, was recorded on February 3, 1972 in the Bessemer Division of Jefferson County to
"CORRECT THAT CERTAIN DEED RECORDED IN REAL VOLUME 772, PAGE 839, IN THE OFFICE OF THE
JUDGE OF PROBATE OF JEFFERSON COUNTY, ALABAMA". A second corrective deed of the same property,
acknowledged the same day, from George Griffin and wife to Residential Planners, [**3] Inc., was recorded in the
Bessemer Division on February 3, 1972 simultaneously with the corrective deed from the Costons to Griffin (the
mortgage from Residential Planners, Inc. was recorded in the Bessemer Division at this time). The second corrective
deed recited that it was "TO CORRECT THAT CERTAIN DEED RECORDED IN REAL VOLUME 772, PAGE 839,
(the original Costons to Griffin deed) IN WHICH THE NAME OF THE GRANTEE WAS MISTAKENLY
REFERRED TO AS GEORGE GRIFFIN IN LIEU OF RESIDENTIAL PLANNERS, INC."
To recapitulate, the title transactions were in this sequence:
Nov. 25, 1970: Incorporation of Residential Planners, Inc.
Dec. 14, 1970: Incorporation of Planned Homes, Inc.
Nov. 22, 1971: Deed from Costons to Griffin.
Nov. 22, 1971: Mortgage from Residential Planners, Inc. to Cobbs, Allen & Hall.
Dec. 1, 1971: Mortgage from Residential Planners, Inc. recorded in Birmingham Division.
Dec. 1, 1971: Mortgage from Residential Planners, Inc. to Cobbs, Allen & Hall recorded in Birmingham Division.
Jan. 31, 1972: Deed from Costons to Griffin to correct deed of Nov. 22, 1971.
Jan. 31, 1972: Deed from Griffins to Residential Planners, Inc. to correct deed of Nov. 22, 1971.
[**4] Feb. 3, 1972: Recordation in Bessemer Division of two correction deeds and mortgage from Residential
Planners, Inc. to Cobbs, Allen & Hall.
July 20, 1972: Building Construction Agreement "between" Culbersons and Planned, signed by Culbersons and
Residential (by Griffin as President of Residential, for building to be constructed on Lot 5, Sterling Manor West
(unrecorded).
Sept. 27, 1972: Deed of Lot 4 from Residential Planners, Inc. to Planned Homes, Inc.
Release by Cobbs, Allen & Hall of Lot 4 from mortgage of November 22, 1971.
Page 37
342 So. 2d 347, *347; 1977 Ala. LEXIS 1985, **1
Future Advance Mortgage on Lot 4 from Planned Homes, Inc. to First National Bank.
Oct. 3, 1972: Instruments of Sept. 27, 1972 recorded in Bessemer Division.
April 26, 1973: Deed of Lot 4 from Planned Homes, Inc. to Culbersons.
May 25, 1973: Recordation of Culberson deed in Bessemer Division.
One of the many couples who chose to invest in Griffin's development are the appellees, who arranged with Griffin
to have a house constructed for them. Following their negotiations, the Culbersons delivered to Planned Homes, Inc. a
$5,000.00 check drawn on The First National Bank of Birmingham representing the purchase price of a lot [**5] in
Sterling Manor West, the subdivision being developed by Residential Planners, Inc. The Culbersons signed a building
construction agreement on July 20, 1972 with Planned Homes, Inc., which was designated as builder of a house to be
constructed [*349] on Lot 5, Sterling Manor West. Among the clauses contained in this construction agreement is one
stating that "the property shall be conveyed by a general warranty deed to the purchaser by the builder after the final
payment has been made to the builder," and another stating that:
Physical possession of improvements to said real estate shall be deemed to have been surrendered by
the Buyer to the Builder as of the time work is commenced hereunder and to continue in said Builder
until said work is completed, and the Buyer shall [not] be entitled to occupancy of said premises or any
part thereof unless and until the aforesaid contract sum, adjusted as to additions and deductions, if any,
have been determined and paid in full.
The designation of Lot 5 was later changed to Lot 4 by Griffin who endorsed a copy of the plans and specifications
of the Culberson home with the following:
Lot 5 on the contract dated [**6] 7/20/72 has been changed to read Lot 4 instead of Lot 5. George
Griffin.
Griffin explained that this change was made necessary due to an inadvertence in the numbering of the lots in the
subdivision, and that on the finally approved plan which was recorded, Lot 5 as referred to in the contract actually was
Lot 4 as shown on the plat. This, he stated, was the lot he and the Culbersons agreed upon. He did not remember when
he made this change. In fact, when he later applied to the Bank for a construction loan he still thought the Culbersons
were on Lot 5, and, in fact, all the money he drew from the bank on that loan went to another lot, not to the Culberson
lot.
Plans and specifications for the Culberson house were furnished to the Bank with Griffin's loan application on
behalf of Planned Homes, Inc. The outside of these bore the symbols "SM-5" in red ink which had been written over
with "SM-4" in green. The site plan and specifications furnished the Bank, however, bore "Lot 5."
At the time the parties entered into the construction agreement Griffin signed as President of Residential Planners,
Inc. Griffin explained this signature as an inadvertence since Planned [**7] Homes, Inc. did the construction work,
while Residential Planners, Inc. bought the land to be built upon and sold it to Planned Homes, Inc., all for tax purposes.
At this juncture we note that the Bank's answer denied the Culbersons' legal title and denied that the contract was with
Residential, contending that the contract was between the Culbersons and Planned Homes, Inc. This agreement was not
recorded. Within a week after the Culbersons submitted the check to Griffin for the purchase price of the lot, Griffin
nailed a visible "sold" sign on a pine tree in the front of what he thought was Lot 5. Two weeks later another visible
sign was placed upon the same tree below the first sign, this one reading "Custom Built for Mr. & Mrs. Bill Culberson."
The Culbersons delivered to Griffin three additional checks aggregating over $27,000.00 made payable to Planned
Page 38
342 So. 2d 347, *348; 1977 Ala. LEXIS 1985, **4
Homes, Inc., drawn on The First National Bank to cover installments on the construction of their house, and these
checks were paid to Griffin by the Bank. Approximately three weeks after the Culbersons paid their fourth installment,
the outside doors to their home were hung. Because the interior was being finished, Mrs. [**8] Culberson unlocked
the house each morning for the workmen (apparently the building superintendent also had keys to the house), and then
locked the house each night, meanwhile placing some of their personal possessions in the house. The record reveals
that while the work was going on and until completion Mrs. Culberson was physically present on the premises during
the day before September 25, 1972, although Mrs. Culberson stated that:
. . . for some time after September 25, 1972, my husband and I continued to maintain our home in
Fairfield. We spent nights in our home in Fairfield, and continued to maintain it as a home until April
29, 1973, at which time we moved the remainder of our household furnishings not previously moved into
the new house.
[*350] On September 25, 1972, Griffin made application to The First National Bank of Birmingham for a
construction loan on Lot 4. Using a form provided by the Bank, he signed in his capacity as President of Planned
Homes, Inc. The form called for the name and address of the purchaser of the house and a copy of the sales contract
should the house on which the loan was negotiated have been pre-sold. In the space [**9] provided for this
information, Griffin inserted a dash (-), which, he stated, he meant that it wasn't sold. He added:
At that point in time this property was not the Culbersons' property, as far as I was concerned. . . . At
the time I made it they had Lot 5. In my own mind they had Lot 5. And I was placing a loan on Lot 4,
which later didn't jive.
The Bank approved the loan application and took a mortgage, September 25, 1972, on Lot 4 from Planned Homes, Inc.
This mortgage was recorded October 3, 1973 in the Probate Judge's Office, Jefferson County, Bessemer Division. A
deed from Residential Planners, Inc. to Planned Homes, Inc., executed September 20, 1972, was recorded with this
mortgage. During this time the Culbersons continued to make payments under their construction agreement with
Planned Homes, by checks drawn on the defendant Bank, and Planned Homes gave them a deed to Lot 4 on April 26,
1973. Also during this period, an agent of the defendant Bank inspected the lot in question at least three times after the
signs had been posted and after the Culbersons had placed possessions in the house.
On October 5, 1973, the Bank proceeded to foreclose on [**10] the mortgage given it by Planned Homes, Inc. The
Culbersons filed their complaint on November 2, 1973, posted bond and received a temporary injunction against the
Bank restraining this foreclosure. On August 8, 1975, the Culbersons filed a motion for summary judgment based upon
pleadings, affidavits, depositions and exhibits. The Bank did likewise on October 13, 1975. On November 6, 1975, the
trial court granted the Culbersons' motion for summary judgment, denied the Bank's similar motion, set aside the Bank's
mortgage, and permanently enjoined the Bank from foreclosing the mortgage.
The basic issue raised by the Bank on this appeal is whether the trial court erred in finding that the Bank was not a
bona fide purchaser for value, i.e., that the Bank was a purchaser with knowledge of facts sufficient to put it on
inquiry regarding the Culbersons' prior equity at the time the Bank took its mortgage from Planned Homes, Inc. on Lot
4. If we could determine from the record that the status of the Bank's mortgage in relation to the Culbersons' equity
remains in issue, this would require a reversal of the trial court's decision.
[HN1] Elements of a bona fide purchase, enumerated in [**11] Murphree v. Henson, 289 Ala. 340, 267 So.2d
414 (1972), include (1) a purchase of legal title, (2) in good faith, (3) for adequate consideration, (4) without notice of
any claim of interest in the property by any other party. The law of this state charges a purchaser with notice of the
contents of instruments by which he takes title and of all facts which would be disclosed by reasonably diligent search.
Jefferson County v. Mosley, 284 Ala. 593, 226 So.2d 652 (1969).
Page 39
342 So. 2d 347, *349; 1977 Ala. LEXIS 1985, **7
In granting the plaintiffs' motion for summary judgment it is apparent that the trial court found that there was no
genuine issue of material fact on the question whether the defendant Bank was a bona fide purchaser for value when it
took its mortgage from Planned Homes, Inc. on October 3, 1972. And in that connection, we quote from the trial court's
order:
The undisputed facts as appear in the Affidavit of Plaintiff, Dillie Ray Culberson, show that Defendant
George Griffin turned over to Plaintiffs the keys to Plaintiffs' home on September 22, 1972, prior to
Defendant Bank's mortgage, and that the Plaintiffs locked the home each night, and returned each
morning to unlock the doors so that Defendant Griffin's [**12] workmen could complete the inside
work; . . .
* * * *
[*351] None of the above facts were disputed by counter affidavits or otherwise. These facts
showing acts of actual possession were clearly open, visible, and obvious. These facts are undenied
except in Defendant Bank's Answer which states in Paragraph 2 thereof ". . . plaintiffs did not have legal
title to the lot nor were plaintiffs in possession of it when the Bank's mortgage was recorded", and again
in Paragraph 11 thereof ". . . Bank again denies that plaintiffs had any legal title to the lot and had actual
or constructive possession of said lot at such time . . .". The denial of Plaintiffs' possession in Defendant
Bank's Answer is insufficient on Motion for Summary Judgment, in that Rule 56(e) ARCP clearly
provides that: "When a motion for summary judgment is made and supported as provided in this rule, an
adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by
affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a
genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered
against [**13] him." When a motion for summary judgment is made and supported as provided in Rule
56, an adverse party may not rest upon the mere allegations or denials of the pleadings. In fact, it can be
perilous for the opposing party neither to proffer any countering evidentiary materials nor to file an
affidavit. Ray vs. Midfield Park, Inc., 308 So.2d 686; 293 Ala. 609.
In this we have concluded that the trial court erred, since there is at least a scintilla of evidence furnished by the
deposition of the witness Jones, the Bank's real estate inspector, contesting the possession of Lot 4. In that deposition
offered by the Bank in support of its own summary judgment motion filed after that of the plaintiffs, Jones states that he
first inspected Lot 4 when the foundation was laid and found some lumber there also. This inspection was made in
connection with Griffin's application for a loan, and he inspected the premises about once or twice a month thereafter,
and "watched it go up from the foundation on." He did not know when the Culbersons actually moved in, and did not
recall having seen Mrs. Culberson before the deposition was taken. Not only did this evidence make an issue [**14] of
the Culbersons' possession, but both Mrs. Culberson's deposition and the trial court's order show that workmen were
present much of the time when Mrs. Culberson was at the site. While the trial court may have been correct in
characterizing the Culbersons' acts of possession as "open, visible, and obvious," it is questionable whether these acts
were also unambiguous and exclusive, as our cases require. Lightsey v. Stone, 255 Ala. 541, 52 So.2d 376 (1951).
Notwithstanding the fact that the Culbersons had keys to the house before they actually began to live there, Mrs.
Culberson's own statement poses the question whether their possession was exclusive, or joint with Griffin because his
workmen were still present on the premises, apparently in accord with the construction agreement. [HN2] A joint
possession with the vendor is not unambiguous, but equivocal. O'Neal et al. v. Prestwood, 153 Ala. 443, 45 So. 251
(1907).
Therefore, in connection with plaintiffs' motion for summary judgment, there was more before the court than
defendant's denial in its answer. The rule of Ray v. Midfield Park, Inc., 293 Ala. 609, 308 So.2d 686 (1975) does not
apply.
Page 40
342 So. 2d 347, *350; 1977 Ala. LEXIS 1985, **11
[HN3] In determining whether [**15] a summary judgment is proper, the ultimate question is whether there
remains a genuine issue of material fact, and if there is one, summary judgment is inappropriate, Rule 56(e) ARCP; 6
Moore's Fed. Prac., par. 56.15 (2nd ed. 1971). Put in another way, "Where the evidentiary matter in support of the
motion does not establish the absence of a genuine issue, summary judgment must be denied even if no opposing
evidentiary matter is presented." Lyons, Alabama Practice, p. 352.
For the error in granting the plaintiffs' motion for summary judgment when there was a genuine issue of material
fact, [*352] the nature of plaintiffs' possession, the case must be reversed and remanded. This action renders it
unnecessary to comment upon the other issues presented by the parties.
REVERSED AND REMANDED.
MADDOX, FAULKNER and EMBRY, JJ., and FRANK B. EMBRY, Supernumerary Circuit Judge, sitting by
designation of the Chief Justice, concur.
Page 41
342 So. 2d 347, *351; 1977 Ala. LEXIS 1985, **14
17 of 266 DOCUMENTS
Analysis
As of: Jul 10, 2014
Riley A. WATSON and Irene C. Watson v. Odie Lee TAYLOR and Dorls Taylor
SC 745
293 Ala. 386; 304 So. 2d 181; 1974 Ala. LEXIS 980
November 27, 1974
DISPOSITION: [***1] Affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Complainant possessors brought an action in personam, pursuant to Ala. Code tit. 7,
1109 (1940; Recompiled 1958), against respondent deed holders to quiet title to certain real property. The Circuit Court
of Madison County (Alabama) entered a decree in favor of the possessors, which held that the possessors were the
owners in fee of the property. The deed holders appealed.
OVERVIEW: The seller owned a tract of land on which two houses were located, an "old home place" and a duplex
next door. The possessors made a down payment on the old home place, the balance secured by a mortgage, and went
into possession, but did not record the deed. Two years later, the deed holders bought the duplex. They knew that they
were not purchasing the old home place. The possessors recorded their deed, which was ambiguous, about two years
later. The possessors filed an action to quiet title. The trial court ruled in favor of the possessors. The court affirmed.
The only parol purchase excepted from Ala. Code 2152 (1896), the statute of frauds, was that the purchase money, or
a portion thereof, had to be paid and the purchaser put into the possession of the land by the seller. When the deed
holders made their purchase, the possessors were in open and notorious possession of the old home place and had paid
part of the purchase price. The deed holders' deed was invalid insofar as it purported to convey the old home place tract,
because the deed holders were not bona fide purchasers for value without notice, and were not entitled to the
protection of the recording statute.
OUTCOME: The court affirmed the judgment.
Page 42
CORE TERMS: deed, thence, feet, duplex, purchaser, notice, ownership, home place, void, recorded, decree, quiet,
plat, cross-bill, probate, purchase price, peaceable possession, parol, cross bill, encumbrance, tract, purchase money,
sufficient to put, statute of frauds, demurrer, grantor, vendor, place of beginning, deed of conveyance, bona fide
purchasers
Civil Procedure > Pleading & Practice > Pleadings > Rule Application & Interpretation
Real Property Law > Title Quality > Adverse Claim Actions > Quiet Title Actions
[HN1] In an in personam action to quiet title, it is unnecessary to allege in terms that the complainant was the owner of
the land at the time the bill was filed.
Civil Procedure > Pleading & Practice > Pleadings > Rule Application & Interpretation
Real Property Law > Title Quality > Adverse Claim Actions > General Overview
[HN2] In a statutory bill to quiet title, it is not necessary that the source of the complainant's or respondent's title or
claim be set out in the bill of complaint.
[HN3] The primary issue in a statutory action to quiet title in personam is the title or interest of the respondent. When it
is shown that complainant is in actual, peaceable possession (as opposed to peaceable, constructive possession) at the
time of filing the complaint and that no other suit is pending, title and ownership in the complainant are presumed and
the burden is on the respondent to establish a valid claim to the lands. Only if the respondent then establishes a valid
claim does the complainant have the burden of proving what title he has and that it is superior.
Energy & Utilities Law > Conveyances > Mineral Interests > General Overview
Real Property Law > Mining > Claims
Real Property Law > Title Quality > Marketable Title > Tests
[HN4] When a complainant shows by evidence peaceable possession by her of certain land as alleged, and that there
was no suit pending at the time of the filing of the bill to test defendant's claim of title, this makes a prima facie case,
and she is entitled to a decree adjudging defendant's claim invalid, unless he establishes a good title. And if, under the
evidence, he acquired no title by his deed, under which he asserts his rights or claim to the mineral interest in this land,
the question whether complainant has a superior title to defendant's asserted claim to the mineral interest, or any title at
all, is not in the case.
Contracts Law > Statutes of Frauds > General Overview
Real Property Law > Purchase & Sale > Contracts of Sale > Enforceability > Statutes of Frauds
[HN5] The only parol purchase excepted from the influence of Ala. Code 2152 (1896) is that the purchase money, or a
portion thereof, be paid and the purchaser be put into the possession of the land by the seller. It is true that both of these
acts must concur to save the purchase from the influence of the statute of frauds. They need not be contemporaneous,
however. If the purchaser is put in possession and subsequently pays the purchase money, or a part thereof, or if he pays
the purchase money and is subsequently put into possession, the transaction is beyond the influence of the statute of
frauds.
Page 43
293 Ala. 386, *; 304 So. 2d 181, **;
1974 Ala. LEXIS 980, ***1
[HN6] Possession by one who is not the purchaser's grantor is sufficient to put the purchaser on notice of an adverse
claim, even if the one in possession has no deed.
COUNSEL: Watts, Salmon, Roberts, Manning & Noojin, Huntsville, for appellants.
In a suit in equity, the controlling issues arise out of the bill and answer, and, to authorize relief in equity, the allegations
and proof must correspond, and no matter how just the demand established by the proof, if it does not harmonize with
the allegations of the prty having the affirmative burden of proof of an issue, such proof cannot be considered.
Manchuria S.S.Co. v. Hary G. G. Donald & Co., 200 Ala. 638, 77 So. 12; W. T. Smith Lumber Co. v. Foshee, 277 Ala.
1, 167 So.2d 154; Colonial Enterprises, Inc. v. Harris, 276 Ala. 292, 161 So.2d 495; Sachs v. Sachs, 278 Ala. 464, 179
So.2d 46; Swendick v. Swendick, 221 Ala. 337, 128 So. 593; Nelson v. Boe, 226 Ala. 582, 148 So. 311. In a statutory suit
to quiet title, when defendant disclaims any title, complainant is entitled to confirmation of his title. Osborn v. Board of
Supervisors Hinds County, 71 Miss. 19, 14 So. 457. When a respondent in a statutory suit to quiet title shows legal title
to the land, the burden of avoiding it by showing superior title is on the complainant. Machen v. Wilder, 283 Ala. 205,
215 So.2d 282. It is not incumbent [***2] on cross-complainant to a suit to quiet title to aver possession of the
subject-matter of the suit. Smith v. Rhodes, 206 Ala. 460, 461, 90 So. 349; Sloss-Sheffield Steel & Iron Co. v. Lollar,
170 Ala. 239, 54 So. 272. On a cross-bill to quiet title, it is the complainant's title, claim or right to the subject-matter of
the suit which is to be inquired into, and not that of the respondent. Whitaker v. Van Hoose, 157 Ala. 286, 289, 47 So.
741. A conveyance of land is void if the starting point of the description of the subject-matter cannot be established, or
where the area is not defined. 26 C.J.S. Deeds 29, p. 639. In construing a deed, where the description is by metes and
bounds, evidence of the situation and locality of the premises, and of their identity, is admissible, but such evidence is
not admissible to show mistake in the description, or to alter or vary the boundary, or to substitute another and different
boundary for the one expressed in the conveyance. Guilmartin v. Wood, 76 Ala. 209; Hereford v. Herford, 131 Ala.
573, 32 So. 620. In the case of a patent ambiguity in the description of the subject-matter of a deed, parol proof of
extrinsic circumstances surrounding [***3] the execution of the deed in explanation of the description will not be
received. Chambers v. Ringstaff, 69 Ala. 140, 146; Martin v. Baines, 217 Ala. 326, 329, 116 So. 341, 343; Elliott v.
Coleman and Davis, 170 Ala. 355, 361, 54 So. 491, 493; Rushton v. McKee, 201 Ala. 49, 77 So. 343; Moss v. Crabtree,
245 Ala. 610, 18 So.2d 467; State ex rel. Allen v. Town of Phil Campbell, 177 Ala. 204, 58 So. 905.
Bell, Richardson, Cleary & Tucker and John W. Evans, Huntsville, for appellees.
The object of Title 7, Section 1109, Code of Alabama is to allow the party who is in possession, and who cannot force
the adversary claimant to institute any proceeding, to bring said party into court in order to determine whether he has
any just claim to the property. Patronas v. West Dauphin Corporation, 280 Ala. 442, 194 So.2d 845; Wood Lumber Co.
v. Williams, 157 Ala. 73, 47 So. 202. A statutory bill to quiet title under this article need not allege in terms that
complainant was owner of land at time bill was filed. Whitmire v. Spears, 212 Ala. 583, 103 So. 668; Vaughan v.
Palmore, 176 Ala. 72, 57 So. 488. Allegations in a bill to quiet title that complainant was in peaceful possession of lands
[***4] and that respondent claimed or was reputed to claim some title or interest in lands and that no suit was pending
to enforce or test the validity of title are sufficient to give the court jurisdiction of an action to quiet title. Chestang v.
Tensaw Land & Timber Company, 273 Ala. 8, 134 So.2d 159. When a cross-bill seeks no relief other than to have the
court decree that other than to have the court decree that has title to the suit property, the court can consider the
averments of the cross-bill as a part of the answer. Berry v. Thomas, 273 Ala. 527, 142 So.2d 918. When a real estate
description is merely indefinite, the maximum applies, "that is certain which can be made certain." Clipper v. Gordon,
253 Ala. 428, 44 So.2d 576; Garrow v. Toxey, 188 Ala. 572, 66 So. 443; Pearson v. Admas, 129 Ala. 157, 29 So. 977;
Henderson v. Noland, 238 Ala. 213, 189 So. 732. In order to constitute one of bona fide purchaser under Title 47,
Section 120, Code of Alabama, and entitle him to protection of the rule, as against a prior equity or conveyance, it is
essential that he is the purchaser of the legal as distinguished from an equitable title, that he purchase the same in good
faith, that he [***5] prted with value as a consideration therefore, and that he had no notice, and knew of no facts
Page 44
293 Ala. 386, *; 304 So. 2d 181, **;
1974 Ala. LEXIS 980, ***1
sufficient o put him on inquiry as to complainant's equity, either at or before the time he paid the purchase money or
otherwise parted with value. Hodges v. Beardley, 269 Ala. 280, 112 So.2d 482; Lightsey v. Stone, 255 Ala. 541, 52
So.2d 376. Possession of land by a vendee under deed, not duly recorded, is sufficient to give notice to a purchaser
equivalent to a due registration of title. Fowler v. Morrow, 245 Ala. 2, 15 So.2d 629.
JUDGES: BLOODWORTH, Justice, wrote the opinion. HEFLIN, C.J. and COLEMAN, McCALL ad JONES, JJ.,
concur.
OPINION BY: BLOODWORTH
OPINION
[**182] [*388] BLOODWORTH, Justice.
This is an appeal by respondents from a decree granting relief to complainants on a statutory bill to quiet title.
Complainants, Odie Lee and Doris Taylor, brought an action in prsonam [pursuant to Tit. 7, 1109, Code of Alabama
1940 (Recompiled 1958)] against respondents, Riley A. and Irene C. Watson, to quiet title to the following described
residential lot in Huntsville, Alabama, viz.:
"Beginning at the Northwest corner of Lot 15, Block 11, according to the plat of Kildare [***6] Estates, as
recorded in Plat Book 1, Page 164, Probate Records of Madision County, Alabama; thence due South 50 feet to a point,
thence North 88 degrees 30 minutes East 133.8 feet to a point, thence North 50 feet to a point, thence West to the place
of beginning."
The cause was submitted on the pleadings, the exhibits, and testimony taken ore tenus. [*389] The Circuit Court
of Madison County, The Honorable John D. Snodgreass, Judge, rendered a final decree declaring that the Taylors are
the owners in fee of the property in question and that the Watsons have no right, title, or interest therein or encumbrance
thereon. From this decree respondents Watson appeal. We affirm.
The factual background of this case is not complicated.
In 1965, Mrs. Myrtle Fanning was the owner of the following described tract of land in Huntsville, Madison
County, alsbama:
"Beginning at the Northwest corner of Lot 15, Block 11, according to the plat of Kildare Estates, as recorded in Plat
Book 1, Page 164, Probate Records of Madison County, Alabama; thence due [**183] South 108 feet to a point,
thence North 88 degrees 30 minutes East 133.8 feet to a point, thence due North [***7] 108 feet to a point, thence due
West to the place of beginning.
Two houses are located on this tract, an "old home place" at 2514 Kildare Avenue and a "duplex" next door at 2512
and 2510 Kildare Avenue.
On June 4, 1965, Mrs. Fanning sold the "old home place" at 2514 Kildare Avenue to the Taylors for $9,200.00.
The Taylors made a substantial down payment, the balance being secured by a mortgage. The conveyance from Mrs.
Fanning to the Taylors described the property sold as follws:
"Lot 15, Block 11, according to the plat of Kildare Estates as recoded in plat Book 1, Page 164, probate records of
Madison County, Alabama, thence due South 50 feet to a point, thence North 88 degrees 30 minutes East 133.8 Feet to
a point, thence due North 50 feet to a point, thence West to the place of beginning."
As is readily apparent, this description contains no beginning point, the same having been omitted. Although this
deed was not recorded until some time later (after recordation of the Watson deed), the Taylors immediately took
Page 45
293 Ala. 386, *; 304 So. 2d 181, **;
1974 Ala. LEXIS 980, ***5
possession of 2514 Kildare Avenue and it appeas that they, or their tenants, have continuously occupied the premises.
On November 27, 1967, the [***8] Watsons purchased the duplex located at 2510 and 2512 Kildare Avenue from
Mrs. Fanning. Before making the purchase, Mrs Watson inspected the premises. The "old home place" lot has a
frontgage on Kildare Avenue of 50 feet while the "duplex" lot has a frontage of 58 feet. The real estate agent, employed
by Mrs. Fanning to sell the "duplex," had, in his listing contract, a recitation that the duplex lot had 58 front feet. It may
have been that Mrs. Taylor considered the vacant lot on the other side of the "duplex," and owned by another person, to
be part of the duplex lot. Mrs. Watson testified that when she inspected the duplex property, she was aware of Mr.
Taylor's house, the "old home place," but did not inquire about its ownership. Mrs. Watson also testified unequivocally
that she knew she was not purchasing the Taylor house or any house other than the duplex even though she did believe
she was purchasing a lot with about a 100-foot front. The contract signed by Mrs. Waton described the property as
2512 Kildare Avenue. The purchase price for the "duplex" was approximately the same as that paid by the Taylors for
the "old home place." (Mr. Watson did not see the property until [***9] a year later.)
The Taylors' deed to the "homeplace" remained unrecorded. In drafting the deed to the Watsons, the scrivener
described all the lad originally owned by Mrs. Fanning and of which she was still the record owner. This, of course,
included the "old home place." The Watsons' deed was recorded December 5, 1967.
No one was aware of the discrepancy in the deeds until about two years later location of the boundary line between
the [*390] Taylor and Watson lots and the discrepancy ws then discovered. It was then that the Taylors recorded their
deed.
The Taylors' complaint alleges that they are in peaceable possession of the lot in question, that the Watsons claim
or are reputed to claim some right, title, or interest in or encumbrance upon said land and that no suit is pending to test
the validity of such claim. The complaint calls upon the Watsons to set forth their claim to the described land and prays
for the court to finally adjudge what title, interest, or encumbrance the Watsons have in or upon the land.
The Watsons demurred to the Taylors' complaint on two grounds:
"1. There is no equity in the bill.
[**184] "2. The source of complainants' [***10] alleged title to the real estate described in said bill is not
alleged."
When their demurrer was overruled, the Watsons filed an "Answer and Cross Bill." In this pleading the Watsons
first admit all allegations contained in the complaint except the Taylors' allegation of peaceable possession and then
moke the following allegatins in paragraph 5:
"5. Respondents are informed and they believe, and, based upon such information and belief, they respectively say
and charge the fact to be, that the Complainants base their entire claim of title, interest, and ownership of the property
described in the paragraph numbered 1 of the original Bill of Complaint upon, and derive all their right, title, interest,
and claim, legal and equitable, in and to said property, from a purported deed of conveyance dated June 4, 1965, by and
between one Myrtle H. Fanning, as grantor, and the Complainants, Odie Lee Taylor and his wife, Doris Taylor, as
grantees, which is recorded in the office of the Probate Judge of Madison County, Alabama, in Deed Book 428, at page
295. A true, correct, complete copy of the said purported deed of conveyance is attached hereto, marked as Exhibit 1,
and the contents [***11] thereof are incorporated herein by reference in their entirety. Said purported deed of
conveyance was not admitted to record in the office of the Probate Judge of Madison County, alabama, pursuant to the
provisions of the Code of Alabama 1940, Title 47, Section 95, until November 7, 1969."
The Watsons also set forth the nature and source of their own title, and allege themselves to be bona fide
purchasers for value without notice in that they purchased the entire Fanning tract, including the land in question, for a
valuable consideration from the Taylors' grantor, Mrs. Fanning, without knowledge of the Taylors' claim. The Watsons
Page 46
293 Ala. 386, *389; 304 So. 2d 181, **183;
1974 Ala. LEXIS 980, ***7
further allege that the Taylors' deed is void on its face because the description of the land is ambiguous and uncertain.
In their prayer for relief, the Watsons seek an adjudication of title and to have the Taylors' deed canceled.
In their answer to the Watsons' cross bill, the Taylors specifically deny paragraph 5 as set out above. The Taylors
also denied, or averred insufficient information upon which to admit or deny, the remainder of the Watsons' allegations.
After hearing the case orally, the trial court concluded that the Watsons were [***12] not bona fide purchasers
for value without notice in that even though the Taylors' deed was not recorded, the Taylors' possession under said deed
was sufficient to put the Watsons on notice of the Taylors' title. In reaching this conclusion, the trial court held that the
ambiguous description in the Taylors' deed could be, and had been, made certain by parol evidence of what the Taylors
agreed to buy and Mrs. Fanning agreed to sell. It was thus that the court rendered a final decree declaring that the
Taylors are the owners in fee of the property in question ("the old home place") and that the Watsons had no right, title,
or interest therein or encumbrance thereon.
[*391] Accoring to the appellants Watson, there are two issues presented on this appeal: (1) Whether under the
issues as defined by the pleadings, the appellants were entitled, upon prrof of their deed, to judgment as a matter of law;
and, (2) Whether under the issues as defined by the pleadings, the judgment as defined trial court is sustained by
"relevant material, and legal evidence." [The case was heard under the so-called "Lazy Lawyers Rule," Tit. 7, 372(1),
Code of Alabama 1940 (ecompiled 1958), which [***13] does ot require objections to the evidence. We note that
Appendix II to the Alabama Rules of Civil Procedure (effective July 3, 1973) states that this section is superseded by
Rule 43 A.R.C.P. The order of this court of January 3, 1973, adopting the rules, states that such Appendix II is not
binding [**185] on any court, but shall be viewed with a presumption of validity.]
The Watsons contend in brief:
"The Complainants, in their answer to the cross-bill (Tr.p. 12) expressly denied the allegations of the paragraph
numbered 5 of the cross-bill, and thereby denied any claim to the subject-matter of the suit based upon such deed. There
was, therefore, no issue in the case, after the filing of the answer to the cross-bill, relating to the validity of
Complainants' alleged deed. Respondents were entitled to judgment removing the cloud of Complainants' deed from
their title, under both aspects of their cross-bill, and were entitled to judgment upon their answer, merely upon proof of
their deed. In such connection, Respondents point out to the Court that in neither the original bill nor in their answer to
the cross-bill did Complainants allege ownership of the subject matter [***14] of the suit - only possession."
The Watsons also contend that oral testimony as to what Mrs. Fanning agreed to convey and what the Taylors
agreed to purchase was not admissible evidence in that title to land cannot rest upon parol evidence and that such
testimony is irrelevant under the state of the pleadings.
The Watsons concede that the Taylors' complaint contains the requisite jurisdictional averments of an in personam
action to quiet title. Although the Taylors do not allege ownership [as required by Tit. 7, 1110, Code of Alabama
1940 (Recompiled 1958)], this Court has held:
"* * * [HN1] In a bill of this character it is unnecesary to allege in terms that the complainant was the owner of the
land at the time the billwas filed." Whitmire v. Spears, 212 Ala. 583, 103 So. 668 (1925).
"* * * It is not averred that complainant is the owner of the * * * interest which she claims to own. * * *
"Assuming this to be a defect in the bill, it is a mere irregularity and was waived by an abandonment of the
demurrer. While 810 requires the bill to allege "ownership" of the land by the complainant, this is a matter of
pleading, and is not a necessary allegation in order to [***15] bring into exercise the jurisdiction of the court, which is
conferred by the preceding section." Kendrick v. Colyar, 143 Ala. 597, 42 So. 110 (1904).
"* * * It is well settled in Alabama that [HN2] in a statutory bill to quiet title it is not necessary that the source of
Page 47
293 Ala. 386, *390; 304 So. 2d 181, **184;
1974 Ala. LEXIS 980, ***11
the complainant's or respondent's title or claim be set out in the bill of complaint; * * *." Brownell v. Lewis, 264 Ala. 79,
84 So.2d 489 (1956).
In the instant case, neither ground of demurrer raises the issue of failure to allege ownership. It is therefore waived.
[HN3] The primary issue in a statutory action to quiet title in personam is the title or interest of the respondent.
When it is shown that complainant is in actual peaceable possession (as opposed to peaceable constructive possession)
at the time of filing the complaint and that no other suit is pending, title and ownership in the [*392] complainant are
presumed and the burden is on the respondent to establis a valid claim to the lands. Only if the respondent then
establishes a valid claim does the complaint have the burden of proving what title he has and that it is superior.
Kendrick v. Colyar, supra; City Loan and Banking Co. v. Poole, 149 [***16] Ala. 164, 43 So. 13 (1907). See Wiggins
v. Stapleton Baptist Church, 282 Ala. 255, 210 So.2d 814 (1968).
The Taylors unquestionably proved peaceable possession at the time of the filing of the complaint and, thus,
created a presumption of ownership and title in themselves. The Watsons, on the other hand, argue that they proved
valid title in themselves by merely introducing a deed valid on its face; and, therefore, put the [**186] burden of
proving a superior title on the Taylors. This contention has been rejected by this Court:
[HN4] "When the complainant, as here, showed by evidence peaceable possession by her of the land as alleged, and
that there was no suit pending at the time of the filing of the bill to test the defendant's claim of title, this made a prima
facie case, and she was entitled to a decree adjudging defendant's claim invalid, unless he established a good title. And
if, under the evidence, he acquired no title by his deed, under which he asserts his rights or claim to the mineral interest
in this land, the question whether complainant has a superior title to defendant's asserted claim to the mineral interest,
or any title at all, is not in the case." [***17] Kendrick v. Colyar, supra.
The evidence shows the Watsons' deed to be invalid insofar as it purports to convey the Taylors' "old home place"
tract, because the Watsons are not, as they allege, bona fide purchasers for value without notice, and are not entitled to
the protion of the recording statute. It is undisputed that Mrs. Fanning agreed to sell and the Taylors agreed to buy the
"old home place" at 2514 Kildare Avenue. The Taylors were put in possession by Mrs. Fanning and have paid part of
the purchase price.
On these facts, City Loan and Banking Co. v. Poole, supra, is controlling. In that case (a quiet suit) B. Purchased
real estate under a parol contract and paid the purchase price, the vendor agreeing to execute a deed (which he did not
do) and directing the purchaser B. to take possession, which he did. The purchaser B. continued in possession of the
premises under his contract and while in possession the vendor conveyed the land to a third person. It was held that the
last conveyance was void as against the purchaser B. and his possession under the oral contract was notice to the other
purchaser. This Court also held:
"The main point insisted upon by the appellant [***18] in this case is that its title should prevail over the claim of
the appellee, because appellee's purchase of the lots in question was within the fifth subdivision of the statute of frauds.
- Section 2152 of the Code of 1896. [HN5] The only parol purchase excepted from the influence of this statute is that
'the purchase money, or a portion thereof, be paid and the purchaser be put into the possession of the land by the seller.'
It is true that both of these acts must concur to save the purchase from the influence of the statute of frauds. - They need
not be contemporaneous, however. If the purchaser is put in possession and subsequently pays the purchase money, or
a part thereof, or if he pays the purchase money and is subsequently put into possession, the transaction is beyond the
influence of the statute of frauds. -
"the complainant being in the abserse possession of the land under a valid [oral] contract of purchase, when
Bowman executed the deed and mortgage to Prude, the espondent's vendor, and [*393] when Prude conveyed to it
[respondent], they were all void as to him [complainant]. So, too, is possession of land under [an oral] contract of
purchase sufficient [***19] to put a purchaser on notice."
Page 48
293 Ala. 386, *391; 304 So. 2d 181, **185;
1974 Ala. LEXIS 980, ***15
When the Watsons made their purchase, the Taylors were in open and notorious possession and had paid part of
the purchase price. In accord with Poole, supra, the Watsons' deed was void as to the Taylors.
We find no merit in the Watsons' argument that the Taylors' deed is void on its face for ambiguity and thus could
not impart notice to them, and that they were thus without notice. As can be seen from Poole, supra, [HN6] possession
by one who is not the purchaser's grantor is sufficient to put the purchaser on notice of an adverse claim, [**187]
even if the one in possession has no deed. Therefore, even assuming arguendo that the Taylor deed is void on its face,
such fact is immaterial because we decide that the Watsons' deed was void as to the Taylors. Poole, supra. The
Watsons having no title thereto, the question as to whether the Taylors have superior title "or any title at all" is not an
issue in this case. Kendrick v. Colyar, supra.
It is therefore unnecessry to decide what is the effect of the Taylors' denial of paragraph 5 of the Watsons' cross
bill. We only note in passing that in paragraph 5 of their cross bill, the [***20] Watsons allege that the sole claim of
the Taylors is based on the Taylors' ambiguous and unrecorded deed. The Taylors' answer thereto could be fairly
construed as only denying that their deed was the sole basis for thei claim.
Having carefully considered the errors assigned, we find no reversible error and accordingly affirm the trial court's
decree.
Affirmed.
HEFLIN, C.J., and COLEMAN, McCALL and JONES, JJ., concur.
Page 49
293 Ala. 386, *393; 304 So. 2d 181, **186;
1974 Ala. LEXIS 980, ***19
18 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
Al YEARGIN, etc. v. Joseph V. DONNELLY and Thelma R. Donnelly
SC 633
292 Ala. 430; 296 So. 2d 144; 1974 Ala. LEXIS 1090
May 30, 1974
CASE SUMMARY:
PROCEDURAL POSTURE: Respondent third transferee sought review of a decree from the Circuit Court of Baldwin
County (Alabama), which set aside a warranty deed from complainant original title holders to respondent first
transferees and removed the cloud of title that the second transferee and the third transferee had on the land.
OVERVIEW: The original title holders had executed and delivered to the first transferees a warranty deed that
conveyed certain real property, which was quitclaimed to the second transferee and was eventually given to the third
transferee by a warranty deed. In an action filed by the original title holders, the trial court had issued a decree that set
aside the warranty deed to the first transferees because of the failure of a fraudulent misrepresentation, and removed the
cloud of title the second transferee and the third transferee had on the land. The third transferee had appealed, arguing
that the complaint had not stated a cause of action against him. The court disagreed. The court held that the original title
holders had no duty, when pleading a fraudulent conveyance, to affirmatively plead and prove that all subsequent
purchasers were not bona fide purchasers. Further, the complaint had pleaded sufficient facts for fraud, which
showed that the first transferees had obtained the deed from the original title holders for stock that turned out to be
worthless. The court affirmed the trial court's decree that set aside the warranty deed and removed the cloud of title.
OUTCOME: The court affirmed the trial court's decree that set aside a warranty deed from the original title holders to
the first transferees, and the removal of the cloud of title the second transferee and third transferee had on the land.
CORE TERMS: deed, cause of action, bona fide purchaser, decree, stock, warranty deed, cloud, quitclaim deed,
Page 50
subject property, assignments of error, responsive, complain, demurrer, pleaded, notice, proven, void, failure of
consideration, fraudulent misrepresentation, executed and delivered, relief prayed, warranty, affirmatively, fraudulent,
amendable, deed conveying, aforementioned, worthless, times
[HN1] Allegations by complainants that they are in possession of a subject property are not necessary in order to state a
valid cause of action and to remove a respondent's deed as a cloud on their title. Possession by complainants goes only
to the issue of whether or not a party is a bona fide purchaser.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Waiver & Preservation
Real Property Law > Purchase & Sale > Fraudulent Transfers
[HN2] The issue of a bona fide purchaser for value is an affirmative defense, in the nature of confession and
avoidance, which must be raised by respondent. When respondent alleges and proves such, burden then shifts to
complainants to prove respondent has actual or constructive notice of the facts constituting the fraud before his purchase
or of facts or circumstances sufficient to put him on inquiry, which if followed up, would lead to discovery thereof.
There is no duty upon complainants, pleading a fraudulent conveyance, to anticipate the defense and to affirmatively
plead and prove that all subsequent purchasers are not bona fide purchasers.
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Defects of Form
Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Demurrers
Real Property Law > Torts > Construction Defects
[HN3] In the absence of a demurrer, if a complaint states a substantial cause of action and the judgment is responsive to
it, the court will treat amendable defects as amended. In the absence of a demurrer, if the complaint contains a
substantial cause of action, and the judgment is responsive to it, appellant will not be heard to complain of errors or
defects in the complaint that would subject it to demurrer. The court will, in construing the averments of a complaint in
actions at law, adopt a liberal construction, and if by treating all amendable defects as amended it appears from the facts
stated, whether well or ill pleaded, a substantial cause of action is stated, then it is sufficient to sustain the judgment.
And the same rule would apply in equity.
COUNSEL: Chason & Underwood, Foley, for appellants.
Proof of a fact not alleged in a bill is as unavailable for relief as is averment without proof, and proof without
allegations cannot be considered. Sachs v. Sachs, 278 Ala. 464, 179 So.2d 154; W. T. Smith Lbr.Co. v. L. J. Foshee, et
al., 277 Ala. 71, 167 So.2d 154; Salmon v. Wynn, et al., 153 Ala. 538, 45 So. 133. Proof without pleading will generally
not suffice to enforce demand or protect right. Nelson v. Boe, 226 Ala. 582, 148 So. 311; Manchuria S.S.Co. v. Harry
G. G. Donald & Co., et al., 200 Ala. 638, 77 So. 12. Equity relief can only be granted on allegations and proof, and
proof will never be allowed to supply defects or omissions in allegations. AGM Drug Co. of Ala. v. Harold R. Dobbs,
277 Ala. 493, 172 So.2d 379; Mid State Homes, Inc. v. Tedford, et al., 284 Ala. 613, 227 So.2d 126.
Chason, Stone & Chason, and Charles C. Partin, III, Bay Minette, for appellees.
A complainant in equity need not anticipate defensive matter in the initial pleading. Henderson Baker Lbr.Co. v.
Page 51
292 Ala. 430, *; 296 So. 2d 144, **;
1974 Ala. LEXIS 1090, ***1
Headley, 247 Ala. 681, 26 So.2d 81; Natl.So.Prod.Corp. v. City of Tuscaloosa, 246 Ala. 316, 20 So.2d 329; Town of
Frisco The question [***2] of whether a person is a bona fide purchaser is defensive matter which need not be
anticipated in the Bill of Complaint. Henderson Baker Lbr.Co. v. Headley, 247 Ala. 681, 26 So.2d 81; Barton v. Barton,
75 Ala. 400. Proof that a purchase was made in good faith and the purchase price was paid, shifts the burden of proof
to the opposing party to show that before the payment, the purchaser had actual or constructive notice of matters that
defeat his right to the property. Marsh v. Elba Bank and Trust Co., 207 Ala. 553, 93 So. 604; Johnston v. Harsh, 207
Ala. 524, 93 So. 451; Taylor v. Burgett, 207 Ala. 524, 93 91 So. 786. In the absence of a demurrer, the Supreme Court
will treat all amendable defects as amended if it appears that a Bill of Complaint states a substantial cause of action.
