Kyle v. Perdue

STONE, C. J.

The points at issue in this cause arise mainly out of a written instrument, bearing date August 9, 1886, and signed by Augusta E. Perdue. One of the controverted questions is, whether that instrument is a deed or a will. It was drawn manifestly by an inexperienced draughtsman. The reporter will set it out in erienso.

*428The conveyance has many of the characteristics of a deed of bargain and sale. It twice recites a consideration. In one place, the language is, “in consideration of the sum of one dollar in hand paid by the said B. 13. Kyle and Sam. Henry, the receipt of which is hereby acknowleged.” In the other place, the recital is, “for and in consideration of valuable services rendered to me by the said B. B. Kyle and Sam. Henry, and the further sum of one dollar to me in hand paid, the receipt of which I do hereby acknowledge.” Now, each of these recitals is of a consideration deemed valuable in the law, as distinguished from one merely good. Each would authorize proof of other valuable consideration in aid of it; and each is sufficient to uphold a conveyance, when not assailed by creditors. — Houston v. Blackman, 66 Ala. 559; Tutwiler v. Munford, 68 Ala. 124 The instrument has many other properties of a deed. The following are some of them: “Hath this day bargained and sold, released, conveyed and confirmed, and by these presents doth bargain, sell, release, convey and confirm” &c. “To have and to hold unto the said B.. B. Kyle and Sam Henry, and their assigns forever; in trust nevertheless, and upon the uses and purposes hereinafter mentioned, namely: First, to take charge of said property, to take, collect and receive the rents, issues and profits thereof, and out of the proceeds to keep the said premises in good order and repair, and to pay all charges, taxes and assessments that may be imposed thereon, and pay the residue to Augusta E. Per-due during her life.” There are many other expressions and clauses which properly pertain to deeds, and do not to wills.

Under the instrument, Kyle and Henry are to take charge of the property, collect the rents, and look after the taxes and repairs — all in the life-time of Mrs. Perdue. This gives to the instrument a large operation during the life-time of the maker, and stamps it a deed, not a will. We have so often and so recently considered the differences which distinguish the one instrument from the other, that we consider it unnecessary to repeat them.—Trawick v. Davis, 85 Ala. 342; Sharp v. Hall, 86 Ala. 110; Griffith v. Marsh, 86 Ala. 302; s. c., 5 So. Rep. 569; Elmore v. Mustin, 28 Ala. 309; Jordan v. Jordan, 65 Ala. 301.

We hold, then, that Mrs. Perdue’s conveyance vested in Kyle and Henry, at the time of its execution, the title to the property she then owned; but the title was received by them *429clothed with a trust, and that trust was so stamped upon it in the face of the title-papers, tbat it would follow tbe property into whose bands soever it might go. The trust was, tbat they should have power to collect tbe rents, issues and profits, pay tbe taxes, and keep up tbe repairs; and any excess of rents, issues and profits beyond this, they were bound to account for and pay to Mrs. Perdue. Tbat was absolutely hers. And if any of tbe profits accruing to her under this provision, or any property in which it may be invested, should remain undisposed of, or unconsumed at tbe time of her death, this will have become property of her estate, and, possibly, will not vest in Kyle and Henry, by virtue of tbe conveyance as a deed. The clause of tbe instrument in reference to such remaining income and profits can, probably, take effect only as a testament.—Kinnebrew v. Kinnebrew, 35 Ala. 628.

We have shown above that tbe title to all tbe property which Mrs. Perdue owned at tbe time she executed tbe instrument, vested at once in Kyle and Henry, incumbered with a trust during tbe life of the grantor. Of what tbat property consists, save tbe single item involved in this suit, we are not informed. The general rule is, tbat one who bolds property charged with tbe duty of accounting to another for tbe income and profits, is to tbat extent a trustee, and subject to tbe disabilities, of a trustee. He has no power to change tbe sfaius of the property, except, possibly, in extreme cases, subject to tbe approval and direction of tbe Chancery Court. — 2 Pom. Eq. §§ 1062, 1065, 1067.

When Mrs. Perdue executed tbe deed, she, under tbe provisions Of her husband’s will, bad become tbe owner of a debt due from Liddell, secured by a trust deed on land, in which Denson was named tbe trustee. Tbe debt was due and payable April 9, 1886, and tbe trust deed provides, tbat should any part of said debt remain due and unpaid at maturity, then, upon tbe written request of Perdue, tbe payee of tbe note, bis agent or attorney, Denson, the trustee, was required to take possession of tbe land, and, after advertising, sell tbe same and pay the debt. Tbe present bill was filed in February, 1887, and avers tbat Kyle and Henry, claiming to be owners of tbe debt and its security, bad notified Den-son, in writing, to foreclose tbe deed and collect tbe money. Tbe bill is filed in tbe name of Kyle, Henry and Denson as complainants, and makes Liddell and wife and Mrs. Perdue, defendants. Liddell and wife offered no defense to tbe suit. *430Mrs. Perdue demurred to the bill, aud the chancellor sustained the demurrer, holding that Kyle and Henry have no power to foreclose the trust deed, or mortgage.

A mortgage of land to secure the payment of a debt, creates a peculiar estate. While it vests a legal title in the mortgagee, upon which he can maintain an action at law against the mortgagor, it does not make him a freeholder. On his death, it does not descend to his heir, as land held by him in absolute right descends. The naked legal title may descend to the heir; but the latter receives and holds it, not as his own property, but as security for the debt, which is payable to, and demandable by the personal representative. When the debt is paid, the purposes of the mortgage are accomplished, and the right to the land (but not always the title) revests in the mortgagor, who has all the while been, as to the whole world, except the mortgagee, the freeholder, entitled to all the rights and privileges which freehold confers. — 3 Brick. Dig. 645, § 177. Mrs. Perdue’s property, then, was not the land conveyed by Liddell’s mortgage. It was Liddell’s debt, secured by the mortgage or trust deed.

The loan of money on mortgage security, the debt having a long time to run, as simply an interest-bearing investment, has not been common with us. We find nothing in the Lid-dell mortgage which induces us to think such was the intention in this case. We regard it as an ordinary debt from Liddell to Perdue, secured by a deed of trust on land. It gives to Perdue, the beneficiary, neither title to the land, nor the right to take possession of it. It gives to Denson, the trustee, the right to take possession after default, but only on written request, and for the purpose of sale under the power in the trust deed. Nothing in said about default in payment of interest. That the debt, if uncollected, would increase, goes without saying; and we have nothing from which to infer the security would increase in value. On the. face of the proceedings, the debt appears, prima facie, to be of a class which it is safest to collect, rather than indulge; and we fail to find anything tending to show that Kyle and Henry are abusing the trust or powers the deed confers upon them. If there be danger or risk in allowing them to convert a chose in action into money, the chancellor can provide against that, by requiring security, or so securing the fund as that Mrs. Perdue shall enjoy its income for her life. Dunham v. Milhous, 70 Ala. 596.

*431There is no misjoinder of parties complainant.—Hitchcock v. U. S. Bank, 7 Ala. 386.

The chancellor erred in sustaining the demurrer to the bill as amended.

Reversed and remanded.