Watford v. Oates

STONE, J.

1. The assignments of error, only bring up the question of liability for rent. The summons, issued on the original bill, was served on defendant, Jackson, March '.7, 1872. This was constructive notice to him, and to all. persons afterwards acquiring right or interest under him, of the claim, title and rights asserted in the bill.—Harris v. Carter, 3 Stew. 233; Chaudron v. McGehee, 8 Ala. 570; Fash v. Ravisies, 32 Ala. 451; Winston v. Westfeldt, 22 Ala. 760. The bill charges (and such is the fact) that the mortgage of Teague and wife to Bernstein & Stowe, of the storehouse and lot described in the bill, was then past due; that such mortgage was then the property of Jackson, Holmes & McAllister, and that they were in possession of the mortgaged property. The complainant alleged that he was a creditor of Koonce, having a lien in equity on said property, arising out of the contract made between Koonce and Teague; and the object and prayer of the bill were to have the several liens established, and the property sold in payment thereof.. It is shown in the record that Jackson, one of the three owners of the mortgage, and also of a judgment lien upon the property, was in possession, and Watford about that time, or before, became his partner, and also went into possession with him. The pleadings and testimony show that there was a lien on the mortgage property to secure complainant’s debt described in the original bill, together with other debts standing in like condition; but it is conceded this lien was subordinate to that conferred by the mortgage.—See Buford v. McCormick, present term.

The first amended bill was filed April 1,1872. It averred that on the 16th day of March, 1872, complainant purchased, from Jackson his interest, which was one-half of said judgment and mortgage securities. In it, complainant prayed “that said Jackson be restrained, by the order of this honorable court, from paying over to any one any portion of what he owes, or may hereafter owe, for the rent of said store or grocery-house, and that he be required to pay the same into this court, as the same falls due, to be disposed of by the final order and decree of your, honor.”

In August, 1872, Jacksonsold to Young his interest in the-store, who then went in, and the house was occupied by Young & Watford as a store, until January 1st, 1873. No-rent was paid into court, or to the complainant, or applied to said mortgage, or any other debt having a lien on the property. Young filed his answer, admitting he had actual, notice of the pendency of the suit, before he purchased from Jackson. Watford did not answer, although personally sued. The bill was taken as confessed against him.

Jackson was examined as a witness before the register, and, among other matters, testified as follows: “ When Mrs... Teague left, which was in March, 1872, I paid the rent due up to the last of April, 1872. And when she was ready to leave, she informed me that, as long as I had been a good friend to her, she would exact no more rent from me. Since the departure of Mrs. Teague no one has demanded the rent of said place.” It will be observed that in this testimony, it is not shown when Jackson paid the rent up to the last of April; whether before or after March 7, when summons was served on him. There is no other testimony in the record bearing on this question.

2. A mortgagee, unless the contrary is expressed in the mortgage, is entitled to the possession, and to the rents and profits of the mortgaged property; and whenever a tenant in possession has notice that the mortgagee claims the rents, a subsequent payment, by such tenant, to the mortgagor, will be in his own wrong, and will not absolve him from the legal duty to pay the rent to the mortgagee, or owner of the mortgage debt.—Doe ex dem. v. McLoskey, 1 Ala. 708; Mansony v. U. S. Bank, 4 Ala. 735; Coker v. Pearsoll, 6 Ala. 542; Hutchinson v. Dearing, 20 Ala. 798.

There can be no question that Young & Watford, under the rules above declared, were and aré liable for rent after they took possession as partners. They had notice, both constructive and actual. Neither is there any doubt that Watford, with Jackson, was liable to account for rent, after the first amended bill was filed, April 1. He had then constructive notice that the rents were claimed on the mortgage debt.

3-4. How does the question stand as to the rent for the month of March ? Was it the duty of Jackson, being in possession,and being one of the owners of the mortgage debt, to apply the rents towards the reduction of his claim, that the property might be, pro tanto, disencumbered for the benefit of subsequent encumbrancers ? And, failing to do so, is he liable for the sum he might thus have saved to them ? The original bill notified him there were such claims, and it charges the insolvency of Koonce. We hold that after the service of summons on him, March 7, it was his legal duty, under the facts shown in this record, to apply the rents to the mortgage debt; and failing to do so, he must account for the same. 2 Washb. Real Prop. 3d ed. 208, marg. page 579. The proof, as we have shown above, fails to show that Jackson paid the rents to Mrs. Teague before March 7, when he was served with summons; and we find nothing to justify us in reversing the chancellor’s decree, holding Watford liable for the March. rent. To relieve himself from this liability, Watford should have seen to it that this doubt, as to date of payment by Jackson, was cleared up. To secure reversal, error must be shown. It is not enough that the question is left in doubt.

The only questions presented by this' record are, whether Watford is liable for rent from March to September, and whether Watford & Young are so liable for the four months they had the possession. The chancellor decreed that they were, and the principles we have announced above show that he did not err.

Decree of the chancellor affirmed.