Nelson v. Boe, 226 Ala. 582, 148 So. 311; Kyle v. Caravello, 103 Ala. 150, 15 So. 527.
JUDGES: BLOODWORTH, Justice, wrote the opinion. COLEMAN, McCALL, FAULKNER and JONES, JJ.,
concur.
OPINION BY: BLOODWORTH
OPINION
[**146] [*432] BLOODWORTH, Justice.
Respondent Al Yeargin appeals from a decree of the circuit court of Baldwin County setting aside a warranty deed
from the complainants, Joseph and [***3] Thelma Donnelly, to the respondents, James and Carol Driver, on account of
failure of consideration and fraudulent misrepresentation, and removing as clouds on complainants' titie a quitclaim
deed to the same parcel of land from the Drivers to Pioneer Investment, [*433] Inc. and a subsequent warranty deed to
said land from Pioneer Investment to respondent Yeargin.
On November 15, 1971, the Donnellys executed and delivered to the Drivers a warranty deed conveying to the
Drivers certain real property situated in Baldwin County. The consideration for the execution of this deed was the
transfer to the Donnellys by James Driver of 180,000 shares of stock in South Central Industries, Inc., which Driver
represented to the Donnellys to be a financially sound corporation, the stock of which he represented to be worth $1.50
to $2.00 per share and further represented that it could be freely traded six months after September 10, 1971.
The warranty deed from the Donnellys to the Drivers was duly recorded on December 15, 1971. The next day, the
Drivers executed and delivered a quitclaim deed to Pioneer Investment, Inc., a corporation. By the terms of the
quitclaim deed, the Drivers [***4] reserved all of the oil, gas and other mineral rights in the subject property. On
February 21, 1972, Pioneer Investment, Inc. executed and delivered a warranty deed conveying the property to
respondent Yeargin. James Driver signed the deed as President; William Lyons signed the deed as Secretary.
After holding the stock for six months (as required by a contract of sale), the Donnellys attempted to sell the stock
and were informed that it was worthless and, even if it were to have some value, it was investment stock and could not
be sold for two years. Whereupon, the Donnellys instituted this suit in the circuit court of Baldwin County seeking to
set aside the warranty deed from the Donnellys to the Drivers on grounds of failure of consideration and fraudulent
misrepresentation. The Donnellys also asked the court to decree that the respondent Yeargin has no right, title or interest
in the subject property and that the quitclaim deed to Pioneer Investment and the warranty deed to Yeagin be removed
as clouds upon the title of complainants Joseph and Thelma Donnelly.
Respondents James and Carol Driver, nonresidents whose address was unknown to complainants, were served by
publication, [***5] and, having failed to answer, plead or demur to the bill of complaint, decrees pro confesso were
entered against them. Respondent Yeargin appeared and defended.
The cause came on for trial and the evidence was heard ore tenus by the trial judge, Hon. Telfair Mashburn. The
evidence taken included testimony by Joseph Donnelly (as part of complainants' case in chief) that he has remained in
Page 52
292 Ala. 430, *; 296 So. 2d 144, **;
1974 Ala. LEXIS 1090, ***1
possession of the property at all times subsequent to the execution of the warranty deed to the Drivers, that he lived on
the property, and continued to operate all the facilities on the property (with the exception of a restaurant which was
operated for several months by a Mr. Fortenberry, an employee [**147] of Mr. Driver, under an A.B.C. license issued
to Mr. Donnelly), and that it was generally known in the community that Mr. Donnelly was in possession of the
property. There was testimony that Mr. Donnelly had told Mr. Driver that he (Donnelly) was going to stay in
possession until he got his money. On rebuttal for complainants Mr. Day, a neighbor, testified that Mr. Donnelly had
been in possession of the property at all times during the three years preceding the trial and that Mr. Donnelly [***6]
had been away from the property for only one week, during which time Mr. Day stayed on the property for him.
A final decree was rendered on May 15, 1973, in which the trial judge found that the allegations in the bill of
complaint had been proved and that complainants were entitled to the relief prayed for. Accordingly, the warranty deed
from the Donnellys to the Drivers was declared to be void and of no legal effect, and the quitclaim deed from the
Drivers to Pioneer Investment and the warranty deed from Pioneer to Yeargin were removed as clouds on [*434]
complainants' title. It is from this decree that respondent Yeargin appeals.
Upon a consideration of those issues argued on this appeal, we hold that the trial court did not err in granting
complainants the relief prayed for. Accordingly, we affirm.
In appellant Yeargin's assignments of error 1. and 2., he complains that the trial court erred in granting relief
because the bill of complaint fails to state any cause of action against him or to allege any wrongful action which would
support the decree against him.
The precise contentions on this issue are less than clear. Appellant Yeargin, in brief, denies that [***7]
complainants/appellees had to allege possession in order to state a cause of action against him. The remainder of his
argument relates only to complainants' failure to affirmatively allege their possession of the property in their complaint;
no other alleged defect in the complaint is brought to our attention. Nevertheless, we will briefly address ourselves to
the contention that a cause of action is not stated.
[HN1] Allegations by complainants that they were in possession of the subject property are not necessary in order
to state a valid cause of action and to remove respondent Yeargin's deed as a cloud on their title. Possession by
complainants goes only to the issue of whether or not appellant was a bona fide purchaser. This Court specifically held
in Barton v. Barton, 75 Ala. 400 (1883) and in Marsh v. Elba Bank and Trust Co., 207 Ala. 553, 93 So. 604 (1922), that
[HN2] the issue of bona fide purchaser for value is an affirmative defense, in the nature of confession and avoidance,
which must be raised by respondent in an action such as the one at bar. When respondent alleges and proves such,
burden then shifts to complainants to prove the respondent had actual or constructive notice [***8] of the facts
constituting the fraud before his purchase or of facts or circumstances sufficient to put him on inquiry, which if
followed up, would lead to discovery thereof. There is no duty upon complainants, pleading a fraudulent conveyance,
to anticipate the defense and to affirmatively plead and prove that all subsequent purchasers are not bona fide
purchasers. Authorities, supra.
As to other possible defects in the complaint, we note that in our case of Nelson v. Boe, 226 Ala. 582, 148 So. 311
(1933), (a bill in equity seeking to have two mortgages decreed fraudulent and void), this Court held that, [HN3] in
absence of a demurrer, if a complaint states a substantial cause of action and the judgment is responsive to it, the Court
will treat amendable defects as amended. The Court there stated at 226 Ala. 586, 148 So. at 313:
"In the absence of a demurrer - as is the case here - if the complaint contains a substantial cause of action, and the
judgment is responsive to it, the appellant [**148] will not be heard to complain of errors or defects in the complaint
which would have subjected it to demurrer. The court will, in construing the averments of a complaint in actions [***9]
at law, 'adopt a liberal construction, and if by treating all amendable defects as amended it appears from the facts stated,
whether well or illy pleaded, a substantial cause of action is stated, then it is sufficient to sustain the judgment.' And we
see no good reason why the same rule would not apply in equity."
Page 53
292 Ala. 430, *433; 296 So. 2d 144, **146;
1974 Ala. LEXIS 1090, ***5
In reviewing the bill of complaint in the case at bar, we find that it is alleged that the Drivers obtained the subject
deed from the complainants for stock, that the stock was worthless, and that statements made by Driver to the
complainants as to value, market for, and stability of, the stock and the corporation were false. The complaint asks that
the aforementioned deed from the Donnellys to the Drivers be declared void and of no force and effect on account of
failure of consideration and fraudulent misrepresentation. The complaint [*435] goes on to allege the execution of
subsequent deeds from the Drivers to Pioneer, and from Pioneer to Yeargin. The complaint asks that it be declared that
Yeargin took no right, title or interest in the property by virtue of his deed and that the Pioneer deed and his deed be
removed as clouds on complainants' title.
While [***10] the complaint does not allege "wrong doing" on the part of Yesrgin, as respects him, it alleges that
Yeargin received no interest in the real estate by virtue of his deed because his predecessors in title had no interest to
convey on account of fraud and misrepresentation.
We think it clear that the complaint alleges a substantial cause of action and that the judgment was responsive to the
complaint. The contention that the bill does not state a cause of action is without merit.
In assignments of error 3. and 4., appellant Yeargin complains that the trial court erred in considering testimony
relating to complainants' possession of the property because there was no allegation of possession by the complainants
in the bill of complaint. Appellant argues that proof of a fact not alleged is unavailable for relief, citing Sachs v. Sachs,
278 Ala. 464, 179 So.2d 46 (1965); W. T. Smith Lumber Co. v. L. J. Foshee, 277 Ala. 71, 167 So.2d 154 (1964); AGM
Drug Company of Alabama v. Dobbs, 277 Ala. 493, 172 So.2d 379 (1965); Mid-State Homes, Inc. v. Ledford, 284 Ala.
613, 227 So.2d 126 (1969).
While we agree that this may be a correct principle of law as stated in these cases [insofar [***11] as it has not
been altered by the adoption of the Alabama Rules of Civil Procedure, Rule 15(b)], we cannot agree that this principle is
dispositive of the case at bar. The above cited cases involve situations wherein the trial court granted relief not
requested by complainants or where the facts, as proven at trial, were entirely inconsistent with the allegations of the
complaint. These cases simply stand for the proposition that one cannot plead one set of facts and then prevail at trial
by proving an entirely different set of facts, even if the latter facts, as proven, would entitle the complainant to relief if
properly pleaded. Testimony, whose only relevancy is to prove facts not properly part of the cause of action pleaded is
inadmissible as irrelevant.
In the instant case, however, we cannot say that the testimony as to complainants' possession was irrelevant under
the pleadings. While complainants were not under any duty to plead and prove their possession in anticipation of
respondent's defense of bona fide purchaser, nevertheless, once respondent alleged in his answer that he gave value for
his deed and did not have notice that complainants were in possession of the [***12] property, and claimed an interest
in said property, until just two weeks prior to commencement of this suit, [**149] we think the defense of bona fide
purchaser was injected into the action by respondent Yeargin himself. The issue of possession of the property,
therefore, was properly before the court and the testimony of Joseph Donnelly and John Day as to complainants'
possession of the property was admissible being relevant to the issue as to whether respondent Yeargin was a bona fide
purchaser or whether he was put on notice of complainants' claims to the property by complainants' possession of the
property.
Respondent also argues that, even if relevant to the issue as to whether or not he was a bona fide purchaser, the
cases of Barton v. Barton, supra, and Marsh v. Elba Bank and Trust Co., supra, hold that only after the party alleging to
be a bona fide purchaser has proven such allegation does the burden shift to the opposing party to disprove such
status. Respondent argues that it was reversible error for the trial court to consider complainants' proof of possession
during complainants' case in chief before the respondent had put on his case to prove he was a bona [***13] fide
purchaser for value.
[*436] We conceive this argument to be without merit. The aforementioned cases deal only with the shifting of
Page 54
292 Ala. 430, *434; 296 So. 2d 144, **148;
1974 Ala. LEXIS 1090, ***9
the burden of proof; they in no way purport to regulate the order of presentation of testimony, a matter we take
generally to be within the sound discretion of the trial court.
Appellant Yeargin's fifth assignment of error, complaining of the trial court's denial of appellant's application for
rehearing, is not argued in brief and is, therefore, waived. Thornton v. Tutt, 283 Ala. 72, 214 So.2d 425 (1968).
Moreover, such denial will not support an appeal, since the decree was not modified. Whiteport v. Whiteport, 283 Ala.
704, 220 So.2d 891 (1964).
Thus, we conclude that the trial court did not err in granting the relief prayed for, and its decree is due to be
affirmed.
Affirmed.
COLEMAN, McCALL, FAULKNER and JONES, JJ., concur.
Page 55
292 Ala. 430, *436; 296 So. 2d 144, **149;
1974 Ala. LEXIS 1090, ***13
19 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
Paralee HILL et al. v. J. P. TAYLOR
7 Div. 844
285 Ala. 612; 235 So. 2d 647; 1970 Ala. LEXIS 1082
May 15, 1970
DISPOSITION: [***1] Reversed and remanded.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellants sought review of a judgment of the trial court (Alabama), which entered
judgment for appellee in his ejectment action against them.
OVERVIEW: The trial court ruled that appellants had no interest or title in the property at issue. Appellant sought a
determination that she had a right by virtue of a sales contract to complete the purchase of the property from appellee by
paying the balance of the purchase price. The court held that the assignment was on record showing the existence of a
contract for the sale of the land, and that was sufficient to put appellee on notice of appellant's rights under the contract.
It held that appellee took title to the land subject to appellant's rights under the contract. The court also held that
appellant's delinquency in making payments under the contract did not constitute a forfeiture of her rights under the
contract. It found that appellant was justified in treating the contract as a subsisting contract of purchase because the
payments she made, some of which were late, were never rejected.
OUTCOME: The court reversed the judgment of the trial court and remanded the cause for further proceedings.
CORE TERMS: notice, deed, forfeiture, mortgage, purchaser, installment, conveyance, forfeited, default, recorded,
decree, bona fide purchaser, precise amount, sale contract, real estate, ejectment, warranty, grantor's, vendor, paid taxes,
sale of land, sufficient to put, sufficient to charge, monthly installments, constructive, predecessor, undisputed,
calculated, subsisting, assignee
Page 56
Real Property Law > Purchase & Sale > Contracts of Sale > General Overview
[HN1] When one purchases property with notice of an interest of another in such property, then the purchaser takes the
property subject to the interest of the third person.
COUNSEL: Rains, Rains & McCurley, Gadsden, for appellants.
In vendor-purchaser relationship as distinguished from that of landlord and tenant, acceptance of installments of
purchase money implies that contract continues in force. The vendee has an equity increasing in value as successive
installments are paid. Cirlot v. Stevens, 222 Ala. 271, 132 So. 163. Time of payment as essence of the contract is
waived by the vendor giving indulgence in respect thereto and receiving payments after the time provided. Eason v.
Roe, 185 Ala. 71, 64 So. 55. Vendor under executory contract for sale of land by accepting past due payments held to
waive right to declare forfeiture because of further defaults. Payment of purchase money is within itself a renewal of
the contract as to any past ground of forfeiture. France v. Ramsey, 214 Ala. 327, 107 So. 816. To constitute one, a
"bona fide purchaser without notice" and to entitle him to protection against prior equity or conveyance he must be
good-faith purchaser of legal title, must have paid something of value, assumed liability, or incurred injury, and must
have had no notice and have known no fact sufficient to put him [***2] on inquiry as to complainants equity either at
time of purchase, or until parting with value. Orso v. Cater, 272 Ala. 627, 133 So.2d 864. It is well settled law in
Alabama that possession by a third party or person is notice to a prospective purchaser as to the title, legal or equitable
of the party in possession. Brewer v. Brewer, 19 Ala. 481; Ensler v. Thornton, 182 Ala. 314, 62 So. 525; Smith v.
Harbaugh, 216 Ala. 202, 112 So. 914.
Roy D. McCord, Lusk, Swann, Burns & Stivender, Gadsden, for appellee.
The trial court is the arbitrer of the controversy. It doubtless takes into consideration all the facts and circumstances
material to a decision of it. Its findings and decision should not be disturbed unless it is contrary to the great weight of
the evidence. O'Rear v. Conway, 263 Ala. 466, 83 So.2d 65. Complainant cannot maintain suit to enforce a contract to
sell land where without legal excuse he declined to perform his part of the contract before the sale was cancelled by
defendant and land resold. Cooper v. Cooper, 201 Ala. 477, 78 So. 383. Specific performance will not be decreed when
it may work hardship or injury to a third party. Bishop v. Ala. Farm Bureau Cotton [***3] Ass'n., 215 Ala. 388, 110
So. 711.
JUDGES: SIMPSON, Justice, wrote the opinion. LIVINGSTON, C.J., and COLEMAN, BLOODWORTH, and
McCALL, JJ., concur.
OPINION BY: SIMPSON
OPINION
[**647] [*613] SIMPSON, Justice.
This case arises out of the following facts.
On August 15, 1963, appellant Paralee Hill executed a mortgage to Homeowners Mortgage Company, Inc., to
secure a debt of $6,251.95 with interest at the rate of 6% per annum. The mortgagor testified that she received from the
mortgage company $4,000.00. The mortgage covered the property which is the subject of this suit.
Thereafter on the 13th of October, 1964, Mrs. Hill entered into a new contract with the assignee of the mortgagee,
Page 57
285 Ala. 612, *; 235 So. 2d 647, **;
1970 Ala. LEXIS 1082, ***1
Southeastern Fund, a corporation, under which the original mortgage was cancelled. At this time Mrs. Hill executed a
deed to the property to Southeastern Fund and the parties executed a contract for the purchase of the land, whereby it
was agreed that Mrs. Hill could re-purchase her property upon the payment of $91.94 per month for 120 months. This
deed was recorded.
Mrs. Hill had lived on the property involved all of her life, having born [**648] there. It was her testimony that
[***4] she paid on the mortgage for about a year. She continued to pay taxes on the property.
On January 28, 1966, the property was deeded to John W. Brown by North American Acceptance Corporation,
which had merged with Southeastern Fund; and the contract between North American Acceptance Corporation, the
successor to Southeastern Fund through merger, and Paralee Hill was transferred to Brown. This deed and assignment
were recorded.
The evidence indicated that Brown paid $5,500.00 for the property and contract.
On February 28, 1967, Brown executed a warranty deed to the property to appellee J. P. Taylor for a consideration
of $2,000.00 and a mortgage in favor of Brown in the amount of $2,500.00, which mortgage was subsequently paid on
March 30, 1967.
Sometime after March 31, 1967, Mrs. Hill tendered to Taylor $100.00, which was refused.
This lawsuit was commenced by an action of ejectment brought by Taylor against Mrs. Hill (and other tenants on
the land) May 30, 1967.
The appellants here, who were the defendants in the ejectment action, filed a motion to transfer the cause to the
equity side of the court. This motion was granted. Thereupon they filed a bill in which [***5] it was alleged that
Paralee Hill had conveyed the property in question to North American Acceptance Corporation and had entered into a
contract with North American Acceptance Corporation on the 13th day of October, 1964, which provided for the sale of
the property to her upon payment of the amounts provided for therein; that thereafter the property had been conveyed to
John W. Brown and the contract for the sale and purchase of the land assigned to him. The deed to Brown and the
assignment were on record in the office of the Judge of Probate. The bill further alleged that on February 28, 1967 the
property had been transferred to J. P. Taylor, and that [*614] Taylor had constructive, if not actual, notice of the sale
contract. The bill further alleged that Paralee Hill had been in possession of the real estate for many years, paid taxes
on it each year, etc.
The bill alleged that Paralee Hill had paid a sum equal to the amount of the payments as set out in the contract, and
that she was able to continue to make the payments, that she had tendered to Taylor $100.00 "to bring the payments
current up to the date of the offer and that the amount was past due at the time because [***6] she had been unable to
contract the defendant."
The complaint further alleged that by reason of the sales contract, she was entitled to exercise her right to make
payments, or to pay the full contract price and when paid to obtain a deed from the defendant in the cause and she
offered to do equity in that she will either bring the payments up to date and continue to pay them, or to pay the full
amount found by the court to be due, which, according to Paralee Hill, was $4,500.00.
The complaint asked the court to make a determination that she had a right by virtue of the sale contract to
complete the purchase of the property from Taylor by paying the balance of the purchase price; and further that the
court determine the amount due under the contract.
The appellee Taylor relied upon his warranty deed from Brown, contending that he knew nothing about any sale
contract at the time he purchased the land from Brown.
Page 58
285 Ala. 612, *613; 235 So. 2d 647, **647;
1970 Ala. LEXIS 1082, ***3
The court entered a decree in favor of Taylor, holding that Paralee Hill, Etta Smith, and Floyd Martin have no
interest or title in the property involved.
The effect of this decree was to find in favor of Taylor in his ejectment action. The court awarded no damages
[***7] for detention.
The effect of this decree must be that the court found that Taylor was a [**649] bona fide purchaser for value
and took perfect title from Brown under the warranty deed. The facts do not support this finding.
It has long been established that [HN1] when one purchases property with notice of an interest of another in such
property, then the purchaser takes the property subject to the interest of the third person. Such notice, according to our
cases, could be "'actual or constructive, or knowledge of facts sufficient to put a reasonable person on notice, which, if
followed up, would have discovered * * * '" the interest of the third party. Shubert v. Lacy, 257 Ala. 629, 60 So.2d 442;
Reeder v. Cox, 218 Ala. 182, 118 So. 338; Stone v. Lacy, 245 Ala. 521, 17 So.2d 865; Hatter v. Quina, 216 Ala. 225,
113 So. 47; Ely v. Pace, 139 Ala. 293, 35 So. 877; Alexander v. Fountain, 195 Ala. 3, 70 So. 669.
Here the appellee took title from Brown. There was on record the following assignment of the contract to purchase
between Paralee Hill and Southeastern Fund (which became through merger North American Acceptance Corporation):
"For valuable consideration received, the [***8] receipt whereof is hereby acknowledged, the undersigned, North
American Acceptance Corporation, a Georgia corporation, does hereby grant, bargain, sell, transfer and convey to John
W. Brown all of its right, title and interest in and to the following:
"That certain contract between the undersigned and Paralee Hill dated October 13, 1964, for the purchase of real
estate located in Etowah County, Alabama, which said real estate is specifically described in deed from Paralee Hill to
Southeastern Fund, a corporation, dated September 10, 1964, and recorded in Book '982', page 65, Probate Office,
Etowah County, Alabama."
In addition to this recorded assignment to his grantor, which surely would have been revealed by a title search, and
which surely under our cases is sufficient to put one on notice, the appellee testified himself [*615] that on the day he
purchased the property, he was aware that Paralee Hill lived on the property, and had known so for quite some time.
We believe that the fact that the assignment was on record showing the existence of a contract for the sale of the
land involved was sufficient to put appellee on notice of the equities held by Mrs. Hill under [***9] that contract. It
has frequently been pointed out in our cases that "It is an established rule of this court that equity as well as law charges
a party with such knowledge as is gained by an inspection of the record as provided or suggested by ordinary prudence."
Sisson v. Swift, 243 Ala. 289 (301), 9 So.2d 891; Alabama Coal & Coke Co. v. Gulf Coal & Coke Co., 171 Ala. 544, 54
So. 685.
Here the appellee admitted that he knew that Mrs. Hill had long been in possession of the property, he knew she
was in possession of it at the time he took the deed from Brown. It was not disputed that Mrs. Hill had paid taxes on the
land for more than 30 years, and a title search would have revealed that a contract for the sale of this land was in
existence in favor of Mrs. Hill. These facts defeat appellee's contention that he was a bona fide purchaser of this land
without notice of the claim asserted by Mrs. Hill. We think all of these facts were sufficient to charge the appellee with
knowledge which due inquiry would have revealed, such facts being sufficient to have led an ordinarily prudent
purchaser to inquire. Dewyer v. Dover, 222 Ala. 543, 133 So. 581. Surely these facts supplied appellee [***10] with
sufficient information to stimulate inquiry, and having failed to do so, he is not under our cases a bona fide purchaser
without notice. In fact, his knowledge alone that Mrs. Hill was in possession was, under Alabama law, sufficient to
charge him with notice of the nature of her claim to possession. Alexander v. Fountain, 195 Ala. 3, 70 So. 669.
Since the record will not support the conclusion that appellee took title to the [**650] land involved without
notice of the contract for the sale of that land to appellant, Paralee Hill, it follws that he took title subject to her rights
Page 59
285 Ala. 612, *614; 235 So. 2d 647, **648;
1970 Ala. LEXIS 1082, ***6
under the contract. He took only the interest which his grantor had, incumbered with every equity to which the grantor's
interest was subject.
The only remaining basis upon which the trial court's decree finding that Taylor was the legal owner of the property
and entitled to the immediate possession of the same would have to be a conclusion that the rights of Paralee Hill under
the contract had been forfeited.
The contract contained the following provision:
"Time being of the essence in this Contract, and in the event that the Purchaser shall fail for any reason to pay the
stated monthly [***11] installments (non-payment of one such installment by the Purchaser, on or before its due date,
may be deemed a failure under the terms of this instrument), in the manner hereinbefore provided for, all payments
made by the Purchaser to the Seller and duly applied to the purchase price, shall be forfeited to the Seller and may be
retained by the Seller as liquidated damages and rent, and the Purchaser shall have no right to receive back such
payments or any part thereof, and the Seller shall have the right to re-enter and take possession of said property upon
ten days notice with or without legal process * * *."
The undisputed facts in this case are that Taylor's predecessor, Brown, accepted a payment in the amount of $70.00
from Paralee Hill some 15 days before the conveyance of the property by Brown to Taylor. As indicated earlier in this
opinion Taylor had notice of the existence of the contract, which means that he stands in exactly the same position as
does Brown. The essential question is, therefore, has Paralee Hill's delinquency in making payments under the contract
worked a forfeiture of her rights thereunder? We [*616] think not. In construing an identical clause [***12] in a
contract for the sale of land, the court in Gatewood v. Hughes, 214 Ala. 674, 108 So. 562, said:
"The bill is in the nature of one for specific performance of an executory contract for the sale of lands on longterm
installments, with stipulation that time is of the essence of the contract, and, upon default in payment of installments,
the contract, at the option of the vendor, is to be forfeited, and all payments made to be retained as liquidated damages."
In that case the contention was made by the vendor that the purchaser had defaulted and that a forfeiture had been
worked. The evidence showed that over a long period of time the vendor had accepted part payments. The court said:
"That forfeitures are not favored in equity, and may be waived by continued recognition and receipt of part
payments after ground of forfeiture, is a wellrecognized equitable doctrine."
In this case the evidence is undisputed that every payment made by Paralee Hill had been accepted by North
American Acceptance Corporation and by its assignee, Brown, and further that infrequently, if at all, did Paralee Hill
pay the precise amount called for in the contract. In some months she paid more than [***13] the installment called
for; in others she paid less. However, at no time was any objection made to the fact that the payments submitted were
not in the precise amount called for by the contract. The evidence tends strongly to show that North American
Acceptance Corporation and Brown treated the contract as continuing in force. To the extent that neither North
American Acceptance Corporation nor Brown ever insisted upon payments in the precise amount called for under the
contract, they treated Mrs. Hill with leniency. They accepted installment payments on the contract when they were past
due. They consistently accepted partial payment on the installments. The [**651] facts and circumstances were
obviously calculated to lead Mrs. Hill to believe that strict performance of the agreement was not required. Clearly
under our cases, therefore, she was not in default and the contract was not forfeited at the time of the conveyance from
Brown to Taylor. See Murray v. Webster, 256 Ala. 248, 54 So.2d 505.
The real issue in the case on the question of default is not whether Paralee Hill was in technical default at the time
of the conveyance by Brown to Taylor, but rather whether [***14] her failure to make payments precisely as provided
for in the contract worked a forfeiture. In Adams v. Smith, 208 Ala. 498, 94 So. 521, it was held that no forfeiture was
worked where on the evidence the court found that the whole course of dealing between the parties prior to the date of
the alleged forfeiture was calculated to impress the appellant with the idea that no forfeiture would be declared on
Page 60
285 Ala. 612, *615; 235 So. 2d 647, **650;
1970 Ala. LEXIS 1082, ***10
account of delay in payment. The same is true here. The vendee, Mrs. Hill, under the evidence, having consistently
made payments, some of which were late, and which were in many instances less than the amount of the monthly
installments called for under the contract, sometimes making semi-monthly payments, never encountered any objection,
all payments at all times being accepted, was justified in treating the contract as a subsisting contract of purchase. See
also Eason v. Roe, 185 Ala. 71, 64 So. 55; E. Rose & Co. v. Woods (Ala.), 39 So. 581. Brown so treated it just 15 days
before the conveyance to Taylor. Taylor is therefore bound by his predecessor, who treated the contract as a subsisting
one 15 days before the conveyance to Taylor.
It follows, therefore, that the case [***15] must be reversed and remanded for a determination of the balance due
under the contract.
Reversed and remanded.
LIVINGSTON, C.J., and COLEMAN, BLOODWORTH, and McCALL, JJ., concur.
Page 61
285 Ala. 612, *616; 235 So. 2d 647, **651;
1970 Ala. LEXIS 1082, ***14
20 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
JEFFERSON COUNTY v. M. C. MOSLEY et al
6 Div. 491
284 Ala. 593; 226 So. 2d 652; 1969 Ala. LEXIS 1146
August 21, 1969
SUBSEQUENT HISTORY: [***1] Rehearing Denied October 2, 1969
DISPOSITION: Reversed and remanded.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff county filed a declaratory action against defendants, the seller and purchasers of
certain real property. The Circuit Court of Jefferson County (Alabama) determined that defendants were bona fide
purchasers of the property, who took the property without notice of a right-of-way in favor of the county. The county
appealed.
OVERVIEW: The county contended that it had a right-of-way for public purposes across lands situated in the
government subdivision involved and that defendants had actual, constructive, or implied notice of sufficient facts to
apprise them of, or place them upon inquiry as to, the existence and extent of the right-of-way. The county argued that
the seller had notice of the right-of-way at the time of the execution of the deed from his grantor to him by the existence
for more that 20 years of a public road traversing a portion of the property and because of a certain exception contained
in his deed, which stated that the property was conveyed subject to all public roads and all easements and rights-of-way.
The court agreed, reversed the trial court's order, and remanded the cause. The court held that the seller was not a bona
fide purchaser for value without notice of the county's easement because he had actual, constructive, or implied notice.
The court further held that the seller's title was, therefore, subject to that easement. The court noted that the seller could
convey to the purchasers' no better title than he possessed and, therefore, the purchasers' title was subject to the
easement.
Page 62
OUTCOME: The court reversed the trial court's judgment in favor of defendants and remanded the matter to the trial
court.
CORE TERMS: deed, right-of-way, notice, conveyed, purchaser, easement, recorded, conveyance, highway, public
roads, golf club, grantor, declaratory, constructive notice, warranty, land described, right of way, visible, deeds
executed, probate, feet, innocent purchasers, disclose, improved, grantee, actual notice, bona fide, recordation,
recording, poles
[HN1] Ala. Code tit. 47, 102 (1940), reads: The recording in the proper office of any conveyance of property or other
instrument, which may be legally admitted to record, operates as a notice of the contents of such conveyance, or
instrument, without any acknowledgment or probate thereof as required by law.
[HN2] If after the recording of a deed from an owner there is later recorded another deed from the same grantor to a
different grantee, whether earlier or later in date, a purchaser from the first grantee is without notice of any rights of the
second grantee unless it is by reason of some fact other than the record; the purchaser's obligation to examine the
grantor's indices as to that grantor ceases at the date of the recording of the first deed.
[HN3] If a second purchaser with notice acquires title from a first purchaser who was without notice and bona fide, he
succeeds to all the rights of his immediate grantor. In fact, when land thus comes, freed from equities, into the hands of
the bona fide purchaser, he obtains a complete jus disponendi, with the exception last above mentioned, and may
transfer a perfect title even to volunteers. The exception to that rule is that such a title cannot be conveyed, free from
prior equities, back to a former owner who was charged with notice.
[HN4] Whatever is sufficient to excite attention and put the party on his guard and call for inquiry is notice of
everything to which the inquiry would have led; that when a person has sufficient information to lead him to a fact, he
shall be deemed conversant with it; that one who has knowledge of facts sufficient to put him on inquiry as to the
existence of an unrecorded deed is not a purchaser without notice within the protection of the registry statutes. It is
difficult, if not impossible, to lay down any general rule as to what facts will in every case be sufficient to charge a
party with notice or put him on inquiry. The purchaser is chargeable with notice of that which appears on the face of
the conveyances in the chain of his title, but he is not bound to inquire into collateral circumstances. One who has
knowledge of facts sufficient to put him on inquiry as to the existence of an unrecorded mortgage is not a purchaser
without notice under registration statutes. In construing conveyances, each word is presumed to have been used for
some purpose, and deemed to have some force and effect. A person is charged with notice of the contents of the
instrument by which he takes title and of all the facts which would be disclosed with a reasonably diligent search.
Real Property Law > Deeds > Property Descriptions
[HN5] Where one occupies a part of the premises conveyed his occupancy extends to the boundaries of the land
described in the instrument under which he claims.
Page 63
284 Ala. 593, *; 226 So. 2d 652, **;
1969 Ala. LEXIS 1146, ***1
Governments > Public Improvements > Bridges & Roads
Real Property Law > Priorities & Recording > Recording Acts
Real Property Law > Purchase & Sale > General Overview
[HN6] The possession of real estate is generally considered constructive notice of rights of the possessor, whether the
possession is sought to be used for the purpose of charging a purchaser with notice of an outstanding equity, or whether
it is sought to charge a subsequent purchaser with notice of an unrecorded instrument and thereby defeat his right to
protection under the recording acts. It is the general rule that actual possession of real estate is constructive notice of
the right of the possessor and of all facts connected therewith which a reasonable inquiry would disclose.
Real Property Law > Limited Use Rights > Easements > Public Easements
[HN7] Whether a purchaser sees an exception clause in a deed or not, he is presumed to have knowledge of it and the
consequences are the same in either case.
COUNSEL: John P. Carlton, Bishop & Carlton, Birmingham, for appellant.
The existence of a public roadway across property is sufficient to place a purchaser of such property on notice of the
existence of the right-of-way for said roadway and the extent thereof. Zaucha v. Town of Medley, Fla. (1953), 66 So.2d
238; Arnold v. City of San Diego, 120 Cal.App.2d 353, 261 P.2d 33 (1953); City of Spokane v. Catholic Bishop of
Spokane, 33 Wash.2d 496, 206 P.2d 277; Ocean Shore Railway Co. v. Spring Valley Water Co., 218 Cal. 86, 21 P.2d
588; Liberty Bank of Buffalo v. High Park Dev.Co., 134 Misc. 733, 236 N.Y.S. 194; Indiana, B. & W. Railway Co. v.
McBroom, 114 Ind. 198, 15 N.E. 831; Lashley Tel.Co. v. Durbin, 190 Ky. 792, 228 S.W. 423; Chicago & E.I.R.R. v.
Wright, 153 Ill. 307, 38 N.E. 1062. In the construction of conveyances, each word is presumed to have been used for
some purpose, and deemed to have some force and effect. Wittmeir v. Leonard, 219 Ala. 314, 122 So. 330; Gamble v.
Black Warrior Coal Co., 172 Ala. 669, 55 So. 190; [***2] Cole v. Birmingham Union Railway Co., 143 Ala. 427, 39
So. 403; Pepper & Co. v. George, 51 Ala. 190. The recital in a deed of an exception as to public roads, or easements and
rights-of-way is sufficient to place a purchaser upon inquiry as to the existence and extent of such public roads,
easements and rights-of-way. Wittmeir v. Leonard, supra; Gamble v. Black Warrior Co., supra; Cole v. Birmingham
Union Railway Co., Supra; Pepper & Co. v. George, 51 Ala. 190; Cochran v. Blout, 161 U.S. 350, 16 S.Ct. 454, 40
L.Ed. 729; Tuggle v. Cooke (Tex.Civ.App. 1955), 277 S.W.2d 729; Floyd County Bd. of Ed. v. Johnson, Ky., 260 S.W.2d
217; McDonald v. Welborn, 220 S.C. 10, 66 S.E.2d 327; Adams v. Hill, 208 Miss. 341, 44 So.2d 457 (1950); Eakers v.
Clopton, 199 Okl. 99, 184 P.2d 247, 173 A.L.R. 309; State v. Jewell, 250 Wis. 165, 26 N.W.2d 825; 28 N.W.2d 314;
Loose-Wiles Biscuit Co. v. Deering Village Corp., 142 Me. 121, 48 A.2d 715. The recording of a deed in the Office of
the Judge of [***3] Probate for the county in which the land conveyed by such deed lies is constructive notice to the
entire public thereof. Wittmeir v. Leonard, supra; Code of Ala., 1940, Title 47, 102, Recompiled 1958.
Jones, Propst & Topazi, Birmingham, for appellees.
All conveyances shall be admitted to record in the Office of the Probate Judge of the County in which the property
conveyed is located, and such filing for registration shall operate as a notice of the contents of such conveyance; and a
conveyance of real property is inoperative and void, as to a purchaser for valuable consideration, unless the same has
been recorded before the accrual of the right of such purchaser. Code of Ala. 1940, Title 47, 95-101, 102-120;
(Recompiled, 1958); Albright, et al. v. Nighswonger, 249 Ala. 302, 31 So.2d 67. A purchaser of property may assume
that no easements are attached thereto which are not of record except those which are open and visible. There must be
an apparent sign of servitude. something to suggest to the purchaser that one estate is servient to the other. Unless there
is an apparent mark or sign which would indicate servitude upon inspection, or cause [***4] a prudent purchaser to
make inquiry, the rule of constructive notice does not apply. Butterworth v. Crawford, 46 N.Y. 349, 7 Am.Rep. 352;
Historic Estates v. United Paper Board Co., 260 App.Div. 344, 21 N.Y.S.2d 819 (1940); Calhoun v. Ozburn, 186 Ga.
569, 198 S.E. 706, 708 (1938); Southern Union Gas Co. v. Cantrell, 56 N.M. 184, 241 P.2d 1209 (1952). Notice of the
outstanding interest of one person acquired by a purchaser from a deed does not put him upon inquiry as to the
Page 64
284 Ala. 593, *; 226 So. 2d 652, **;
1969 Ala. LEXIS 1146, ***1
further interest of another person, and the purchaser may take free of the interest of the latter. 55 Am.Jur.Sec. 689, p.
1070; Batt v. Mallon, 151 Mass. 477, 25 N.E. 17, 7 L.R.A. 840 (1890). Where the visible state of things existing on the
premises may legally exist without the property being subject to some burden, the existing condition will not of itself
charge the purchaser with notice or impose on him the duty of inquiry. 92 C.J.S. Vendor & Purchaser, 328, pp.
239, 240; Waldo Fertilizer Works v. Dickens (1944), 206 Ark. 747, 177 S.W.2d 398; Walker v. Dwelle, 187 Iowa 1384,
175 N.W. 957 (1920); Wash-O-Matic [***5] Laundry Co. v. 621 Lefferts Ave.Corp., 191 Misc. 884, 82 N.Y.S.2d 572
(1948). The purchaser of real property is only to be charged with constructive notice of what an inquiry would
naturally lead to, not of such facts as it might possibly lead to if it had been made. Wilkins v. Bevier, 43 Minn. 213, 45
N.W. 157; Hawkes v. Hoffman, 56 Wash. 120, 105 P. 156, 24 L.R.A., N.S., 1038. A purchaser of real estate for value,
without notice of a prior unrecorded conveyance, may make a valid conveyance to a person who has notice. Myers v.
Peek's Adm'rs., 2 Ala. 648 (1841); Fenno v. Sayre, 3 Ala. 458 (1842); Mallory v. Stodder, 6 Ala. 801 (1845); Chandler
v. Tardy, 58 Ala. 150 (1877); Barron v. Hughes, 202 Ala. 207, 80 So. 29 (1918); Reeder v. Cox, 218 Ala. 182, 118 So.
338 (1928).
JUDGES: LAWSON, Justice, wrote the opinion. LIVINGSTON, C.J., and MERRILL and HARWOOD, JJ., concur.
OPINION BY: LAWSON
OPINION
[**653] [*595] LAWSON, Justice.
This is an appeal from a declaratory judgment rendered by the Circuit Court of Jefferson County following the
filing by [***6] the plaintiff, Jefferson County, of its "Substituted Petition for Declaratory Judgment" and the filing of
an "Answer to Substituted Petition for Declaratory Judgment" by M. C. Mosley, a single man; Earnie A. Peoples and
wife, Edna M. Peoples; and George R. Self and wife, Margarette Self, which the defendants separately and severally
prayed "be taken as a cross bill." Plaintiff made no response to the so-called "cross bill."
The ultimate question for decision is whether Jefferson County has a right-of-way over certain lands included in the
description in separate warranty deeds executed by the defendant M. C. Mosley to the Peoples and to the Selfs.
The land described in the two aforementioned deeds is in the SW 1/4 of the SW 1/4 of Section 9, Township 17,
Range 1 West, which will be referred to hereinafter as the government subdivision involved.
The cause was tried by the court without a jury. No oral testimony was adduced. In so far as the record before us
discloses, the cause was submitted to the trial court on a "Stipulation of Facts" and, of course, on the pleadings.
On October 18, 1945, Lester L. Dillard by warranty deed conveyed to Jefferson County a "right-of-way [***7] for
public purposes" across lands situated in the government subdivision involved. The right of way is described as being
eighty feet in width or forty feet on each side of a center line of a proposed road which is described by metes and
bounds.
In September, 1949, the "Old Alton-Weems Road" where it traversed the government subdivision involved was
widened, paved and otherwise improved. The pavement was twenty feet wide and the shoulders on each side of the road
were widened to a distance of five feet, making the [*596] said road thirty feet wide after the improvements were
made. In Paragraph 4 of the "Substituted Petition for Declaratory Judgment" it is alleged that "said road was built over
and occupied a substantial portion of the right-of-way acquired by Jefferson County, Alabama, under deed from Lester
L. Dillard executed and delivered on October 18, 1945." Defendants' "Answer to Substituted Petition for Declaratory
Judgment" admits all of the allegations of Paragraph 4 of that Petition.
Prior to the making of the improvements in September, 1949, the part of the "Old Alton-Weems Road" here
involved had a gravel surface. Its width prior to September, 1949, is not [***8] shown and the exact amount of the
Page 65
284 Ala. 593, *; 226 So. 2d 652, **;
1969 Ala. LEXIS 1146, ***4
eighty-foot right-of-way used in widening the "Old Alton-Weems Road" does not appear. Subsequent to 1949 the "Old
Alton-Weems Road" was straightened, further widened and improved where it traversed the right-of-way conveyed by
Dillard to Jefferson County in 1945, but such work was done subsequent to all transactions involved in this case.
On December 20, 1951, Lester L. Dillard and wife conveyed by warranty deed certain real property in the
government subdivision involved to M. C. Mosley. The description in the deed includes the right-of-way conveyed by
Lester L. Dillard to Jefferson County under the deed of October 18, 1945. The deed from Dillard to Mosley contains
the following exception: "The property hereinabove described and conveyed is conveyed subject to all public roads, or
easements and rights of way thereover." The "Old Alton-Weems Road" existed as a public road and was maintained by
Jefferson County for more than twenty-five years prior to the date on which Dillard executed the deed to Mosley.
Paragraph 4 of the "Substituted Petition for Declaratory Judgment," which is concerned with the improvement of
the Alton-Weems Road in September, [***9] 1949, concludes as follows: "Plaintiff further avers that on December 20,
1951, the date of the [**654] deed from Lester L. Dillard and wife, Betty Lawson Dillard, to M. C. Mosley, said road
was situated and maintained as set out above and in such manner as to be plainly visible." As before indicated, the
averments of said Paragraph 4 were admitted in the defendants' "Answer to Substituted Petition for Declaratory
Judgment."
The right-of-way deed from Lester L. Dillard to Jefferson County under date of October 18, 1945, was not recorded
in the office of the Judge of Probate of Jefferson County until April 2, 1952, which was subsequent to the execution of
the deed from Lester L. Dillard to M. C. Mosley. The last-mentioned deed was recorded in the office of the Judge of
Probate of Jefferson County on January 14, 1952.
On May 26, 1952, M. C. Mosley conveyed by warranty deed certain real property in the government subdivision
involved to Earnie A. Peoples and Edna M. Peoples. The description in the deed includes a part of the right-of-way
conveyed by Lester L. Dillard to Jefferson County under the deed of October 18, 1945. It was recorded in the office of
the Judge of Probate [***10] of Jefferson County on July 7, 1952. The deed from Mosley to the Peoples contains the
following exception: "The property hereinabove described and is conveyed subject to all public roads, easements, and
right-of-ways thereover."
By warranty deed dated June 26, 1953, and corrected in so far as the description is concerned by warranty deed
dated December 27, 1958, M. C. Mosley conveyed to George R. Self and wife, Margarette Self, certain real property in
the government subdivision involved. The description of said real property (as corrected) includes a part of the
right-of-way conveyed by Lester L. Dillard to Jefferson County under the deed of October 18, 1945. The deed from
Mosley to the Selfs dated June 26, 1953, was recorded in the office of the Judge of Probate of Jefferson County on June
26, 1953, and the deed correcting the description was recorded in that office on [*597] December 29, 1958. These
deeds do not contain any exceptions as to public roads, easements or rights-of-way.
The trial court rendered a judgment which in pertinent parts reads:
"That the defendant M. C. Moseley, did not have notice, either actual, constructive or implied, of sufficient facts to
[***11] put him upon inquiry of the execution of the right-of-way deed executed on October 18, 1945, by Lester L.
Dillard in favor of Jefferson County, Alabama, or of the ownership, right, title, or claim of Jefferson County, Alabama
as to the right-of-way described in said right-of-way deed; and therefore, that the defendants, Earnie A. Peoples and
wife, Edna M. Peoples, George R. Self and wife, Margarette Self, as purchasers from said Moseley, acquired the same
title that said Moseley had acquired, regardless of the recordation of said right-of-way deed before said Moseley
conveyed to said Peoples and wife, and said Self and wife."
From that judgment Jefferson County has appealed to this court.
In brief filed here on behalf of appellant, Jefferson County, it is said:
Page 66
284 Ala. 593, *596; 226 So. 2d 652, **653;
1969 Ala. LEXIS 1146, ***8
"Jefferson County is entitled to a declaration that the Defendants had actual, consructive or implied notice of
sufficient facts to apprise them of, or place them upon inquiry as to, the existence and extent of the County
right-of-way. The Defendant Mosley had notice of the controverted right-of-way at the time of the execution of the
deed from Dillard to him by (1) the existence for more than 20 years prior to that time [***12] of a County maintained
public road traversing a portion of the property and right-of-way in question; and (2) because of the exception in the
deed to him, viz., 'The property hereinabove described and conveyed is conveyed subject to all public roads, all
easements and rights-of-way thereover.' A similar exception is [**655] contained within the deed from Mosley to the
Defendants Peoples.
"The case of the County against the Defendants Peoples and Self is stronger even than that against Mosley because
the conveyances to them by Mosley were executed after recordation of the deed from Dillard to Jefferson County. At
the time of the conveyance to the Defendants Peoples and Self, they had, in addition to actual notice of the right-of-way,
constructive notice thereof by virtue of operation of Title 47, 102, Code of alabama, 1940, Recompiled 1958."
The last sentence quoted above is inaccurate if the words "in addition to actual notice of the right-of-way"
contained in that sentence were used to convey the impression that the Selfs had actual notice of the right-of-way
because of the exceptions in their deeds as to public roads, easements and rights-of-way. As we have pointed [***13]
out above, the deeds from Mosley to the Selfs contained no such exceptions. As we view this case, the absence of such
exceptions in the deeds from Mosley to the Selfs is of no consequence.
We will first consider the assertion of appellant to the effect that since its right-of-way deed was recorded prior to
the time Mosley executed the deeds to the Peoples and to the Selfs, they had constructive notice of the rights of
appellant by virtue of the provisions of 102, Title 47, Code 1940, and hence the Peoples and the Selfs were not
innocent purchasers for value without notice. [HN1] Section 102, Title 47, supra, reads:
"The recording in the proper office of any conveyance of property or other instrument which may be legally
admitted to record, operates as a notice of the contents of such conveyance, or instrument, without any acknowledgment
or probate thereof as required by law."
If appellant is correct in that assertion, a judgment by this court reversing the judgment of the trial court would
necessarily [*598] follow and we would not be called upon to consider the question as to [***14] whether Mosley
was an innocent purchaser for value without notice of appellant's rights under the 1945 deed to it from Dillard. But
we cannot agree with appellant's contention here under consideration.
Our case of Fenno v. Sayre, 3 Ala. 458, and that of Tennessee Coal, Iron & R.Co. v. Gardner, 131 Ala. 599, 32 So.
622, appear to hold to the contrary. The Peoples and Selfs claim title from Mosley and from him alone. In the case last
cited above it was said: "The record of a deed from any other person than the grantor from whom title is claimed will
not operate to give constructive notice to a subsequent grantee."
In American Law of Property, Vol. IV, 17.21, the rule is stated thusly:
[HN2] "If after the recording of a deed from an owner there is later recorded another deed from the same grantor to
a different grantee, whether earlier or later in date, a purchaser from the first grantee is without notice of any rights of
the second grantee unless it is by reason of some fact other than the record; the purchaser's obligation to examine the
grantor's indices [***15] as to that grantor ceased at the date of the recording of the first deed. * * * "
See Hawley v. McCabe, 117 Conn. 558, 169 A. 192.
We hold, therefore, that the recordation of the 1945 deed from Dillard to Jefferson County, after the recordation of
the deed from Dillard to Mosley, did not by virtue of the provisions of 102, Title 47, Code 1940, operate as notice to
the Peoples and to the Selfs of the contents of the 1945 deed from Dillard to Jefferson County.
Page 67
284 Ala. 593, *597; 226 So. 2d 652, **654;
1969 Ala. LEXIS 1146, ***11
If Mosley was an innocent purchaser for value without notice of his grantor's right-of-way deed to Jefferson
County, the title which he conveyed to the Peoples and to the Selfs would pass to them unaffected even by any notice
which they themselves [**656] might have had. Reeder v. Cox, 218 Ala. 182, 118 So. 338; Barron v. Hughes, 202
Ala. 207, 80 So. 29; Whitfield v. Riddle, 78 Ala. 99; Gulf, C. & S.F.Ry.Co. v. Gill, 5 Tex.Civ.App. 496, 23 S.W. 142.
In Vol. 3, Pomeroy's Equity Jurisprudence, 5th Ed., 754a, it is said:
[HN3] " * * * if a second purchaser [***16] with notice acquires title from a first purchaser who was without
notice and bona fide, he succeeds to all the rights of his immediate grantor. In fact, when land thus comes, freed from
equities, into the hands of the bona fide purchaser, he obtains a complete jus disponendi, with the exception last above
mentioned, and may transfer a perfect title even to volunteers. * * * "
The exception to that rule is that such a title cannot be conveyed, free from prior equities, back to a former owner
who was charged with notice.
So the question is presented as to whether the record before us shows that Mosley was an innocent purchaser for
value without notice of the appellant's [Jefferson County's] rights under the deed executed to Jefferson County in 1945
by Dillard.
Appellant says that he was not.
As far as the record discloses, Mosley at the time he secured his deed from Dillard did not have actual knowledge
of the deed executed by Dillard to Jefferson County in 1945. He was not charged with the constructive notice provided
by 102, Title 47, Code 1940, because Jefferson County did not record its deed until after Mosley secured his deed and
after it was recorded.
[***17] But it is well settled in this state that [HN4] whatever is sufficient to excite attention and put the party on
his guard and call for inquiry is notice of everything to which the inquiry would have led; that when a person has
sufficient information to lead him to a fact, he shall be deemed conversant with it; that one who has knowledge of facts
sufficient to put him on inquiry as [*599] to the existence of an unrecorded deed is not a purchaser without notice
within the protection of the registry statutes. Wittmeir v. Leonard, 219 Ala. 314, 122 So. 330; Gamble v. Black Warrior
Coal Co., 172 Ala. 669, 55 So. 190; Cole v. Birmingham Union R.Co., 143 Ala. 427, 39 So. 403; Pepper v. George, 51
Ala. 190; Alexander v. Fountain, 195 Ala. 3, 70 So. 669; Blocker v. Boyd, 242 Ala. 345, 6 So.2d 19; Walden v. Walden,
268 Ala. 145, 105 So.2d 105.
It has been said that it is difficult, if not impossible, to lay down any general rule as to what facts will in every case
be sufficient to charge a party with [***18] notice or put him on inquiry. Veitch v. Woodward Iron Co., 200 Ala. 358,
76 So. 124.
In Wittmeir v. Leonard, supra, we said:
" * * * the purchaser is chargeable with notice of that which appears on the face of the conveyances in the chain of
his title, but he is not bound to inquire into collateral circumstances. Attorney Gen. v. Blackhouse, 17 Vesey 282. One
who has knowledge of facts sufficient to put him on inquiry as to the existence of an unrecorded mortgage is not a
purchaser without notice under registration statutes. Gamble v. Black Warrior Coal Co., supra. In construing
conveyances, 'each word is presumed to have been used for some purpose, and deemed to have some force and effect.'
Allumns v. Allumns, 208 Ala. 369, 94 So. 296; Chattahoochie & Gulf R.Co. v. Pilcher, 163 Ala. 401, 51 So. 11. See also,
Head v. Hunnicutt, 172 Ala. 48, 55 So. 161."
Cases from other states hereafter cited are authority for the proposition that a person is charged with notice of the
contents of the instrument by which he takes title and of all the facts which would be disclosed with a reasonably
[***19] diligent search. Floyd County Board of Education v. Johnson (Ct. of App. of Ky.), 260 S.W.2d 217; Adams v.
Page 68
284 Ala. 593, *598; 226 So. 2d 652, **655;
1969 Ala. LEXIS 1146, ***15
Hill, 208 Miss. 341, 44 So.2d 457; Eakers v. Clopton, 199 Okl. 99, 184 P.2d 247, 173 A.L.R. 309; McDonald v. [**657]
Welborn, 220 S.C. 10, 66 S.E.2d 327; Tuggle v. Cooke (Ct. of Civ.App. of Tex.), 277 S.W.2d 729; State v. Jewell, 250
Wis. 165, 26 N.W.2d 825, 28 N.W.2d 314.
In State v. Jewell, supra, it appears that one Esther Lindgren conveyed certain land to Burnett County on April 29,
1931, for the purpose of permitting the State Highway Commission to relocate a portion of State Trunk Highway No. 87
in Burnett County. That conveyance was not recorded. On March 9, 1944, Esther Lindgren conveyed to Henry A.
Jewell a parcel of land which included the property previously conveyed to Burnett County. In the deed to Jewell, after
the granting clause and description of the property, there appeared the following recital: "Subject to the right of way of
Highway No. 87 on the east side of the parcel above described." At the time the deed to Jewell was executed State
Trunk Highway [***20] No. 87 had been improved and in use for many years.
The Supreme Court of Wisconsin among other things said as follows:
"It is a well established rule that a person is charged with notice of the contents of the instrument by which he takes
title and all the facts which would be disclosed with a reasonable diligent search. 39 Am.Jur.p. 246, sec. 22, and cases
cited. Pringle v. Dunn, 1875, 37 Wis. 449, 19 Am.Rep. 772.
"A part of the tract conveyed by Mrs. Lindgren was occupied as a highway. [HN5] Where one occupies a part of
the premises conveyed his occupancy extends to the boundaries of the land described in the instrument under which he
claims. Land and Loan Co. v. Kesler, 1912, 150 Wis. 283, 136 N.W. 625; Childs v. Nelson, 1887, 69 Wis. 125, 33 N.W.
587; Ovig v. Morrison, 1910, 142 Wis. 243, 125 N.W. 449.
"Having knowledge that the premises granted were subject to the rights of the state as established by the boundaries
of [*600] state highway 87, the defendants were charged with notice of the rights of the public. [HN6] [***21] The
possession of real estate is generally considered constructive notice of rights of the possessor, whether the possession
is sought to be used for the purpose of charging a purchaser with notice of an outstanding equity, or whether it is sought
to charge a subsequent purchaser with notice of an unrecorded instrument and thereby defeat his right to protection
under the recording acts. It is so held in the United States courts and in 28 states of the Union. 55 Am.Jur. 1087, sec.
712, and cases cited.
"Here the occupation of the lands described in the deed to the defendants was open and notorious. The notice was
not confined to that part of the premises used as a highway but extended to the lands described in the deed.
"It is the general rule that actual possession of real estate is constructive notice of the right of the possessor (cases
already cited) and of all facts connected therewith which a reasonable inquiry would disclose. Kirby v. Tallmadge,
1896, 160 U.S. 379, 16 S.Ct. 349, 40 L.Ed. 463; 55 Am.Jur. 1098, 729, and cases cited.
"The defendants were also put upon notice by the recitals contained [***22] in the conveyance to them."
In the Jewell case, supra, the Supreme Court of Wisconsin affirmed the judgment of the trial court, which was in
favor of the State, with certain modifications not here pertinent. On rehearing the Wisconsin Court affirmed the
judgment of the trial court without modifications. State v. Jewell, 250 Wis. 165, 26 N.W.2d 825, 28 N.W.2d 314.
In Ocean Shore Railroad Company v. Spring Valley Water Company et al., 218 Cal. 86, 21 P.2d 588, the railroad
company owned a right-of-way which was conveyed to it in 1909, but the instrument of conveyance was not recorded.
Not later than the [**658] early part of 1921, the railroad company discontinued operation of the railroad over the
right-of-way and removed its tracks and equipment except for a trestle which was visible to the naked eye. In March of
1922, a golf club entered into a contract for the purchase of the land. The golf club thereupon entered into possession
and improved the property after paying $10,000 on account of the purchase price. Unlike the case at bar, the contract of
purchase contained no reference to plaintiff's right-of-way and the deed conveying the [***23] right-of-way was not
recorded until approximately one month after the defendant golf club had executed such contract and paid a portion of
Page 69
284 Ala. 593, *599; 226 So. 2d 652, **656;
1969 Ala. LEXIS 1146, ***19
the purchase price. The Supreme Court of California said, in part:
" * * * Examination of the evidence satisfies us that the defendant golf club, while lacking actual knowledge of
plaintiff's easement when negotiating for the purchase of the property, had actual notice of circumstances sufficient to
put it upon inquiry which, if prosecuted, would have disclosed plaintiff's interest and right in the property. This being
so, the defendant golf club is chargeable with constructive knowledge of the existence of plaintiff's right of way. Its title
to the property is, therefore, subject to plaintiff's easement.
"In conclusion, we repeat that the defendant golf club is not a bona fide purchaser for value without notice of
plaintiff's easement. Prior to executing the contract of purchase or advancing any money thereunder, it had knowledge
of facts sufficient to indicate the existence, at one time or another, of a right of way across the land. Reasonable
inquiry would have disclosed plaintiff's interest in the property and dissipated any theory of [***24] abandonment.
Having failed to pursue the inquiry suggested by the facts of which it had knowledge, it necessarily follows that the
defendant golf club acted at its peril and its title to the property [*601] is therefore subject to plaintiff's easement
therein."
In McLaren et al. v. American Telephone & Telegraph Co. of New Jersey, 1 N.J.Super. 600, 63 A.2d 922, it was
said:
" * * * The plaintiffs had constructive notice of the prior rights of the defendant. Since October 1923 when the
poles were erected, the defendant's occupation of the strip of land upon which the poles were erected was exclusive and
uninterrupted, open, notorious and visible. The presence of the poles, the wires, cables, guys and anchors as a part of a
communication system indicated that someone other than he who appeared by the record to be the owner had rights in
the premises. The visible presence of the poles and wires was sufficient to put the plaintiffs upon inquiry to determine
whether the defendant or some other similar company had the right to erect and maintain the telephone lines. The
occupation of the strip of land by the defendant was as exclusive as the circumstances of the [***25] case would
permit. The plaintiffs took title to the premises in question with notice of the defendant's rights and subject thereto.
The failure of the defendant to record the instrument does not affect its rights in the circumstances."
It is difficult to understand how Mosley could have read the deed and not have seen the exception clause. [HN7]
Whether he saw it or not, he is presumed to have knowledge of it and the consequences are the same in either case.
State v. Jewell, supra.
So far as the record discloses, Mosley made no effort to ascertain whether, in fact, there were any public roads,
easements or rights-of-way across the land described in the deed from Dillard to him prior to the present controversy.
After the controversy arose, apparently he had no trouble in ascertaining such information, as is evidenced by the map
or drawing which is in the record.
[**659] It seems to us that a reasonably prudent man who obtained a deed containing an exception such as was
included in the deed from Dillard to Mosley would have made inquiry from his grantor as to why [***26] such an
exception was included. If such an inquiry had been made, Mosley would no doubt have been advised of the
right-of-way deed executed by Dillard to Jefferson County in 1945.
The defendants in their answer admitted that the improvements made on the old Alton-Weems Road in 1949 were
"built over and occupied a substantial portion of the right-of-way acquired by Jefferson County, Alabama, under deed
from Lester L. Dillard executed and delivered on October 18, 1945." The defendants in their answer further admitted
that at the time Dillard executed the deed to Mosley "said road was situated and maintained as set out above and in such
a manner as to be plainly visible."
The existence of this road at the time Mosley secured his deed from Dillard was open and notorious and its
presence was such notice as to put Mosley on inquiry and the notice was not confined to that part of the right-of-way
used as a road or highway, but extended to the lands described in the deed from Dillard to Jefferson County.
Page 70
284 Ala. 593, *600; 226 So. 2d 652, **658;
1969 Ala. LEXIS 1146, ***23
The established rules of law may operate harshly in this case, but they are well established and we have no
alternative but to apply the law as it is.
In conclusion, we hold that [***27] Mosley was not a bona fide purchaser for value without notice of Jefferson
County's easement. His title was subject to that easement. He could convey to the Peoples and to the Selfs no better title
than he possessed.
We have referred to one of the appellees as "Mosley," which is the spelling used most frequently in the record,
although his name is spelled "Moseleyc in some places in the record, and that is perhaps the correct spelling of his
name.
[*602] It follows that the judgment of the trial court is reversed and the cause is remanded.
LIVINGSTON, C.J., and MERRILL and HARWOOD, JJ., concur.
Page 71
284 Ala. 593, *601; 226 So. 2d 652, **659;
1969 Ala. LEXIS 1146, ***26
27 of 266 DOCUMENTS
Analysis
As of: Jul 10, 2014
Eulus JOHNSON et ux. v. Lonnie GREEN
No. 6 Div. 10
264 Ala. 381; 88 So. 2d 375; 1956 Ala. LEXIS 390
June 14, 1956
CORE TERMS: deed, heir, tract, grantor, deceased, hollow, successor, purchasers, warranty, decree, tenant, notice,
conveyed, bid
COUNSEL: J. E. Bains, Oneonta, for appellants.
To entitle complainant to revision of a deed proof must be clear and convincing that the intention complainant would
have substituted in the instrument was that of both parties, and if the proof is uncertain in any material respect relief will
be denied. Hyatt v. Ogletree, 31 Ala.App. 8, 12 So.2d 397. Where party pleading bona fide purchaser of land makes
satisfactory proof of purchase and payment, burden then shifts to other party to prove that before payment purchaser had
actual or constructive notice of equity asserted or facts sufficient to put him on inquiry which, if followed up, would
have discovered equity relied on. Hatter v. Quina, 216 Ala. 225, 113 So. 47.
Johnson & Randall, Oneonta, for appellee.
Appellee had a right to have the deed reformed. Code 1940, Tit. 9, 59; American T. N. Bank v. Henderson, 222 Ala.
426, 133 So. 36; Ballentine v. Bradley, 238 Ala. 446, 191 So. 618; Taylor v. Burns, 250 Ala. 218, 34 So.2d 5.
Appellants were not bona fide purchasers. Actual possession by a person not the grantor at the time of execution of
the deed to grantee is notice to purchaser of claim of such person in possession. [***2] Long v. Long, 255 Ala. 353,
51 So.2d 533; Gilmore v. Sexton, 254 Ala. 560, 49 So.2d 157.
JUDGES: Livingston, C. J., and Simpson, Goodwyn and Spann, JJ., concur.
Page 72
OPINION BY: PER CURIAM
OPINION
[*381] [**375] This is an appeal by respondents from a final decree in equity reforming a certain deed therein
mentioned. There was a former appeal from a decree on the cross bill, Johnson v. Green, 259 Ala. 511, 66 So.2d 768;
but nothing there considered is here involved.
The deed in question was dated November 6, 1934, and was executed by all the heirs at law of A. L. Johnson,
deceased, except Dock Johnson to whom the deed was executed. The land included in the [*382] deed was described
as the W 1/2 of NE 1/4, and N 1/2 of SE 1/4 of NE 1/4 of Section 25, Township 12, Range 2W in Blount County. Louis
Johnson was one of the grantors. The evidence shows that Louis Johnson was the owner of a portion of [**376] the
NW 1/4 of NE 1/4 about eight acres, which lies east of a hollow extending north and south and marked by a ditch, and
north of Bangor Road. The said A. L. Johnson did not own that tract in the NW 1/4 of NE 1/4, above mentioned, east of
the hollow and north of the road and [***3] had no color of title to it. On November 6, 1934, the heirs of A. L.
Johnson assembled and agreed to sell at auction to the highest bidder the land owned by him, which included his home
place. The home was situated in the SW 1/4 of the NE 1/4, supra. That land was auctioned and Dock Johnson, one of
the heirs bid it off at $ 1,290, the highest bid. The deed was then drawn and all the heirs executed it. Although it
included the tract in the NW 1/4 of NE 1/4 east of the hollow and north of the road, it was done by mistake of all parties
and the grantee did not go into possession of it. But Louis Johnson, the owner of it, held the possession by himself or
by his tenant, Lonnie Green, until the death of Louis Johnson. After his death such possession continued under his heirs
until they conveyed the tract in dispute with other land to Lonnie Green. Dock Johnson conveyed it to Eulus Johnson,
his son, and Gerstel Johnson, the son's wife.
The complainants include all the grantors in the deed to Dock Johnson of November 6, 1934, or the heirs of some
who have since died: this includes the heirs of Louis Johnson. The respondents are Eulus Johnson, Gerstel Johnson and
Dock Johnson.
[***4] The deed of November 6, 1934, contains a general warranty clause. The person more directly interested in
having the error corrected so as to eliminate the tract in question is Lonnie Green who is the successor to Louis Johnson
in the ownership of it. Louis Johnson was also an heir of A. L. Johnson and executed the deed of November 6, 1934.
So that, Lonnie Green has the right to maintain this suit both as a grantor in that deed and as the successor in interest of
Louis Johnson who was the owner of that tract and a grantor in the deed which erroneously included it. Section 59,
Title 9; section 136, Title 47, Code; Bankhead v. Jackson, 257 Ala. 131, 57 So.2d 609. But he made as parties
complainant all the heirs of A. L. Johnson, deceased, and all the heirs of Louis Johnson, deceased. They are all
interested because they all executed a conveyance with a general covenant of warranty of title.
It is objected that appellants as the purchasers from Dock Johnson had no notice of the error. But when they
purchased Lonnie Green was in possession of the tract openly and adversely for Louis Johnson or his heirs. This
without something to discredit it was sufficient notice. Long v. Long, [***5] 255 Ala. 353, 51 So.2d 533. Possession
by a tenant is sufficient. Brunson v. Brooks, 68 Ala. 248(4); 92 C.J.S. Vendor & Purchaser, 349, p. 287(2). The
evidence was clear, satisfactory and convincing that the error was made and that it was mutual. There is nothing in the
record which serves to prevent a reformation of the deed of November 6, 1934, as adjudged and decreed by the trial
court. It should be affirmed.
The foregoing opinion was prepared by FOSTER, Supernumerary Justice of this Court, while serving on it at the
request of the Chief Justice under authority of Title 13, section 32, Code, and was adopted by the Court as its opinion.
Affirmed.
Page 73
264 Ala. 381, *; 88 So. 2d 375, **;
1956 Ala. LEXIS 390, ***2
31 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
HOLGERSON et al. v. GARD et al.
1 Div. 481.
SUPREME COURT OF ALABAMA
257 Ala. 579; 60 So. 2d 427; 1952 Ala. LEXIS 286; 33 A.L.R.2d 1315
August 27, 1952, Decided
PRIOR HISTORY: [***1] The plat of the lots involved is as follows:
[SEE DRAWING IN ORIGINAL]
DISPOSITION: Affirmed.
CORE TERMS: notice, fence, deed, purchaser, bona fide purchasers, feet, good faith, valuable consideration, bought,
boundary line, plat, fact sufficient, constructive possession, time prior, house and lot, strip, buy, conveyance, equitable,
parted, seized, matter of fact, reformation, constructed, correctly, recorded, offering, frontage, decreed, partly
COUNSEL: Caffey, Gallalee & Caffey, Mobile, for appellants.
As against an outstanding equity bona fide purchase for value must be specially pleaded. Adams v. Pollak, 217 Ala.
688, 117 So. 299; Hogan v. Bailey, 234 Ala. 64, 173 So. 605; Kelley v. Chandler, 184 Ala. 358, 63 So. 941. To be
sufficient, plea or answer must allege that pleader is purchaser from one in actual or constructive possession. Where
pleading does not meet this requirement, respondent cannot have benefit of his defense even if proved, without
amendment. Hooper v. Strahan, 71 Ala. 75; May v. Wilkinson, 76 Ala. 543; Webb v. Elyton Land Co., 105 Ala. 471, 18
So. 178; Tutwiler v. Montgomery, 73 Ala. 263; Gresham v. Ware, 79 Ala. 192. Appellees did not meet the burden of
proving that their grantors were in possession. Tutwiler v. Montgomery, supra. What is sufficient to put one on his
guard and call for inquiry is notice of everything to which inquiry would lead. Roberts v. Grayson, 233 Ala. 658, 173
So. 38; [***2] Home Bond Co. v. Ala. Utilities Co., 225 Ala. 322, 142 So. 827; Blocker v. Boyd, 242 Ala. 345, 6 So. 2d
19; Cole v. Birmingham R. Co., 143 Ala. 427, 39 So. 403; Figh v. Taber, 203 Ala. 253, 82 So. 495; Gamble v. Black
Warrior Coal Co., 172 Ala. 669, 55 So. 190; Alexander v. Fountain, 195 Ala. 3, 70 So. 669; Frame v. Frame, 32 W.Va.
463, 9 S.E. 901, 5 L.R.A. 323; Shepherd v. Delaney, 191 Iowa 138, 181 N.W. 753. Possession by another than grantor
Page 74
is sufficient to put any purchaser on guard and to call for inquiry as to rights of such others. Gamble v. Black
Warrior Coal Co., supra; Alexander v. Fountain, supra; Copeland v. Warren, 214 Ala. 150, 107 So. 94; Brunson v.
Brooks, 68 Ala. 248; King v. Paulk, 85 Ala. 186, 4 So. 825; Harris v. Carter, 3 Stew. 233; Morgan v. Morgan, 3 Stew.
383; Fenno v. Sayre, 3 Ala. 458; Smith v. Heirs of Bond, 8 Ala. 386; Daniel v. Sorrells, 9 Ala. 436. Occupation of
property by Shoemake and Holgerson up to old fence line, pointed [***3] out to them as west boundary of lot they
were buying put them in open, adverse possession. Walker v. Bailey, 250 Ala. 287, 33 So. 2d 898; Milstead v. Devine,
254 Ala. 442, 48 So. 2d 530; Duke v. Wimberly, 245 Ala. 639, 18 So. 2d 554.
McCorvey, Turner, Rogers, Johnstone & Adams and C. A. L. Johnstone, Jr., Mobile, for appellees.
The defense of bona fide purchaser for value without notice was properly pleaded by respondents. Lightsey v. Stone,
255 Ala. 541, 52 So. 2d 376; Birmingham Securities Co. v. Southern University, 173 Ala. 116, 55 So. 240.
Proof of conveyance of legal title to, and payment of a valuable consideration by the respondents created a presumption
that the purchase was in good faith and placed the burden upon complainants of showing by evidence that the
respondents took with notice of complainants' equity. Lightsey v. Stone, supra; Stone v. Lacy, 245 Ala. 521, 17 So. 2d
865; Lamar v. Lincoln Reserve Life Ins. Co., 222 Ala. 60, 131 So. 223. For possession to operate as notice it must be
open, visible, exclusive, and unambiguous; not liable to be misconstrued [***4] or misunderstood. Lightsey v. Stone,
supra; Wells v. American Mortgage Co., 109 Ala. 430, 20 So. 136; Rankin Mfg. Co. v. Bishop, 137 Ala. 271, 34 So. 991.
Possession, to put a purchaser upon inquiry and operate as constructive notice, must exist at the time of the
transaction by which his rights and interests are created. Lightsey v. Stone, supra; Holly v. Dinkins, 202 Ala. 477, 80 So.
861; O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251; Scotch Lumber Co. v. Sage, 132 Ala. 598, 32 So. 607.
JUDGES: STAKELY, Justice. FOSTER, LAWSON and SIMPSON, JJ., concur.
OPINION BY: STAKELY
OPINION
[**428] [*582] STAKELY, Justice.
This is a suit filed in equity for reformation of certain deeds and to quiet title against some of the respondents.
On December 31, 1945, Verdie Narkates Gard (one of the appellees) was the owner of Lots 7, 8, 9 and 10 in Block
14 of the Bascomb Tract, according to a plat duly recorded in the Probate Court of Mobile County. [The report of the
case will show the aforesaid plat]. Mrs. Gard purchased the aforesaid lots in 1936 or 1937. She used the part which is
designated as lot No. 10 as a chicken [***5] yard and for this purpose it was fenced on all four sides. At some time
prior to 1945 she bought a small house and moved it on to her property. It became house No. 1257 Easton Street. A
short time prior to December 31, 1945, she approached Charles H. Shoemake, Jr., and offered to sell him house and lot
No. 1257 Easton Street. She pointed out the boundaries of the property which she proposed to sell. The house No. 1257
Easton Street was located partly on Lot 10 and partly on on Lot 9 and she had constructed a fence, running northwardly
and southwardly, [**429] across Lots 7, 8 and 9 so that the portion of Lots 7, 8 and 9 which lay to the east of the fence
was a part of the premises upon which she had located the house and which she pointed out to Mr. Shoemake as the
property she was offering for sale. The fence which had been constructed across Lots 7, 8 and 9 was the west boundary
of the property which she was offering for sale and which he intended to buy.
In order to carry out the understanding which had been reached between Mrs. Gard and Mr. Shoemake, on
December 31, 1945 a deed was executed by Verdie Narkates Gard and her husband Thomas O. Gard to Charles H.
Shoemake, Jr. This deed described [***6] the property as Lot 10 in Square 14 of the Bascomb Tract as per plat
recorded in Deed Book 128 N.S. at page 1. As a matter of fact Lot 10, according to the plat, has a frontage of 50 feet on
Easton Street and runs back south 150 feet of even width. But the property which Mrs. Gard intended to sell and which
Page 75
257 Ala. 579, *; 60 So. 2d 427, **;
1952 Ala. LEXIS 286, ***2; 33 A.L.R.2d 1315
Mr. Shoemake intended to buy included not only Lot 10 but a strip off of the eastern side of Lots 7, 8 and 9 which lay
east of the fence. This additional strip had a frontage of 22 feet on Easton Street on its north line and 14 feet on the
south boundary of Lot 7, which was the south boundary line of the strip. In other words, the lot actually conveyed by
the deed lacked 22 feet of going to the fence on its north boundary line and 14 feet on its south line.
When Mr. Shoemake accepted the deed he understood that the existing fence was the west boundary line of the lot
which the deed purported to convey. Mrs. Gard put him in possession of the house and lot up to the fence and he
continued in possession thereof, claiming from the fence on the west boundary line of the lot, until he sold [*583] the
lot to Alma Holgerson and her husband Allan Holgerson (appellants) on or about February 13, 1947. Mrs. [***7]
Holgerson handled the transaction with Mr. Shoemake, her husband being a sea captain and absent at the time. He
agreed to sell and she agreed to buy the property which he considered he had bought from Mrs. Gard. As a matter of
fact, however, the deed from Chas. H. Shoemake, Jr., and his wife to Alma Holgerson and her husband described the
property as being Lot 10 of Block 14 of the Bascomb Tract. At the time there was a fence on the south side, on the east
side and on the west side except at the rear. The parties understood that Mr. Shoemake was selling and that Mr. and
Mrs. Holgerson were buying the house and lot from fence to fence. Mrs. Holgerson went in possession and used the
property up to the west fence without objection or question on the part of Mrs. Gard.
The court correctly found that the description contained in the two aforementioned deeds arose out of a mutual
mistake and accordingly, except as to any portion of Lot 7, Block 14 of the Bascomb Tract, decreed a reformation of the
two deeds so as to show the property which was actually intended to be bought and sold. Section 133 et seq., Title 47,
Code of 1940.
In August 1947 Mr. and Mrs. Gard executed and delivered to [***8] William Zdenek and Ethel Zdenek a deed to
Lot 7 in Block 14 of the Bascomb Tract. The court decreed that the complainants Allan and Alma Holgerson "are
entitled to no part of Lot 7, Block 14 of the Bascomb Tract" and that they were enjoined from trespassing upon or
disturbing the possession of William and Ethel Zdenek in and to the aforesaid lot. It seems to be conceded that the
correctness of the action of the court turns upon the question as to whether William and Ethel Zdenek were bona fide
purchasers for value from the Gards, without notice of the equity in Lot 7 of the Holgersons.
Before we get to the evidence on the issue of bona fide purchase for value, our attention has been directed to the
pleading on such an issue. As against an outstanding equity a bona fide purchase for value without notice must be
specially pleaded where this does not appear on the face of the bill. Adams v. Pollak, 217 Ala. 688, 117 So. 299. And if
the pleading is defective in this respect, even though there is proof, the respondent cannot have the benefit of this
defense without amendment. Hooper Adm'r. v. Strahan, 71 Ala. 75. In [**430] the recent cases of Larkins v. Howard,
252 Ala. 9, 39 So. 2d 224, 7 A.L.R.2d 541, [***9] and Lightsey v. Stone, 255 Ala. 541, 52 So. 2d 376, citing Craft v.
Russell, 67 Ala. 9, and other authorities, it was said that in order to constitute one a bona fide purchaser without notice
and entitle him to the protection of the rule as against a prior equity or conveyance, it is essential "'* * * (1) that he is
the purchaser of the legal as distinguished from an equitable title; (2) that he purchased the same in good faith; (3) that
he parted with value as a consideration therefor by paying money or other thing of value, assuming a liability or
incurring an injury; (4) that he had no notice, and knew no fact sufficient to put him on inquiry as to complainant's
equity, either at the time of his purchase, or at or before the time he paid the purchase-money, or otherwise parted with
such value.' * * *" [252 Ala. 9, 39 So. 2d 224, 226.]
Appellants contend that a plea or answer setting up the defense of bona fide purchase for value without notice
must allege that the purchase was from one in actual or constructive possession who was seized or claimed to be seized
of the legal title at the same time. In support of this proposition the appellant cites [***10] the following cases: Hooper
v. Strahan, 71 Ala. 75; May v. Wilkinson, 76 Ala. 543; Tutwiler v. Montgomery, 73 Ala. 263; Webb v. Elyton Land Co.,
105 Ala. 471, 18 So. 178. Assuming for the purpose of discussion that the pleading omits the allegation referred to, we
do not think that there is any contradiction in the early decisions of this court which have just been cited and the recent
decisions of this court which have been referred to above. We say this because if in accordance with essential (4), as set
forth in Larkins v. Howard, supra, and [*584] Lightsey v. Stone, supra it is alleged and shown that the purchaser had
Page 76
257 Ala. 579, *582; 60 So. 2d 427, **429;
1952 Ala. LEXIS 286, ***6; 33 A.L.R.2d 1315
no notice and knew of no fact sufficient to put him on inquiry as to the complainant's equity at the time of his purchase
or at or before he paid the purchase money, then the requirements of the earlier cases have been complied with, where it
is shown that the purchaser is a purchaser of the legal as distinguished from an equitable title. The vital question is not
whether the purchaser bought from one in or out of actual or constructive possession, but whether the purchaser had no
notice [***11] and knew of no fact sufficient to put him on inquiry. Of course, it must be conceded that if there is
possession by another than the grantor, then the purchaser would be put on his guard and be required to make inquiry
as to the rights of such other person in possession. Alexander v. Fountain, 195 Ala. 3, 70 So. 669; Evans v. Bryan, 202
Ala. 484, 80 So. 868.
It will be noticed that in both Webb v. Elyton Land Co., supra, and in Sherrod v. Hollywood Holding Corp., 233
Ala. 557, 173 So. 33, the case of Craft v. Russell, 67 Ala. 9, is cited along with Hooper v. Strahan, supra, and May v.
Wilkinson, supra, as to the requirements of a plea of bona fide purchase for value without notice, just as though there
was no conflict in these cases, even though in Craft v. Russell, supra, there is no statement of a requirement of purchase
from one in actual or constructive possession.
In Thompson on Real Property, Vol. 8, 4287, the matter is stated as follows:
"The courts define a 'bona fide purchaser' to be one who has in good faith paid a valuable
consideration without notice of the [***12] adverse rights in another. In other words, it is essential that
he be a good faith purchaser for value without notice. The three elements necessary to constitute an
innocent purchaser are payment of a valuable consideration, absence of notice, and good faith on the
part of the purchaser.
"He not only must have purchased in good faith and for a valuable consideration without notice,
but he must have had no knowledge or notice of prior rights at the time of his purchase or at any time
prior to payment of the purchase-price. It is the policy of the law to protect such purchasers. The bona
fide purchaser doctrine applies only to legal title. * * *."
We accordingly consider that the pleading in the case at bar in the respect which has been under discussion is
adequate [**431] to set up the defense of bona fide purchaser for value without notice.
It is also claimed that there is not a sufficient allegation that William and Ethel Zdenek had no notice or knowledge
of the equity of the Holgersons. In the answer of William and Ethel Zdenek it is averred that they had no notice or
knowledge of the facts which complainants had alleged in their bill of complaint as constituting the basis of their
[***13] claim of an equity. This was the only equity which the complainants asserted in the bill of complaint and
William and Ethel Zdenek alleged directly and positively that they had no notice or knowledge of such equity. The
pleadings in this last respect were also sufficient.
We come now to a consideration of the evidence on the issue of bona fide purchase for value without notice. We
have read and reread the record with great care but we see no reason to discuss in detail the considerable amount of
evidence adduced on this issue. Beasley v. Ross, 234 Ala. 335, 174 So. 764. Suffice it to say that we have reached the
conclusion that the trial court was correct in holding that William Zdenek and Ethel Zdenek were purchasers for value
of Lot 7 without notice of the asserted equity in Lot 7 claimed by the Holgersons. Without question the proof showed
the conveyance of the legal title by the Gards to William and Ethel Zdenek and payment of a valuable consideration
therefor by the grantees. This created a presumption that the purchase was in good faith and placed the burden upon
the complainants (Holgersons) of showing by evidence that the Zdeneks took with notice of the equity [***14] of the
Holgersons. Lightsey v. Stone, 255 Ala. 541, 52 So. 2d 376; Stone v. Lacy, 245 Ala. 521, 17 So. 2d [*585] 865. It is
claimed by the Holgersons that they had such possession of Lot 7 at the time the deed was made to William and Ethel
Zdenek as to put William and Ethel Zdenek on notice of the equity of the Holgersons in Lot No. 7. However, for
possession to operate as notice it must be open, visible, exclusive and unambiguous, not liable to be misconstrued or
Page 77
257 Ala. 579, *584; 60 So. 2d 427, **430;
1952 Ala. LEXIS 286, ***10; 33 A.L.R.2d 1315
misunderstood. Lightsey v. Stone, 255 Ala. 541, 52 So. 2d 376; Wells, Adm'r v. American Mortgage Company of
Scotland, 109 Ala. 430, 20 So. 136; Rankin Manufacturing Company v. Bishop, 137 Ala. 271, 34 So. 991.
It is furthermore true that possession to put a purchaser upon inquiry and to operate as constructive notice, must
exist at the time of the transaction by which his rights and interests are created. Lightsey v. Stone, supra; Holly v.
Dinkins, 202 Ala. 477, 80 So. 861; O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251.
It is insisted by the appellants that there were physical facts which were sufficient to put William [***15] and
Ethel Zdenek on notice of the possession of the part of Lot 7 claimed by the Holgersons. It is claimed that there was a
fence running across the western boundary of the property of the Holgersons over Lot 7. On the contrary, however, this
is disputed and there is testimony to show that at the time the fence was not in existence and the only fence which
marked the western boundary line of the Holgerson property was that which was a trellis for some roses which did not
extend back to Lot 7.
It is further contended that the part of Lot 7 in controversy was mowed as a lawn by the Holgersons, but on the
contrary there is testimony that the lawn of the Holgersons did not extend back to Lot 7, but on the contrary this part of
Lot 7 was grown up in weeds and high grass.
We do not consider that the complainants carried the burden of proof in this respect and so we consider that the
court correctly decided that William and Ethel Zdenek were purchasers for value without notice of the alleged equity of
the Holgersons.
The decree of the lower court is due to be affirmed.
Affirmed.
FOSTER, LAWSON and SIMPSON, JJ., concur.
Page 78
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1952 Ala. LEXIS 286, ***14; 33 A.L.R.2d 1315
33 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
SANFORD v. ALABAMA POWER CO.
6 Div. 993.
256 Ala. 280; 54 So. 2d 562; 1951 Ala. LEXIS 76
October 18, 1951, Decided
CORE TERMS: mineral, deed, surface, conveyance, mineral interest, adverse possession, notice, purchaser, grantor,
conveyed, convey, color, mining operations, decree, grantee, quiet, heirs, actual possession, constructive, coal, quarry,
acres of land, land covered, peaceable, severance, so-called, land described, successors in interest, purporting,
occupation
COUNSEL: McEniry, McEniry & McEniry, Bessemer, for appellant.
Constructive possession is possession in law annexing as an incident to the legal title accompanied by a right to
immediate possession. Shannon v. Long, 180 Ala. 128, 60 So. 273. To maintain a bill to quiet title, complainant must
have actual or constructive possession, peaceable and undisputed, as distinguished from a disputed or scrambling
possession. Ladd v. Powell, 144 Ala. 408, 39 So. 46; Randle v. Daughdrill, 142 Ala. 490, 39 So. 162; Wood Lbr. Co. v.
Williams, 157 Ala. 73, 47 So. 202; Vandergrift v. Southern Mineral Land Co., 166 Ala. 312, 51 So. 983; Holland v.
Coleman, 162 Ala. 462, 50 So. 128; Dawsey v. Walden, 243 Ala. 93, 8 So. 2d 417; Webb v. Griffin, 243 Ala. 468, 10 So.
2d 458; Price v. Robinson, 242 Ala. 626, 7 So. 2d 568; Cooper v. Cooper, 201 Ala. 477, 78 So. 383; Hinds v. Federal
Land Bank, 237 Ala. 218, 186 So. 153. Actual possession of mineral interest on one forty under deed covering
continuous tract of three forties described in bill as amended and more is not such slight possession as to deprive such
actual holder of the benefit of his claim of adverse possession. Newell v. Manley, 173 Ala. 205, 55 [***2] So. 495.
Where defendant in bill to quiet title establishes title to minerals upon and under land, the decree should so declare.
Rucker v. Jackson, 180 Ala. 109, 60 So. 139, Ann.Cas. 1915 C, 1058. Possession of land is notice to world of every
right that the possessor has therein, legal or equitable. Where purchaser is in possession under unrecorded deed, his
possession is notice of his title. 55 Am.Jur.--Vendor & Purchaser-- 712; Id., p. 242, 18; Howser v. Cruikshank, 122
Page 79
Ala. 256, 25 So. 206; Allen-West Commission Co. v. Millstead, 92 Miss. 837, 46 So. 256, 131 Am.St.Rep. 556; Tuttle v.
Jackson, 6 Wend., N.Y., 213, 21 Am.Dec. 306. Purchaser of mineral rights in land from one not shown to have been in
possession was put on inquiry as to rights of person in possession of surface land, claiming mineral rights under
unrecorded deed. Sloss-Sheffield Steel & Iron Co. v. Taff, 178 Ala. 382, 59 So. 658; Black Warrior Coal Co. v. West,
170 Ala. 346, 54 So. 200; Hooper v. Bankhead & Bankhead, 171 Ala. 626, 54 So. 549. Where one enters upon lands he
is presumed to enter under the title which his deed purports on its face to convey, both as to extent of land and nature of
his interest. [***3] Buckelew v. Yawkey, 247 Ala. 304, 24 So. 2d 136; Moore v. Elliott, 217 Ala. 339, 146 So. 346; Dew
v. Garner, 207 Ala. 353, 92 So. 647, 27 A.L.R. 5. Where severance of mineral interest was made by reservation in deed,
and grantor subsequently released and declared null and void such reservation, mineral interest and surface right were
merged in grantee, and if grantee continued in possession of surface, all the time holding such release unrecorded, for
period of ten years before grantor again conveyed mineral to third person, title was good in grantee by adverse
possession as against such third person. Code 1940, Tit. 7, 828. If it appears from instrument that it was intention of
grantors to transfer lands described to grantee, it is sufficient to constitute color of title in grantee to support adverse
possession, although it may lack apt words of conveyance. Henry v. Brown, 143 Ala. 446, 39 So. 325; Code 1940, Tit.
47, 23; Cloud v. Dean, 212 Ala. 305, 102 So. 437.
Fite & Fite, Jasper, and Martin, Turner & McWhorter and J. C. Blakey, all of Birmingham, for appellee.
The deed of January 16, 1874 from H. A. Key to J. M. Garner effected a severance of the minerals from the surface
[***4] of the lands, and excepted and retained to the grantor, H. A. Key, all such minerals. Spears v. Wise, 187 Ala.
346, 65 So. 786; Sarratt v. Arthur, 200 Ala. 53, 75 So. 365; Fryer v. Fryer, 204 Ala. 422, 85 So. 706; Kilgore & Son v.
Shannon & Co., 6 Ala. App. 537, 60 So. 520; Jamison Coal Co. v. Carnegie Nat. Gas. Co., 77 W.Va. 30, 87 S.E. 451;
Allen v. Henson, 186 Ky. 201, 217 S.W. 120; Martin v. Cook, 102 Mich. 267, 60 N.W. 679; Mayor of N. Y. v. N. Y. Cent.
R. Co., 69 Hun 324, 23 N.Y.S. 562; Id., 147 N.Y. 710, 42 N.E. 724. Appellant's instrument of agreement and settlement
dated as of September 27, 1874, contains no apt words of alienation, grant, conveyance or transfer, and such instrument
did not and could not convey any minerals to James M. Carner. Brewton v. Watson, 67 Ala. 121; Webb v. Mullins, 78
Ala. 111; Matthews v. Tennessee Coal, Iron & R. Co., 157 Ala. 23, 47 So. 78; Long v. Holden, 216 Ala. 81, 83-84, 112
So. 444, 52 A.L.R. 536. Neither appellee nor any of its predecessors in title in the chain of title to the minerals in the two
forties here involved, had or were charged with any actual or constructive notice of appellant's unrecorded agreement,
and even if it had constituted [***5] a conveyance, which it did not, the title of appellee and its predecessors in title to
said minerals is not and was not affected thereby. Hodge v. Winston, 94 Ala. 576, 580, 10 So. 535; Scotch Lumber Co. v.
Sage, 132 Ala. 598, 606, 32 So. 607; O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251; Holly v. Dinkins, 202 Ala. 477, 80
So. 861; Evans v. Bryan, 202 Ala. 484, 80 So. 868. Appellee, being the owner and holder of the legal title to the
minerals in the two forties here involved, and no one being in the actual possession of such minerals, appellee was and
is in the constructive possession thereof, and had the right to maintain this bill to quiet title against appellant. Kyle v.
Alabama State Land Co., 147 Ala. 698, 41 So. 174; Rucker v. Jackson, 180 Ala. 109, 60 So. 139; Brunson v. Bailey, 245
Ala. 102, 16 So. 2d 9; Buckelew v. Yawkey, 247 Ala. 304, 24 So. 2d 133; Walthall v. Yohn, 252 Ala. 262, 40 So. 2d 705.
JUDGES: LAWSON, Justice. LIVINGSTON, C. J., and BROWN and STAKELY, JJ., concur.
OPINION BY: LAWSON
OPINION
[*283] [**563] LAWSON, Justice.
The bill in this cause was filed by the Alabama Power Company against I. N. Sanford under 1109, Title 7, Code
1940, to quiet the title to the iron, [***6] coal and other minerals in, under and upon the W 1/2 of the NE 1/4 and NW
1/4 of the SE 1/4 of Section 34, Township 15 South, Range 17 West, in Walker County, Alabama. The bill was
amended so as to delete therefrom the NW 1/4 of the NE 1/4 of said Section 34. In other words, as finally amended the
bill sought to quiet the title to the iron, coal and other minerals in, under and upon the SE 1/4 of the NE 1/4 and the NW
Page 80
256 Ala. 280, *; 54 So. 2d 562, **;
1951 Ala. LEXIS 76, ***2
1/4 of the SE 1/4 of said Section 34, a total of eighty acres. From a decree for complainant, the respondent has appealed
to this court. Since the appeal was taken, I. N. Sanford, the appellant, has died and the cause has been revived in the
name of his heirs or personal representatives.
A bill in equity may be properly filed and maintained under 1109, Title 7, to quiet title to the mineral interest in
land by the owner of such interest. Gulf Coal & Coke Co. v. Alabama Coal & Coke Co., 145 Ala. 228, 40 So. 397.
It is well settled by the decisions of this court that under the statute authorizing a bill in equity to quiet title, the
complainant must have the quiet and peaceable possession, actual or constructive, as distinguished from a scrambling or
disputed [***7] possession. Ladd v. Powell, 144 Ala. 408, [**564] 39 So. 46; Randle v. Daughdrill, 142 Ala. 490, 39
So. 162; Vandegrift v. Southern Mineral Land Co., 166 Ala. 312, 51 So. 983; Dawsey v. Walden, 243 Ala. 93, 8 So. 2d
417; Price v. Robinson, 242 Ala. 626, 7 So. 2d 568.
The complainant did not aver or seek to prove an actual possession of the minerals in question, but relies upon
constructive possession, which the law attaches to legal title in the absence of an actual possession by anyone else.
Vandegrift v. Southern Mineral Land Co., supra.
The answer of the respondent denied that complainant was the owner of the legal title to the minerals and denied
that complainant was in peaceable possession thereof. The answer further avers that respondent is in possession of the
minerals, claiming title to an undivided interest therein.
Complainant could not recover merely upon proof of title if the evidence showed that respondent was in possession
of the minerals. Ordinarily, we would first consider the evidence as it relates to the possession of the minerals involved,
because if the evidence showed that respondent [***8] was in possession or that there was a scrambling or disputed
possession, it would be unnecessary to pass on the question of complainant's title. However, in view of the nature of this
case, we think it advisable to first treat the question of title.
Complainant and respondent both trace their claim of title to the minerals back to a common source, one H. A. Key,
it being conceded that the said Key was, as of January 16, 1874, the owner of both the surface and the minerals in the
land here involved.
On January 16, 1874, H. A. Key and wife executed a deed to J. M. Garner covering 360 acres of land, including
that here involved. This deed was recorded on February 20, 1882. It is the contention of complainant that this deed only
conveyed to J. M. Garner the surface rights in the 360 acres of land, the mineral rights being retained by the grantor, H.
A. Key.
On November 14, 1884, after the deed to J. M. Garner had been placed on record, H. A. Key and wife by warranty
deed, for a recited consideration of $ 700, conveyed to Musgrove Brothers all the minerals in, under and upon 280 acres
of land which [*284] had been included in the deed of January 16, 1874, including the minerals [***9] in, under and
upon the land involved in this proceeding. Upon the trial of this cause, complainant introduced in evidence numerous
deeds executed from 1885 to 1941 showing a full, direct, and complete chain of title to the minerals involved in this suit
from H. A. Key through Musgrove Brothers and others into complainant. Complainant's deed to the minerals involved
in this suit, which deed included other property, was under date of September 22, 1941. All the conveyances under
which complainant claims were duly recorded.
While the respondent, appellant here, does not expressly concede that the deed of January 16, 1874, from H. A.
Key and wife to J. M. Garner conveyed only the surface rights to the land covered by the deed, it is not argued here, nor
was it argued below, that the construction contended for by complainant, appellee here, is not correct.
The respondent relies, in the main, on a written instrument termed an "agreement," under date of September 27,
1874, which the respondent contends conveyed to J. M. Garner the mineral rights which had been excepted or reserved
in the conveyance of January 16, 1874. This so-called agreement was not placed on record until April 5, 1948, long
Page 81
256 Ala. 280, *283; 54 So. 2d 562, **563;
1951 Ala. LEXIS 76, ***6
[***10] after complainant secured its deed purporting to convey to it the minerals here involved.
In regard to this "agreement," the complainant takes the position that it is not sufficient to operate as a conveyance,
but that if it should be so construed, complainant was an innocent purchaser for value, without notice as to any interest
which the agreement purports to convey, since it was not placed on record until April 5, 1948. The respondent contends
that irrespective of the fact that the "agreement" was not placed on record, J. M. Garner and his successors in interest
have been in possession of the surface of the land covered by the conveyance of January 16, [**565] 1874, from that
date until the date of trial, and have performed acts showing possession of the minerals; hence complainant had
constructive notice of the "agreement" under date of September 27, 1874. The respondent also seems to claim
ownership of the minerals in, under and upon the lands involved in this suit by adverse possession.
The respondent's mother was the daughter of J. M. Garner, the grantee in the deed of January 16, 1874.
Respondent claims to own a substantial undivided interest in both the surface and mineral [***11] rights of the land
covered by the deed under date of January 16, 1874, through inheritance and by purchase from other heirs of the said J.
M. Garner.
The first question for our determination is whether or not the deed of January 16, 1874, conveyed only the surface
interest to the grantee therein, J. M. Garner. If that deed also conveyed the mineral interest, then it is admitted by the
complainant, appellee here, that it is not entitled to recover and that the decree of the trial court is erroneous. The deed
of January 16, 1874, reads as follows:
"This indenture made the 16th day of January in the year of our Lord 1874, between H. A. Key & wife C C Key of
the first part J M Garner of the second part Witnesseth that the said party of the first part for & in consideration of the
sum of three hundred dollars them in hand paid at & before the sealing & delivery of these presents by the party of the
second part the receipt whereof is hereby acknowledged hath granted bargained sold and conveyed & by these presents
grant bargain sell and convey unto the said party of the second part & to his heirs and assigns forever, the following
described Lands, viz: the SW quarter & the SW 1/4 of [***12] the NW 1/4 & the W 1/2 of the SE 1/4 & the W 1/2 of
the NE 1/4 Section 34 T 15 R 7 W together with all & singular the tenements & appurtenances thereunto belonging or
in any wise appertaining & all the estate rite title interest claim or demand whatever with the exception of the F
Montgomery mineral agreement, to wit all the mineral access to all timber needed & together with on tenth of the
surface, wright of way whatsoever of H A Key & his heirs & assigns free from claim or claims of all & every person or
persons whomsoever [*285] as also the claim of the General Government
"In testimony whereof the aforesaid party of the first part has hereunto set there hands & affixed there seal the day
& year above written
"H A Key (LS)
C C Key (LS)
"The State of Alabama,
Walker County
"I John Brake Justice of the Peace for said county certify that H A Key and C C Key whose manes are signed to the
foregoing conveyance and who is known to me acknowledged before me on this day that being informed of the contents
of the conveyance executed the same voluntarily on the day the same bears date "Given under my hand the 16 day of
January A D 1874
John Brake J P"
(Emphasis supplied.)
Page 82
256 Ala. 280, *284; 54 So. 2d 562, **564;
1951 Ala. LEXIS 76, ***10
[***13] Unless that part of the deed of January 16, 1874, which we have italicized above operates to except the
mineral interests and to reserve such interests to the grantor, then, of course, it follows that the grantee, J. M. Garner,
received the entire interest in the land described in the deed. It is evident that the deed was drafted by an unskilled
person. The excepting clause is poorly punctuated and is not altogether clear. The "F Montgomery mineral agreement"
referred to in the deed was not produced in the trial of this cause. No one seems to know anything about its contents.
Because of the admission of the parties that on January 16, 1874, H. A. Key was the owner of both the surface and
mineral interests in the land covered by the deed of that date, for the purposes of this case it is to be assumed that F.
Montgomery, if there was such a person, had no interest whatsoever in the minerals at the time the deed was executed.
The phrase, "with the exception of the F Montgomery mineral agreement," if considered alone, might be said to be so
vague and uncertain as to render such phrase inoperative [**566] in the absence of proof of its contents. However,
such phrase must be considered [***14] with the words immediately following, viz., "to wit, all the mineral." When
thus considered, it appears that the grantor, Key, intended to and did except the mineral interests from the conveyance
and reserved in himself the title to the minerals in the land conveyed. Spears v. Wise, 187 Ala. 346, 65 So. 786; Sarratt
v. Arthur, 200 Ala. 53, 75 So. 365; Jamison Coal Co. v. Carnegie Natural Gas Co., 77 W. Va. 30, 87 S.E. 451.
The deed of January 16, 1874, effected a severance of the minerals in situ from the surface. The title to the surface
was conveyed to J. M. Garner. The title to the minerals remained in the grantor, H. A. Key.
The so-called agreement under date of September 27, 1874, which the respondent contends was a conveyance by
Key and wife to Garner of the mineral interests which had been excepted and reserved by the deed of January 16, 1874,
reads as follows:
"Sept, 27, 1874
"To Whom it may concern. This Agreement entered in to by James N Garner and H A Key and wife C C Key, The
receipt where of is hereby acnolidged, for and in consideration of the some of one hundred and fifty dollars and one iron
gray Stalion horse the debt [***15] of three hundred dolars for said land is hereby settled and in further settlement H A
Key and wife C C Key said the F. Montgomery agreement in James. M Garner deed is nul and void and they do not
claime the tenth of timber surface and mineral as described in deed made to James M Garner and dated January. 16th
1874
Witness
Tom. Jones
Jim Laird
Signed before me
John Brake A Justice of the peace
"H. A. Key. and wife C. C. her X mark Key"
We do not think this so-called agreement is sufficient to operate as a conveyance of the mineral interests in the
land. There can be no valid and operative conveyance of land without some words of grant or alienation. We can find no
such words in the agreement. The declaration [*286] that "the F. Montgomery agreement in James. M Garner deed is
nul and void" is meaningless. As before indicated, the contents of that agreement are not even shown. Nor should it be
said that the mere fact that Key and wife, by virtue of the so-called agreement, no longer claimed "the tenth of timber
surface and mineral as described in deed made to James M Garner and dated January. 16th 1874" shows an intention to
convey such interests to Garner.
Respondent relies [***16] on the provisions of 23, Title 47, Code 1940, which section reads: "A seal is not
Page 83
256 Ala. 280, *285; 54 So. 2d 562, **565;
1951 Ala. LEXIS 76, ***12
necessary to convey the legal title to land to enable the grantee to sue at law. Any instrument in writing, signed by the
grantor, or his agent, having a written authority, is effectual to transfer the legal title to the grantee, if such was the
intention of the grantor, to be collected from the entire instrument."
We have construed 23, Title 47, supra, and its progenitors as dispensing with the requirement of the use of formal
and technical words of grant or alienation. Cloud v. Dean, 212 Ala. 305, 102 So. 437, and cases cited.
However, in Webb v. Mullins, 78 Ala. 111, 114, after quoting 2948 of the Code of 1876, the provisions of which
are now codified as 23, Title 47, Code 1940, Mr. Justice Clopton, writing for the court, said:
"* * * The manifest purpose of the statute is to dispense with the necessity of a seal to a valid conveyance, and of
formal, technical words of grant, release, or transfer. The statute is remedial, and should be liberally construed, so far as
may be necessary to suppress the mischief, and effectuate the purpose and intent of the law-makers; [***17] but, being
also in modification of the common law, it will not be presumed to modify it farther than is expressly declared; and
construction, or intendment, will not be resorted to, for the purpose of extending its operation. Cook v. Meyer, 73 Ala.
580.
"At common law, a deed must contain words of grant, release, or transfer, in order to pass the legal title to the land
designed [**567] to be conveyed. The title to land can be transferred from one person to another, only by apposite and
appropriate language. It was not the intention of the statute to dispense with the use of any words whatever, operative to
convey. By the statute, the duty is imposed upon the courts to liberally construe the words employed in the conveyance
as words of transfer, and give them effect and operation according to the intention of the grantor, to be collected from
the entire instrument. There must, however, be some words intended as words of conveyance. They cannot be supplied
by judicial interpolation. When the entire instrument shows the intent to pass the title, it will be so construed, if
practicable, to have that operation. Brewton v. Watson, 67 Ala. 121; Johnson v. Bantock, 38 Ill. 111. [***18] The
instrument to James Bennifield contains no words which can be construed to transfer the legal title, and was properly
excluded. If the defendant is entitled to any relief in respect to this instrument, it must seek it in another forum."
In Long v. Holden, 216 Ala. 81, 83, 112 So. 444, 446, 52 A.L.R. 536, we said:
"Innumerable cases may be cited to the proposition that the cardinal rule for the construction of written instrument
is to ascertain, if possible, from the language employed, the intention of the parties, and then to give effect to such
intention, if it can be done without violation of law. As often stated, the intention must be gathered from a fair
consideration of the whole instrument ( Hammer v. Smith, 22 Ala. 433; McWilliams v. Ramsay, 23 Ala. 813, 817), or
from its 'four corners.' Slaughter v. Hall, 201 Ala. 212, 77 So. 738.
"In most of the cases the qualification is properly stated that the intention, as gathered from the language of the
whole deed, will be effectuated if consistent with law. Hammer v. Smith, 22 Ala. 433, 438; Jenkins v. McConico, 26
Ala. 213, 237; Campbell v. Gilbert, 57 Ala. 569; [***19] Dinkins v. Latham, 154 Ala. 90, 99, 45 So. 60; Alabama Corn
Mills Co. v. Mobile Docks Co., 200 Ala. 126, 128, 75 So. 574; 18 Corpus Juris, 254, 198. This means, of course,
where deeds and devises to real estate are concerned, that even a clearly stated intention will be ineffectual if the
instrument does not, as to the mode of its execution, and the use of language apt for the purpose [*287] stated, meet
the requirements of the law. 8 R.C.L. 1035, 91. In Culver v. Carroll, 175 Ala. 469, 479, 57 So. 767, 771 (Ann.
Cas.1914D, 103), we quoted with approval this statement from Brown v. Brown, 66 Me. [316], 320:
"'The intention of an owner of property in his attempted act of transferring it is not necessarily and always supreme.
The law has prescribed certain plain rules to be observed in the execution of such important instruments as those by
which the title to real property is transferred; and, whatever courts may sometimes have done in their zeal to carry into
effect the intention of parties, the law itself does not permit its salutary rules to be broken or bent to meet the exigencies
of ignorance or negligence; deeming [***20] it better, on the whole, that the intention of a party in disposing of his
property should occasionally fail, than that its important and firmly established rules made and applied for the benefit of
Page 84
256 Ala. 280, *286; 54 So. 2d 562, **566;
1951 Ala. LEXIS 76, ***16
all be overridden.'"
The "agreement," not containing any words of transfer of the mineral interests, cannot operate as color of title to the
minerals. In writing to this question for the court in Matthews v. Tennessee Coal, Iron & R. Co., 157 Ala. 23, 24, 47 So.
78, Mr. Chief Justice Tyson said: "The receipt upon which complainant relies as color of title does not purport to
convey the lands described in it. It possesses no semblance of title, not containing any words of transfer of the lands. As
said by the Supreme Court of the United States in Deffeback v. Hawke, 115 U.S. [392], 407, 6 S. Ct. 95, 29 L. Ed. 423:
'There can be no color of title in an occupant who does not hold under any instrument, proceeding, or law purporting to
transfer to him the title or to give to him the right of possession.' See, also, Webb v. Mullins, 78 Ala. 111; 1 Am. & Eng.
Ency. Law (2d Ed.) pp. 846, 857, and notes. It therefore cannot be looked to for the purpose [***21] of extending
complainant's possession to the boundaries of the lands described in it."
[**568] But even if it could be said that the so-called agreement under date of September 27, 1874, operated as a
conveyance of the mineral interests to J. M. Garner, it could not affect the complainant's status as an innocent
purchaser for value without notice, since that agreement was not recorded until April 5, 1948, several years after the
complainant secured its deed to the minerals involved.
It was agreed upon the trial of this cause that J. M. Garner and his successors in interest had been in possession of
the surface of the land covered by the deed of January 16, 1874, from the date of its execution until the day of trial. But
we cannot agree with the contention of respondent, appellant here, that the open and notorious possession of the
surface was notice to complainant, appellee here, of such interest as the respondent might have, regardless of the record,
and that complainant seeking to acquire an interest in the property, was bound to go further than a mere examination of
the record and to ascertain whether those in possession of the surface also claimed the minerals. Respondent [***22]
cites authorities to sustain the contention that a purchaser is charged with notice of the nature of the title of one in
possession of the premises. Those authorities need not be cited here, for that general rule has been often stated by this
court and is well known. However, that rule has no application here, for the only instrument on record tending to show
any interest in J. M. Garner or his successors in interest was the deed of January 16, 1874, wherein Garner only secured
title to the surface and the possession of the surface by Garner's successors in interest was consistent with the record
title. While possession by a person having a record title is notice, the purchaser may ascribe the possession to the
recorded deed and is not affected with notice of any other undisclosed title or interest which the occupant may have.
Otherwise expressed, where the record shows a conveyance under which a person is entitled to possession, his
possession will be referred to the record title, and a subsequent purchaser will not be charged by it with notice of any
other undisclosed title or equity which the occupant may have. The possession is a matter tending to excite inquiry, but
the fact that [***23] the occupant has placed upon the public records written evidence of his right, with the terms of
which [*288] his possession is consistent, arrests inquiry at that point, and reasonably informs the purchaser that he
may rest upon the knowledge thus obtained. 66 Corpus Juris, Vendor and Purchaser, 1018, p. 1172; 55 American
Jurisprudence, Vendor and Purchaser, 731, p. 1099; Adkins v. Arsht, D. C., 50 F. Supp. 761; Rose v. Roberts, 195
Okla. 687, 161 P.2d 851; Schlegel v. Kinzie, 158 Okla. 93, 12 P.2d 223.
The case of Sloss-Sheffield Steel & Iron Co. v. Taff, 178 Ala. 382, 59 So. 658, does not hold to the contrary. In that
case there was no deed on record showing the conveyance of any interest in the land to the person in possession at the
time the Sloss-Sheffield Steel & Iron Company secured its deed purporting to convey the mineral interests. Under such
circumstances, the majority of the court were of the opinion that the duty of inquiry was upon that company at the time
it made its purchase; that proper inquiry would have discovered the existence of an unrecorded deed to the deceased
husband of the woman in possession, [***24] which deed covered the entire interest in the land, although the wife also
had an unrecorded deed purporting to convey the surface interest only; that the widow's, or her agent's, possession, even
under the deed conveying only the surface interest, was not inconsistent with a possession under the deed to the husband
covering the entire interest. That is not this case. As before shown, the deed conveying surface interest only was on
record at the time the complainant secured its deed to the mineral interests in the land.
In so far as the evidence discloses, mining operations have never been conducted on the eighty acres of land to
Page 85
256 Ala. 280, *287; 54 So. 2d 562, **567;
1951 Ala. LEXIS 76, ***20
which title was quieted by the decree appealed from. It does appear from the evidence that sometime between 1902 and
1907 respondent's father permitted mining operations to be conducted on a part of the land which was covered in the
deed of January 16, 1874, wherein Key was the grantor and Garner was the grantee. Respondent's father had purchased
a part of the land from Garner. [**569] That is the extent of the evidence as it relates to acts tending to show
possession by any one of the minerals as distinct from possession of the surface prior to the time [***25] complainant
secured its deed. Such acts committed more than thirty-four years prior to the time complainant secured its deed could
not operate to put complainant upon inquiry as to whether those in possession of the surface claimed any interest in the
minerals. To put a purchaser upon inquiry and operate as constructive notice, possession must exist at the time of the
transaction by which his rights and interests are created. A possession that has ended before, or commenced after, the
sale does not affect the purchaser with notice. Holly v. Dinkins, 202 Ala. 477, 80 So. 861; Wood v. Bowden, 182 Ga.
329, 185 S.E. 516; Webster v. Black, 142 Ga. 806, 83 S.E. 941; 66 Corpus Juris, Vendor and Purchaser, 1017, p. 1171;
55 American Jurisprudence, 714, p. 1089.
There was no evidence to support respondent's claim of title to the minerals by adverse possession. After severance
of the minerals, in situ, from the surface the possession of the latter is not possession of the former. The effect of the
severance is to create two closes, adjoining but separate. The mineral, after severance, is a corporeal hereditament, and
mere nonuser will not affect [***26] the owner's title; and to lose his right by adverse possession, the owner must be
disseised. Hooper et al. v. Bankhead & Bankhead, 171 Ala. 626, 54 So. 549, and cases cited. To acquire by adverse
possession the title to the mineral interests so severed, there must be an actual taking or use under claim of right of the
minerals from the land for the period necessary to affect the bar. Under the authorities, it is essential, to effect adverse
possession of the minerals, after severance in title from the surface, that the adverse claimant do some act or acts
evincing a permanency of occupation and use, as distinguished from acts merely occasional, desultory or temporary acts
suitable to the enjoyment and appropriation of the minerals so claimed, and hostile to the rights of the owner.
Birmingham Fuel Co. v. Boshell, 190 Ala. 597, 67 So. 403, and cases cited; Hooper v. Bankhead & Bankhead, supra.
We are of the opinion that the evidence fully warrants a finding that the legal title to the minerals is in complainant.
[*289] We come now to consider the contention of respondent below, appellant here, that the trial court erred in
rendering the [***27] decree appealed from for the reason the evidence showed that complainant was not in the
peaceable possession of the minerals, inasmuch as respondent was conducting mining operations in, under and upon a
part of the land.
As before shown, the original complaint sought to quiet title to the minerals in, under and upon 120 acres of land,
including the NW 1/4 of the NE 1/4 of said Section 34. The evidence for the respondent tended to show that for a period
of two years prior to the time the bill was filed and up until the date of trial, he was conducting mining operations in the
northeast corner of the NW 1/4 of the NE 1/4 of said Section 34.
It was this tendency of the evidence which caused the complainant to amend its bill so as to delete that quarter
section.
Under Equity Rule 28, Code 1940, Tit. 7 Appendix, generally speaking, a complainant is entitled to amend this
complaint any time prior to final decree to meet any state of evidence which will authorize relief.
Although it is conceded that there was no proof of any actual possession by the respondent, or anyone else, of the
minerals in, under or upon the land included in the complaint after amendment, the respondent contends [***28] that
the mining operations conducted in the quarter section deleted by amendment gave the respondent possession of the
minerals in, under or upon the entire tract of land and that, therefore, the complainant did not have peaceable
constructive possession of any of the minerals and, hence, regardless of the amendment the decree quieting title to the
minerals in, under or upon the land included in the complaint after amendment is erroneous.
Some of the deeds from the heirs of J. M. Garner to the respondent purport to convey the grantor's undivided
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256 Ala. 280, *288; 54 So. 2d 562, **568;
1951 Ala. LEXIS 76, ***24
interest [**570] to the minerals in, under or upon the land described in the original bill of complaint, including that to
which title was quieted in complainant by the decree from which this appeal is taken. Irrespective of the fact that the
grantors in such deeds had no title to the minerals, the deeds would give color of title. Ryan v. Kilpatrick, 66 Ala. 332;
Hoyle v. Mann, 144 Ala. 516, 41 So. 835. A deed may be color of title, though the purported grantor was not in
possession. McBride v. Lowe, 175 Ala. 408, 57 So. 832.
On the theory that he has color of title to the minerals, respondent invokes [***29] the principle often declared in
cases where surface rights were involved, to the effect that actual possession of part of the tract of land, with claim of
title to the whole, under a written instrument, is sufficient to constitute possession of the whole tract defined in the
conveyance, to the extent that the same is not in the actual possession of another. Black v. Tennessee Coal, Iron & R.
Co., 93 Ala. 109, 9 So. 537; Buck v. Louisville & N. R. Co., 159 Ala. 305, 48 So. 699; Alabama State Land Co. v.
Matthews, 168 Ala. 200, 53 So. 174; Marsh v. Gragg, 228 Ala. 269, 153 So. 219.
Our research discloses no case where this court has been called upon to pass on the question as to whether the
principle above stated has application to mining operations. However, that question has arisen in other jurisdictions,
where it was held that the principle does not apply to mining operations. French v. Lansing, 73 Misc. 80, 132 N.Y.S.
523; Piney Oil & Gas Co. v. Scott, 258 Ky. 51, 79 S.W.2d 394; Davis v. Federal Land Bank of Columbia, 219 N.C. 248,
13 S.E.2d 417.
We quote from the case of French v. Lansing, supra, 132 N.Y.S. 526, [***30] as follows:
"These rules apply to adverse possession of the surface, and form no guide, even by analogy, to such a case as the
present. They all contemplate some sort of notice to the true owner and possession and dominion of one kind or another
over the whole of the premises claimed adversely. Where there is such known farm or lot with defined boundaries, the
partial improvement may fairly be said to give warning of a claim to the whole, and to constitute possession of the
whole.
"The same thing cannot be said to result from the opening of a quarry for gypsum or limestone or the driving of a
gallery into a vein of coal. In either case, what claim is made or what possession is there [*290] of the minerals beyond
the face of the quarry or the end of the vein? If a coal mine, is there possession and claim of the entire vein no matter
how far the same may extend? In the case at bar, if there is adverse possession, it covers at least the 200 acres deeded to
Otis; for it is to be observed that the act of Otis and his grantees in subsequently dividing the surface is not notice of any
kind to Wickham and his heirs. One of the tests of adverse possession under a claim of title is whether [***31] or not it
is such as enables the possessor to maintain trespass against a stranger. If A. opened a quarry on the south end of these
200 acres, could he maintain an action in trespass against B. who, subsequently, opened a quarry at the north end
thereof? Or, suppose B. opened a coal mine. Without, however, deciding definitely just how, if at all, adverse
possession of minerals separated from the surface can be obtained, it is probably enough to hold here that the mere
opening of a quarry, with or without a written claim of title, did not constitute adverse possession as against Wickham
and his heirs of the gypsum situated beyond the quarry." (Emphasis supplied).
In Piney Oil & Gas Co. v. Scott, supra, 79 S.W.2d 400-401, it was said:
"A would-be disseisor who enters under a bare color of title is no better off than one who enters without color and
marks off a distinct line around what he intends to occupy. Each, if he acquires any rights, must do so because of his
occupation, claim, and use of the premises for the statutory period.
"A disseisor upon the surface may actually build upon, occupy, and use but a portion of the territory embraced
within his marked [***32] line or color, but he has an immediately potential use and occupancy of the remainder of his
claim, and the law by construction extends his actual occupation over it, but, [**571] when he gets below the surface
and attempts to take possession of minerals, he can have no immediately potential use or occupation of the whole of the
minerals over which the law can by construction extend his actual possession; therefore he can have no possession of
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256 Ala. 280, *289; 54 So. 2d 562, **569;
1951 Ala. LEXIS 76, ***28
the unmined portion. Their possession was never in advance of their operations, unless they surrounded a block; then
they had possession of that block, but no more. They got no more than they loosened or around which they had
established a confine. By their operations they may have pushed the mineral owner back, but they have never pushed
him off. To disseise the title holder, they must push him off and keep him off. See Flinn v. Blakeman, 254 Ky. 416, 71
S.W.2d 961. They could have no actual possession until they had a potential possession, and they have never had any
potential possession of the coal that has not been disturbed. The same is true of all of the defendants."
We recognize the fact that we are not here dealing with [***33] a question of adverse possession and that we have
said that, touching a possession which will defeat a bill filed under the statute to quiet title, it is not necessary to show
such character of adverse possession as would ripen into title, but such possession as would amount to a disputed title.
Crabtree v. Alabama State Land Co., 155 Ala. 513, 46 So. 450; Holland v. Coleman, 162 Ala. 462, 50 So. 128. But we
are not concerned here with this character of possession, that is, the nature of the possessory acts, but with the territorial
limit to which isolated mining operations should be extended.
We are of the opinion that the reasoning underlying the holdings in the cases from other jurisdictions, from which
we have quoted above, impels us to the conclusion that the mining operations conducted by the respondent in the NW
1/4 of the NE 1/4 of Section 34 cannot be said to have put him in possession of the minerals in, under or upon the lands
included in the bill of complaint as amended.
We hold that the evidence shows the complainant has the legal title to the minerals and it was in the peaceable
constructive possession thereof. It follows that the decree of [***34] the trial court should be affirmed. It is so ordered.
Affirmed.
LIVINGSTON, C. J., and BROWN and STAKELY, JJ., concur.
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1951 Ala. LEXIS 76, ***32
35 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
LIGHTSEY v. STONE et ux.
1 Div. 384.
255 Ala. 541; 52 So. 2d 376; 1951 Ala. LEXIS 367
May 10, 1951, Decided
DISPOSITION: [***1] Reversed and remanded.
CORE TERMS: notice, strip of land, feet, street, deed, driveway, fence, undivided, daughter, shrubbery, equitable,
decree, convey, strip, bona fide purchaser, conveyance, disputed, visible, boundary line, cross-fence, statute of frauds,
constructive, admissible, grantor, parked, actual knowledge, seal, fig, east side, died intestate
COUNSEL: Outlaw, Seale & Kilborn, Mobile, for appellant.
Contract for sale of lands or any interest therein is void unless purchase money or portion thereof be paid and purchaser
put in possession by seller. Purchaser is not put in possession as required by statute when vendor owns merely
undivided interest. Smith v. Thomas, 224 Ala. 41, 138 So. 542; Trammell v. Craddock, 93 Ala. 450, 9 So. 587; Flinn v.
Barber, 64 Ala. 193; Barclift v. Peinhardt, 18 Ala. App. 340, 92 So. 208; Code 1940, Tit. 20, 3(5). Possession taken
after alleged oral purchase is not effectual to charge a subsequent purchaser with notice of rights of the possessor. 55
Am.Jur. 1089, 714. Where possession is permissive it cannot ripen into notice of an adverse claim. Louisville & N. R.
Co. v. Higginbotham, 153 Ala. 334, 44 So. 872; Kidd v. Browne, 200 Ala. 299, 76 So. 65. Possession taken by purchaser
from one holding a mere equitable right in land will not put subsequent purchaser of legal title on notice of alleged
rights of purchaser of equitable interest. Flinn v. Barber, supra. In equity [***2] proceeding testimony of a witness
may not be impeached by introduction of a mere slip of paper purportedly signed by a witness whose deposition has not
been taken and who is not present in court to be confronted with cross-examination, the contents of which slip of paper
purportedly contradict statements by a witness whose testimony is sought to be impeached. Nelson v. Iverson, 17 Ala.
216; Pieme v. Arata, 202 Ala. 427, 80 So. 811; David v. David, 66 Ala. 139; Equity Rule 50, Code 1940, Tit. 7, p. 1090.
Johnston, McCall & Johnston, Mobile, for appellees.
Page 89
Actual possession of land operates as notice of title, whether title be legal or equitable, of party in possession, and is
notice of everything to which inquiry would lead. Enslen v. Thornton, 182 Ala. 314, 62 So. 525; Alexander v.
Fountain, 195 Ala. 3, 70 So. 669; Sulzbacher v. Campbell, 219 Ala. 191, 121 So. 706; Wiggins v. Stewart Bros., 215
Ala. 9, 109 So. 101; Beason v. Duke, 246 Ala. 387, 20 So.2d 717; Fowler v. Morrow, 245 Ala. 2, 15 So. 2d 629. The
surviving husband took a life estate in his deceased [***3] wife's real property, which he had a right under the law to
convey. Code 1940, Tit. 16, 12; Tit. 20, 3(5); Thompson v. Thompson, 107 Ala. 163, 18 So. 247; Murphy v. May,
243 Ala. 94, 8 So. 2d 442; Stafford v. State, 33 Ala. App. 163, 31 So. 2d 146; Lynch v. Partin, 250 Ala. 241, 34 So. 2d 2;
Mitchell v. White, 244 Ala. 603, 14 So. 2d 687; Owens & Co. v. Blanks, 225 Ala. 566, 144 So. 35; Cotton v. Cotton, 75
Ala. 345; McLure v. Tennille, 89 Ala. 572, 8 So. 60; Adams v. Adams, 235 Ala. 27, 176 So. 825; Penney v. Norton, 202
Ala. 690, 81 So. 666; Burt v. Moses, 211 Ala. 47, 99 So. 106; 26 C.J.S., Deeds, 17, 20, pp. 191, 194. A stranger to a
contract cannot collaterally attack it on ground that it was in violation of the statute of frauds and invalid. Bradley v.
Hall, 239 Ala. 544, 195 So. 883; Lavender v. Hall, 60 Ala. 214, 215; Hooper v. Reed, 211 Ala. 451, 100 So. 875; Ex
parte Banks, 185 Ala. 275, 64 So. 74. Evidence, though irrelevant, incompetent and illegal to issue in the case, is [***4]
permissible in the way of rebuttal to contradict the force and effect of evidence improperly adduced by adverse party.
Hart v. Clark, 54 Ala. 490; Code 1940, Tit. 7, 420; 70 C.J. 1062; 64 C.J. 135; 22 C.J. 195; Dickson v. Dinsmore, 219
Ala. 353, 122 So. 437; Mobile Light & R. Co. v. Ellis, 209 Ala. 580, 96 So. 773; Houston v. State, 208 Ala. 660, 95 So.
145; Bank of Phoenix City v. Taylor, 196 Ala. 665, 72 So. 264; Woodrow v. Hawving, 105 Ala. 240, 16 So. 720; Evans
Bros. Const. Co. v. Steiner Bros., 208 Ala. 306, 94 So. 361; First Nat. Bank v. Chaffin, 118 Ala. 246, 24 So. 80.
JUDGES: LAWSON, Justice. LIVINGSTON, C. J., and FOSTER and STAKELY, JJ., concur.
OPINION BY: LAWSON
OPINION
[**378] [*544] LAWSON, Justice.
This proceeding was instituted in the circuit court of Mobile County, in equity, by Edward S. Stone and wife, Laura
M. Stone, against Leon E. Lightsey to establish and define a disputed boundary line between adjoining city property.
Incidental to this relief, the bill prayed for an injunction restraining Lightsey from trespassing and for damages resulting
from the removal of shrubbery [***5] and for general relief.
The appeal is by the respondent, Lightsey, from a decree fixing the boundary line as claimed by the Stones,
ordering Lightsey to remove the fence he had constructed, and enjoining him from trespassing. The trial court did not
award damages for the removal of the shrubbery, finding that any damages suffered were negligible.
The real question in the case is whether the complainants or the respondent is entitled to the possession of a strip of
land off the east side of Lot 20 of Alexander [**379] Heights addition to the City of Mobile, which strip is
approximately thirteen feet wide and 150 feet long.
Lot 20 fronts on the north side of Woodruff Street, formerly called A Street, which street runs east and west. Lot 20
was owned by Lewis Cole and his wife, Etta Cole, each of whom owned an undivided one-half interest. Etta Cole died
intestate in 1947 and was survived by her husband and two daughters, Mrs. Lanelle Hathorn and Mrs. Lavern Ford.
On May 1, 1948, Lewis Cole, his two daughters and their husbands, executed a deed conveying Lot 20 to Leon E.
Lightsey, the respondent below. This deed purports to convey the fee simple title to all of Lot 20 and contains the
following [***6] statement: "The grantors herein being the surviving husband and only children of Etta Cole, who died
intestate in February, 1947." At the time this deed was executed, there was nothing on record to indicate that the
grantors therein could not convey a fee simple title to all of Lot 20. As before indicated, Lewis Cole owned an
undivided one-half interest. Upon the death of his wife Lewis Cole, by virtue of the provisions of 12, Title 16, Code
1940, became vested with a life estate in the other undivided one-half interest, with the remainder or reversion in fee in
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255 Ala. 541, *; 52 So. 2d 376, **;
1951 Ala. LEXIS 367, ***2
his daughters.
Thus, it would appear that the respondent, Lightsey, would be entitled to the possession of all of Lot 20 which, as
before shown, includes the strip off the east side thereof which is the subject of this controversy.
But the complainants claim that Lightsey was not a bona fide purchaser and that by virtue of events hereafter
related, complainants and not Lightsey were entitled to possession of the said strip of land.
[*545] Lot 19 of Alexander Heights addition to the City of Mobile is situate immediately east of Lot 20 and is
located at the northwest corner of the intersection of Woodruff Street and Florida [***7] Street. It has a frontage of
fifty-two feet on Woodruff Street. Lot 19 was owned by Mrs. Lanell Hathorn and her husband. As before shown, Mrs.
Lanell Hathorn is the daughter of Lewis Cole. On March 6, 1948, Mrs. Lanell Hathorn and husband executed a deed
wherein they conveyed Lot 19 to Wiley D. Humphrey. A few days thereafter, on March 9, 1948, Lewis Cole and Wiley
D. Humphrey entered into the following written contract:
"State of Alabama County of Mobile
"This Agreement between Louis Cole, a widower, and Wiley D. Humphrey, Witnesseth:--
"That in consideration of the payment by the said Wiley D. Humphrey to the said Louis Cole of One and no/100 ($
1.00) Dollar and for the purpose hereinafter set out, the said Louis Cole agrees as follows:--
"That he will convey to the said Wiley D. Humphrey without any other consideration, a strip of land off the East
edge of Lot Twenty (20) of Alexander Heights, which the said Louis Cole owns, wide enough to make when added to
Lot Nineteen (19) of said Alexander Heights, a frontage on A Street of sixty-five (65) feet with equal width throughout
the depth of said lot.
"This agreement will be carried out as soon as the said Wiley D. Humphrey can [***8] have Lot Nineteen (19)
surveyed and determine the width of said strip to be conveyed by the said Louis Cole.
"This agreement is made to consummate the purchase by the said Wiley D. Humphrey, from the daughter of the
said Louis Cole, namely, Mrs. Lanell Hathorn, who has agreed and contracted to convey to the said Wiley D. Humphrey
said Lot Nineteen (19) of Alexander Heights, the same to have a width of sixty-five (65) feet.
"In Witness Whereof, we have hereto set out hands in duplicate this 9 day of March, 1948.
"Lewis Cole (Seal)
Louis Cole
Wiley D. Humphrey (Seal)
Wiley D. Humphrey
"Witness as to Signature of Wiley D. Humphrey
Jere Austill
"State of Alabama County of Mobile
[**380] "I, Laura Stone, a Notary Public in and for said State and County, do hereby certify that Louis Cole, a
widower, whose name is signed to the foregoing agreement, and who is known to me, acknowledged before me on this
day, that, being informed of the contents of said agreement, he executed the same voluntarily on the day the same bears
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255 Ala. 541, *544; 52 So. 2d 376, **379;
1951 Ala. LEXIS 367, ***6
date.
"Given under my hand and official seal this 9th day of March, 1948.
"Laura Stone (Seal)
Notary Public, Mobile County, Alabama."
This contract was not placed [***9] on record until July 15, 1948, after Lightsey had secured his deed to Lot 20
and after he and his family began occupancy of the dwelling located on said lot.
On March 19, 1948, Edward S. Stone and wife, Laura M. Stone, complainants below, purchased Lot 19 from Wiley
D. Humphrey. This purchase was under a written contract of sale, which made no mention of the contract between
Humphrey and Cole as to Lot 20. It is contended by the Stones, and the evidence supports their contention, that at the
time Humphrey conveyed Lot 19 to the Stones, and as a part of that transaction, he orally transferred to the Stones his
interest in Lot 20 under his contract with Cole. The evidence was sufficient to support a finding that Cole knew of this
transfer.
It is undisputed that on the day of the execution of the conveyance of Lot 19 by Humphrey to the Stones, they went
into possession of that lot. The Stones also contended that on the same day, under their oral contract with Humphrey,
they [*546] went into possession of the east thirteen feet of Lot 20, the strip of land here involved, although no survey
had been made as provided by the written contract between Humphrey and Cole and no conveyance executed [***10]
by Cole.
As before shown, the contract between Cole and Humphrey was in writing. This contract was sufficient under the
statute of frauds. Dobson v. Deason, 248 Ala. 496, 28 So. 2d 418; Cotton v. Cotton, 75 Ala. 345; Wilkins v. Hardaway,
173 Ala. 57, 55 So. 817; Alabama Central R. Co. v. Long, 158 Ala. 301, 48 So. 363.
By virtue of this contract with Cole, Humphrey acquired an equitable interest in the land. Bay Minette Land Co. v.
Stapleton, 224 Ala. 175, 139 So. 342; J. A. Owens & Co. v. Blanks, 225 Ala. 566, 144 So. 35; Boozer v. Blake, 245 Ala.
389, 17 So. 2d 152; Lynch v. Partin, 250 Ala. 241, 34 So. 2d 2.
At the time Cole entered into the contract with Humphrey, he owned an undivided one-half interest in Lot 20 and
had the use of the entire lot during his life, as the surviving husband of Etta Cole, who owned the other undivided
one-half interest and who, as before shown, died intestate. 12, Title 16, Code 1940. Hence Cole could convey the fee
simple title to his one-half undivided interest and a life estate in the other undivided one-half interest, thus giving to his
[***11] grantee the right of possession during the life of Lewis Cole. Murphy v. Leatherwood, 221 Ala. 61, 127 So.
843. Though the contract between Cole and Humphrey purported to relate to the entire fee, it could only convey Cole's
life estate as to the one-half undivided interest formerly owned by his wife, Etta Cole. Murphy v. Leatherwood, supra.
Since the statute of frauds has no application to the written contract of sale between Cole and Humphrey, the cases
of Smith v. Thomas, 224 Ala. 41, 138 So. 542, and Barclift v. Peinhardt, 18 Ala. App. 340, 92 So. 208, have no bearing
on the question here considered. Those cases are also distinguishable in that the grantors had only an undivided interest
in the property, without any right of possession of the entire premises during the life of the grantor, as is the situation
in the instant case.
As before indicated, the transfer by Humphrey to the Stones of his rights under the contract with Cole was by parol.
Appellant, Lightsey, seeks to invoke the statute of frauds, Code 1940, Tit. 20, 3, as to this transaction. But he cannot
invoke the statute of frauds, for it applies only to persons [***12] who are parties to the parol [**381] contract and
their privies and those whose rights are directly controlled by it. Bradley v. Hall, 239 Ala. 544, 195 So. 883; Hooper v.
Reed, 211 Ala. 451, 100 So. 875; Ex parte Banks, 185 Ala. 275, 64 So. 74. Neither Lightsey nor those under whom he
claims, Cole and his daughters, are privies to the contract between Humphrey and the Stones.
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255 Ala. 541, *545; 52 So. 2d 376, **380;
1951 Ala. LEXIS 367, ***8
We think the evidence warrants a finding that complainants had an equitable interest in the strip of land here
involved.
But the mere establishment of an equity in the complainants in the strip of land here involved is not sufficient to
entitle them to possession. They are not entitled to possession if Lightsey was a bona fide purchaser.
In order to constitute one a bona fide purchaser and entitle him to the protection of the rule, as against a prior
equity or conveyance, it is essential: "* * * (1) that he is the purchaser of the legal as distinguished from an equitable
title; (2) that he purchased the same in good faith; (3) that he parted with value as a consideration therefor by paying
money or other thing of value, assuming a liability or incurring an injury; (4) that he [***13] had no notice, and knew
no fact sufficient to put him on inquiry as to complainant's equity, either at the time of his purchase, or at, or before the
time he paid the purchase-money, or otherwise parted with value * * *." Craft v. Russell, 67 Ala. 9, 12, and cases cited.
Webb v. Elyton Land Co., 105 Ala. 471, 18 So. 178; Sherrod v. Hollywood Holding Corp., 233 Ala. 557, 173 So. 33;
Gibson v. Gibson, 200 Ala. 591, 76 So. 949; Holly v. Dinkins, 202 Ala. 477, [*547] 80 So. 861; Larkins v. Howard,
252 Ala. 9, 39 So. 2d 224, 7 A.L.R.2d 541.
Since the respondent, Lightsey, proved the execution of a deed to him purporting to convey legal title to all of Lot
20 and further showed payment of a valuable consideration, there was a presumption that the purchase was in good
faith and the burden was upon complainants of proceeding by evidence to show that respondent, Lightsey, took with
notice of their equity. Stone v. Lacy, 245 Ala. 521, 17 So. 2d 865; Lamar v. Lincoln Reserve Life Ins. Co., 222 Ala. 60,
131 So. 223.
Such notice, according to our cases, could be "actual or constructive, or [***14] knowledge of facts sufficient to
put a reasonable person on inquiry, which, if followed up, would have discovered the title" asserted by complainants.
Reeder v. Cox, 218 Ala. 182, 118 So. 338, 341; Stone v. Lacy, supra. See also Hatter v. Quina, 216 Ala. 225, 113 So. 47;
Ely v. Pace, 139 Ala. 293, 35 So. 877.
Complainants asserted and sought to show that Lightsey was not a bona fide purchaser in that their possession of
the strip of land was sufficient notice of their equity.
It is a familiar principle that a possession which contains all the required elements will operate as notice of the
occupant's equitable rights. Munn v. Achey, 110 Ala. 628, 18 So. 299, and cases cited; King v. Paulk, 85 Ala. 186, 4 So.
825; Fowler v. Morrow, 245 Ala. 2, 15 So. 2d 629; Alexander v. Fountain, 195 Ala. 3, 70 So. 669; Rankin Mfg. Co. v.
Bishop, 137 Ala. 271, 34 So. 991.
But for possession to operate as notice, it must be open, visible, exclusive and unambiguous, not liable to be
misconstrued or misunderstood. Wells v. American Mortgage Co., 109 Ala. 430, 20 So. 136; [***15] Brunson v.
Brooks, 68 Ala. 248; Rankin Mfg. Co. v. Bishop, supra. Consequently, it is uniformly held that where there is no open
and visible change of possession, it does not operate as notice. Troy v. Walter Bros., 87 Ala. 233, 6 So. 54; Motley v.
Jones, 98 Ala. 443, 13 So. 782; Scotch Lumber Co. v. Sage, 132 Ala. 598, 32 So. 607; McCullars v. Reaves, 162 Ala.
158, 50 So. 313.
Hence, we have held that where the possession of the vendor and vendee is joint at the time of the sale and
conveyance, the rule does not apply. The joint possession does not operate as constructive notice, because there would
be no visible act which is calculated to put a stranger on inquiry as to the changed attitude or status of the title, created
by the secret conveyance by the vendor to the [**382] vendee. McCarthy v. Nicrosi, 72 Ala. 332; Motley v. Jones,
supra; Munn v. Achey, supra; Kindred v. New England Mortgage Security Co., 116 Ala. 192, 23 So. 56; O'Neal v.
Prestwood, 153 Ala. 443, 45 So. 251; Langley v. Pulliam, 162 Ala. 142, 50 So. 365; Christopher v. Curtis-Attalla
Lumber Co., 175 Ala. 484, 57 So. 837; [***16] Sloss-Sheffield Steel & Iron Co. v. Taff, 178 Ala. 382, 59 So. 658;
Autauga Banking & Trust Co. v. Chambliss, 200 Ala. 87, 75 So. 463; Holly v. Dinkins, supra; Pake v. Lindsey Mill Co.,
208 Ala. 569, 94 So. 573. Relevant in this connection is the observation of this court in Munn v. Achey, supra, where it
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255 Ala. 541, *546; 52 So. 2d 376, **381;
1951 Ala. LEXIS 367, ***12
is said that the court, in discussing possession or constructive notice, lays quite as much stress upon the fact that the
vendor is out as that the claimants of the equity or unrecorded legal title are in possession.
Much evidence was adduced in the trial court as to the possession of the land both before and after the respondent,
Lightsey, secured his deed to Lot 20. But in considering the question as to whether complainants' possession was such
as to charge Lightsey with notice of their equity, we are limited to the evidence which relates to the nature of their
possession at the time Lightsey secured his deed to Lot 20. Possession, to put a purchaser upon inquiry and operate as
constructive notice, must exist at the time of the transaction by which his rights and interests are created. A possession
that has ended [***17] before, or commenced after, the sale does not charge the purchaser with notice. Holly [*548] v.
Dinkins, supra; O'Neal v. Prestwood, supra; Scotch Lumber Co. v. Sage, supra.
However, the evidence as it relates to the manner in which Lots 19 and 20 were occupied prior to the time the
complainants secured their conveyance and went into possession of Lot 19 does have some bearing on complainants'
contention that they were in such possession of the strip of land here involved as to charge Lightsey with notice of their
equity.
In this connection the evidence may be summarized as follows: Mr. and Mrs. Hathorn occupied the dwelling on Lot
19. Mrs. Hathorn's father, Lewis Cole, her brother-in-law and sister lived in the house on Lot 20. There was no fence,
hedgerow or monument of any kind marking the western boundary of Lot 19 and the eastern boundary of Lot 20. There
was a fence running east and west between the two houses, which is called the "cross-fence." This fence is from thirty to
thirty-five feet north of Woodruff Street. Shrubbery was planted along this fence. A few feet west of the boundary line
between Lots 19 and 20, and hence on the disputed [***18] strip, was a row of shrubbery which extended from
Woodruff Street to a point approximately five feet north of the "cross-fence." The back yards of the two lots were not
separated in any way. Some fig trees were growing on that portion of the disputed strip north of the cross-fence; in other
words, in the back yard of Lot 20. Mr. Hathorn, the occupant of the house on Lot 19 and the son-in-law of Lewis Cole,
always parked his car in what is termed the driveway on Lot 20, west of the row of shrubbery referred to above. This
so-called driveway is on the disputed strip. The car could not be driven into Lot 20 for more than a distance of twenty or
twenty-five feet, for there was an azalea bush located approximately ten feet south of the "cross-fence." It appears that
Hathorn parked his car in the "driveway" with consent of the occupants of Lot 20 and without any claim of right.
Such was the condition of the premises and the use to which they were put at the time complainants moved into the
house on Lot 19 on March 19, 1948. They moved in on the same day the Hathorns moved out. Lewis Cole, his daughter
and son-in-law, Mr. and Mrs. Ford, continued to reside in the house on Lot 20 and were [***19] residing therein on
May 1, 1948, when the respondent, Lightsey, secured his deed to Lot. 20.
Between March 19, 1948, the day on which complainants moved into the house on Lot 19, and May 1, 1948, the
day on which the deed to Lot 20 was executed to Lightsey, no visible change was made as to the boundaries of the
property claimed by complainants and that of Cole and his [**383] daughters. No boundary fence was erected; the
shrubbery was not moved; the cross-fence was not changed.
Mr. Stone did park his car in the so-called driveway on the eastern side of Lot 20 and the trial court could have
found from the evidence that the Stones attended to the shrubbery on the strip of land here involved and cut the grass
thereon. It also appears that they picked some figs from the trees in the back yard. Yet on the other hand, it appears from
one of complainants' own witnesses that after the Stones moved in, Cole cut down the largest of the fig trees. This is the
extent to which the evidence bears on the complainants' claim that they were in such possession of the strip of land as to
deprive Lightsey of the status of a bona fide purchaser for value without notice of their equitable claim.
We do not think [***20] this evidence is sufficient to deprive Lightsey of being a bona fide purchaser. It falls far
short of showing that complainants had the exclusive possession of the strip of land. Cole, who had the right to the use
of all of Lot 20 during his life, was still living in the house on that lot. The most that can be said of the evidence is that it
shows a joint possession between complainants and Cole which, as before shown, is insufficient because there is no
Page 94
255 Ala. 541, *547; 52 So. 2d 376, **382;
1951 Ala. LEXIS 367, ***16
visible act which is calculated to put a stranger on inquiry as to the changed attitude or status of the title. McCarthy v.
Nicrosi, supra, and other cases cited above.
[*549] We hold, therefore, that the decree of the trial court cannot be sustained on the theory that the possession
of the strip of land by complainants was sufficient to operate as notice of their equitable rights.
But complainants also contended and brought forth evidence tending to show that Lightsey had actual knowledge
of the contract between Cole and Humphrey and of complainants' rights thereunder.
Stone testified that Lightsey had admitted to him that Cole had so advised him at the time he purchased the lot and
that Lightsey said to Stone that [***21] "he would have bought Lot Twenty if the remainder of it wasn't but forty feet."
Lightsey emphatically denied making any such statement.
On this issue of actual knowledge, we think the evidence as it relates to the conduct of the Stones and of Lightsey,
after he moved into the house on Lot 20, is important.
The evidence is in sharp conflict as to who attended to the grass and shrubbery on the disputed strip and as to
whether or not the complainants gathered the figs from the trees growing thereon.
But it is undisputed that after Lightsey moved in, Stone continued to park his automobile in the so-called driveway
which is on Lot 20 until about Thanksgiving Day, 1948, when, in the absence of complainants, Lightsey built a fence
approximately on the boundary line between the lots as platted.
Lightsey never made any inquiry of Stone as to why he was parking his car in the driveway or discussed their
boundary line until the first part of August, 1948, when a survey was made. During all this time and until the time
Lightsey built the fence, he had parked his automobile on the west side of his house on an adjoining lot owned by one
Sheffield. When Sheffield in effect forbade such use of [***22] his lot and constructed a fence between his lot and that
of Lightsey, he aided Lightsey in constructing the fence between Lot 20 on the west and Lot 19 on the east.
The fact that Lightsey permitted Stone to park his car on Lot 20 without even so much as mentioning the matter to
Stone tends to support Stone's testimony to the effect that Lightsey had actual knowledge of Stone's right of possession.
Lightsey sought to explain his conduct in this respect and the trial court permitted Lightsey and his wife to testify
that Cole, at the time they secured their deed to Lot 20, asked them to permit Stone to continue to park his car in the
driveway until Stone could build a gate into the rear of Lot 19 from Florida Street.
Cole did not testify in the case. It appears that he was out of the state. After Lightsey and his wife had testified that
Cole had asked them to permit Stone to use [**384] the driveway for a while, the trial court, over the strenuous
objection of counsel for Lightsey, permitted complainants to introduce in evidence an undated written instrument,
which reads:
"This is to certify that I, Louis Cole, sold Wiley Humphrey a piece of land of lot 20 in Alexander Heights, when
added [***23] to lot 19 made 65 ft frontage on Woodruff St. and that I informed Mr. Lightsey of my agreement with
Mr. Humphrey.
"/S/ Lewis Cole
"Witnesses:
E. S. Stone
Laura M. Stone"
Page 95
255 Ala. 541, *548; 52 So. 2d 376, **383;
1951 Ala. LEXIS 367, ***20
It appears from statements made by the trial court at the time the writing was admitted in evidence, and from the
decree, that the court's ruling was on the theory that the writing was admissible for the purpose of rebutting the
testimony of Mr. and Mrs. Lightsey to the effect that Cole had asked them to permit Stone to park his car in the
driveway.
Complainants below, appellees here, seek to sustain the action of the trial court in admitting this writing in evidence
by the invocation of the principle that incompetent or illegal evidence may be admitted without error to rebut evidence
of like character and by the assertion that the evidence given by Lightsey and his wife to the effect that they were asked
by Cole to permit Stone to use the driveway until he could gain entrance to Lot 19 from Florida Street was incompetent
and illegal. The principle which complainants [*550] seek to invoke is, of course, well established. Bank of Phoenix
City v. Taylor, 196 Ala. 665, 72 So. 264, and cases cited.
[***24] But we do not think that principle has application, for we cannot agree that the evidence of Lightsey and
wife as to the statement made to them by Cole was incompetent or illegal. It seems clear to us that the statement of Cole
was explanatory of his possession of Lot 20 during the time he lived in the house thereon and after complainants had
entered upon the occupancy of the house on Lot 19, during which time Stone parked his car on a part of the disputed
strip of land off the east side of Lot 20, "A party in possession of land may make declarations explanatory of his
possession, and either claim or disclaim ownership, no matter who may be parties to the suit. Possession being the
principal fact, such declarations are admissible as part of the res gestae of the possession itself and are admissible when
made by a party on the land, or in possession thereof, whether actually on the land or not at the time of making same.
Owen v. Moxon, 167 Ala. 615, 52 So. 527; Payne v. Crawford, 102 Ala. [387,] 398, 14 So. 854." Shelton v. Stapler, 219
Ala. 15, 16, 121 So. 34, 35.
As before pointed out, the trial court indicated that it did not consider this [***25] writing as original or primary
evidence of the fact that Cole did tell Lightsey of his contract with Humphrey, but limited the effect of the writing to
contradiction or impeachment of the witnesses Mr. and Mrs. Lightsey. In other words, the writing was considered as if
Cole had been present in court and had testified that he made no such request as testified by the Lightseys. Of course,
the Lightseys were subject to being contradicted, but we do not think it could be done in this manner. Vendetti v.
United States, 9 Cir., 45 F.2d 543. We know of no exception to the hearsay rule that would make this unsworn ex parte
statement admissible in evidence even for the purpose to which it was limited. If Cole had been produced as a witness
or if he had given evidence by deposition, the respondent would have had the opportunity to cross-examine him. We
hold, therefore, that the writing was erroneously admitted in evidence. State ex rel. Bailes, Solicitor, v. Guardian Realty
Co., 237 Ala. 201, 186 So. 168.
Complainants below, appellees here, argue that even though it be held that the writing was erroneously admitted in
evidence, such action of the trial court does [***26] not require a reversal of the decree.
We have adopted for equity the prevailing rule at law that "the admission of illegal evidence over objection requires
a reversal unless the remaining evidence is without conflict and sufficient to support [**385] the judgment." Pfingstl v.
Solomon, 240 Ala. 58, 64, 197 So. 12, 16. As to this rule, it is sufficient to say that it can have no application here, for
the remaining evidence is decidedly in conflict.
We also apply Supreme Court Rule 45, Code 1940, Tit. 7 Appendix, to equity cases and will not reverse a decree
unless in the opinion of the court, after an examination of the entire cause, it should appear that the error complained of
has probably injuriously affected a substantial right. Roubicek v. Roubicek, 246 Ala. 442, 21 So. 2d 244.
But we think it appears from this record that the admission in evidence of Cole's ex parte statement has probably
affected a substantial right. As before pointed out, the decree could only be sustained on the theory that Lightsey had
actual knowledge of complainants' equitable rights. The evidence as to this issue was in sharp conflict and the ultimate
question for decision hinged in [***27] a large measure on whether Lightsey and his wife or Stone was telling the
truth. It affirmatively appears that the trial court considered this ex parte written statement as bearing on the credibility
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255 Ala. 541, *549; 52 So. 2d 376, **384;
1951 Ala. LEXIS 367, ***23
of the testimony of Lightsey and his wife. We feel constrained, therefore, to reverse the decree appealed from.
LIVINGSTON, C. J., and FOSTER and STAKELY, JJ., concur.
Page 97
255 Ala. 541, *550; 52 So. 2d 376, **385;
1951 Ala. LEXIS 367, ***27
41 of 266 DOCUMENTS
Positive
As of: Jul 10, 2014
MOORER v. TENSAW LAND & TIMBER CO.
No. 1 Div. 222
246 Ala. 223; 20 So. 2d 105; 1944 Ala. LEXIS 464
December 14, 1944
PRIOR HISTORY: [**1] Appeal from Circuit Court, Mobile County; J. Blocker Thornton, Judge.
Action in ejectment by Monte L. Moorer against the Tensaw Land & Timber Company. Judgment for defendant,
and plaintiff appeals.
CASE SUMMARY:
PROCEDURAL POSTURE: Plaintiff challenged an order of the Circuit Court of Mobile County (Alabama), which
entered a judgment for defendant in plaintiff 's action for ejectment.
OVERVIEW: Plaintiff and defendant both were conveyed the same piece of property. Plaintiff filed an action of
ejectment against defendant. The trial court entered a judgment for defendant and the court affirmed. The facts indicated
that the prior owners conveyed the property as security to the lender and that said property was to be reconveyed back to
the owners in the event there was no default on the loan. The lender conveyed its deed to plaintiff and defendant
received its conveyance from the property owners. The trial court entered a judgment for defendant and the court
affirmed. The court found that there was no evidence of a default on the loan. Further, the court found that there was
evidence that the deed was intended to operate as a mortgage within the meaning of Ala. Code 181 (1940). The court
reasoned that the deed was conveyed in legal title as a security. Thus, repayment of the debt allowed defendant to regain
possession.
OUTCOME: The court affirmed the order that entered a judgment for defendant in plaintiff 's action for ejectment.
Page 98
CORE TERMS: mortgage, deed, reservation, conveyance, mortgagor, default, grantor, revest, equitable mortgage,
right to possession, full payment, defeasance clause, collateral agreement, equitable right, reconveyance, foreclosure,
demurrer, defeat, recover possession, mortgage debt, parol agreement, immediate possession, fully paid, ejectment suit,
eliminated, quitclaim, purchaser, mortgagee, declare, expired
Contracts Law > Contract Interpretation > Parol Evidence > General Overview
Evidence > Documentary Evidence > Parol Evidence
[HN1] It is well settled that two writings connected by reference one to the other, or simultaneously made, with respect
to the same subject matter and proved to be parts of an entire transaction constitute but a single contract as if embodied
in one instrument. When such situation exists, it does not require equity to declare that to be the result, but the one
contract consisting of the two writings is so treated at law as well as in equity. It is of course quite true that parol
evidence is not admissible at law to show that a deed absolute on its face was intended to operate as a mortgage.
[HN2] A mortgage effective at law passes the legal title to the mortgagee, who is entitled to the immediate possession
of the land even before default, unless it is provided in it that the possession shall remain in the mortgagor.
Real Property Law > Estates > General Overview
[HN3] It is well settled that a deed effective instanter may contain an effectual reservation of possession by the grantor
for any definite period, extending to that of his life.
Real Property Law > Financing > Mortgages & Other Security Instruments > General Overview
[HN4] The controlling elements of a mortgage at law are: a conveyance of the legal title; and at the same time it is
stipulated in writing to be given as security for a debt or the performance of some other act for which the grantor is or
thereby becomes personally liable.
COUNSEL: Wm. G. Caffey, of Mobile, for appellant.
In this State the common law prevails that a deed or conveyance of land, absolute and unconditional upon its face, but
intended and understood by the parties to be merely a security for payment of debt, will be treated and regarded in
equity, and only in equity, as a mortgage. Richardson v. Curlee, 229 Ala. 505, 158 So. 189; Walker v. Harris, 238 Ala.
176, 189 So. 746; Vickers v. McNeal, 242 Ala. 652, 7 So.2d 858; Smith v. Smith, 157 Ala. 79, 47 So. 220, 25
L.R.A.,N.S., 1045; Smith v. Smith, 153 Ala. 504, 45 So. 168; Rogers v. Burt, 157 Ala. 91, 47 So. 226; Lindsey v. Hamlet,
235 Ala. 335, 179 So. 234; Hammett v. White, 128 Ala. 380, 29 So. 547; Lewis v. Davis, 198 Ala. 81, 73 So. 419;
Morton v. Allen, 180 Ala. 279, 60 So. 866, L.R.A.1916B, 11; Bragg v. Massie's Adm'r, 38 Ala. 89, 79 Am.Dec. 82.
While deed absolute in form and collateral contemporaneous agreement that title shall be held under deed as security
[**2] will be considered as part of same transaction, their effect is to vest legal title in grantee, with only a right in
grantor to have deed given effect of an equitable mortgage. Authorities, supra; Hawes v. Williams, 92 Me. 483, 43 A.
101; Harrison v. Maury, 157 Ala. 227, 47 So. 724. Right and title of grantor in deed absolute in form, intended as
security, being equitable only, cannot be set up and considered in action of ejectment to defeat legal title of grantee.
Green v. Jordan, 83 Ala. 220, 3 So. 513, 3 Am.St.Rep. 711; Bowden v. Turner, 243 Ala. 182, 8 So.2d 849; Rountree v.
Jackson, 242 Ala. 190, 4 So.2d 743; Blair v. Blair, 199 Ala. 480, 74 So. 947; McCormick v. McCormick, 221 Ala. 606,
Page 99
246 Ala. 223, *; 20 So. 2d 105;
1944 Ala. LEXIS 464, **1
130 So. 226; Claraday v. Abraham, 174 Ala. 130, 56 So. 720. Nor does the fact that instrument creating equitable right
confers right of possession defeat recovery by holder of legal title in ejectment; the right of possession under such
instrument being equitable only in nature. Kelly v. Hendricks, 57 Ala. 193; Doe v. Haskins, 15 Ala. 619, 50 Am.Dec.
154, 1 Am.Rep. 154; Brewton v. Watson, 67 Ala. 121; Lanahan v. Sears, 102 U.S. 318, 26 L.Ed. 180; Hawes v.
Williams, supra; Cox v. Cox, 209 Ala. [**3] 75, 95 So. 275; Bynum v. Hewlett, 137 Ala. 333, 34 So. 391; Sharpe v.
Brantley, 123 Ala. 105, 26 So. 289; Neville v. Cheshire, 163 Ala. 390, 50 So. 1005; Coker v. Hughes, 205 Ala. 344, 87
So. 321; Hollingsworth v. Walker, 98 Ala. 543, 13 So. 6. It is only the legal right to possession of the premises in dispute
that will defeat ejectment by the holder of the legal title. Lomb v. Pioneer Sav. & Loan Co., 106 Ala. 591, 17 So. 670.
The suit in ejectment was a proceeding to foreclose, within the meaning of the collateral contract. Grandin v. Hurt, 80
Ala. 116; 41 C.J. 530. Where possession is permissive as in this case neither adverse possession nor prescription has
application. Kidd v. Browne, 200 Ala. 299, 76 So. 65; Smith v. Collier, 207 Ala. 635, 93 So. 648; Herbert v. Hanrick, 16
Ala. 581; Mitchell v. Bottoms, 233 Ala. 107, 170 So. 220. Mortgagor who remains in actual open possession without
recognition of deed or existence of mortgage as valid claim, but without renunciation or disclosure of mortgagee's
rights, traced to his knowledge, for twenty years from maturity or last recognition of it as subsisting, cannot defeat
mortgagee's title by adverse possession. Barrentine [**4] v. Parker, 236 Ala. 188, 181 So. 263.
Gaillard & Gaillard, of Mobile, for appellee.
The deed and the contemporaneous agreement will be taken together and held to constitute a mortgage. 41 C.J.,
Mortgages, 68; Lanahan v. Sears, 102 U.S. 318, 12 Otto 318, 26 L.Ed. 180; 41 Cyc., Mortgage, 576. Plaintiff in
ejectment must not only have legal title at time of bringing suit, but must have right to possession of property at that
time; and whatever defeats that right of possession cuts off right of plaintiff for judgment. Lomb v. Pioneer Sav. &
Loan Co., 106 Ala. 591, 671, 17 So. 670; McCormick v. McCormick, 221 Ala. 606, 130 So. 226; Grandin v. Hurt, 80
Ala. 116; 41 C.J., Mortgages, 578.
A mortgage is not foreclosed by a suit in ejectment. There was no foreclosure and plaintiff had no right of recovery.
Rountree v. Satterfield, 211 Ala. 464, 100 So. 751; Grandin v. Hurt, supra.
The quitclaim deed conveyed only such interest as the grantee then had, and put the purchaser on inquiry as to any
and all defects in the title. Rucker v. Tennessee Coal, Iron & R. Co., 176 Ala. 456, 58 So. 465.
JUDGES: Foster, Justice. Gardner, C. J., and Thomas and Stakely, [**5] JJ., concur.
OPINION BY: FOSTER
OPINION
[*226] This is an ejectment suit, and the right of plaintiff to recover depends upon a legal question. The plaintiff
and defendant claim under Everett and Boykin. The plaintiff by quitclaim deed from Taylor, Lowenstein and Company,
to whom Everett and Boykin had conveyed it, and defendant by a later deed from Everett and Boykin.
Contemporaneously with the execution of the deed by Everett and Boykin to Taylor, Lowenstein and Company,
there was a separate agreement in writing executed by them both, whereby it was agreed that the deed was executed as
security for any indebtedness then due or thereafter to become due by virtue of any notes, contracts or agreement then in
effect between them; that upon payment of said indebtedness Taylor, Lowenstein and Company agreed to reconvey to
Everett and Boykin the land, otherwise said deed to remain in full force and effect for the purpose so expressed. It also
provided that until the deed and separate agreement should be foreclosed by reason of default Everett and Boykin were
to remain in possession of the property with the right to operate same for timber and turpentine purposes.
There was no foreclosure [**6] by reason of a default: Everett and Boykin remained in possession, and defendant
holds by deed under them, and the debt of Everett and Boykin to Taylor, Lowenstein and Company has not been shown
Page 100
246 Ala. 223, *; 20 So. 2d 105;
1944 Ala. LEXIS 464, **2
to be in default, but no reconveyance has been made under the terms of the contract. The trial court sustained demurrer
to pleas setting up its payment, but rendered judgment for defendant.
The deed without the defeasance was recorded, and plaintiff had no actual notice of it; but his deed was a quitclaim,
and therefore he is not in the attitude of a bona fide purchaser. Batson v. Etheridge, 239 Ala. 535 (11), 195 So. 873.
The only question presented is whether the reservation of possession in the collateral agreement until a foreclosure,
which has not occurred, is sufficient to defeat plaintiff in the right of recovery. Whether by the collateral agreement a
mortgage was executed in such legal effect as that its full payment served to revest title in the mortgagor under the
statute, and defeat an ejectment suit -- section 181, Title 47; section 950, Title 7, Code of 1940 -- was eliminated by the
court on appellant's contention by sustaining demurrers to the pleas. But that question [**7] is incidental to a treatment
of the one directly involved.
[HN1] It is well settled that two writings connected by reference one to the other, or simultaneously made, with
respect to the same subject matter and proved to be parts of an entire transaction constitute but a single contract as if
embodied in one instrument. Sewall v. Henry, 9 Ala. 24; Byrne v. Marshall, 44 Ala. 355; Collins v. Whigham, 58 Ala.
438; Drennen v. Satterfield, 119 Ala. 84, 24 So. 723; Weeden v. Asbury, 223 Ala. 687, 138 So. 267; Frasch v. City of
Prichard, 224 Ala. 410, 140 So. 394; Albert v. Nixon, 229 Ala. 273, 156 So. 775.
When such situation exists, it does not require equity to declare that to be the result, but the one contract consisting
of the two writings is so treated at law as well as in equity.
It is of course quite true that parol evidence is not admissible at law to show that a deed absolute on its face was
intended to operate as a mortgage. Bragg v. Massie's Adm'r, 38 Ala. 89 (4), 79 Am.Dec. 82; Jones v. Trawick's Adm'r,
31 Ala. 253, 256; Ex parte St. Paul Fire & Marine Ins. Co., 236 Ala. 543, 184 So. 267, and cases cited in them.
A mortgage is sometimes said to be a conveyance by a debtor [**8] to a creditor of real or personal property, with
a defeasance clause whereby the conveyance will be void and the debtor entitled to repossess the property if the debt is
discharged by a day named. Mervine v. White, 50 Ala. 388; Sewall v. Henry, 9 Ala. 24.
It is wholly immaterial between the parties whether the defeasance clause is incorporated [*227] in the same
instrument or in a separate instrument contemporaneously executed. 41 Corpus Juris 318, note 93; 41 Corpus Juris 610,
section 578.
The defeasance clause may be in the form of an agreement for a reconveyance of the property to the grantor or for
the revesting of title in him on paying the debt. 41 Corpus Juris 317.
Under section 181, Title 47, Code of 1940, though the legal title passes under a mortgage effective at law, a
reconveyance is not necessary to revest the title in the mortgagor, upon its full payment.
Though this statute does not apply in a suit at law to an equitable mortgage, which is not operative as such at law, it
does apply to any mortgage which is such at law.
A written instrument may be an equitable mortgage, either when there are no words of conveyance passing the
legal title in praesenti [**9] ( O'Neal v. Seixas, 85 Ala. 80, 4 So. 745), or when it makes a present conveyance without
the mortgage features expressed in it, but only in a parol agreement. Cases heretofore cited.
We think that if they are expressed in a contemporaneous agreement in writing, such agreement, as between the
parties and those who stand in their shoes, creates a mortgage at law. [HN2] A mortgage effective at law passes the
legal title to the mortgagee, who is entitled to the immediate possession of the land even before default, unless it is
provided in it (or by separate instrument) that the possession shall remain in the mortgagor. Woodward v. Parsons, 59
Ala. 625; Trannon v. Towles, 200 Ala. 82, 75 So. 458; Cowart v. Aaron, 220 Ala. 35, 123 So. 229; Wilson v. Federal
Page 101
246 Ala. 223, *226; 20 So. 2d 105;
1944 Ala. LEXIS 464, **6
Land Bank, 230 Ala. 75, 159 So. 493; Mallory v. Agee, 226 Ala. 596, 147 So. 881, 88 A.L.R. 1107.
But if there is such a provision or one which means that in effect, it serves to defeat the right of the mortgagee to
recover possession at law from the mortgagor, until the right to possession so stipulated has expired. Grandin v. Hurt,
80 Ala. 116; McMillan v. Otis, 74 Ala. 560; Brown v. Loeb, 177 Ala. 106(8), 58 So. 330. To recover possession [**10]
of land in such a suit plaintiff must have the legal title and legal right to the immediate possession. Lomb v. Pioneer
Savs. & L. Co., 106 Ala. 591, 17 So. 670.
In Cox v. Cox, 209 Ala. 75, 95 So. 275, the agreement by which defendant claimed the right to possession was
verbal. It was held that this conferred only an equitable right not available at law. In that case defendant claimed to
have gone into possession of the property under a verbal agreement with plaintiff, the owner, whereby defendant
received it in full payment for services and with the understanding that plaintiff would convey the property to him by
deed. The court held that this was not competent testimony because it presented an equitable title in defense of a legal
title in plaintiff. The court cited cases holding that a vendor in a bond for title could recover possession of the vendee,
though the latter had fully paid the purchase price. Doe ex dem. Nickles v. Haskins, 15 Ala. 619, 50 Am.Dec. 154; Kelly
v. Hendricks, 57 Ala. 193; Chapman v. Glassell, 13 Ala. 50, 48 Am.Dec. 41. Compare those cases with Able v. Gunter,
174 Ala. 389, 57 So. 464; Forrester v. Granberry, 211 Ala. 402, 100 So. 551.
In none of [**11] those cases was there a stipulation in writing by which the purchaser under the bond for title was
to hold possession.
[HN3] It is well settled that a deed effective instanter may contain an effectual reservation of possession by the
grantor for any definite period, extending to that of his life. Smith v. Davis, 199 Ala. 687, 75 So. 22. But any parol
agreement to that effect is inoperative. Burroughs v. Pate, 166 Ala. 223, 51 So. 978; Wright v. Graves, 80 Ala. 416.
The stipulation in the collateral agreement being of equal force as though it had been incorporated in the deed, was
expressly a reservation from the otherwise unconditional terms of the deed of a legal (not equitable) right in the grantor
which thereby did not pass to the grantee. That right was the possession and use of the property for the period expiring
with a foreclosure caused by a default. This has not occurred.
The second defense denied by the court, if proven, is equally as effective to prevent a recovery: that is, that the
mortgage debt has been fully paid.
Since the trial court eliminated that as a defense but gave a judgment for defendant because there was a reservation
of possession, and since the effect [**12] of such a reservation is available at law only if the [*228] mortgage
containing that clause is operative as such at law, it is argued that the trial court was not consistent in ruling that
sections 181, Title 47, and section 950, Title 7, Code of 1940, did not apply, presumably by reason of a holding that the
transaction created an equitable mortgage, because if the mortgage is only such in equity, the right to possession is
likewise only an equitable right, and would not be a defense at law.
It is explained in brief that two of the circuit judges made rulings in the case and did not agree on the law.
We accept the view that if the deed and collateral contract create an equitable mortgage only, sections 181, Title 47,
and 950, Title 7, Code of 1940, would not apply. If an instrument at law is a deed merely, but the facts authorize a court
of equity only to declare it a mortgage, the aspect of it as a mortgage has no effect at law and the repayment of the debt
would not revest the title available at law. So that if the legal title does not revest under that statute by a payment of the
mortgage debt, it is because its status as a mortgage is only available in equity.
That [**13] statute does apply to any transaction which creates a mortgage effective as such at law. And when it
applies, and the debt is paid, the title revests in the mortgagor, and it is a legal title which will prevent a recovery by
plaintiff at law as well as in equity based on the mortgage title. Lampley v. Knox, 92 Ala. 625, 8 So. 822; Lomb v.
Pioneer Savs. & L. Co., 106 Ala. 591, 17 So. 670; Davis v. Anderson, 163 Ala. 385, 50 So. 1002; Crutchfield v. Vogel,
Page 102
246 Ala. 223, *227; 20 So. 2d 105;
1944 Ala. LEXIS 464, **9
233 Ala. 306, 171 So. 889; Brown v. Loeb, 177 Ala. 106, 58 So. 330; Fiscus v. Young, 243 Ala. 39, 8 So. 2d 514;
Metropolitan Life Ins. Co. v. Estes, 228 Ala. 582, 155 So. 79; and may be proven on a plea of not guilty, section 941,
Title 7, Code of 1940; Bush v. Thomas, 172 Ala. 77, 55 So. 622; Fiscus v. Young, supra.
But the payment of the debt to have that effect on a plea of not guilty does not include other defenses to that debt,
such as usury, set-off, want or failure of consideration, and the like. Ramsey v. Sibert, 192 Ala. 176, 68 So. 349;
Lampley v. Knox, 92 Ala. 625, 8 So. 822. Where such claim is made, the provisions of section 950, Title 7, Code, must
be observed. The special pleas to which demurrer was sustained were [**14] authorized by that statute.
As we have heretofore shown, [HN4] the controlling elements of a mortgage at law are (1) a conveyance of the
legal title, and (2) at the same time it is stipulated in writing to be given as security for a debt or the performance of
some other act for which the grantor is or thereby becomes personally liable. There is here shown a mortgage in its true
sense whether at law or in equity, to which the statutes (section 181, Title 47, and section 950, Title 7, supra), have full
application, and in which the grantor effectually reserved possession for a period which has not expired.
The court was correct in rendering judgment for defendant.
Affirmed.
GARDNER, C. J., and THOMAS and STAKELY, JJ., concur.
Page 103
246 Ala. 223, *228; 20 So. 2d 105;
1944 Ala. LEXIS 464, **13
44 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
FOWLER v. MORROW
No. 8 Div. 264
245 Ala. 2; 15 So. 2d 629; 1943 Ala. LEXIS 46
November 18, 1943
PRIOR HISTORY: [**1] Appeal from Law and Equity Court, Franklin County; W. H. Quillin, Judge.
Bill in equity by Albert Morrow against J. A. Fowler for specific performance. From a decree for complainant,
respondent appeals.
CORE TERMS: notice, deed, tract of land, convey, garage, grist, specific performance, valuable considerations, stock
of goods, conveyance, vendee's, decree, bona fide purchaser, acknowledgment, purchaser, conveyed, grantor, grantee,
founded, parted, rested
COUNSEL: The land involved is thus described in the bill and conveyance: "One acre more or less lying between the
three roads right of ways Russellville and Red Bay road and the Vina Road and the Vina and Red Bay Road where
Albert Morrow Store and garage and mill are located, said land is in the SE 1/4 of Sec. 13 T. 7, R. 15."
The bill alleges that complainant filed an ejectment suit on the law side of the court to recover possession of said land,
relying upon a deed from W. P. Hall and wife, Fannie Hall, dated April 10, 1928 (a copy of which is exhibited), but that
the court held that said deed did not pass the legal title and that complainant could not maintain ejectment. Thereupon
complainant moved to transfer the cause to the equity side of the court, which motion was granted. It is alleged that
said deed did not pass the legal title to the property to complainant, but that the consideration of said deed was one
dollar and the purchase of a stock [**2] of merchandise owned by said Hall and wife, which consideration was paid
and complainant was placed in possession of said property by the grantors and remained in possession until about the
year 1936, when respondent took possession of said property under a deed from one or both of the grantors and now
claims to own said property, refusing to allow complainant to have the same. That the consideration for said deed
Page 104
having been paid by complainant and said deed having been signed but improperly acknowledged by the officer, in
failing to sign and certify to the general acknowledgment, and complainant having been put in possession by the
grantors, he is entitled to specific performance of said contract by the respondent who received a conveyance to said
property since said deed to complainant, and who claims said land through the same source of title, and the complainant
having complied with his part of the contract.
The prayer of the bill is for a decree causing said contract to be specifically performed by respondent and that title to the
land be quieted and confirmed in complainant.
The deed exhibited with the bill, recites that "W. P. Hall and wife Fannie Hall for and [**3] in consideration of One
Dollar to be paid in hand by Albert Morrow, the receipt whereof is hereby acknowledged, do grant, bargain, sell and
convey unto the said Albert Morrow" the land above described, and "There will be no tax to be paid on said land by
Albert Morrow until after our deaths." It purports to be signed by W. P. Hall and, by mark, by Fannie Hall. The general
acknowledgment, filled out and dated by a Justice of the Peace appears not to have been signed by him. The separate
acknowledgment by the wife bears the signature of the Justice of the Peace.
This deed bears an endorsement of recording as of August 23, 1939.
Respondent by his answer asserts that complainant's deed passed no title whatever to him and denies that the grantors
put him into possession. It is alleged that respondent has himself been in the open and undisputed actual possession of
the land since January 2, 1933, holding under a claim of ownership in fee simple and under a deed of conveyance
sufficient to constitute either ownership or color of title; that on said date he bought the land in question from W. P. Hall
and wife, one or both, receiving a conveyance thereto, about which time he [**4] was placed in possession and has
remained in actual possession under claim of ownership, down to the time complainant brought his suit in ejectment.
That when he paid the purchase money and went into possession of the tract he was without any notice or knowledge of
any claim of ownership on the part of complainant, and that as against any such claim of ownership by complainant
respondent is an innocent purchaser.
On the hearing respondent introduced, among others, a deed from W. P. Hall to Fannie Hall, dated February 18, 1924,
and conveying the East Half of the Southeast Quarter of Section 13, Township 7, Range 15, with stated exceptions; a
deed from Fannie Hall to J. A. Fowler dated January 2, 1933, conveying the same land, upon a recited consideration of
"One Dollar and to nurses fee until death of both Fannie Hall and W. P. Hall, her husband;" and also a deed from Fannie
Hall to J. A. Fowler, dated February 20, 1936, conveying the same land upon a consideration of maintenance and
support of the grantor.
It appears that the larger tract conveyed to respondent, and containing about 57 acres, embraces the one or more acre
tract claimed by complainant; that the wife of [**5] complainant Morrow is the niece of W. P. Hall and the wife of
respondent Fowler is the niece of Mrs. W. P. Hall.
J. Foy Guin, of Russellville, for appellant.
The conveyance relied upon by appellee is utterly void; there was no sufficient attestation or acknowledgment of the
signature of the wife in whom lay the legal title; the signature of the husband is neither attested nor acknowledged.
Code 1940, Tit. 47, 22, 24; Code, Tit. 34, 73; Cheney v. Nathan, 110 Ala. 254, 20 So. 99, 55 Am.St.Rep. 26; Munn
v. Lewis, 2 Port. 24; American Ins. Co. v. Millican, 26 Ala.App. 31, 153 So. 448; Id. 228 Ala. 357, 153 So. 454; Carlisle
v. Carlisle, 78 Ala. 542; 1 Am.Jur. 353; 29 A.L.R. 964, note; 72 A.L.R. 1293, note. Appellee had been out of
possession of the tract for almost ten years when he brought suit. He had no legal title, resided nearby and passed the
tract almost daily and knew of the various activities of the Halls and appellant. He cannot in good conscience maintain
this suit. Harris v. Heard, 234 Ala. 650, 176 So. 360; 58 C.J. 1159; 59 C.J. 923; Fountain v. Pateman, 189 Ala. 153, 66
So. 75. Appellant to sustain his claim of innocent purchaser had only the burden [**6] of showing his purchase, and
that he paid or agreed to pay value. Having shown this, the burden shifted to appellee to show he had notice or
Page 105
245 Ala. 2, *; 15 So. 2d 629;
1943 Ala. LEXIS 46, **2
knowledge of appellee's claim. Lamar v. Lincoln Res. Life Ins. Co., 222 Ala. 60, 131 So. 223; Kibbe v. Scholes, 219
Ala. 571, 123 So. 61; Reeder v. Cox, 218 Ala. 182, 118 So. 338; Coskrey v. Smith, 126 Ala. 120, 28 So. 11. Where
grantee in an unrecorded deed occupies the land in connection with his grantor, such general occupancy is not sufficient
notice of his deed to charge a subsequent purchaser with notice or put him on inquiry. Wells v. Amer. Mortg. Co. of
Scotland, 109 Ala. 430, 20 So. 136; O'Neal v. Prestwood, 153 Ala. 443, 45 So. 251; Pake v. Lindsey Mill Co., 208 Ala.
569, 94 So. 573; McCarthy v. Nicrosi, 72 Ala. 332, 47 Am.Rep. 418.
Wm. Stell, of Russellville, for appellee.
A defective conveyance of land is enforceable as an agreement to convey. Gay v. Fricks, 211 Ala. 119, 99 So. 846.
Possession of land by a vendee under a deed not recorded is sufficient to give notice to a purchaser and is equivalent to
registration. Lester v. Walker, 172 Ala. 104, 55 So. 619; Price v. Bell, 91 Ala. 180, 8 So. 565. To make defense [**7]
that one is a bona fide purchaser without notice, he must clearly aver that he is holder of a legal title, purchased in
good faith, parted with value as a consideration, and at time of parting with such value had no notice or knowledge
sufficient to put him on notice of outstanding equities. Sherrod v. Hollywood Holding Corp., 233 Ala. 557, 173 So. 33.
JUDGES: Thomas, Justice. Gardner, C. J., and Brown and Livingston, JJ., concur.
OPINION BY: THOMAS
OPINION
[*4] The bill is for specific performance in order to perfect title to a small tract of land.
The controversy has arisen over two contracts or conveyances of the land by grantors, who were relatives of
respective grantees. There are decisions to the effect that courts of equity in a proper case favor the enforcing of
contracts which amount to family settlements touching properties held in common. Betts v. Ward, 196 Ala. 248, 72 So.
110. Such is not the case here presented where relatives conveyed lands founded upon different considerations.
The record contains much evidence as to the fulfillment of the conditions on which appellant's conveyance rested.
This is beside the questions on which the decree rested and from which [**8] the appeal is taken.
The rules for specific performance have been recently considered in this jurisdiction. General Securities
Corporation v. Welton, 223 Ala. 299, 135 So. 329; Albert v. Nixon, 229 Ala. 273, 156 So. 775; Gay v. Fricks, 211 Ala.
119, 99 So. 846.
A further established rule as to notice is that the possession of land by a vendee under a deed, not duly recorded, is
sufficient to give notice to a purchaser, equivalent to a due registration of the title. Lester v. Walker, 172 Ala. 104, 55
So. 619. The purchaser of land in the actual occupancy of a vendee, under a parol contract to convey, is charged with
notice of the vendee's title. Walling v. Moss, 240 Ala. 87, 197 So. 30, and authorities therein cited.
In Sherrod v. Hollywood Holding Corporation, 233 Ala. 557, 173 So. 33, it is held, on authority, that to make
defense that one is a bona fide purchaser without notice, it must be clearly averred and proven that one is the holder of
legal title purchased in good faith, parted with valuable considerations in such purchase, or assumed a liability, and
had no notice or knowledge sufficient to put him on inquiry as to complainant's equity at the time of the purchase
[**9] or at or before the time he paid the purchase money or parted with such value.
The deed from Mr. and Mrs. Hall to appellee, on account of the defective general acknowledgment, was not
sufficient to convey the legal title to the properties in litigation, but under the holding of Gay v. Fricks, supra, such a
deed is enforceable in equity as an agreement to convey. After obtaining the deed from Mr. and Mrs. Hall, grantee
(appellee here) went into possession of the small tract of land between the several roads forming a part of the
description employed, operated a store, a grist mill and a garage thereon. [*5] It is alleged, and the evidence shows,
Page 106
245 Ala. 2, *; 15 So. 2d 629;
1943 Ala. LEXIS 46, **6
that he purchased the small stock of goods that remained of Mr. Hall's business, paid therefor a reasonable price and
sold out the same. The grist mill and garage were placed on the land and removed therefrom by the appellee. The
period of appellee's actual possession was a year and a half or two years, during which time the appellant Fowler lived
in the same community, and, as we view the evidence, knew of appellee's operation of the store, the grist mill and the
erection and use of the garage, and that appellee later removed the [**10] garage and grist mill. This, under the record
before us, was sufficient notice to defeat appellant's claim that he was a bona fide purchaser without notice of the
superior title or equity of appellee to the small tract of land in question.
However, the testimony of appellee and of the notary undertaking to make the acknowledgment to the first deed is
sufficient to show that before Fowler took either of the purported deeds from the Halls, he had actual knowledge or
notice that his grantor had theretofore conveyed or attempted to convey the property by the imperfect deed, founded on
a valuable consideration, to Morrow. No witness disputes the fact that Morrow paid a valuable consideration for the
small triangular tract of land and the stock of goods in the store situated thereon. There is no controversy as to the fact
that Morrow's deed was prepared by the officer in question, who testified in this case that he read the deed to the Halls
and they stated such was their intention to convey.
The evidence further shows that the purchase of the stock of goods was contemporaneous with the purchase of the
land and a part of the consideration, and that the provision for payment of taxes [**11] was a part of the consideration
of the first attempted conveyance of the Halls to Morrow.
The relation of the parties, their residence in the little village and the attingency of the two tracts of land, as well as
the acts of ownership further support the fact of knowledge or notice by appellant of the prior equity of appellee.
We find no error in the decree of the trial court for specific performance as sought by appellee and in the taxation of
the costs. The decree of the Law and Equity Court of Franklin County, sitting in equity, is affirmed.
Affirmed.
Page 107
245 Ala. 2, *5; 15 So. 2d 629;
1943 Ala. LEXIS 46, **9
46 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
WALLING v. MOSS.
8 Div. 48.
240 Ala. 87; 197 So. 30; 1940 Ala. LEXIS 147
June 29, 1940, Decided
PRIOR HISTORY: [***1] Appeal from Circuit Court, Madison County; Schuyler H. Richardson, Judge.
Suit in equity by Lelia Sugg Moss against V. Luke Walling and others to reform certain deeds. From a decree for
complainant, named respondent appeals.
Affirmed.
CORE TERMS: tract, deed, tenant, reformation, conveyed, erroneously, grantor, purchaser, acres, tract of land,
cultivated, mortgage, decree, constructive notice, ascertained, benefited, corrected, notice, sever, mutual mistake,
northwest corner, constructively, abstracter, southeast, deprive, lessor, leased, rented, intend
HEADNOTES
1. Appeal and error
In suit to reform deeds, one of which erroneously described tract purchased by respondent as conveyed to
complainant, while tract intended to be conveyed to complainant was erroneously described in deeds to respondent's
grantor and respondent, Supreme Court need not consider complainant's right to correction of deed to respondent on
appeal from decree for complainant, where no such point is made and for further reason that reformation of deed to
complainant would sever respondent's rights to tract claimed by complainant and respondent would be benefited by
having his deed include tract purchased by him.
Page 108
2. Reformation of instruments
In suit to reform deeds, erroneously describing tract intended to be conveyed to complainant as conveyed to
respondent's grantor and tract purchased from such grantor by respondent as conveyed to complainant, respondent must
show that he purchased tract described in deeds to him and his grantor for value in order to deprive complainant of right
to reformation, and when respondent does so complainant must prove notice to respondent of complainant's equity,
either actually or constructively.
One intending to purchase different tract of land than that described in deeds to him and his grantor was not
purchaser for value of tract described, so that another, to whom such tract was intended to be conveyed, was entitled to
reformation of such deeds and deed erroneously describing as conveyed to her tract intended to be conveyed to such
grantor.
The possession of tract of land through tenant by one to whom such tract was intended to be conveyed by deed
erroneously describing another tract was constructive notice of lessor's claim of ownership leased tract to person to
whom grantee in another deed, erroneously describing such tract, conveyed land by same description, so that lessor was
entitled to reformation of her deed as against such person, who claimed to be purchaser of leased tract for value.
COUNSEL: Brickell & Johnston and Taylor & Taylor, all of Huntsville, for appellant.
If the mistake of the parties in the conveying of property is in the identity of the property itself, reformation cannot be
had for there has been no meeting of minds. Keith v. Woodruff, 136 Ala. 443, 34 So. 911; Alexander v. Caldwell, 55 Ala.
517; Smith v. Allen, 102 Ala. 406, 14 So. 760; Tyson v. Chestnut, 100 Ala. 571, 13 So. 763; Tillis v. Smith, 108 Ala. 264,
19 So. 374. A mistake in a written instrument will not be corrected against a bona fide purchaser for value without
notice. 53 C.J. 983. Where one of two innocent persons must suffer by the act of a third, he by whose negligence it
happened must be the sufferer. Sherwood v. Robertson, 48 Cal.App. 208, 191 P. 972. The court in a reformation suit
will not make a new contract. Gallilee Baptist Church v. Pallilla, 219 Ala. 683, 123 So. 210.
Lanier, Price, Shaver & Lanier, of Huntsville, [***2] for appellee.
A misdescription in a deed will be reformed in a court of equity. Code 1923, 6960; Fields v. Clayton, 117 Ala. 538, 23
So. 530, 67 Am.St.Rep. 189; Houston v. Faul, 86 Ala. 232, 5 So. 433; Blackburn v. Perkins, 138 Ala. 305, 35 So. 250.
Equity will reform an instrument so it will embody the true agreement. 53 C.J. 908, 5; Bagley v. Bagley, 206 Ala. 232,
89 So. 739; Daniels v. Williams, 177 Ala. 140, 58 So. 419. Actual possession of land operates as notice of the title, legal
or equitable, of the party in possession. Gamble v. Black Warrior Coal Co., 172 Ala. 669, 55 So. 190; Enslen v.
Thornton, 182 Ala. 314, 62 So. 525; Smith v. Harbaugh, 216 Ala. 202, 112 So. 914. A purchaser with notice of facts
sufficient to put him on inquiry is not a bona fide purchaser. Sloss-S. S. & I. Co. v. Taff, 178 Ala. 382, 59 So. 658;
Evans v. Bryan, 202 Ala. 484, 80 So. 868; Gamble v. Black Warrior Coal Co. supra; Dozier v. Mitchell, 65 Ala. 511.
When parties go into possession of the land intended to be conveyed but there is a misdescription in the deed, a court of
equity will intervene and reform the conveyance if the parties will not voluntarily cure the imperfection. Bagley [***3]
v. Bagley, supra; Blackburn v. Perkins, supra; Fields v. Clayton, supra.
JUDGES: FOSTER, Justice. GARDNER, C.J., and BOULDIN and LIVINGSTON, JJ., concur.
OPINION BY: FOSTER
OPINION
Page 109
240 Ala. 87, *; 197 So. 30, **;
1940 Ala. LEXIS 147, ***1
[*88] [**31] FOSTER, Justice.
This is litigation in which reformation is sought of three deeds, all alleged to carry an error in the description of
land, resulting from mutual mistake of all the parties.
The land with other tracts was inherited from L. C. Sugg, deceased. In making a division between the several heirs,
two of them, Mrs. Lelia Sugg Moss and Harry B. Sugg, were to have three tracts set apart for them separately. A
description was quite complicated and long extended. They secured the services of a firm of abstracters and
conveyancers in Huntsville.
The tracts of land have been designated for convenience "A", "B" and "C". The deeds which were prepared and
executed described "C" in the deed to Mrs. Moss, and "A" and "B" in that to Harry Sugg; whereas it was intended, as
Mrs. Moss and Harry Sugg both admit, that Mrs. Moss was to have "A", and that Harry Sugg was to have "B" and "C".
"A" was half mile northwest of the northwest corner of "B", and across a community called Toney from it, and
contained [***4] 105.19 acres: "B" had approximately 90 acres, and "C" was to the southeast of "B", so that its
northwest corner was the same as the southeast corner of "B", and "C" contained 81.29 acres. These deeds were
executed on April 30, 1936, and immediately Mrs. Moss took possession of tract "A" (though her deed called for "C"),
and rented it to a tenant who had possession, lived on it and cultivated it in 1936 and 1937, and to another tenant in
1938. And Harry Sugg took possession of tracts "B" and "C" (though his deed called for "B" and "A").
In January, 1937, Harry Sugg sold his land to respondent Walling, and executed a deed describing tracts "B" and
"A", as the deed to him had done. There was a mortgage on tracts "B" and "C" to the Federal Land Bank, which Harry
Sugg assumed, which was excepted in the warranty of the deed to Walling. Tract "A" was not included in that
mortgage.
The controversy here is between Mrs. Moss and Walling. When Walling bought from Harry Sugg, Mrs. Moss was
in possession by a tenant of tract "A". Walling in fact took possession of "B" and "C" by a tenant. "C" was in the main
woodland, with about fifteen acres in cultivation, which his tenant cultivated, and he [***5] permitted the timber to be
freely cut on the balance. Mrs. Moss discovered the error in 1938, and had the abstracter who made the division seek to
have it corrected. After negotiation, Walling declined to correct it, but advanced money to cause the tenant of Mrs.
Moss to move on to his own place, and to be relieved of rent on such place, whereupon Walling at once put a tenant on
tract "A", and this suit resulted in which the court found that there [*89] was a mutual mistake in the deed including
that to Walling, and ordered them all reformed. From that decree Walling appeals.
The evidence is to the effect that in 1936 Mrs. Moss went into possession of tract "A" by renting it to a tenant, and
likewise [**32] in 1937 the same tenant rented it from her and cultivated it. So that when, in January, 1937, Walling
made his purchase, tract "A" was in the possession of Mrs. Moss. It also satisfactorily appears that Walling did not
intend to buy the tract so indicated, did not inspect it himself or by agent, and that he and Harry Sugg agreed upon a sale
of tracts "B" and "C," which were embraced in the mortgage to the Federal Land Bank, and of which Harry Sugg had
possession, and which [***6] did not include tract "A"; but that the deed to him was of tracts "A" and "B", because the
description was taken from the deed to Harry Sugg which erroneously included "A".
We need not here consider the right of complainant to have the deed from Harry Sugg to Walling corrected since no
such point is made, and for the further reason that if the right of complainant to the reformation of the deed to her is not
curtailed on account of the purchase by Walling as a bona fide purchaser for value, the reformation of her deed would
serve to sever any rights of Walling to tract "A", and he would be rather benefited by having his deed include tract "C",
which he really purchased. We make this observation in the light of one of our cases--Tillis v. Smith, 108 Ala. 264, 267,
19 So. 374.
In order to deprive complainant of her right to reformation, it is necessary that Walling show that he purchased tract
"A" for value; when so, complainant must prove notice to him of her equity, either actually or constructively.
Page 110
240 Ala. 87, *; 197 So. 30, **;
1940 Ala. LEXIS 147, ***3
We think in both aspects the evidence is against Walling. Though his deed calls for tract "A", we think the evidence
shows that he did not intend to purchase it, but intended [***7] to purchase tract "C" instead of "A". That would
prevent him from being a purchaser for value of tract "A", though his deed so recites. 53 Corpus Juris 984, note 51.
The possession of tract "A" by Mrs. Moss through a tenant was constructive notice of her claim upon the idea that
had Walling inquired of her tenant he would have ascertained that she had a claim to it, the nature of which he could
have ascertained then from her. Brunson v. Brooks, 68 Ala. 248; Pique v. Arendale, 71 Ala. 91; Vandiveer v. Stickney,
75 Ala. 225; Tutwiler v. Montgomery, 73 Ala. 263; Price v. Bell, 91 Ala. 180, 181, 8 So. 565; 66 Corpus Juris 1177, sec.
1022.
It is our interpretation of the evidence that Mrs. Moss put the tenant in possession. There is certainly no claim that
he had been a tenant of Harry Sugg. There is no application of the principle declared in the following cases: Griffin v.
Hall. 111 Ala. 601, 20 So. 485; Bynum v. Gold, 106 Ala. 427, 17 So. 667; Troy v. Walter Bros., 87 Ala. 233, 6 So. 54;
King v. Paulk, 85 Ala. 186, 4 So. 825.
There is no error in the decree prejudicial [***8] to appellant of which he is here complaining.
Affirmed.
GARDNER, C.J., and BOULDIN and LIVINGSTON, JJ., concur.
Page 111
240 Ala. 87, *89; 197 So. 30, **32;
1940 Ala. LEXIS 147, ***6
47 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
HESTER et al. v. FIRST NAT. BANK OF RUSSELLVILLE.
8 Div. 963.
237 Ala. 307; 186 So. 717; 1939 Ala. LEXIS 179
February 16, 1939, Decided
PRIOR HISTORY: [***1] Appeal from Circuit Court, Franklin County; Chas. P. Almon, Judge.
Bill in equity by the First National Bank of Russellville against J. F. Swinney, Lila Swinney, H. H. Hamilton, A. B.
Hester, Hosea Hester and Wilson Hester, to reform and foreclose a mortgage. From a decree for complainant,
respondents Hester appeal.
Reversed and rendered.
DISPOSITION: Reversed and rendered.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellants sought review of a judgment of the Circuit Court, Franklin County
(Alabama) in favor of appellee bank in the bank's action to foreclose a mortgage.
OVERVIEW: The bank filed a bill in equity to reform a mortgage to correct the property description, and to foreclose.
The bank alleged a transfer of the mortgage to the bank from a previous mortgagee, and that appellants claimed the land
under the mortgagors and in subordination to the mortgage, which was allegedly executed in November 1931. A
demurrer to the bill was overruled. Appellants answered that they claimed under a tax sale made in July 1932, and that
the alleged mortgagors sold the land in March 1931, so that they were not the owners in November 1931 when the
mortgage was allegedly made. Appellants also alleged that their tax title anteceded the mortgagors' sale, and the bank
thus had no right to redeem. The mortgage was reformed and ordered foreclosed. On appeal, the court reversed and
rendered judgment for appellants. The purchaser at the tax sale did not dispose of his interest until after the two-year
Page 112
redemption period expired. His sale to appellants thus conveyed a right free from redemption. The tax sale was prima
facie valid, and the bank failed to meet its burden of proving no notice to the taxpayer. Appellants had the better legal
and equitable right to he property.
OUTCOME: The court reversed the judgment that was in favor of the bank and against appellants in the bank's action
to foreclose a mortgage. The court rendered judgment for appellants.
CORE TERMS: mortgage, notice, tax sale, mortgagee, purchaser, redeem, deed, right to redeem, decree, redemption,
claimant, recorded, recital, foreclose, conveyed, invalid, proper party, foreclosure suit, mortgagor, Gen Acts, contradict,
grantees, reformation, probate, prison, foreclosed, expiration, decreed, recited, facie
Real Property Law > Financing > Mortgages & Other Security Instruments > Redemption > General Overview
[HN1] If a tax sale is regular and legal a purchaser receives a good title, subject to the right of redemption within two
years (changed to three years by 1933 Ala. Acts p. 74) by the owner, his heirs or personal representatives or by any
mortgagee or purchaser of any part of the land, or by any person having an interest in it; and if the mortgagee seeks to
redeem and his mortgage is recorded, in addition to the two years, above named, he shall have one year from the date of
written notice to him from the purchaser. Ala. Code 3109.
Real Property Law > Financing > Mortgages & Other Security Instruments > Redemption > General Overview
[HN2] Ala. Code 3109, which covers the right of redemption from a tax sale, contemplates a mortgage effectual as
such, not just a scrap of paper on which such a form of instrument appears. The mortgagor must have such interest as
will pass by the instrument in order that the relation may be created. If the mortgagor has effectually sold and conveyed
that interest and has none left in him when the mortgage is made, the mortgagee obtains no interest in the land which
will entitle him to redeem from a valid tax sale. But if the tax sale was invalid, all that the purchaser has is a right to be
reimbursed by one who has a right to redeem for such amounts as the law allows under Ala. Code 3101, 3102.
[HN3] A superior lien holder may be brought into the foreclosure suit of one who is his subordinate if the purpose is to
redeem from him.
Tax Law > State & Local Taxes > Administration & Proceedings > Collection
[HN4] The Ala. Rev. Law of 1919, 243, p.353 requires a tax collector's notice to be served by the tax collector or his
deputy on the person to whom it is addressed, or his agent, or by leaving a copy at his residence or place of business.
HEADNOTES
1. Taxation
The statute providing for notice to mortgagee so as to limit time for redemption for tax sale contemplates a
mortgage effectual as such, and a mortgagee must have such an interest as will pass by the instrument. Code 1923,
3109.
Page 113
237 Ala. 307, *; 186 So. 717, **;
1939 Ala. LEXIS 179, ***1
2. Taxation
Under statute providing for notice to mortgagee so as to limit time for redemption from tax sale, if mortgagor has
sold his interest before making mortgage, the mortgagee obtains no interest in the land which will entitle him to redeem
from a valid tax sale. Code 1923, 3109.
3. Taxation
Where tax sale is invalid, all that purchaser has is right to be reimbursed by one who has a right to redeem for such
amounts as the law allows. Code 1923, 3101, 3102.
4. Evidence
In litigation between persons not parties to a deed, who assert rights independent of it, they may contradict its terms
and show that it is invalid because the land included was not so intended.
5. Taxation
Where proof is made that a superior claimant, not made a party, had lost right to redeem land from tax sale and that
otherwise the right to redeem exists, it may be decreed, and if superior claimant has not lost his right, his controversy is
then with the party allowed to redeem. Code 1923, 10140, 10141.
6. Taxation
Where apparent outstanding title to one not made a party was shown to be based on deed which by mistake
included land involved, such apparent title did not bar right of mortgagee to redeem land from tax sale. Code 1923,
10140, 10141.
7. Mortgages
Reformation of instruments
In suit to reform and foreclose mortgage, mortgagor was a "proper party" even though he had conveyed his equity.
[Ed. Note.--For other definitions of "Proper Party," see Words & Phrases.]
8. Mortgages
Reformation of instruments
In a suit to reform and foreclose a mortgage, the mortgagee, though he has assigned the mortgage, is a "necessary
party," unless his assignment conveyed the legal title, and is a "proper party" if it did.
[Ed. Note.--For other definitions of "Necessary Parties," see Words & Phrases.]
9. Equity
In suit to reform and foreclose a mortgage, making parties persons claiming under tax purchase, and in possession
of the land, to determine validity of tax title and redeem land, if necessary, did not render bill "multifarious" where
complainant could not sue claimants under tax title on account of error in the description in the mortgage.
[Ed. Note.--For other definitions of "Multifariousness," see Words & Phrases.]
Page 114
237 Ala. 307, *; 186 So. 717, **;
1939 Ala. LEXIS 179, ***1
Equity will in the same suit correct the mortgage, foreclose it and settle the claim of persons in possession of the
premises.
11. Mortgages
Persons in possession of premises under grant from purchaser at tax deed did not occupy position of title claimants
superior to mortgage sought to be foreclosed in the sense that the court would not grant relief as to them in foreclosure
suit, where one main purpose of the suit was to contest claim of persons in possession and complainant had no standing
except in equity.
12. Mortgages
The rule that in a mortgage foreclosure suit prior lienors cannot ordinarily be brought in has many exceptions and
limitations, one of which is as to a tax sale, especially where the sale occurred after the execution of the mortgage since
such sale affects the equity of redemption which is before the court.
13. Mortgages
In suit to foreclose mortgage a superior lien holder may be brought into the foreclosure suit of one who is his
subordinate if the purpose is to redeem from him.
14. Taxation
If right to redeem from tax sale expires without notice to purchaser of error in description of land in recorded
mortgage, it cannot be said that mortgagee, so far as the purchaser is concerned, was entitled to benefits of Code
provision requiring notice to mortgagee to redeem. Code 1923, 3109.
15. Taxation
Mere failure of grantees of purchaser of land at tax sale to give mortgagee notice to redeem and knowledge that
mortgage through error failed to include land involved were immaterial where grantees did not take title to land until
after expiration of period for redemption and there was no showing that purchaser at tax sale had knowledge of error in
mortgage. Code 1923, 3109.
16. Taxation
In tax sale proceeding recitals of decree in the language of the law were prima facie evidence of the facts so recited,
with special application to the recital as to notice, but were subject to contradiction by other evidence. Gen. Acts 1919,
pp. 353, 355, 243, 249.
17. Taxation
Burden is on one who would contradict recitals of decree in tax sale proceeding to prove that no notice was given
as required by law. Gen. Acts 1919, pp. 353, 355, 243, 249.
18. Taxation
Evidence that owner of land was in prison and that there was no notice of tax sale proceeding served on him at
prison was insufficient to overcome recitals in decree that notice had been duly and regularly given. Gen. Acts 1919, pp.
353, 355, 243, 249.
19. Equity
Page 115
237 Ala. 307, *; 186 So. 717, **;
1939 Ala. LEXIS 179, ***1
Where controversy is between parties, both of whom paid material value for land in controversy and are innocent of
unfair dealing, one having the better legal and equitable title must prevail.
20. Taxation
Title of grantees of purchaser at tax sale who took title and went into possession of property after expiration of
time to redeem was superior to title of mortgagee under mortgage which incorrectly described the premises even though
no notice to redeem was given mortgagee and grantees knew that through mistake mortgage failed to include land
involved. Code 1923, 3109.
COUNSEL: Jas. L. Orman, of Russellville, for appellants.
The bill as one to redeem from tax sale is without equity and as one to quiet title is insufficient. Brown v. Feagin, 174
Ala. 438, 57 So. 20; Osborne v. Waddell, 176 Ala. 232, 57 So. 698; Watson v. Baker, 228 Ala. 652, 154 So. 788. The bill
is multifarious. Bullock v. Knox, 96 Ala. 195, 11 So. 339; Merritt v. Alabama Pyrites Co., 145 Ala. 252, 40 So. 1028.
The bill seeking reformation and foreclosure of mortgage, fails to allege any possession of the land in complainant, but
alleges that appellants claim to hold under a tax title which is in character a superior title to that of complainant. Thus
the bill is demurrable. Bolling v. Pace, 99 Ala. 607, 12 So. 796; Merritt v. Alabama Pyrites Co., supra. Remedy to
redeem from tax sale is at law, unless complainant [***2] is in possession and so alleges as to make bill one to quiet
title. Osborne v. Waddell, supra; Green v. Stephens, 198 Ala. 325, 73 So. 532; Code 1923, 3102, 3108.
Complainant's recorded mortgage did not describe the land embraced in tax deed, and complainant was not entitled to
notice, 41 C. J. 564; Scott v. Thomas, 211 Ala. 420, 100 So. 778; Stickney v. Dunaway, 169 Ala. 464, 53 So. 770; Hickey
v. McDonald Bros., 160 Ala. 300, 48 So. 1031; 4 Mayfield's Dig. p. 209, 321; Cahalan v. Monroe, 56 Ala. 303.
Recital in the decree of the probate court that notice was given as required by law was prima facie evidence that the
property owner had legal notice. Gen. Acts 1919, p. 360; Simons Rev. Laws, p. 116, 242. Service of notice cannot be
attacked in a collateral proceeding in equity. 34 C. J. 516, 1172; Driggers v. Cassady, 71 Ala. 529; Gunn v. Howell, 27
Ala. 663, 62 Am. Dec. 785; Helm v. Griffith, 19 Ala. App. 1, 95 So. 548; McCann v. Ellis, 172 Ala. 60, 55 So. 303. It is
presumed, until the contrary is shown, that public officers have done their duty as required by statute. Barry v. Stephens,
176 Ala. 93, 58 So. 467.
J. Foy Guin, of Russellville, for appellee.
The relief [***3] sought all grows out of the same subject matter, relates to the same property. The bill is not
multifarious. Code 1923, 6526; Tennessee C. I. & R. Co. v. Jourdan, 221 Ala. 106, 128 So. 132; Strickland v.
Strickland, 206 Ala. 452, 90 So. 345. A bill to foreclose a mortgage may bring in later purchasers or claimants of the
title, without being multifarious. Mitchell v. Cudd, 196 Ala. 162, 71 So. 660; Butler & Co. v. Henry & Co., 202 Ala.
155, 79 So. 630. Hamilton, being an open endorser, is a proper party; but if not, he is the only person who can raise the
question. Appellants are not prejudiced by bringing him in. Treadaway v. Stansell, 203 Ala. 52, 82 So. 12. In decreeing
the sale of land for taxes the probate court is not a court of record. Its powers are limited and statutory, and the record
must affirmatively show facts essential to the exercise of its jurisdiction of both subject matter and person. Unless the
record so shows, the proceeding is void for all purposes. Carlisle v. Watts, 78 Ala. 486; Gilliland v. Armstrong, 196 Ala.
513, 71 So. 700; Union Central L. I. Co. v. State ex rel. Whetstone, 226 Ala. 420, 147 So. 187; Smith v. Cox, 115 Ala.
503, 22 So. 78. Service of [***4] notice and return thereof as required by the statute are essential to the jurisdiction to
decree sale of lands for taxes, and should appear of record. McGee v. Fleming, 82 Ala. 276, 3 So. 1. There is no
provision for service of notice on the wife of the taxpayer. Revenue Act 1935, 217; Revenue Code 1929, 252. The
record of appellee's mortgage operated as constructive notice. Alexander v. Fountain, 195 Ala. 3, 70 So. 669. When
Reid conveyed to Swinney by quitclaim deed he put Swinney on notice as to all outstanding equities, and he became
charged with the duty to inquire as to all outstanding equities. Swinney was not and could not have been a bona fide
purchaser. Marsh v. Marsh, 215 Ala. 571, 112 So. 189; Betts v. Ward, 196 Ala. 248, 72 So. 110; O'Neal v. Prestwood,
153 Ala. 443, 45 So. 251; Rucker v. Tennessee C. I. & R. Co., 176 Ala. 456, 58 So. 465. The doctrine extends to
appellants as grantees of Swinney, the quitclaim deed from Reid being in their chain of title. Adams v. Pollak, 217 Ala.
Page 116
237 Ala. 307, *; 186 So. 717, **;
1939 Ala. LEXIS 179, ***1
688, 117 So. 299; Creel v. Keith, 148 Ala. 233, 41 So. 780.
JUDGES: ARTHUR B. FOSTER, J. JOHN C. ANDERSON, C. J., LUCIEN D. GARDNER and VIRGIL BOULDIN,
JJ., concurred.
OPINION BY: FOSTER
OPINION
[*309] [***5] [**718] FOSTER, Justice.
The bill in this case was filed in equity by appellee for the reformation of a mortgage executed on November 21,
1931, by J. F. Swinney and wife to H. H. Hamilton, so that the forty acres intended to be included should be described
as in range 12, west, instead of range 13 west, as set out in the mortgage. It alleges a transfer of the mortgage by
Hamilton to appellee, and that appellants claim the land under Swinney, and in subordination to the mortgage. Demurrer
to the bill was overruled.
Appellants then filed answer alleging that they claim under a tax sale made to one Fletcher Reid on July 5, 1932, on
which a deed was executed by the probate judge on August 20, 1934, under an assessment made to J. F. Swinney as of
October 1, 1930, and also that on March 16, 1931, Swinney sold the land to Moreland. So that the answer alleged that
Swinney was the owner on October 1, 1930, but was not the owner on November 21, 1931, when the mortgage which
appellee claims was made, and that [**719] appellants' tax title anteceded the Moreland sale, and that the mortgage
conferred no rights though there might have been a misdescription in it, and that appellee has no [***6] right to
redeem.
The bill sought to redeem if it be found that appellants had a valid tax title. The testimony does not appear to have
been taken before the trial judge. The court reformed the mortgage, expressing the opinion that the tax sale was invalid
for the failure to serve notice on the taxpayer; that no notice was given appellant as mortgagee under section 3109,
Code, so as to limit the time in which redemption must be made by it as such, and that appellants had notice that
appellee held a mortgage on the land; that appellants failed to furnish appellee with a statement of the amount required
to redeem after timely application, and are therefore taxable with the costs. The decree [*310] then ordered the
mortgage foreclosed in default of paying the debt ascertained, and out of the proceeds decreed payment of the costs and
expenses of the sale: then to repay the amount of the taxes paid by appellants and the purchaser at tax sale for the
amount due on that account.
Swinney and Hamilton were parties but have made no active defense. The Hesters who claim under the purchase at
tax sale are appellants. Moreland was not made a party.
There was ample proof of the mistake in [***7] the description of the land in the mortgage.
The court does not decree that the tax sale is void, though he expresses the opinion that it is, but holds that whether
so or not appellee, the complainant in the trial court, has a right to redeem the land, or that the Hesters are entitled to a
lien for their charges, and makes provision for it. The decree makes no reference to the Moreland deed. If that deed is
valid, complainant has no standing so far as the Hesters are concerned.
[HN1] If the tax sale was regular and legal the purchaser received a good title, subject to the right of redemption
within two years (changed now to three years,--Gen. Acts 1933, p. 74) by the owner, his heirs or personal
representatives or by any mortgagee or purchaser of any part of the land, or by any person having an interest in it; and if
the mortgagee seeks to redeem and his mortgage is recorded, in addition to the two years, above named, he shall have
one year from the date of written notice to him from the purchaser. Section 3109, Code. The change to three years does
not affect this transaction.
Page 117
237 Ala. 307, *; 186 So. 717, **;
1939 Ala. LEXIS 179, ***
No such notice was given the mortgagee, and his mortgage was recorded, but as recorded it incorrectly described
[***8] the land. But notwithstanding such error the court found that the Hesters had notice that it was intended to cover
the land in question. See Alabama Mineral Land Co. v. McFry, 236 Ala. 632, 184 So. 192.
[HN2] That section (3109) of the Code, of course, contemplates a mortgage effectual as such, not just a scrap of
paper on which such a form of instrument appears. The mortgagor must have such interest as will pass by the
instrument in order that the relation may be created. If the mortgagor has effectually sold and conveyed that interest and
has none left in him when the mortgage is made, the mortgagee obtains no interest in the land which will entitle him to
redeem from a valid tax sale. But if the tax sale was invalid, all that the purchaser has is a right to be reimbursed by one
who has a right to redeem for such amounts as the law allows under section 3101 or 3102, Code.
J. F. Swinney was in jail when he executed the mortgage and in the penitentiary when the tax sale occurred. His
father bought it from the tax sale purchaser, and he and his wife and J. F. Swinney and wife sold and conveyed it to the
Hesters in April 1935. The Swinneys had remained in possession in their [***9] own right until then, when they
yielded possession to Hester who has continuously had possession since then, and did have when this suit was begun.
So that they were and are in possession under color of title, though their real title is dependent upon a tax sale.
If that tax sale is good, this appellee has no right to redeem, if the Moreland deed is a valid conveyance. But in
litigation between persons not parties to the deed, who assert rights independent of it, they may contradict its terms and
show that it is invalid for that the land included was not so intended. Ex parte St. Paul Fire & Marine Ins. Co., 236 Ala.
543, 184 So. 267.
It would not be necessary as between them first to resort to equity to have the mistake corrected. And in litigation
between them in equity, as here, where the deed between other parties is material, one of them may allege and prove its
invalidity.
No such question was raised in Stringer v. Kelly, 212 Ala. 565, 103 So. 650, where [**720] one was seeking to
redeem under sections 10140 and 10141, Code, asserting a secondary right without making a superior claimant a party,
upon allegations that the superior claimant had lost [***10] such right.
When proof is made of that fact and otherwise the right to redeem exists, it may be decreed, and if the superior
claimant has not lost his right, his controversy is then with the party who had been allowed to redeem.
So here, when complainant shows without dispute, admitted by Moreland as a witness, that the deed to Moreland
included that here in controversy by mistake of both parties, he shows that it is not in his way to exercise the right. But
if thereby the right is perfected and exercised by complainant and Moreland wishes to assert the effect of his deed, his
controversy is with [*311] complainant and not the Hesters. The outstanding apparent right in Moreland does not
otherwise affect the rights of complainant.
The equity of this bill is not to redeem from a tax sale, nor to quiet title. It is to reform and foreclose a mortgage. So
that the mortgagor is a proper party even though he has conveyed his equity. And the mortgagee, though he has
assigned the mortgage, is a necessary party unless his assignment conveyed the legal title, and is a proper party if it did.
Langley v. Andrews, 132 Ala. 147, 31 So. 469; Pratt City Savs. Bank v. Merchants' Bank & Trust Co., 228 Ala. 251, 153
So. 185; [***11] Prout v. Hoge, 57 Ala. 28; Harwell v. Lehman, Durr & Co., 72 Ala. 344.
The Hesters claim under a tax purchaser, are in possession of the land, and it is not multifarious to bring them in
and try their tax title, and redeem if necessary. The complainant could not sue the Hesters at law on account of the error
in the description. Equity will in the same suit correct the mortgage, foreclose it and settle the claim of the Hesters in
possession. They do not occupy a position of title claimants superior to the mortgage sought to be foreclosed in the
sense that the court will not grant relief as to them in that suit. One main purpose of the suit is to contest with them their
claim, but to do so complainant has no standing except in equity, where it must go to establish it and then be free to
contest with the Hesters in possession.
Page 118
237 Ala. 307, *310; 186 So. 717, **719;
1939 Ala. LEXIS 179, ***7
Moreover, the rule that in a foreclosure suit prior lienors cannot ordinarily be brought in has many exceptions and
limitations. One of them is as to a tax sale, especially where the sale occurred after the execution of the mortgage. It is
said that such sale affects the equity of redemption, which is before the court. Randle v. Boyd, 73 Ala. 282; [***12]
Lyon v. Powell, 78 Ala. 351; Mendenhall v. Hall, 134 U.S. 559, 10 S. Ct. 616, 33 L. Ed. 1012.
It is also true that [HN3] a superior lien holder may be brought into the foreclosure suit of one who is his
subordinate if the purpose is to redeem from him. Harwell v. Lehman, Durr & Co., 72 Ala. 344; Threefoot v. Hillman,
130 Ala. 244, 30 So. 513, 89 Am. St. Rep. 39; Fendley v. Smith, 217 Ala. 166, 115 So. 103.
We do not think the bill was multifarious on account of such matters.
Without holding that the tax sale was valid, the court held that if it was so the complainant was a mortgagee under
section 3109, Code, and no notice was given him as there provided, so that he was not barred of his right to redeem
under the two year limit there provided: that if the sale was invalid the same amount was due the Hesters under section
3102, Code, and the two year limitation of section 3109 then has no application.
Appellants insist that the sale is valid and that appellee does not come under section 3109, Code, because, though
his mortgage was recorded, it misdescribed the land.
Appellee contends that though this is true, the purchaser [***13] at the sale and the Hesters had notice that his
recorded mortgage was intended to embrace the land in question, and should have given him as mortgagee the notice
provided for in section 3109.
We have no guide to construe the Code section in this connection further than as there set out. The right to redeem
then was two years from the date of sale. If that period expires without notice to the purchaser of such error in the
recorded mortgage, we think that it cannot be contended that as mortgagee, in so far as the purchaser was concerned, he
was entitled to its benefits, though afterwards such notice was given.
The court finds that the Hesters had notice of the true status of the mortgage, and did not give the notice under
section 3109, Code. But it does not find when they acquired such notice. In fact the purchaser at the tax sale did not
dispose of his interest until after two years had [**721] expired, and there is no evidence that he had such notice, and
during that time, under those circumstances, the material question is whether he had the notice. After the expiration of
two years, and after he had acquired his deed, he sold the land all without such notice. His sale conveyed [***14] a
right free from redemption under section 3109, Code. The time to redeem had elapsed, and this mortgagee was thus cut
off because he had no recorded mortgage describing this land, and the purchaser had no notice of the error within that
time.
The next question then is whether the tax sale was void, but entitling the Hesters to the benefits of section 3102,
Code.
In that connection the evidence showed an assessment of the land by J. F. Swinney [*312] on June 29, 1931, as of
October 1, 1930. The report by the tax collector of his inability to collect the taxes without sale of this land. The decree
of the probate court, June term 1932, was rendered in the form prescribed by law. Rev. Act of 1919, section 249, page
355. See Simon on Ala. Rev. Laws, section 223. This decree recited that "notice of this proceeding has been given as
required by law." The sale was made July 5, 1932, to Fletcher Reid. And a deed to him was executed August 20, 1934.
Then the time when the deed was to be executed was two years after the sale. Now it is three years. Simon on Ala. Rev.
Laws, section 241, and notes.
At the time of the sale Swinney was in the penitentiary at Kilby prison. He testified that [***15] no notice of the
proceeding in the probate court was served on him. The tax collector testified that he did not have the original notice
with his return, and it was not produced: that he did not remember how he served the notice, but did not do so at the
Kilby prison, though he knows from his course of dealing and the finding by the court that he did serve it, perhaps on
Page 119
237 Ala. 307, *311; 186 So. 717, **720;
1939 Ala. LEXIS 179, ***11
his wife at his home, but certainly someone in the residence, and that he made such a showing on the hearing in the
probate court. This was the substance of the evidence on that question.
[HN4] The Alabama Revenue Law of 1919, section 243, page 353 (see section 217 of Simon's compilation),
requires the notice to be served by the tax collector or his deputy on the person to whom it is addressed, or his agent, or
by leaving a copy at his residence or place of business. We do not undertake to set out other features of the requirement,
not here material.
The recitals of the decree, such as we have shown, being in the language of the law in that respect, are prima facie
evidence of the facts so recited, with special application to the recital as to notice. Ex parte Griffith, 209 Ala. 158, 95 So.
551; Driggers v. Cassady, 71 Ala. 529; [***16] McGee v. Fleming, 82 Ala. 276, 3 So. 1; Gilliland v. Armstrong, 196
Ala. 513, 71 So. 700.
It is clear from those authorities that the proceedings here involved are prima facie valid, but that the question of
the service of notice is open, so that the recital may be contradicted by other evidence. But the burden is on the one who
would contradict such recitals to prove that no such notice as was required by law was given. We have stated the
substance of the evidence on that issue. It was not in our opinion sufficient to meet that burden.
This is a controversy between respective parties, both of whom paid material value, and are innocent of unfair
dealing. As between them in such situation that one must prevail who has the better legal and equitable right. We think
such is with the Hesters, appellants.
The decree of the circuit court is reversed and one is here rendered denying relief to appellee and dismissing its
cause.
Reversed and rendered.
ANDERSON, C. J., and GARDNER and BOULDIN, JJ., concur.
Page 120
237 Ala. 307, *312; 186 So. 717, **721;
1939 Ala. LEXIS 179, ***15
48 of 266 DOCUMENTS
Analysis
As of: Jul 10, 2014
FOSTER et al. v. WILLIAMSON.
5 Div. 287.
236 Ala. 672; 185 So. 168; 1938 Ala. LEXIS 438
December 1, 1938, Decided
PRIOR HISTORY: [***1] Appeal from Circuit Court, Randolph County; W. B. Bowling, Judge.
Suit in equity for reformation and foreclosure of a mortgage by W. D. Williamson against T. C. Foster and others,
in which there was a cross-bill by respondent M. C. Foster. From a decree granting relief under the original bill, and
dismissing the cross-bill, respondents T. C. Foster, M. C. Foster, R. D. Foster, W. P. Mills, Arlis Mills, and Marshall
Mills appeal.
Affirmed.
CORE TERMS: notice, mortgage, reformation, decree, bona fide purchaser, grantor, foreclosure, assignments of error,
parted, disclaiming, ownership, conveyed, burden of going forward, pleaded, cross-bill, mortgagors, surety
HEADNOTES
1. Appeal and error
On appeal from decree for complainant in suit for reformation and foreclosure of mortgage, an appellant could take
nothing by joint assignments of error with other appellants whose rights were not affected by the decree appealed from.
2. Vendor and purchaser
Defense of bona fide purchaser for value without notice must be set up by way of plea or answer by person who
relies upon the defense to protect his interest.
Page 121
In suit for reformation and foreclosure of mortgage, allegations by respective grantors of defendants that before
filing of the bill, or before the grantors were made parties, they parted with their respective titles without notice, did not
constitute pleas that defendants were bona fide purchasers for value without notice.
In suit for reformation and foreclosure of a mortgage, when the defense of bona fide purchaser for value without
notice is raised, burden is upon the defendant to show purchase and payment, and, when that burden is met, the burden
of going forward shifts to the adversary to show notice.
5. Husband and wife
In suit for reformation and for foreclosure of mortgage, the burden of proving that one defendant was but the surety
of her husband, and that no part of the indebtedness was the debt of such defendant, was upon the defendant raising the
issue.
COUNSEL: Merrill, Jones & Merrill, of Anniston, for appellants.
It requires very great particularity of averment and very clear proof to authorize a reformation of a written instrument.
Lewis v. Belk, 219 Ala. 343, 122 So. 413; Webb v. Sprott, 225 Ala. 600, 144 So. 569; Camper v. Rice, 201 Ala. 579, 78
So. 923. If the description of property in a mortgage wholly fails to identify that intended to be encumbered or by
mistake is so expressed as to be applicable to a different tract or lot, so that it could not be enforced without invoking
the aid of a court of equity to reform it, the record of it is not notice to subsequent purchasers or lienors. Scott v.
Thomas, 211 Ala. 420, 100 So. 778; 41 C.J. 564; New Orleans Canal, etc. [***2] , v. Montgomery, 95 U.S. 16, 24
L.Ed. 346; Davis v. Ward, 109 Cal. 186, 41 P. 1010, 50 Am.St.Rep. 29; Wixon v. Wixon, 76 Colo. 392, 232 P. 665;
Storthz v. Bank of England, 123 Ark. 451, 185 S.W. 784; Tiffany on Real Prop. 1082. A wife may not, directly or
indirectly, become the surety for her husband. Code 1923, 8272; Continental Life Ins. Co. v. Brandt, 228 Ala. 570,
154 So. 903. A mortgage void because given to secure a husband's debt will not be reformed or foreclosed. Day v.
Shiver, 137 Ala. 185, 33 So. 831; Garland v. First Nat. Bank, 228 Ala. 480, 153 So. 743; Hughes v. Gates, ante, p. 311,
181 So. 762.
D. T. Ware, of Roanoke, for appellee.
A purchaser of land is charged with implied notice of the nature of the title of the one in possession. Alexander v.
Fountain, 195 Ala. 3, 70 So. 669; Creel v. Keith, 148 Ala. 233, 41 So. 780. Purchaser must purchase legal title to be a
bona fide purchaser for value. Winters v. Powell, 180 Ala. 425, 61 So. 96; Gibson v. Gibson, 200 Ala. 591, 76 So. 949;
Marsh v. Marsh, 215 Ala. 571, 112 So. 189. Any facts that will put one on inquiry are sufficient to give him notice to
the extent that he could not claim to be a bona fide purchaser. [***3] Nolen v. Henry, 190 Ala. 540, 67 So. 500, Ann.
Cas.1917B, 792; La Brie v. Cartwright, 55 Tex.Civ.App. 144, 118 S.W. 785; 8 C.J. 1148; 19 R.C.L. 422, 424; 27 R.C.L.
475; Carroll Merc. Co. v. Harrell, 199 Ala. 87, 74 So. 252; Gamble v. Black Warrior Coal Co., 172 Ala. 669, 55 So.
190; Ala.Code 1928, 6856. The burden of proving that a mortgage executed by a wife was given as security for
husband's debt is on the wife seeking to cancel the mortgage on that ground. Gafford v. Speaker, 125 Ala. 498, 27 So.
1003; Corinth Bank & Trust Co. v. King, 182 Ala. 403, 62 So. 704; Davis v. Elba Bank & Trust Co., 216 Ala. 632, 114
So. 211; Stroup v. International Life Ins. Co., 218 Ala. 382, 118 So. 752; Hall v. Gordon, 189 Ala. 301, 66 So. 493;
Alabama Farm Bureau Credit Corp. v. Helms, 227 Ala. 636, 151 So. 589.
JUDGES: BROWN, Justice. ANDERSON, C. J., and THOMAS and KNIGHT, JJ., concur.
OPINION BY: BROWN
Page 122
236 Ala. 672, *; 185 So. 168, **;
1938 Ala. LEXIS 438, ***1
OPINION
[*673] [**168] BROWN, Justice.
The equity and sufficiency of the bill in this case was sustained on the former appeal, reported as Foster et al. v.
Williamson, 234 Ala. 144, 174 So. 232, to which we refer for general statement of the purpose and nature of the
proceedings.
At [***4] the time of that appeal the bill had been amended as of date, October 7, 1936, by making W. P. Mills
and Arlis Mills parties defendant, in response to a statement in paragraph nine of the answer of the defendants Foster,
disclaiming any interest in the property misdescribed in the mortgage, in respect to which the reformation was sought,
and alleging that said defendants Foster had by deed conveyed said property to the said Mills.
Thereafter, all the defendants joined in an answer to the bill as amended, disclaiming ownership of the property and
alleging that the said defendants, W. P. Mills and Arlis Mills, before they were made parties and without notice,
conveyed said property to Marshall Mills, "and to the best of their knowledge and belief said Marshall Mills is at this
time [the time of filing said answer] the holder of the legal title in and to said land."
Thereupon complainant amended the bill bringing in the said Marshall Mills as a party defendant, who likewise
disclaimed [**169] ownership, and alleging that before he was made a party, he "without notice sold and conveyed the
land to one C. A. Rice."
Rice answered, disclaiming ownership, alleging that he "had not [***5] acquired title [to said land] from one
Marshall Mills or any one else."
On submission for final decree, the circuit court granted relief to the complainant, and dismissed the cross-bill of
the defendant M. C. Foster, and from that decree the defendants, T. C. Foster, M. C. Foster, R. D. Foster, W. P. Mills,
Arlis Mills and [*674] Marshall Mills, have appealed, and have here submitted without severance in the assignments
of error.
All of the appellants, except Marshall Mills, testified that they had disposed of their entire interest in said lands as
alleged in their said answers. Taking that testimony as reflecting the truth, the rights of appellants Foster, W. P. Mills
and Arlis Mills, are not affected by the decree. If Marshall Mills, contrary to the averments of his answer, still owned
the land, he can take nothing here by his joint assignments of error with the other appellants, whose rights are not
affected by the decree. Killian v. Cox, 132 Ala. 664, 32 So. 738; Moore et al. v. Welden, 225 Ala. 458, 143 So. 831.
On the other hand if he parted with his interest in the property to the defendant Rice, who has not appealed, he has
no ground to complain.
[***6] It will be noted that none of the defendants set up in their own right the defense of a bona fide purchaser
for value without notice, but their respective grantors allege that before the filing of the bill, or before such grantor was
made a party, they parted with their respective titles, without notice. This does not meet the requirement of the rules of
good pleading "that the defense of bona fide purchaser for value without notice is defensive matter that must be set up
by way of plea or answer," by the person who relies on such defense to protect his interest. Kelley et al. v. Chandler,
184 Ala. 358, 63 So. 941. And when so pleaded, the burden is on the defendant to show purchase and payment, and this
shown, the burden of going forward shifts to his adversary to show notice. Reeder v. Cox, 218 Ala. 182, 118 So. 338;
Hatter et al. v. Quina et al., 216 Ala. 225, 113 So. 47; Ely v. Pace et al., 139 Ala. 293, 35 So. 877.
Our conclusion however is, that if this defense had been well pleaded, that the evidence wholly fails to sustain such
defense. The defendants' testimony affords inferences that clearly go to show an attempt to fabricate [***7] a defense,
by colorable transfers of the property to defeat the complainant's mortgage, and prevent a reformation thereof.
Page 123
236 Ala. 672, *; 185 So. 168, **;
1938 Ala. LEXIS 438, ***3
The evidence clearly shows the mistake of the scrivener and that the complainant intended to take a mortgage on
the lands owned by the mortgagors, and that said mortgagors intended to give such mortgage.
The burden was on M. C. Foster to show that she was but the surety of her husband; that no part of the debt was her
debt. We concur in the conclusion expressed in the decree that she failed to carry that burden. The allegation of the
cross-bill as to M. C. Foster's incompetency to execute the mortgage is not sustained by the proof.
Affirmed.
ANDERSON, C. J., and THOMAS and KNIGHT, JJ., concur.
Page 124
236 Ala. 672, *674; 185 So. 168, **169;
1938 Ala. LEXIS 438, ***7
57 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
FINDLAY et al. v. HARDWICK.
2 Div. 51.
230 Ala. 197; 160 So. 336; 1935 Ala. LEXIS 115
February 28, 1935, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied March 28, 1935. Reported at: 230 Ala. 197 page 201.
PRIOR HISTORY: Appeal from Circuit Court, Hale County; John Miller, Judge.
Action by Georgia Hardwick against John H. Findlay and another. From a judgment for plaintiff, defendants
appeal.
Affirmed in part, and in part reversed and rendered.
DISPOSITION: Affirmed in part, and in part reversed and rendered.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendants sought review of the judgment of the Circuit Court, Hale County (Alabama),
which entered judgment for plaintiff landowner in her action for statutory ejectment, trespass for the wrongful taking of
1 bale of cotton and 60 bushels of corn, trover for the conversion of the cotton and corn, detinue for the recovery of the
cotton and corn, and for the destruction of the landlord's lien on the cotton and corn.
OVERVIEW: The landowner brought an action for statutory ejectment, trespass for the wrongful taking of 1 bale of
cotton and 60 bushels of corn, trover for the conversion of the cotton and corn, detinue for the recovery of the cotton
and corn, and for the destruction of the landlord's lien on the cotton and corn. The circuit court found in favor of the
landowner and defendants appealed. The court held that the landowner successfully established title by showing the
purchase of the property at the foreclosure sale. The court held that the landowner was entitled to recover, as defendants
Page 125
did not show a better title. The court held that the landowner was entitled to recover against defendants in the action of
ejectment. The court found that the undisputed evidence showed that the landowner had no title to the cotton and corn;
nor did she have a lien thereon as landlord. The court reversed the judgment, in so far as it awarded the cotton and corn
or damages therefor to the landowner and rendered judgment in favor of defendants.
OUTCOME: The court affirmed the judgment of the circuit court awarding the possession of the land to the
landowner. The court reversed the part of the judgment awarding the cotton and corn, or damages therefor to the
landowner and rendered judgment in favor of defendants.
CORE TERMS: tract, deed, grantee, ejectment, supposed, tenant, cotton, corn, rented, foreclosure, trespass, causes of
action, misjoinder, notorious, landlord, grantor, renting, lands selected, rent, action of ejectment, personal action,
common source, entitled to recover, predecessor, disclaimer, mortgage, delicto, joinder, trover, action in rem
Civil Procedure > Parties > Joinder > General Overview
Civil Procedure > Joinder of Claims & Remedies > General Overview
[HN1] The statute, Ala. Code 9467 (1923), authorizes the joinder of all actions ex delicto of the same nature, that ism
personal actions, in the same suit, but in separate counts, whether they arose out of the same transaction or not.
[HN2] It is only where the plaintiff seeks to join counts ex delicto with counts ex contractu that it must appear from the
averments of the complaint that the cause of action arose out of the same transaction or related to the same
subject-matter.
Civil Procedure > Jurisdiction > Personal Jurisdiction & In Rem Actions > In Rem Actions > True in Rem Actions
Real Property Law > Title Quality > Adverse Claim Actions > Ejectment
[HN3] The statutory action in the nature of ejectment is a mixed action partaking of the nature of actions in rem and
also in personam. It partakes of an action in rem in so far as the court undertakes to determine the title and deliver
through its process the possession of the land, and in personam in so far as it is a remedy for reparation in damages, as
for mesne profits and damages for waste, or any other injury to the lands, as the plaintiff's interests in the lands entitled
him to recover, to be computed up to the time of the verdict. Ala. Code 7453 (1923).
Criminal Law & Procedure > Criminal Offenses > Property Crimes > Burglary & Criminal Trespass > Criminal
Trespass > General Overview
Torts > Intentional Torts > Conversion
[HN4] Counts in trover, trespass and trespass on the case may be joined, when they relate to the same subject-matter.
Evidence > Documentary Evidence > Parol Evidence
Evidence > Relevance > Parol Evidence
[HN5] Where the supposed grantee claims no right or title to the land embraced in the deed, parol evidence is
admissible to show the character of the holder's possession.
HEADNOTES
Page 126
230 Ala. 197, *; 160 So. 336, **;
1935 Ala. LEXIS 115, ***1
1. Pleading
Grounds of demurrers to complaint that there was misjoinder of parties defendant and misjoinder of causes of
action held not sufficiently specific (Code 1923, 9479).
2. Action
Complaint wherein all counts were ex delicto held not demurrable for misjoinder of causes of action on ground that
causes of action did not arise out of same transaction (Code 1923, 9467).
3. Ejectment
Statutory action in nature of "ejectment" is a mixed action, partaking of action in rem in so far as court undertakes
to determine title and deliver possession and of action in personam in so far as it is remedy for reparation in damages
(Code 1923, 7453).
[Ed. Note.--For other definitions of "Ejectment," see Words & Phrases.]
4. Action
Joinder of personal action with action of ejectment, or statutory action in nature thereof, is not authorized (Code
1923, 9467).
5. Adverse possession
Rule that grantor remaining in possession is presumptively grantee's tenant at sufferance, and his possession
cannot become adverse until there is clear, unequivocal, and notorious disclaimer of landlord's title, was inapplicable,
where supposed grantee claimed no interest in land covered by deed and recognized title of person in possession by
renting land and becoming tenant.
Rule that grantor remaining in possession is presumptively grantee's tenant at sufferance and his possession
cannot become adverse until there is clear, unequivocal, and notorious disclaimer of landlord's title, is inapplicable
except as between parties to deed, and does not apply to subsequent grantees.
7. Evidence
In ejectment, where supposed grantee claimed no right or title to land embraced in deed, parol evidence held
admissible to show mistake in description of deed.
Supposed grantor, renting land to supposed grantee, could hold adversely to supposed grantee without otherwise
disavowing such grantee's title.
9. Champerty and maintenance
Where son, selecting west and middle forty-acre tracts in plan for partitioning mother's land was erroneously
deeded west and east tracts, but went into possession of lands selected, son's deed of tracts conveyed to him to
mortgagee in lieu of foreclosure, which was executed before Code changing common law, held champertous and void
as to mother who was in open notorious adverse possession of east forty.
Page 127
230 Ala. 197, *; 160 So. 336, **;
1935 Ala. LEXIS 115, ***1
Where son, selecting west and middle forty-acre tract in plan for partitioning mother's land, was erroneously
deeded west and east tract, but went into possession of land selected, and rented east tract from mother, plaintiff
claiming east tract under mother held entitled to recover in ejectment against defendants claiming under son's deed of
lands conveyed to him in lieu of foreclosure of mortgage (Code 1923, 7457).
11. Mortgages
Where son, selecting west and middle forty-acre tracts in plan for partition of mother's land, was erroneously
deeded west and east tracts, but went into possession of land selected and subsequently rented east tract from mother,
purchaser at foreclosure sale of east tract under mother's mortgage held not entitled to recover cotton and corn taken by
mortgagee claiming under son's deed of land conveyed to him in lieu of foreclosure who dispossessed son from east
tract, since son was not purchaser's tenant (Code 1923, 8798).
On Rehearing.
In ejectment, evidence showed that person claimed as common source of title acquired title by open notorious
adverse possession of land involved (Code 1923, 7453).
Son of person claimed as common source testified that his mother claimed land involved; that from 1898 witness
rented part of tract from mother, and defendants' predecessor also rented part, and during 1930 executed rent note to his
mother; that he assessed tract in his own name as agent for his mother; that mother leased portions of land to other
parties from 1898 up to time of her death; that tract was known as mother's land, and she claimed same and exercised all
control over it, although witness tended to it for her during her later years; that defendants' predecessor never claimed to
own any of tract, but always rented small portion from his mother and paid her rent for it until her death, and then paid
rent to witness as agent for heirs.
Person claimed as common source of title in ejectment who was in adverse possession of land involved for more
than 20 years under doctrine of prescription was conclusively presumed to be owner in fee, and such presumption
precluded all judicial inquiry into her title (Code 1923, 7453).
COUNSEL: Tom B. Ward and J. Monroe Ward, both of Tuscaloosa, and S. F. Hobbs, of Selma, for appellants.
A grantor remaining in possession is presumptively but a tenant at sufferance of the grantee. Daniels v. Williams, 177
Ala. 140, 58 So. 419; Abbett v. Page, 92 Ala. 571, 9 So. 332; Williams v. Higgins, 69 Ala. 517; Wells v. Sheerer, 78 Ala.
142; Gewin v. Shields, 187 Ala. 153, 65 So. 769. Nothing but a clear, unequivocal, and notorious disclaimer of title of
landlord could render such possession adverse. Jackson v. Burton, 1 Wend. (N. Y.) 341; Chandler v. Pope, 205 Ala. 49,
87 So. 539; Bishop v. Truett, 85 Ala. 376, 5 So. 154; Salter v. Fox, 190 Ala. 288, 67 So. 439, 440. Plaintiff's
predecessors were guilty of laches in not having the error in the deed corrected before twenty-five years passed from the
execution [***2] of the deed of Frenshaw Steele to Bridgen. Moore v. Moore, 212 Ala. 685, 103 So. 892. In ejectment
the legal title only is involved. Plaintiff can recover only on a superior legal title, and defendant can defeat title only on
legal defenses. Equities of the parties cannot be asserted or regarded. Blair v. Blair, 199 Ala. 480, 74 So. 947; 28 R. C.
L. 81; Monfee v. Hagan, 201 Ala. 627, 79 So. 189; Carpenter v. Joiner, 151 Ala. 454, 44 So. 424; Rottenberry v. Brown,
142 Ala. 630, 38 So. 804. If both plaintiff and defendant claim title through Narcilla White, neither has to show her title.
As between them, the older title is best. Bishop v. Truett, supra; Florence B. & I. Ass'n v. Schall, 107 Ala. 531, 18 So.
108; Perolio v. Doe, 197 Ala. 560, 73 So. 197; Stewart Bros. v. Ransom, 204 Ala. 589, 87 So. 89; 9 R. C. L. 846.
Appellant Mrs. Findlay is an innocent purchaser. Kelly v. Andalusia Brick Co., 222 Ala. 203, 131 So. 559. Narcilla
White, her heirs, her mortgagee, and any purchaser at foreclosure sale are estopped from setting up title superior to that
of Bridgen or his grantees. Ashurst v. Ashurst, 119 Ala. 219, 24 So. 760. Plaintiff in ejectment may recover mesne
Page 128
230 Ala. 197, *; 160 So. 336, **;
1935 Ala. LEXIS 115, ***1
profits and damages [***3] for waste. Mesne profits mean fair rental value. Code 1923, 7454; Profile Cot. Mills v.
Calhoun W. Co., 204 Ala. 243, 85 So. 284. Persons having color of title are liable for only a year's rent. Code 1923,
7464. Ejectment and conversion, trespass, or detinue cannot be joined in the same complaint. Gulf Y. P. Co. v.
Urkuhart, 151 Ala. 452, 44 So. 555.
Jones & Dominick, of Tuscaloosa, for appellee.
The tract of land was held adversely by Narcilla White for thirty years, and by the statute a title was conferred on her
which would either maintain or defeat ejectment. Gerald v. Hayes, 205 Ala. 105, 87 So. 351; Brantley v. Helton, 224
Ala. 93, 139 So. 283; Ford v. Bradford, 218 Ala. 62, 117 So. 429; Earnest v. Fite, 211 Ala. 363, 100 So. 637; Smith v.
Keyser, 115 Ala. 455, 22 So. 149; Doolittle v. Robertson, 109 Ala. 412, 19 So. 851; Murray v. Hoyle, 92 Ala. 559, 9 So.
368; Normant v. Eureka Co., 98 Ala. 181, 12 So. 454, 39 Am. St. Rep. 45. Possession of a tenant of one who claims to
hold by adverse possession inures to the benefit of such claimant. Alabama S. L. Co. v. Hogue, 164 Ala. 657, 51 So.
320; Eiland v. Frost, McGhee & Co., 199 Ala. 639, 75 So. 293; Bates v. Flowers, [***4] 220 Ala. 205, 124 So. 661. A
grantor in a conveyance with general warranty is not estopped from asserting against his grantee a title acquired by
adverse possession subsequent to the conveyance. Doolittle v. Robertson, supra; Abbett v. Page, 92 Ala. 571, 9 So. 332;
Mahan v. Smith, 151 Ala. 482, 44 So. 375; Chandler v. Pope, 205 Ala. 49, 87 So. 539; 2 C. J. 145. Where a cause is
tried by the court without a jury, on evidence ore tenus, the finding will not be disturbed on appeal unless plainly
contrary to the weight of the evidence. McCay v. Parks, 201 Ala. 647, 79 So. 119; Profile C. Mills v. Calhoun W. Co.,
204 Ala. 243, 85 So. 284; Hackett v. Cash, 196 Ala. 403, 72 So. 52.
JUDGES: JOEL B. BROWN, J.
OPINION BY: BROWN
OPINION
[**337] [*199] BROWN, Justice.
This action was commenced by the appellee, Georgia Hardwick, and her husband, William G. Hardwick, on
November 2, 1933, against appellants, John H. Findlay and Lenna J. Findlay, the complaint embodying five counts.
Before the case was submitted, the complaint was amended by striking out William G. Hardwick as party plaintiff,
thus leaving Georgia Hardwick as the sole plaintiff.
The first count was statutory ejectment in Code form (an [***5] action in the nature of an action in ejectment,
Code 1923, 7453) for the recovery of the possession of the N.E. 1/4 of the S.E. 1/4 of section 19, township 23, range 5
east, in Hale county; the second, trespass de bonis asportatis, for the wrongful taking of one bale of cotton and sixty
bushels of corn grown during the year 1933 on said lands described in count 1; the third count was in trover for the
conversion of said cotton and corn; the fourth in detinue for the recovery of the possession of the cotton and corn; and
the fifth in case for the destruction of the landlord's lien on the cotton and corn alleged to have been grown on the lands
by Frenshaw Steele during the year 1933.
The defendants demurred to the complaint because: "1. There is a misjoinder of parties defendant to said cause. 2.
There is a misjoinder of causes of action in said suit. 3. There is a misjoinder of causes of action in that the causes of
action set up in said complaint do not arise out of the same transaction."
The demurrers were overruled, and properly so. The first and second grounds were not sufficiently specific. Code
1923, 9479; Central of Georgia Railway Co. v. Joseph, 125 Ala. 313, 28 So. 35. [***6]
[HN1] The statute, Code 1923, 9467, authorized the joinder of all actions ex delicto of the same nature--that is,
personal actions--in the same suit, but in separate counts, whether they arose out of the same transaction or not.
Page 129
230 Ala. 197, *; 160 So. 336, **;
1935 Ala. LEXIS 115, ***2
Bridwell v. Brotherhood of Railroad Trainmen et al., 227 Ala. 443, 150 So. 338; Ballenger v. Ballenger, 205 Ala. 595,
88 So. 826.
[HN2] It is only where the plaintiff seeks to join counts ex delicto with counts ex contractu that it must appear from
the averments of the complaint that the cause of action arose "out of the same transaction or related to the same
subject-matter." Western Ry. of Alabama v. Hart et al., 160 Ala. 599, 49 So. 371, 375; Cox v. Awtry, 211 Ala. 356, 100
So. 337.
All the counts were ex delicto; therefore the third ground of demurrer was not well taken.
[HN3] The statutory action in the nature of ejectment is a mixed action partaking of the nature of actions in rem and
also in personam. It partakes of an action in rem in so far as the court undertakes to determine the title and deliver
through its process the possession of the land, and in personam in so far as it is a remedy for reparation in damages,
[***7] as for "mesne profits and damages for waste, or any other injury to the lands, as the plaintiff's interests in the
lands entitled him to recover, to be computed up to the time of the verdict." Code 1923, 7453; Woolf v. McGaugh, 175
Ala. 299, 57 So. 754; Walker's American Law (11th Ed.) p. 569, 264.
Gulf Yellow Pine Co. v. Urquhart, 151 Ala. 452, 44 So. 555, dealt with a joinder of trespass and trover under
section 3293 of the Code of 1896, which provided that [HN4] "Counts in trover, trespass and trespass on the case may
be joined, when they relate to the same subject-matter." While that statute is a predecessor to section 9467 of the present
Code, it was revised to speak its present language in bringing it forward into the Code of 1907 as section 5329.
In a later case, Snead v. Patterson, 190 Ala. 43, 66 So. 664, it was held, that counts in detinue, trover, and trespass
quare clausum fregit were properly joined, and in the course [**338] of the opinion the trespass counts were
characterized as "real actions." That characterization appears to have been a mere inadvertence not necessary to a
decision of the question presented, and is contrary [***8] to the express holding in Woolf v. McGaugh, supra, where
the character of the action, trespass quare clausum fregit, was directly involved and necessarily decided. It is also
contrary to the unanimous authority on the subject. Walker's American Law, supra; 63 C. J. p. 964, 127.
Looking to the predecessors of the present statute, section 9467, they clearly dealt with personal actions, and, when
this statute [*200] is considered in the light of its history, it is apparent that it was not the legislative intent in its
revision to authorize the joinder of a personal action with the action of ejectment or the statutory action in the nature
thereof.
The trial was before the court sitting without a jury.
It appears without dispute that Narcilla White is the common source of the title to the land in controversy; this is
conceded in appellants' brief. It is also conceded that said Narcilla White, up to the year 1903, owned that portion of the
N.E. 1/4 of the S.W. 1/4 of section 19, township 23, range 5 east, in Hale county, lying north of Baptist creek,
consisting of about twenty acres, and the N.W. 1/4 of the S.E. 1/2 and the N.E. 1/4 of the S.E. 1/4 of the same section,
[***9] township, and range, the first tract above described being designated as the "west forty," the next as the "middle
forty," and the last as the "east forty," along with other lands; that she had a number of children and undertook to parcel
out and divide her holdings between them; that her son, Frenshaw Steele selected as his portion said "west forty and the
middle forty"; that the deed executed to said Frenshaw Steele, instead of describing the land selected by him, described
the "west forty"--twenty acres of it--and the "east forty"; that Frenshaw Steele went into possession of the lands selected
by him--the "west forty" and the "middle forty"--and remained in possession thereof until January 21, 1908, when he
executed a deed, in lieu of foreclosure, to one G. Brigden, and thereafter rented said west and middle tracts from
Brigden up until Brigden's death; that Narcilla White retained possession of the east forty up until her death in 1930,
more than twenty years; that from 1903 to the death of Narcilla White Frenshaw Steele rented a portion of the east
forty--seven acres--and cultivated the same, paying his mother rent therefor up until she died, more than twenty years;
that he (Frenshaw) [***10] never claimed any right, title, or interest in said land, except as a tenant of his mother.
Page 130
230 Ala. 197, *199; 160 So. 336, **337;
1935 Ala. LEXIS 115, ***6
The evidence is further without dispute that the mistake in the description in said deed executed by Narcilla White
to Frenshaw Steele was not discovered until the year 1931, after the death of Narcilla White. The evidence is also
without dispute that Frenshaw Steele, after the death of Narcilla White, rented the east forty from her heirs and paid
them rent therefor, and was in possession of the east forty as such tenant in 1933, cultivated the same, and remained
thereon until the defendant John Findlay, through force, drove him out of possession and took from him the cotton and
corn sued for in this case.
One of appellants' major contentions is that a grantor remaining in possession is presumptively but a tenant at
sufferance of the grantee, and such possession cannot become adverse, until there is a clear, unequivocal, and
notorious disclaimer of the title "of his landlord." Daniels et al. v. Williams et al., 177 Ala. 140, 58 So. 419.
This is a sound proposition of law, but it is not applicable, where the supposed grantee claims no interest in the land
covered by the deed and [***11] recognizes the title of the person in possession by renting the land and becoming a
tenant himself. Nor is it applicable except as between the parties to the deed. It does not apply to subsequent grantees.
Gerald et al. v. Hayes et al., 205 Ala. 105, 87 So. 351.
Another contention is that parol evidence was not admissible to vary the terms of the deed, in an action of
ejectment by showing the mistake in the description of the deed. This is also a correct abstract proposition.
But [HN5] where, as here, the supposed grantee claims no right or title to the land embraced in the deed, the
evidence was admissible to show the character of the holder's possession.
Moreover, there could be no clearer disavowal of the title of the supposed grantee than a renting of the land in
question by the supposed grantor to the supposed grantee and such grantee entering under such renting. In fact and in
law, in these circumstances, no necessity exists for such disavowal.
The plaintiff successfully deraigned title from Narcilla White, through the Bank of Moundville, by showing the
execution of the mortgage by said Narcilla to said bank, its foreclosure, and a purchase of the property at the foreclosure
[***12] sale by the plaintiff. Therefore the plaintiff was entitled to recover, unless the defendants showed a better title.
[**339] The deed executed by Frenshaw Steele and his wife, Harriett Steele, to G. Brigden on January 21, 1908, was
an essential link in the defendants' chain of title. This deed was executed before the Code of 1907 went into effect, May
1, 1908, changing the common law, and was champertous and void as to Narcilla White, who was then in the open
notorious adverse possession of the land. Gerald et al. v. Hayes et al., supra.
Issue was joined on the plea of disclaimer, and the plaintiff, under the evidence, was entitled to recover against both
defendants [*201] in the action of ejectment. Code 1923, 7457.
The judgment of the circuit court awarding the possession of the land to the plaintiff was therefore free from error,
and will be affirmed.
The undisputed evidence shows that the plaintiff had no title to the cotton and corn; nor did she have a lien thereon
as landlord. Frenshaw Steele was not her contract tenant. The cotton and corn, under the evidence, were the property of
Frenshaw Steele. Code 1923, 8798; Hardin v. Pulley, 79 Ala. 381. [***13]
The judgment, in so far as it awarded the cotton and corn or damages therefor to plaintiff, is reversed, and a
judgment here rendered in favor of the defendants. One-half of the costs of the appeal is taxed against appellants; the
other half against appellee.
Affirmed in part, and in part reversed and rendered.
Page 131
230 Ala. 197, *200; 160 So. 336, **338;
1935 Ala. LEXIS 115, ***10
59 of 266 DOCUMENTS
Caution
As of: Jul 10, 2014
SHERROD et al. v. KING.
6 Div. 259.
226 Ala. 522; 147 So. 600; 1933 Ala. LEXIS 364
March 9, 1933, Decided
SUBSEQUENT HISTORY: [***1] Rehearing Denied April 27, 1933.
PRIOR HISTORY: Appeal from Circuit Court, Jefferson County, Bessemer Division; Gardner Goodwyn, Judge.
Bill to remove cloud from title by Bloss King against F. C. Sherrod and S. P. King. From a decree for complainant,
respondents appeal.
Affirmed.
CASE SUMMARY:
PROCEDURAL POSTURE: Respondent purchasers challenged an order of the Circuit Court, Jefferson County,
Bessemer Division (Alabama), which granted judgment to complainant possessor, in an action to remove cloud upon
title to land.
OVERVIEW: Complainant sought to remove a cloud of title on the land. Both parties claimed title from a common
source, complainant through a lease sale contract made in 1924 and respondents through a mortgage in 1926. Soon after
the purchase of the property by lease sale contract, and prior to the execution of the mortgage under which respondents
claimed, the complainant went into actual possession. There was a balance due the grantor on the lease sale contract at
the time of his death. The complainant paid this balance to the widow and son of decedent and received delivery of a
deed. Respondents insisted this balance was due to be paid to the mortgagee, and complainant was required to do equity
by making such payment as a condition to relief. The court held that complainant was a prior purchaser of the lands
Page 132
with a superior equity to that of the mortgagee or his purchaser with notice by reason of complainant's actual
possession. The right of the administrator of the grantor's estate, rather than the heirs at law, to collect this balance of
purchase money was not a matter of which respondents could complain.
OUTCOME: The court affirmed the judgment of the trial court.
CORE TERMS: mortgage, grantor's, mortgagee, notice, tenant, lease sale, rents, foreclosure, conveyance, mortgagor's,
lessor, deed, common source, purchaser, actual notice, purchase money, signature, tendered, lessee, cloud, actual
demand, claim of ownership, intercepted, intercept, certum, executed and delivered, cash payment, own name, actual
possession, administrator
Real Property Law > Financing > Mortgages & Other Security Instruments > Transfers > General Overview
[HN1] The mortgagor, rather than the mortgagee, is entitled to rents from the mortgagor's tenant until they are
intercepted by notice to or demand upon the tenant. Even after foreclosure, or other grant of the complete reversion, the
tenant is protected in making payment of rents to his lessor until he has notice of such conveyance. Ala. Code 6849.
This means actual notice, not constructive notice, given by the record of the mortgage. Mere actual notice of the
existence of the mortgage does not, before foreclosure, intercept the rents and put the tenant in the wrong in making
payment to the lessor. An actual demand is required.
HEADNOTES
1. Quieting title.
Title to common source is all that need be shown by lessee claiming through lease sale contract to remove cloud on
title to land subsequently mortgaged by lessor.
2. Quieting title.
Evidence showed that grantor named "Wylam Heights Land Company," throughout body of lease sale contract
signed "Wylam Heights Land Company, by R. L. Sudduth, Owner," was R. L. Sudduth, who subsequently executed
mortgage, thus entitling lessee to have such cloud removed from title.
Evidence disclosed that R. L. Sudduth in person negotiated the trade, received the cash payment,
executed and delivered the lease sale contract, put the lessee in possession, and for nearly five years
thereafter collected the monthly installments, giving his personal receipts therefor, and finally signed and
tendered a deed in his own name.
3. Deeds.
In determining grantor's identity in conveyance, rule that is certain which can be made certain obtains.
4. Mortgages.
Actual possession prior to execution of mortgage charged mortgagee with notice of possessor's claim of
ownership, and put him on inquiry as to nature of such claim.
Page 133
226 Ala. 522, *; 147 So. 600, **;
1933 Ala. LEXIS 364, ***1
5. Mortgages.
Mortgagor, not mortgagee, is entitled to rents from mortgagor's tenant, until they are intercepted by notice to, or
demand on, tenant.
6. Mortgages.
Even after foreclosure, tenant is protected in paying rents to his lessor until he has actual notice of conveyance
(Code 1923, 6849).
7. Mortgages.
Actual notice of existence of mortgage does not, before foreclosure, put tenant in wrong in making payment to his
lessor, actual demand being required (Code 1923, 6849).
8. Appeal and error.
Mortgagee cannot complain of right of administrator of mortgagor's estate, rather than heirs at law, to collect, from
purchaser seeking to quiet title, balance of purchase money not payable to mortgagee.
COUNSEL: Theo. J. Lamar and T. A. Murphree, both of Birmingham, for appellants.
The burden was upon the complainant to establish his title or to trace title out of R. L. Sudduth into him, as it is asserted
in the bill that complainant and respondents traced title through him. Kegley v. Rosser, 197 Ala. 109, 72 So. 381. The
answer of respondents put in issue the title claimed by appellee in his bill. Rushton v. McLaughlin, 213 Ala. 380, 104
So. 824. Complainant, averring that he was the owner of the land and had a valid contract of sale from Sudduth,
assumed the burden of proving a contract with Sudduth prior to execution of the mortgage to appellant King. Vaughan
v. Palmore, 176 Ala. 72, 57 So. 488. The lease sale contract which complainant contended was the contract of Sudduth
was not sufficient to establish the contractual relations as contended, and the court is bound to construe the contract
[***2] as a transaction with Wylam Heights Land Company. Wailes v. Howison, 93 Ala. 375, 9 So. 594; Ashley v.
Cathcart, 159 Ala. 474, 49 So. 75; Boykin v. Bank, 72 Ala. 262, 47 Am. Rep. 408; Harrison v. Simons, 55 Ala. 510;
Shriner v. Craft, 166 Ala. 146, 51 So. 884, 28 L. R. A. (N. S.) 450, 139 Am. St. Rep. 19; 6 R. C. L. 876, 264; 16 Cyc.
72. There being no evidence that the contract between Wylam Heights Land Company and appellee was the contract of
Sudduth, the estoppel sought to be invoked by the contract must fail. Hall v. Henderson, 126 Ala. 449, 28 So. 531, 61 L.
R. A. 621, 85 Am. St. Rep. 53. The question of innocent purchaser does not arise, nor was the mortgage to appellant
King void under the doctrine of champerty or maintenance. Code 1923, 6069. If Sudduth had executed the lease sale
contract, the liability of appellee would have inured to the benefit of appellants after the law day of the mortgage. Otis v.
McMillan & Sons, 70 Ala. 46; Coffey v. Hunt, 75 Ala. 236. Upon the death of Sudduth, the debt could only be
discharged by payment to his administrator or appellant King. 24 Cyc. 926; Code 1923, 6946. The recording of
appellant King's mortgage was notice to appellee that [***3] Sudduth had conveyed the land by mortgage to King.
Code 1923, 6860.
F. W. McCarthy and W. B. Harrison, both of Birmingham, for appellee.
Neither Sudduth nor his personal representative or heirs was a necessary party. 32 Cyc. 1347; Hodge v. Joy, 207 Ala.
198, 92 So. 171. King's mortgage passed no title, because the mortgagor Sudduth then owned none. Bailey v. Selden,
124 Ala. 403, 26 So. 909; Williams v. Armstrong, 130 Ala. 389, 30 So. 553; Fitzpatrick v. Brigman, 130 Ala. 450, 30 So.
500. Complainant's possession under color of title was coextensive with such color and its boundaries. Such extended
possession is actual possession, not constructive. 41 C. J. 540; Marietta F. Co. v. Blair, 173 Ala. 524, 56 So. 131;
McMillan v. Aiken, 182 Ala. 303, 62 So. 519. Complainant's possession put King and Sherrod on notice the same as a
record, and Sudduth's lack of possession excited their inquiry. Smith v. Harbaugh, 216 Ala. 202, 112 So. 914; Gamble
v. Black Warrior Coal Co., 172 Ala. 669, 55 So. 190; Wiggins v. Stewart Bros., 215 Ala. 9, 109 So. 101; Kent v. Dean,
Page 134
226 Ala. 522, *; 147 So. 600, **;
1933 Ala. LEXIS 364, ***1
128 Ala. 600, 30 So. 543; Alexander v. Fountain, 195 Ala. 3, 70 So. 669; Pake v. Lindsey Mill Co., 208 Ala. 569, 94
[***4] So. 573; Sulzbacher v. Campbell, 219 Ala. 191, 121 So. 706; Evans v. Bryan, 202 Ala. 484, 80 So. 868; Sloss S.
S. & I. Co. v. Taff, 178 Ala. 382, 59 So. 658.
JUDGES: BOULDIN, Justice. ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.
OPINION BY: BOULDIN
OPINION
[*523] [**601] BOULDIN, Justice.
The bill invoked the general jurisdiction of a court of equity to remove a cloud upon title to land, complainant being
in possession, and without adequate remedy at law.
The property in question is described as "Lots Number Three (3), Four (4), Five (5) and Six (6) of Block Five (5),
Wylam Heights, according to the map and survey of Wylam Heights," in Jefferson county, Ala.
Both parties claim title from R. L. Sudduth, the common source of title. Complainant's possession, admittedly, did
not extend the statutory period of ten years so as to perfect title by adverse possession. His proof of title must be rested
upon the rule that title to a common source is all that need be shown.
Appellants question the claim that R. L. Sudduth is complainant's source of title.
Complainant claims through a lease sale contract made in 1924, and respondents through a mortgage in 1926.
In the lease sale contract [***5] to complainant, the grantor is named throughout the body of the instrument
"Wylam Heights Land Company." It is signed "Wylam Heights Land Company, By R. L. Sudduth, Owner."
There is no evidence touching the identity of Wylam Heights Land Company, save as appears from the contract and
subsequent events.
Appellants insist the deed imports the sole grantor was a legal entity named in the body of the instrument, acting
through R. L. Sudduth. In effect, this contention would make the signature read: "Wylam Heights Land Company,
owner, by R. L. Sudduth" (agent).
The more obvious import is to be found in the signature as written, "R. L. Sudduth, owner," thus identifying Wylam
Heights Land Company with R. L. Sudduth, the owner of the land; in other words, R. L. Sudduth, owner, doing
business in the name of such company.
Without dispute R. L. Sudduth in person negotiated the trade, received the cash payment, [*524] executed and
delivered the contract, put the grantee in possession, and for nearly five years thereafter collected the monthly
installments, giving his personal receipts therefor, and finally signed and tendered a deed in his own name.
In determining the identity of the [***6] grantor in a conveyance of lands, the rule, "Id certum est quod certum
reddi potest," obtains. Sloss-Sheffield S. & I. Co. v. Lollar, 170 Ala. 239, 54 So. 272; Bowles v. Lowery, 181 Ala. 603,
62 So. 107; 18 C. J. p. 172, 54-b.
Cases such as Harrison v. Simons, 55 Ala. 510, wherein the grantors are named in the body of the instrument, but
signed also by another not named as grantor, are not in point.
We are here concerned with the identity of the sole grantor named in the body of the instrument as further disclosed
by the signature and accompanying facts.
Page 135
226 Ala. 522, *; 147 So. 600, **;
1933 Ala. LEXIS 364, ***3
R. L. Sudduth was, under the evidence, the common source of title.
The evidence discloses that, soon after the purchase of such property by lease sale contract, and prior to the
execution of the mortgage under which respondents claim, the complainant went into actual possession, built a small
storehouse and a residence on the property, and thereafter continuously occupied and operated the store down to the
filing of this suit, and from time to time rented the residence to tenants. Complainant resided just across the street on
other property.
Such possession charged the mortgagee with notice [***7] of complainant's claim of ownership and put him on
inquiry as to the nature of such claim and title. Gamble v. Black Warrior Coal Co., 172 Ala. 669, 672, 673, 55 So. 190;
Marietta Fertilizer Co. v. Blair, 173 Ala. 524, 56 So. 131.
It appears there was a balance due the grantor, R. L. Sudduth, on the lease sale contract at the time of his death,
November, 1929. Thereafter, during the same month, the complainant paid this balance to the widow and son of
decedent, and received delivery of a deed theretofore signed and acknowledged by the grantor and tendered by him in
person on November 15th; but he was awaiting payment of such balance when he died.
Appellants insist this balance was due to be paid to the mortgagee, and complainant should be required to do equity
by making such payment as a condition to relief.
The mortgage had not been foreclosed at the time this balance was paid as stated; and no evidence shows any
demand or notice to intercept the rents prior to such payment.
The theory of appellants is that the conveyance by mortgage passed to the mortgagee, the rents to accrue under the
lease, after the law day of the mortgage.
Without considering any [***8] question as to the status of this fund as purchase money as well as rents under the
lease sale contract, [HN1] the mortgagor, rather than the mortgagee, is entitled to rents from the mortgagor's tenant until
they are intercepted by notice to or demand upon the tenant. Even after foreclosure, or other grant of the complete
reversion, the tenant is protected in [**602] making payment of rents to his lessor until he has notice of such
conveyance. Code, 6849.
This means actual notice, not constructive notice, given by the record of the mortgage. Mere actual notice of the
existence of the mortgage does not, before foreclosure, intercept the rents and put the tenant in the wrong in making
payment to the lessor. An actual demand is required. Comer v. Sheehan, 74 Ala. 452, 457; Otis v. McMillan & Sons, 70
Ala. 46.
No question of the rights of a purchaser at foreclosure sale under our redemption statutes is involved. Complainant
was a prior purchaser of the lands with a superior equity to that of the mortgagee or his purchaser with notice by reason
of complainant's actual possession.
The right of the administrator of the grantor's estate, rather than the heirs [***9] at law, to collect this balance of
purchase money, if such right may be assumed in the absence of evidence, is not a matter of which respondents can
complain.
There is no evidence that complainant had any purpose to forestall any claim of respondents by making payment as
he did.
The title, legal and equitable, was represented by parties before the court, and we find no error calling for a reversal
of the decree granting complainant relief.
Affirmed.
Page 136
226 Ala. 522, *524; 147 So. 600, **601;
1933 Ala. LEXIS 364, ***6
ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.
Page 137
226 Ala. 522, *524; 147 So. 600, **602;
1933 Ala. LEXIS 364, ***9
256 of 266 DOCUMENTS
Cited
As of: Jul 10, 2014
Alabama State Employees Association v. Richard B. Sanks
2080562
COURT OF CIVIL APPEALS OF ALABAMA
32 So. 3d 47; 2009 Ala. Civ. App. LEXIS 480
September 11, 2009, Released
SUBSEQUENT HISTORY: Released for Publication February 17, 2010.
PRIOR HISTORY: [**1]
Appeal from Montgomery Circuit Court; Eugene W. Reese, Trial Judge. (CV-08-900108).
CASE SUMMARY:
PROCEDURAL POSTURE: Non-party former wife had executed a quitclaim deed to appellee former husband on
September 5, 2001. Appellant, the Alabama State Employees Association (Association) obtained a judgment against the
former wife. It sought judicial review of a judgment of the Montgomery Circuit Court (Alabama) denying its request for
declaratory and equitable relief with respect to real property occupied by the former husband.
OVERVIEW: The quitclaim deed, although executed on September 5, 2001, was not recorded until March 6, 2006.
The Association recorded its judgment against the former wife on December 9, 2005. Notwithstanding the circuit court's
designation of the January 20, 2009, hearing as a bench trial, that hearing was, in essence, also a summary-judgment
hearing. Citing the Nelson decision, the Association argued that the first-in-time, first-in-right rule of Ala. Code
35-4-90(a) governed the appeal. That argument failed. The former husband's possession continued for four years before
the recording of the judgment lien, and that was clearly a sufficient time to have put the Association on notice to
inquire as to the source of the former husband's claim to the property. The former husband's continuous and sole
occupancy of the property for four years after he was divorced from the former wife constituted constructive notice to
the Association of the former husband's unrecorded deed and thereby prevented the Association's judgment lien from
Page 138
attaching to the property.
OUTCOME: The judgment of the circuit court was affirmed.
CORE TERMS: deed, recorded, judgment creditors, former husband, notice, buyers, former wife, judgment lien,
constructive notice, unrecorded deed, recording, documentary evidence, summary judgment, occupancy, seller, real
property, quitclaim deed, legal arguments, subsequent purchasers, sufficient to put, continuous, conveyance, attaching,
divorced, disputed, general rule, present case, sworn testimony, actual knowledge, implied notice
Civil Procedure > Appeals > Standards of Review > De Novo Review
Civil Procedure > Appeals > Standards of Review > Fact & Law Issues
[HN1] As to issues of law, or where there are no disputed facts and where the judgment is based entirely upon
documentary evidence, no presumption of correctness applies; appellate review is de novo.
Contracts Law > Secured Transactions > Perfection & Priority > Priority > Creditor Priorities > First in Time Rule
[HN2] See Ala. Code 35-4-90(a).
[HN3] If a judgment creditor had actual knowledge or constructive notice of the existence of an unrecorded deed at or
before the time its rights under the judgment accrued, then it can claim no priority by virtue of its having recorded the
judgment before the deed, and the first-in-time, first-in-right rule does not apply.
[HN4] The Alabama Supreme Court has explained the notice exception to Ala. Code 35-4-90. Section 35-4-90(a)
gives judgment creditors priority over an earlier executed deed that has not been recorded only when the judgment
creditor records its instrument without actual knowledge or constructive notice of the earlier conveyance. Therefore,
simply winning the race to the courthouse and recording first is not enough to give a lienholder priority. It is also
necessary that the judgment creditor, whose rights, if any, attach upon the act of recording, record its judgment without
notice of the earlier deed.
[HN5] Alabama cases have long held that when the holder of an unrecorded deed is in possession of property, a
lienholder is charged with constructive notice of the nature of the possessor's title.
[HN6] The Alabama registry acts place creditors, and subsequent purchasers, upon the same footing, as to
unregistered deeds; but the term creditor in the statute, does not mean creditors at large of the grantor, but such creditors
as by obtaining a judgment against him, have acquired a lien, without notice of the existence of the deed, either express
Page 139
32 So. 3d 47, *; 2009 Ala. Civ. App. LEXIS 480, **1
or implied. That possession by the vendee, is constructive notice of the conveyance, so as to defeat a subsequent
purchaser, and prevent the judgment creditor from obtaining a lien.
[HN7] An owner is not required to physically reside on property in order to establish possession. Instead, he need only
make use of the property in a manner that is consistent with its nature. The character or quality of possession that is
sufficient to provide notice has been described as whatever is sufficient to put a party on inquiry concerning possible
competing claims to the property.
COUNSEL: For Appellant: Joseph W. Warren, Montgomery.
Richard B. Sanks, Appellee, Pro se.
JUDGES: THOMAS, Judge. Thompson, P.J., and Pittman and Bryan, JJ., concur. Moore, J., concurs in the result,
without writing.
OPINION BY: THOMAS
OPINION
[*47] THOMAS, Judge.
The Alabama State Employees Association ("ASEA") appeals from a judgment of the Montgomery Circuit Court
denying its request for declaratory and equitable relief with respect to real property occupied by Richard B. Sanks. We
affirm the circuit court's judgment.
In September 2001, Richard B. Sanks ("the former husband") and Taylor S. Sanks ("the former wife") were
divorced by the Montgomery Circuit Court. The divorce judgment incorporated a settlement agreement by which the
former wife agreed to transfer to the former husband all of her right, title, and interest in the marital residence, which
the couple had purchased in 1999. The former wife executed a quitclaim deed to the former husband on September 5,
2001. The quitclaim deed was not recorded until March 6, 2006.
In the interim between the execution of the deed conveying the former wife's interest [*48] in the property to the
former husband and the recording of that deed, ASEA obtained a judgment in the amount of $ 60,534.96 against the
former [**2] wife. ASEA recorded the judgment on December 9, 2005. In August 2006, the sheriff levied on the
property, the property was sold at public auction to ASEA, and ASEA recorded a sheriff's deed.
ASEA's complaint requested that the circuit court declare its ownership interest in the property, determine that the
property could not be equitably divided, and order that the property be sold for a division. The former husband
answered. asserting that he was the sole owner of the property. He attached to his answer a certified copy of the 2001
judgment divorcing him from the former wife.
On July 14, 2008, the circuit court held a hearing at which the former husband, pro se, and counsel for ASEA were
present. The court admitted the pertinent instruments, and the parties presented legal arguments. The court inquired of
the former husband, "Have you been in possession of the property since th[e] time [you and your former wife purchased
the property in 1999]?" The former husband, who had not been placed under oath, responded, "I have been in
possession solely since 2001." The court reviewed the judgment divorcing the former wife and the former husband,
after which it inquired, "Is there any testimony [**3] anybody wants to put in, or do you want to submit this as strictly
a legal question?" The parties indicated that they had no evidence to offer other than the documentary evidence the
court had already received.
Page 140
32 So. 3d 47, *; 2009 Ala. Civ. App. LEXIS 480, **1
On July 15, 2008, the court entered a judgment stating that ASEA's "claim having been submitted on documents
and arguments, judgment for the defendant, Richard B. Sanks. Case dismissed." ASEA filed a motion to alter, amend,
or vacate the judgment on August 11, 2008. The court granted the motion on August 21, 2008, and set the matter for a
hearing on January 20, 2009. At that hearing, the court again heard legal arguments from the parties, received
documentary evidence, and did not hear any sworn testimony. Counsel for ASEA conceded that, at the time ASEA
obtained the judgment against the former wife in 2005, it was aware that the former wife had been divorced from the
former husband in 2001. On January 23, 2009, the court entered the following judgment:
"This cause having come before the Court on bench trial, the same having been considered, it is hereby
ordered, adjudged and decreed judgment for the Defendant Richard Sanks. Case dismissed."
ASEA timely appealed to the Alabama [**4] Supreme Court on February 26, 2009. The supreme court transferred the
appeal to this court pursuant to 12-2-7(6), Ala. Code 1975.
Standard of Review
The circuit court's July 15, 2008, judgment, which followed a hearing at which it received documentary evidence
and heard legal arguments but took no sworn testimony, was, in essence, a hearing on a motion for a summary
judgment.
1
Notwithstanding the circuit court's designation [*49] of the January 20, 2009, hearing as a "bench trial,"
that hearing was, in essence, also a summary-judgment hearing. Our supreme court recently stated the appropriate
standard of review as follows:
[HN1] "'[A]s to issues of law, or "where there are no disputed facts and where the judgment is based
entirely upon documentary evidence, no . . . presumption of correctness applies; our review is de novo."'
Padgett v. Conecuh County Comm'n, 901 So. 2d 678, 685 (Ala. 2004) (quoting Alfa Mut. Ins. Co. V.
Small, 829 So. 2d 743, 745 (Ala. 2002))."
Weeks V. Wolf Creek Indus., Inc., 941 So. 2d 263, 268-69 (Ala. 2006).
1 We do not consider that the former husband's unsworn answer to a question by the circuit court -- that he had
in been in sole possession of the property since 2001 disqualifies [**5] the judgment from being a summary
judgment. The husband's occupancy of the property was not disputed. ASEA did not contest at the hearing, and
it does not challenge on appeal, the fact that the former husband has been in continuous sole possession of the
property since 2001.
Discussion
Citing Nelson v. Barnett Recovery Corp., 652 So. 2d 279, 281 (Ala. Civ. App. 1994), for the proposition that the
"first-in-time, first-in-right" rule of 35-4-90(a), Ala. Code 1975, governs this appeal, ASEA contends that the circuit
court erred by giving the former husband's later recorded been in sole possession of the property since 2001 disqualifies
the judgment from being a summary judgment. The husband's occupancy of the property was not disputed. ASEA did
not contest at the hearing, and it does not challenge on appeal, the fact that the former husband has been in continuous
sole possession of the property since 2001. quitclaim deed priority over its earlier recorded judgment lien. Section
35-4-90(a) provides:
[HN2] "All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature
of mortgages to secure any debts are inoperative and void as to purchasers for a valuable consideration,
[**6] mortgagees and judgment creditors without notice, unless the same have been recorded before the
accrual of the right of such purchasers, mortgagees or judgment creditors."
Page 141
32 So. 3d 47, *48; 2009 Ala. Civ. App. LEXIS 480, **3
[HN3] If a judgment creditor had actual knowledge or constructive notice of the existence of an unrecorded deed at
or before the time its rights under the judgment accrued, then it can claim no priority by virtue of its having recorded the
judgment before the deed, and the "first-in-time, first-in right" rule does not apply. See Baldwin County Fed. Sav. Bank
V. Central Bank of the South, 585 So. 2d 1279 (Ala. 1991).
In Baldwin County Federal Savings Bank, 585 So. 2d at 1281, [HN4] our supreme court explained the "notice"
exception to 35-4-90:
"Section 35-4-90 (a) gives judgment creditors . . . priority over an earlier executed deed that has not
been recorded only when the judgment creditor . . . records its instrument without actual knowledge or
constructive notice of the earlier conveyance. Therefore, simply winning the race to the courthouse and
recording first is not enough to give a lienholder priority. It is also necessary that the judgment creditor,
whose rights, if any, attach upon the act of recording, record Its judgment [**7] without notice of the
earlier deed."
[HN5] Alabama cases have long held that when the holder of an unrecorded deed Is In "possession" of property, a
llenholder Is charged with constructive notice of the nature of the possessor's title. See, e.g., Gulf Oil Corp. v. Beck,
293 Ala. 158, 300 So. 2d 822 (1974); Burt v. Cassety, 12 Ala. 734 (1848) .
In Gulf Oil, supra, the Becks bought land from the Thompsons and received a deed In 1966. The Becks began
residing on the property Immediately but did not record their deed until 1973. In 1967, Gulf Oil obtained and recorded a
judgment against the Thompsons. The Becks filed an action to remove Gulf Oil's judgment lien as a cloud on their title.
The trial court entered a summary judgment for the Becks, and Gulf Oil appealed to the Alabama Supreme Court, which
stated the question presented as follows: "Is actual possession of land under a purchase such 'notice' to a creditor as will
prevent the creditor's judgment lien from attaching upon It, though the deed Is not recorded?" [*50] 293 Ala. at 159,
300 So. 2d at 823. Relying on Burt v. Cassety, supra, the court concluded that the Becks' possession did prevent Gulf
Oil's judgment lien from attaching to the property. [**8] Id.
In Burt, a mother purchased land from her son and was put in possession in 1839. The son delivered a deed to the
mother, but the mother never recorded it. In 1843, creditors of the son obtained and recorded a judgment against the
son. The mother sought to have the judgment creditors enjoined from selling the land in satisfaction of their judgment.
Our supreme court stated:
"The deed was never recorded, and was therefore inoperative, as against subsequent purchasers, and
creditors without notice. Actual notice of the execution of the deed, is not brought home to the creditor,
who subsequently obtained a judgment against the [son]; but the possession by the [mother], of the land,
and the exercise of ownership over it by her, is an implied notice, quite as effectual as the implied notice
from a registry of the deed, and as potent in its effects as an actual notice of the existence of the deed,
before the judgment was obtained.
[HN6] "Our registry acts place creditors, and subsequent purchasers, upon the same footing, as to
unregistered deeds; but the term creditor in the statute, does not mean creditors at large of the grantor,
but such creditors as by obtaining a judgment against him, have [**9] acquired a lien, without notice of
the existence of the deed, either express or implied. That possession by the vendee, is constructive notice
of the conveyance, so as to defeat a subsequent purchaser, and prevent the judgment creditor from
obtaining a lien.
"It results from this view, that as the judgment creditor had, by the possession of the [mother],
constructive notice of her title, he acquired no lien upon the land, in virtue of his judgment."
12 Ala. at 739 (citations omitted).
Page 142
In Baldwin County Federal Savings Bank, buyers of real property received a deed from their seller on March 30,
1986, but did not record the deed until July 16, 1986. In the interim, a judgment creditor recorded a judgment against
the seller on June 4, 1986. The buyers filed an action seeking a declaration that their interest in the property was
superior to that of the judgment creditor. The trial court held that it was, and the judgment creditor appealed. The
subject property was undeveloped beachfront real estate on which the buyers had not continuously resided during the
slightly more than two-month period that they had owned it before the judgment was recorded. During that time, the
buyers had "repeatedly [**10] visited" the property, "walked its boundaries," and "had it surveyed and had the corners
marked with stakes." 585 So. 2d at 1282. The supreme court stated that "[HN7] [a]n owner is not required to physically
reside on property in order to establish possession. Instead, he need only make use of the property in a manner that is
consistent with its nature." Id. Noting that "[t]he character or quality of possession that Is sufficient to provide notice
has been described as 'whatever Is sufficient to put a party on Inquiry' concerning possible competing claims to the
property," 585 So. 2d at 1281 (quoting Gamble v. Black Warrior Coal Co., 172 Ala. 669, 672, 55 So. 190, 190 (1911)),
the supreme court determined that the trial court's Implicit finding -- that the buyers' possession was sufficient to give
the judgment creditor constructive notice of the buyers' unrecorded deed -- was supported by the evidence and due to be
affirmed. See also Alexander v. Fountain, 195 Ala. 3, 5, 70 So. 669, 670 (1916) [*51] (stating that "[w]hatever is
sufficient to put one on his guard and call for inquiry is notice of everything to which the inquiry would lead").
In Nelson, the case on which ASEA relies, a seller had [**11] sold real property and delivered a deed to the buyers
on November 4. Previously, on June 15, a judgment creditor had recovered a judgment against the seller. The judgment
creditor recorded its judgment on November 6, and the buyers recorded their deed on November 10. This court held that
the "first-in time, first-in-right" rule governed the case because the judgment creditor had recorded its judgment four
days before the buyers had recorded their deed. The court did not mention the question of notice except to state the
general rule that "a judgment creditor without notice who perfects a lien against the property has priority over
subsequently recorded instruments, regardless of the date of execution or delivery of those instruments." 652 So. 2d at
281. The court apparently assumed without deciding that the judgment creditor was "without notice" of the buyers'
unrecorded deed.
Such an assumption may have stemmed from the fact that the buyers had received a deed to the property only two
days before the judgment was recorded. The opinion in Nelson is silent with respect to whether, during that two-day
period, the buyers had actually occupied the property or otherwise made use of the property [**12] in such a way as to
have put the judgment creditor "'on inquiry' concerning possible competing claims to the property," Baldwin County
Fed. Sav. Bank, 585 So. 2d at 1281. Moreover, even if the buyers had begun to reside on the property the moment the
sale was consummated, a two-day occupancy of the premises would have presented a close factual question as to
whether the buyers had "'possessed' the property in a manner sufficient to put [the judgment creditor] on notice of their
deed," Baldwin County Fed. Sav. Bank, 585 So. 2d at 1282. See Jefferson County v. Mosley, 284 Ala. 593, 599, 226 So.
2d 652, 656 (1969) (recognizing "that it is difficult, if not impossible, to lay down any general rule as to what facts will
in every case be sufficient to charge a party with notice or put him on inquiry").
Nevertheless, because the Nelson court decided the case strictly on the "first-in-time, first-in-right" rule without
addressing the potential notice issue. Nelson has only limited, if any, precedential value on the issue presented by this
appeal. Moreover, Nelson is distinguishable from the present case because it involved, at most, only a two-day
possession by the holder of the unrecorded [**13] deed before the recording of the judgment lien. In this case, the
former husband's possession continued for four years before the recording of the judgment lien -- clearly a sufficient
time to have put ASEA on notice to inquire as to the source of the former husband's claim to the property.
The weight of Alabama authority dictates that the circuit court's implicit finding in the present case -- that the
former husband's continuous and sole occupancy of the property for four years after he was divorced from the former
wife constituted constructive notice to ASEA of the former husband's unrecorded deed and thereby prevented ASEA's
judgment lien from attaching to the property -- be affirmed.
AFFIRMED.
Page 143
Thompson, P.J., and Pittman and Bryan, JJ., concur.
Moore, J., concurs in the result, without writing.
Page 144
Analysis
As of: Jul 10, 2014
CUMBERLAND CAPITAL CORPORATION, INC. v. Dorothy M. ROBINETTE
Civ. No. 716
Court of Civil Appeals of Alabama
57 Ala. App. 697; 331 So. 2d 709; 1976 Ala. Civ. App. LEXIS 794
April 28, 1976
DISPOSITION: [***1] AFFIRMED.
CASE SUMMARY:
PROCEDURAL POSTURE: Defendant, a mortgage holder, appealed a decision of the Circuit Court of Jefferson
County (Alabama), which entered a judgment in favor of plaintiff, an alleged grantor, cancelling two deeds and
defendant's mortgage. The trial court had previously, at the request of the grantor, set aside a consent judgment in favor
of the holder and had granted a new trial. The mortgage holder appealed the judgment and the granting of the new trial.
OVERVIEW: The deeds conveyed the grantor's property to her son and his wife. The grantor and her husband
contended that neither signed the deeds, and the grantor remained in possession. The mortgage to secure personal and
business debts was executed to the holder from the grantor's son and his wife. The trial court properly found that the
deeds were procured by fraud and that the mortgage holder had sufficient notice to apprise itself of the grantor's interest
in the property. The motion for new trial was timely pursuant to Ala. R. Civ. P. 59. A new trial was proper because the
consent judgment was contrary to law and equity and the grantor had been uninformed as to the terms of the judgment.
The forged deeds were void and completely ineffective to pass title. Under the facts presented, the mortgage holder was
under a duty of inquiry and was charged with notice of the grantor's title. Therefore, the holder could not avail itself of
the protection accorded an innocent purchaser. The grantor was not estopped because of the one-year statute of
limitations of Ala. Code tit. 7, 42 (1940) where the court could not say that grantor should have earlier discovered her
son's fraud.
OUTCOME: The court affirmed the trial court's judgment.
Page 145
CORE TERMS: deed, mortgage, grantor, signature, notice, consent judgment, new trial, convey, void, purportedly,
witnessed, thereunder, purchaser, procured, signing, forged, vendor's, cancelling, amend, bearing in mind, innocent
purchaser, conveyed, execute, decree, noted earlier, subject property, reversible error, bona fide purchaser, statute of
limitations, defendant-appellant
Civil Procedure > Judgments > Entry of Judgments > General Overview
Civil Procedure > Judgments > Relief From Judgment > Motions for New Trials
Civil Procedure > Judgments > Relief From Judgment > Motions to Alter & Amend
[HN1] Ala. R. Civ. P. 59 provides in part as follows: A new trial may be granted to all or any of the parties and on all or
part of the issues in an action tried without a jury, for any of the reasons for which rehearings have theretofore been
granted in suits in equity in the courts of Alabama. On a motion for a new trial in an action tried without a jury, the
court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions
of law or make new findings and conclusions, and direct the entry of a new judgment. A motion for a new trial shall be
served not later than 30 days after the entry of the judgment. A motion to alter, amend, or vacate the judgment shall be
served not later than 30 days after entry of the judgment.
Civil Procedure > Judicial Officers > Judges > Discretion
Civil Procedure > Judgments > Entry of Judgments > Consent Decrees
Civil Procedure > Judgments > Relief From Judgment > General Overview
[HN2] Rehearings in equity have been granted based upon the sound discretion of the court.
[HN3] A signature procured by this character of fraud is considered forged under Alabama law. A forged deed is void,
and completely ineffectual to pass title.
Real Property Law > Financing > Mortgages & Other Security Instruments > Formalities
[HN4] Even if the signatures are not forged, or considered as such, a deed is nonetheless absolutely void where the
grantor's signature is obtained by fraud going to the nature of the instrument he was requested to sign.
[HN5] Deeds in which the grantor's signature is obtained by fraud are held invalid for the reason that the grantor in such
cases cannot be said to have executed the instrument. This is so because in such instances the signature is not that of the
grantor, made with the intention to convey, as is required by Ala. Code tit. 47, 22 (1940). A subsequent innocent
purchaser is not protected against such void instruments.
[HN6] Where a purchaser buys land and has knowledge that a third party is in possession thereof, he is charged with
notice as to the nature of that party's title. However, where at the time of sale the vendor has but recently obtained a
deed, and the vendor's grantor remains in possession, such fact alone does not impute notice of the grantor's title to
the purchaser.
Page 146
57 Ala. App. 697, *; 331 So. 2d 709, **;
1976 Ala. Civ. App. LEXIS 794, ***1
Governments > Legislation > Statutes of Limitations > Equitable Estoppel
Governments > Legislation > Statutes of Limitations > Time Limitations
[HN7] The statute of limitation, Ala. Code tit. 7, 42 (1940), and the cases interpreting it hold that suit must be brought
within one year from the time the fraud is discovered or should have been discovered.
[HN8] The notice contemplated by the recording statutes affects subsequent parties and not those antecedent in the
chain of title.
COUNSEL: Donald L. Newsom, Birmingham, for appellant.
Did the Court err in setting aside a consent judgment, approved in writing by the attorneys for all parties, in the absence
of any evidence of fraud, collusion, accident or surprise? Title 46, 46, Code of Alabama, Recompiled 1958; B. F.
Roden Grocery Co. v. MacAfee, 160 Ala. 564, 49 So. 402; Ex parte Hayes, 92 Ala. 120, 9 So. 156; Wadsworth v. First
Natl. Bank of Montgomery, 124 Ala. 440, 27 So. 460; State v. Neuhoff, 239 Ala. 584, 196 So. 130; DeSoto Coal Mining
& Dev. Co. v. Hill, 188 Ala. 667, 65 So. 988; Battle v. Morris, 265 Ala. 581, 93 So.2d 428, 434; Starke v. Kenan, 11
Ala. 818. Does the filing of a deed, purporting to convey title, for record in the Probate Office of the County wherein the
property lies, constitute notice of its contents to all the world? Title 47, 95, Code of Alabama, Recompiled 1958; Title
47, 102, Code of Alabama, Recompiled 1958; Cooper v. Cooper, 273 Ala. 694, 144 So.2d 62. Does an instrument in
writing, intended as a conveyance of lands, not witnessed nor acknowledged before an officer having authority to take
and certify it, constitute an agreement to convey, and is performance [***2] of it enforceable in equity? Lavender v.
Ball, 267 Ala. 104, 100 So.2d 331; Hoisten v. Ziglar, 258 Ala. 554, 64 So.2d 592. Was the Appellee estopped from
asserting the invalidity of a deed to her son and daughter-in-law, and a mortgage given by the latter to Appellant when
she learned the son had borrowed money on the property within a week after signing the deed, and stood by and
remained silent for more than a year after signing the deed? Ashurst v. Ashurst, 119 Ala. 219, 24 So. 760; Lindsey v.
Cooper, 94 Ala. 170, 11 So. 325; Collins v. State, 22 Ala.App. 323, 118 So. 264, cert. den., 218 Ala. 250, 118 So. 265;
Smith v. Bryant, 263 Ala. 331, 82 So.2d 411; 56 A.L.R. 791. Was Cumberland Capital Corporation a bona fide
purchaser for value? Orso v. Cator, 272 Ala. 657, 133 So.2d 864; Hodges v. Beardsley, 269 Ala. 280, 112 So.2d 482.
Was Dorothy Robinette's cause of action barred by the one year statute of limitations? Title 47, 42, Code of Alabama
Recompiled 1958; Moss v. Davitt, 255 Ala. 513, 52 So.2d 515; Hudson v. Moore, 239 Ala. 130, 194 So. 147. As to two
innocent parties on whom a fraud was perpetrated by a third party, which must suffer -- the one who enabled the fraud
[***3] to be committed by misplaced confidence or the other? Smith v. Bryant, 263 Ala. 331, 82 So.2d 411; Dinsmore
v. Cooper, 212 Ala. 485, 103 So. 460; Federal Land Bank v. Branscomb, 213 Ala. 567, 105 So. 585; Thompson v. Union
Bank & Trust Co., 204 Ala. 293, 85 So. 388; J. R. Watkins Medicine Co. v. Hargett, 209 Ala. 165, 95 So. 811.
Nina Miglionico, Harry Asman and Samuel A. Rumore, Jr., Birmingham, for appellee.
A new trial may be granted for any of the reasons for which rehearings have been granted in suits in equity. Rule 59(a)
Alabama Rules of Civil Procedure. Rehearing in equity rest in the sound discretion of the court. Smith v. Bank of
Blountsville, 262 Ala. 65, 77 So.2d 357; Chenault v. Milan, 205 Ala. 310, 87 So. 537; Hale v. Kinnaird, 200 Ala. 596,
76 So. 954; Cox v. Brown, 198 Ala. 638, 73 So. 964. Constructive notice by the recordation of a deed under Title 47,
Secs. 95 and 102, Code of Alabama, applies only to those whose duty it is to search the record. Pittman v. Pittman, 247
Ala. 458, 25 So.2d 26; Gimon v. Davis, 36 Ala. 589; Hendley v. First National Bank of Huntsville, 235 Ala. 664, 180 So.
667; Blocker v. Boyd, 242 Ala. 345, 6 So.2d 19. A deed does not convey [***4] legal title unless it is signed by the
grantor and such signature is attested by one witness or acknowledged before a notary public. Title 47, Secs. 22 and 24,
Code of Alabama. One cannot convey legal title to real property by estoppel. Weatherwax v. Heflin, 244 Ala. 210, 12
So.2d 554; Carey v. Hart, 208 Ala. 316, 94 So. 298; Phillips v. Lowenstein, 91 Fla. 89, 107 So. 350. Cumberland
Capital Corporation cannot claim to be a bona fide purchaser for value of an equitable title. Orso v. Cater, 272 Ala.
657, 133 So.2d 864.
Page 147
57 Ala. App. 697, *; 331 So. 2d 709, **;
JUDGES: Holmes, Judge. Wright, P. J., and Bradley, J., concur.
OPINION BY: HOLMES
OPINION
[*700] [**711] This appeal is from the Circuit Court of Jefferson County. The trial court sitting without a jury
found in favor of plaintiff-appellee Dorothy Robinette, and against defendant-appellant Cumberland Capital
Corporation, Inc. Defendant appeals from that judgment.
The determinative issues before this court are whether the trial court erred to reversal by granting plaintiff's motion
to set aside a prior final decree in the cause and granting a motion for a new trial, and whether the trial court erred by
cancelling a mortgage held by defendant-appellant.
The controversy [***5] centers around certain real estate transactions between plaintiff, defendant, and plaintiff's
son and his wife, Robert L. and Linda S. Robinette. Two deeds and a mortgage are involved. The following facts
pertinent in this regard are revealed by the record:
The first deed with which we are concerned is dated July 12, 1971, and conveys title to certain real property on
which plaintiff Dorothy Robinette's homeplace is situated. It is purportedly executed by Dorothy Robinette and
conveys title to Robert L. and Linda S. Robinette and Dorothy Robinette.
Plaintiff denied signing this instrument. She testified that in July of 1971 she signed a blank paper presented to her
by Robert Robinette. She further testified Robert told her only that the purpose of this transaction was to state that she
was an unmarried woman.
Robert Robinette testified that the deed was duly executed. He stated that plaintiff was at that time divorced, that
she was then contemplating another marriage, and that the conveyance was made so that her prospective husband could
obtain no interest in her property through the marriage.
The second deed pertinent here concerns the same property discussed above, is dated [***6] September 27, 1972,
and conveys title to Robert and Linda Robinette from Dorothy Robinette Wright, her then husband John Harold Wright,
Robert Robinette, and Linda Robinette.
[**712] Plaintiff also denied signing this deed. Her testimony was that she signed a blank paper in September of
1972 presented to her by Robert Robinette for the purpose of stating that she was a married woman. She also testified
Robert at that time requested that she furnish him with a copy of John Harold Wright's signature. She gave him a
cancelled check or other instrument, not a deed, bearing the signature of John Harold Wright.
John Harold Wright denied ever having signed this deed.
Robert Robinette again asserted the regularity of the conveyance, stating that its purpose was to protect plaintiff's
interest in the property in the event she obtained a contemplated divorce from Wright.
The parties stipulated that the two deeds were notarized without the grantors being in the presence of the notary.
The attorney [*701] who purportedly witnessed the second deed testified the only grantor's signature which he
witnessed was that of Robert Robinette, and that no other signatures were on the deed [***7] when Robert signed it.
The mortgage noted earlier is on the same property which is the subject of the above mentioned deeds. It bears the
date of September 28, 1972, and is executed to defendant Cumberland Capital Corporation, Inc., from Robert and Linda
Robinette.
The record reveals that defendant discussed the mortgage with Robert before title to the property was purportedly
Page 148
57 Ala. App. 697, *; 331 So. 2d 709, **;
conveyed to him and Linda alone. It is also evident from the record that defendant was aware plaintiff initially had an
interest in the property and lived thereon at the time of the mortgage. The mortgage monies were disbursed on October
3, 1972, and the formal mortgage application was dated October 4 of that year.
The mortgage proceeds were used by Robert Robinette mostly to secure various personal and business debts.
The trial court found that the two deeds were not properly acknowledged and witnessed, that the deeds had been
procured by fraud on the part of Robert and Linda Robinette, and that defendant Cumberland Capital Corporation had
notice of sufficient facts to apprise it of plaintiff's interest in the property. The trial court accordingly cancelled the
deeds and mortgage, and rendered judgment [***8] in favor of Cumberland Capital Corporation against Robert and
Linda Robinette in the amount of the unpaid mortgage indebtedness. Defendant Cumberland Capital appeals from the
cancellation of the mortgage.
I
When this lawsuit was first begun, the parties entered into a consent judgment by which, inter alia, defendant's
mortgage was allowed to remain in force and effect as an encumbrance on the subject property. However, plaintiff's
subsequent motion to set aside the judgment and for a new trial was granted, and the trial of the cause described above
ensued. Defendant contends the granting of this motion by the trial court was reversible error. We disagree.
Rule 59, ARCP, [HN1] provides in pertinent part as follows:
"(a) Grounds. A new trial may be granted to all or any of the parties . . . and (2) on all or part of the
issues in an action tried without a jury, for any of the reasons for which rehearings have theretofore been
granted in suits in equity in the courts of Alabama. On a motion for a new trial in an action tried without
a jury, the court may open the judgment if one has been entered, take additional testimony, amend
findings of fact and conclusions of law [***9] or make new findings and conclusions, and direct the
entry of a new judgment.
"(b) Time for Motion. A motion for a new trial shall be served not later than 30 days after the entry
of the judgment.
. . . .
[**713] "(e) Motion to Alter, Amend or Vacate a Judgment. A motion to alter, amend, or vacate
the judgment shall be served not later than 30 days after entry of the judgment."
Plaintiff's motion was timely filed within thirty days after entry of the consent judgment.
[HN2] Rehearings in equity previously were granted based upon the sound discretion of the court. Ex parte
Upchurch, 215 Ala. 610, 112 So. 202. Here, the trial court's order setting aside the consent judgment recited that the
court had heard statements and arguments of counsel. Plaintiff's motion alleged that the prior consent judgment was
contrary to law and equity and that plaintiff had been uninformed as to the terms of the judgment. As such, and bearing
in mind the trial court's [*702] findings in its final order, we cannot perceive how the trial court's discretion was
abused in the instant case.
The cases cited by defendant for the proposition that consent judgments can only be set aside [***10] for fraud,
accident and the like, are inapposite here. Initially, we note that defendant's cases do not refer solely to consent
judgments, but to all judgments. Furthermore, they do not concern motions filed within thirty days after judgment as
does the instant case, but rather deal with those judgment vacation proceedings formerly commenced by a bill in the
nature of a bill of review and now begun by a motion under Rule 60(b), ARCP.
Page 149
57 Ala. App. 697, *701; 331 So. 2d 709, **712;
The trial judge accordingly did not err by granting plaintiff's motion.
II
Defendant also contends the trial court erred to reversal by its final order cancelling defendant's mortgage.
Defendant argues that it is a bona fide purchaser without notice of the true state of plaintiff's title, and that the validity
of its mortgage is thus unaffected by any wrongdoing.
We initially note that the deeds purporting to convey the property to Robert and Linda Robinette were, by the
parties' stipulation, improperly acknowledged. Furthermore, the evidence indicates that one deed was improperly
witnessed, although these defects are not apparent from the face of the instruments. We express no opinion on the
manner on which the defects affected defendant's mortgage [***11] as such is not necessary to this appeal.
As noted earlier, the trial court found that the deeds were procured by fraud. Clearly, the evidence previously set
out is sufficient to support this finding.
In view of this finding by the trial court, it is apparent from the record that the signatures of the grantors Dorothy
Robinette and John Harold Wright were placed upon the deeds either by forgery or by the grantors having been
deceived into signing the instruments in ignorance of their true character. [HN3] A signature procured by this character
of fraud is considered forged under Alabama law. Warren v. State, 247 Ala. 595, 25 So.2d 698. See also 11 A.L.R.3d
1076. A forged deed is void, and completely ineffectual to pass title. 23 Am.Jur.2d Deeds 137, 139, and cases cited
thereunder.
[HN4] Even if the signatures are not forged, or considered as such under the rule enunciated in the Warren case,
supra, a deed is nonetheless absolutely void where the grantor's signature is obtained by fraud going to the nature of the
instrument he was requested to sign. Gamble v. Moore, 278 Ala. 104, 176 So.2d 35; 23 Am.Jur.2d Deeds 142, and
cases cited thereunder. In the Gamble [***12] case, the plaintiff conveyed his lands to defendants in the belief, induced
by defendant's fraud, that he was executing a mortgage to a savings and loan association. Defendants subsequently
mortgaged the property. The trial court [**714] held the deed to be void and of no effect, and its decree was upheld by
the Supreme Court of Alabama.
[HN5] Deeds are held invalid in the instances described above for the reason that the grantor in such cases cannot
be said to have executed the instrument. This is so because in such instances the signature is not that of the grantor,
made with the intention to convey, as is required by Tit. 47, 22, Code of Ala. 1940.
A subsequent innocent purchaser is not protected against such void instruments. Barden v. Grace, 167 Ala. 453,
52 So. 425, and authorities cited, supra. Therefore, defendant's mortgage is also void.
In this context, we would note that, due to the filial relation of Robert Robinette [*703] to the plaintiff, we do not
regard plaintiff as having been so negligent in her actions as to neutralize the fraud as against a bona fide purchaser.
It is settled law that [HN6] where a purchaser buys land and has knowledge that a third [***13] party is in
possession thereof, he is charged with notice as to the nature of that party's title. See 19 Ala.Dig. Vendor and
Purchaser Key Number 232, and cases cited thereunder. However, where at the time of sale the vendor has but recently
obtained a deed, and the vendor's grantor remains in possession, such fact alone does not impute notice of the
grantor's title to the purchaser. Evans v. Bryan, 202 Ala. 484, 80 So. 868.
While bearing in mind the above principles, this court is of the opinion that plaintiff's continued possession was
coupled with sufficient other facts to place defendant-mortgage holder on notice as to the state of her title in the subject
property.
Here, mortgage negotiations with Robert Robinette began before he purportedly acquired title, he was at that time
Page 150
57 Ala. App. 697, *702; 331 So. 2d 709, **713;
1976 Ala. Civ. App. LEXIS 794, ***10
already in debt to defendant, defendant knew plaintiff was in possession at the time the mortgage was executed, and the
deed from plaintiff to Robert was for merely a nominal consideration. Under the circumstances of this particular case,
considering the facts set out above as a whole, we are of the opinion that defendant was under a duty of inquiry and
was charged with notice of plaintiff's [***14] title. Being so charged, defendant cannot avail itself of the protection
accorded an innocent purchaser.
Defendant argues that plaintiff is barred by the one-year statute of limitations or by estoppel from asserting the
invalidity of the mortgage due to her son's fraud. We disagree. [HN7] The statute of limitation, Tit. 7, 42, Code of
Ala.1940, and the cases interpreting it hold that suit must be brought within one year from the time the fraud is
discovered or should have been discovered. Plaintiff filed suit on January 31, 1974. While there was some testimony
by plaintiff that she was aware in the fall of 1972 that Robert Robinette borrowed money "on the house," she also
testified she did not learn of the existence of the mortgage and thus of her son's fraud until September or December of
1973. This conflict was for the trial judge to resolve. Additionally, we cannot say that she should have earlier
discovered the base conduct of one in whom she naturally reposed trust and confidence. She was accordingly not
barred from maintaining her action.
In this regard, defendant contends that plaintiff received notice of the deeds when they were recorded by Robert
Robinette. We note [***15] the general rule, expressed in Pittman v. Pittman, 247 Ala. 458, 25 So.2d 26, that [HN8]
the notice contemplated by the recording statutes affects subsequent parties and not those antecedent in the chain of
title. While the opposite result was apparently reached in the case of Cooper v. Cooper, 273 Ala. 694, 144 So.2d 62,
cited to us by counsel for defendant, it can be distinguished from the instant case. [**715] The result in Cooper was
based on special circumstances involving a deed in fact conditional but which appeared on its face to be regular, and
which was actually executed by the grantors. Such are not the facts here, and we cannot agree that plaintiff received
constructive notice of deeds she did not execute by virtue of their recordation.
Defendant finally argues that the defectively acknowledged deeds will be given effect as agreements to convey.
This result will not obtain where the grantor did not execute the instrument, as is the case here.
Based on the foregoing discussion, we hold that the trial judge committed no reversible error by cancelling the
mortgage from Robert and Linda Robinette to defendant, and by denying defendant's motion for new trial.
[***16] [*704] All issues presented having been considered, and there being no error in the record, the case is
due to be and accordingly is affirmed.
AFFIRMED.
Page 151
57 Ala. App. 697, *703; 331 So. 2d 709, **714;
1976 Ala. Civ. App. LEXIS 794, ***13
Analysis
As of: Jul 10, 2014
HYATT et al. v. OGLETREE
No. 8 Div. 221
Court of Appeals of Alabama
31 Ala. App. 8; 12 So. 2d 397; 1942 Ala. App. LEXIS 28
November 3, 1942
SUBSEQUENT HISTORY: [**1] Rehearing Denied November 24, 1942. Certiorari Denied by Supreme Court in
Hyatt v. Ogletree, 244 Ala. 172, 12 So.2d 400.
PRIOR HISTORY: Appeal from Circuit Court, Marshall County; W. J. Haralson, Judge.
Action for breach of warranty in a deed by Doyal Hyatt and Ludy Hyatt against J. E. Ogletree. From a judgment
for defendant, plaintiffs appeal.
CORE TERMS: deed, warranty deed, quitclaim deed, grantee, grantor, mutual mistake, mortgage, consideration paid,
tax lien, conveying, conveyance, original transaction, foreclosure, admissible, convincing, quitclaim, covenant,
warranty, revised, dollar, exact, breach of warranty, present suit, disputed facts, new consideration, recital, perfect
COUNSEL: Marion F. Lusk, of Guntersville, for appellants.
In trial without jury, if there is no substantial conflict in the evidence, no presumption will be indulged in favor of the
conclusion of the trial judge; and if an erroneous conclusion was reached the appellate court will render such judgment
as should have been rendered. Code 1940, Tit. 7, 260; Henderson v. Henderson, 228 Ala. 438, 153 So. 646; Ala. &
So. Dig., Appeal & Error, 931(1) (2). If deed could have been reformed by court of equity to express intention of
parties, it may by them in absence of fraud or rights of third persons be amended by a subsequent instrument. This
rule applies to omission of warranties by mutual mistake. In such case, the subsequent deed will operate as a
confirmation or as a deed of bargain and sale, nor is a new consideration [**2] necessary as against the vendor. Code
1940, Tit. 47, 136; 26 C.J.S. 222, 31; Bethea v. McCullough, 195 Ala. 480, 70 So. 680. For that matter, the rule that
Page 152
all prior agreements are merged in the deed finally delivered and accepted also prevails where a second deed has been
executed as a substitute for and correction of a prior deed. 2 Devlin, Real Est. (3d Ed.) 1576, 850c; Chloupek v.
Perotka, 89 Wis. 551, 62 N.W. 537, 46 Am.St.Rep. 858; 26 C.J.S. 580, 174, notes 23, 24. As between the parties the
legal operation of an instrument as a conveyance, in absence of fraud, mistake or duress, cannot be changed or defeated
by showing through the agency of parol evidence that it was voluntary and without valuable consideration. This rule
obtains in courts of law and equity. Stewart v. Stewart, 171 Ala. 485, 54 So. 604; Bethea v. McCullough, supra. A
covenant of warranty operating as covenant of quiet enjoyment entitles grantee to remove encumbrance without
awaiting actual eviction. Dothan Nat. Bank v. Hollis, 212 Ala. 628, 103 So. 589. In grantee's action against grantor for
breach of warranty in deed, measure of damages is actual loss suffered. Coston v. McClelland, 220 [**3] Ala. 598, 127
So. 176.
Scruggs & Creel, of Guntersville, for appellee.
Where case was tried by court without jury and judgment rendered, and there was neither special finding of facts nor
request for such, and facts were not agreed upon, the conclusion of the judge stands as the verdict of a jury. The rule is
not changed by Code 1940, Tit. 7, 260. Finney v. Studebaker Corp. of America, 196 Ala. 422, 72 So. 54; Loyd v.
Oates, 143 Ala. 231, 38 So. 1022, 111 Am.St.Rep. 39; Mayhall v. State, 146 Ala. 124, 41 So. 290; Western Union Tel.
Co. v. White, 129 Ala. 188, 30 So. 279. Where testimony is conflicting, judgment of court will be upheld unless plainly
contrary to weight of testimony. Armour Fertilizer Wks. v. Alabama Farm Bureau Cotton Ass'n, 25 Ala.App. 452, 148
So. 748. Defendant may by plea impeach or inquire into consideration of a sealed instrument in the same manner as if it
had not been sealed. Code 1940, Tit. 7, 232. By this section the common-law rule of the sanctity of the seal is
rendered obsolete. Counts v. Harlan, 78 Ala. 551. Consideration is an essential ingredient of a contract. Consolidated
Portrait & Frame Co. v. Barnett, 165 Ala. 655, 51 So. [**4] 936; Assets Realization Co. v. Ganus, 25 Ala.App. 113,
141 So. 721. Reformation of deed on ground of mutual mistake to include alleged promise of grantee to pay taxes on
property is not authorized if such promise was made after contract of purchase and sale was complete, since it was then
a purely gratuitous undertaking and, being without consideration, did not become an element of the contract. Kelley v.
Spencer, 213 Ala. 612, 105 So. 802; Montgomery County v. New Farley Nat. Bank, 200 Ala. 170, 75 So. 918; Shriner v.
Craft, 166 Ala. 146, 51 So. 884, 28 L.R.A.,N.S., 450, 139 Am.St.Rep. 19. Purchaser of real estate in possession of a
third person is bound to take notice of that person's title. Phillips v. Costley, 40 Ala. 486; Garrett v. Lyle, 27 Ala. 586;
Gamble v. Black Warrior Coal Co., 172 Ala. 669, 55 So. 190; Enslen v. Thornton, 182 Ala. 4, 62 So. 525; Smith v.
Harbaugh, 216 Ala. 202, 112 So. 914; Sulzbacher v. Campbell, 219 Ala. 191, 121 So. 706. Purchaser under
circumstances sufficient to put him on inquiry is considered as affected with notice of an encumbrance, and
possession of land is such circumstance as should put a party on inquiry. Harris v. Carter's Adm'rs, 3 Stew., [**5]
Ala., 233.
JUDGES: Simpson, Judge.
OPINION BY: SIMPSON
OPINION
[*10] The suit is for breach of general covenants of warranty in a deed.
The appellant, Hyatt, was the grantee who sues the grantor, Ogletree.
(The plaintiffs, husband and wife, are referred to as singular.)
The recited consideration of the deed is "one dollar and other considerations", but it is conceded that nothing was
paid. The deed contains a recital that a quitclaim deed, conveying the property, was previously given by the grantor to
the grantee and that the warranty deed was "made to perfect and warrant the title in the grantee."
Page 153
31 Ala. App. 8, *; 12 So. 2d 397;
1942 Ala. App. LEXIS 28, **2
The question presented by the appeal is whether, under the facts, the grantee, who paid off a tax lien to clear his
title after grantor refused to do so, can recover the sum so paid from the grantor.
The facts are:
The United States Internal Revenue Collector filed a tax lien against the land, January 21, 1938, under Revised
Statutes, Section 3186, Title 26 U.S.C.A. 1560-1562, 26 U.S.C.A. Int.Rev.Code, 3670-3672, at which time one
Bailey owned the property. Some years prior to this, Bailey had given a mortgage thereon to defendant, Ogletree. In
1939, the mortgage being [**6] in default, Bailey executed a deed in lieu of foreclosure, conveying the property to his
mortgagee, Ogletree. Thereafter, according to the stipulation of facts in the bill of exceptions: "Mr. Bailey traded his
right to the lands to Mr. and Mrs. Hyatt, the plaintiffs, and they went to Dr. Ogletree and had him execute a quitclaim
deed to the Hyatts. The consideration for the land was paid to Dr. Ogletree and he received all of it; the amount
received by Dr. Ogletree was no more than the mortgage indebtedness, the amount paid by Hyatt was $ 700.00, which
was less than the amount owing on the mortgage at the time of foreclosure by several hundred dollars, and Dr. Ogletree
received all the money paid by the Hyatts, and at Bailey's request, executed to the Hyatts a quitclaim deed, sometime
later the plaintiffs went to Dr. Ogletree and obtained from him a warranty deed and the parties are not agreed upon what
took place at that time, but no money passed when it was executed." Neither party appears to have known of the
existence of the lien until after the giving of the quitclaim deed and it appears that Ogletree's first knowledge of it was
after he had given the warranty deed.
The quitclaim [**7] deed from Ogletree to Hyatt, mentioned in the stipulation above, was under date of October,
1939, and the warranty deed, February 23, 1940. Soon after the giving of the warranty deed, Hyatt demanded that
Ogletree discharge the tax lien, still pending against the land, and Ogletree declined to do it. Hyatt then paid it, and in
May, 1940, filed the present suit for reimbursement.
The only disputed facts are those, surrounding the execution of the warranty deed.
The suit is for breach of warranty in this second deed. The lower court, sitting without a jury, rendered judgment
for the defendant and the plaintiff, Hyatt appeals.
[*11] Our first observation is that recovery, if due, can rest only upon one of two hypotheses, either: (1) the
second deed (warranty) must have been an entirely separate transaction for which value was paid (in which case
recovery would be limited to the consideration paid), or, if no consideration was paid therefor, (2) the last conveyance
must have been given to reform the first which, by mutual mistake of the parties, did not express their true intention. In
this latter event, the second (warranty) deed would be supported by the consideration of [**8] the first (quitclaim) deed.
The First Theory.
This proposition is easily disposed of by adverting to the uncontradicted evidence, showing that no consideration
was paid for the new, warranty deed.
Viewed in this aspect then, as a new and independent transaction, unrelated to the original transaction, there
manifestly can be no recovery, for the plaintiff is limited therein to the consideration paid. "The damages for the breach
of a covenant against encumbrances are to be assessed at such a sum as will afford a just compensation for the injury
actually suffered by the covenantee, not, however, to exceed the consideration paid", etc. 14 Am.Jur. 599, Section 178;
Mixon v. Burleson, 203 Ala. 84(2), 82 So. 98; 61 A.L.R. 140 et seq.
The authorities cited by appellant (Stewart v. Stewart, 171 Ala. 485, 54 So. 604, Ann.Cas.1913A, 925; Bethea v.
McCullough, 195 Ala. 480, 70 So. 680), holding that in the absence of fraud or mistake the grantor may not dispute the
operation and effect of a deed reciting a nominal consideration, have no applicability to the principle here involved.
The consideration of the deed is only prima facie and, generally, may be inquired into. "Parol evidence [**9] is
Page 154
31 Ala. App. 8, *10; 12 So. 2d 397;
1942 Ala. App. LEXIS 28, **5
admissible to show the true consideration of like kind as expressed in the deed, that it is greater or less, but evidence
going to show a consideration of a different kind is not admissible." Union Bank & Trust Co. v. Royall, 226 Ala. 670,
672, 148 So. 399, 401; Pruett v. First National Bank, 229 Ala. 441, 444, 157 So. 846; Gilliland v. Hawkins, 216 Ala. 97,
101, 112 So. 454.
The Second Theory.
No new consideration was paid for the new deed and, according to its recitals, it was "made to perfect and warrant
the title in the grantee; a quitclaim deed was made from the same grantors to the same grantee conveying the same
property * * *."
The contention of appellant is conceded, that, if through mutual mistake, the original, quitclaim deed did not
express the real intention of the parties and equity could reform it to so express that intention, then the present suit has
merit.
The rule is: when a written contract or conveyance does not express the true intention of the parties, due to fraud or
mutual mistake or a mistake of one party which the other at the time knew or suspected, it may be revised by a court of
equity. Code 1940, Title 9, 59; Title 47, 136.
But, to [**10] entitle a complainant to such relief, the proof must be clear, exact and convincing that the intention
and agreement he would have substituted in the instrument was, in fact, that of both parties thereto. If the proof is
uncertain in any material respect, relief will be denied. Kelley v. Spencer, 213 Ala. 612, 105 So. 802; Lipham v.
Shamblee, 205 Ala. 498, 88 So. 569.
The principle results that (except in certain cases not here pertinent) where equity could reform such a deed, the
parties may correct it by a subsequent instrument to effectuate their real intention, without a new consideration. 26
C.J.S., Deeds, 31, p. 222.
In order for the appellant to recover under this hypothesis, the evidence must satisfy the dictates of the foregoing
rule, viz: that by mutual mistake a quitclaim deed was first given and accepted, whereas the intention of both parties
was that a warranty deed be given, and that to carry out this real intention the subsequent warranty deed was given to
reform the previous instrument, and therefore supported by its consideration.
If this be true, then the foregoing rule prevails and recovery for breach of warranty would be due. But, as we view
the evidence, [**11] this fact is not clearly and convincingly proven, but is in dispute.
The transaction of the quitclaim deed is not developed by the evidence except as appears in the agreed stipulation
quoted. Nothing is shown there to support the claim that a different deed, from the (quitclaim) one accepted, was
intended.
The plaintiff did testify that when he requested the new deed, "Dr. Ogletree [*12] looked at it and said; 'I thought I
made that kind to begin with -- where do you want to go to make it?'; that plaintiff suggested the First National Bank
and the Ogletrees signed and acknowledged it there." But, even here, the plaintiff's testimony shows that his request was
based, not upon a claimed mutual mistake of the parties in the original transaction of the quitclaim deed, but upon the
fact that "he would have to have it (a warranty deed) to complete his abstract of title."
The testimony of the defendant is even more persuasive against the contention of the appellant. A clear inference
arises from Ogletree's testimony that there was no understanding or agreement between the parties as to the kind of
conveyance to be executed when the quitclaim deed was given. He testifies that [**12] he had no conversation
whatever with Hyatt during any of the transactions until he was requested to sign the warranty deed; that Hyatt then said
he wanted it executed because "he was trying to get a loan from the Federal Government and could not get it without a
warranty deed." This plainly does not support an uncontroverted conclusion that the new deed, expressive of the true,
Page 155
31 Ala. App. 8, *11; 12 So. 2d 397;
1942 Ala. App. LEXIS 28, **9
original intention of the parties, was being given to reform a previous one which by mutual mistake did not so express
them.
The more reasonable inference is that, when the original deed was given, its character did not then seem important.
But later it became important to the grantee, plaintiff, to have a warranty deed (either, as he testified, "to complete his
abstract of title" or, as argued by counsel for appellee, to fasten liability on the latter for the tax lien of which he
(Ogletree) had no knowledge). Hence Hyatt's request for the new deed and the voluntary and gratuitous act of Ogletree
in complying.
An unbiased construction of the evidence leads to the conclusion that the fact was in substantial dispute as to the
considerations which prompted the execution of the subsequent warranty deed. The [**13] evidence was not so "clear,
exact and convincing," to the exclusion of reasonable adverse inferences -- as is the requirement of the rule -- that the
new deed, being the true intention and agreement of the parties, was executed to reform a previous abortive one. Being
so, the trial court was justified in denying recovery and in rendering judgment for the defendant.
It follows then that we should not disturb the trial court's findings. The testimony as to these controlling and
disputed facts was taken ore tenus. The conclusion thereon by the trial judge will be accorded the same effect on appeal
as the verdict of a jury, and will not be disturbed unless clearly contrary to the great weight of the evidence. 2 Alabama
Digest, Appeal and Error, 1011(1).
It is our view that the evidence adduced justified the finding below, so the judgment is affirmed.
Affirmed.
Page 156
31 Ala. App. 8, *12; 12 So. 2d 397;
1942 Ala. App. LEXIS 28, **12

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