Rike et al. v. Nichols

Rike et al. v. Nichols. Bill to Foreclose Mortgage. 1. Wife; when equal owner with husband in land; when her interest not subject to sale by mortgagee. — If a husband and wife, being tenants in common of a lot of land, bolding tbeir interest by recorded conveyances, sell and convey the same, and take from the purchaser a mortgage in the name of the husband alone to secure the payment of the purchase money; and if the land is conveyed to the husband by the mortgagor to satisfy the mortgage debt; and if afterwards the husband and wife execute a mortgage on the land to secure a debt for money loaned to the husband for his individual benefit; the wife in equity became equal owner with the husband of the land when it was taken by him in payment of the mortgage debt; and the mortgagee of the husband and wife cannot subject her equitable title to the satisfaction of the mortgage debt of the husband — the mortgagee being chargeable with notice through the record, of the wife’s interest in the land. ■ Appeal from tlie City Court of Montgomery. I-Iearcl before tlie Hon. A. I). Sayre. Mrs. Isabella B. S. Nicbols brings her bill to foreclose a mortgage executed to lier by E. G-. Pike and his Avife on a certain lot of land. The land Avas OAvned jointly by Bike and his Avife, but the legal title became vested in the husband alone as stated in the opinion. The husband and Avife executed the mortgage to the complainant to secure the payment of money borrowed by the husband for his own use. The question Avas Avhetlier the complainant by virtue of her mortgage had any lien on the'equitable interest of the wife in the lot. The court held that the complainant aaúis an innocent purchaser, and Avas entitled to the payment of her debt by foreclosure of the mortgage. Appeal by the defendants and reversed. Francis Gf. Oaffey, for appellants. — When E. (I. Rike acquired the title to the land through the deeds from Strother and Harrington he became in equity the trustee of lxis wife to the extent of one-half interest — she haying originally paid one-half of the purchase money. Church v. Church, 25 Pa. St. 278; Gordon v. Bell, 50 Ala. 213; Tarleion v. Goldlhioaite, 23 Ala. 346. (2). Mrs. Nichols had notice of the interest of Mrs. Rike. She was chargeable with notice of everything which appears in her own chain of title. — Campbell v. Roach, 45 Ala. 667; Breioer v. Brown, 68 Ala. 212; 2 Devlin on Deeds, Sec. 1000. (3). She was also charged with notice of every fact which could have been ascertained by inquiry excited by the facts disclosed to her by the record. Foxier v. Bialhoorlh, 62 Ala. 547; Overall v. Taylor, 99 Ala. 12; Woodall v. Kelley, 85 Ala. 368; Webb v. Robins, 77 Ala. 176; Monbefiero v. Brown, 7 House of Lords 241. W. S. Ti-iorington, contra, contended, that the only notice it can be claimed Mrs. Nichols had was the notice of the deed of January, 1885; and the records disclosed that that interest liad passed out of Mrs. Rike by the deed from her and her husband to Harrington & Strother, and that she never afterwards acquired any interest. As against Harrington & Strother and Mrs. Nichols, -svlio claims under them, it will be presumed that if Rike squandered the money it was a gift from Mrs. Rike to him. — Amor F. L. Mfrq. Co. v. Thornton, 108 Ala. 258. [MAJORITY — MCCLELLAN, O. J.] MCCLELLAN, O. J. — On and prior to May 15, 1890, Mrs. Rike owned an undivided one-half interest in the lot involved in this case, and her husband, E. G. Rike, the other undivided half interest: They were tenants in common. On that day they united in a sale and conveyance of the property to Strother and Harrington for $4,000, $500 cash and $3,500 on time. The cash payment was made to Rike, and a mortgage on the lot was executed to him alone by Strother and Harrington to secure the deferred payment. Directly from Harrington and through foreclosure from Strother the lot was conveyed to E. G. Rike alone in satisfaction of this mortgage. In our opinion on these facts E. G. Rike held the lot under these conveyances from Strother and Harrington made in satisfaction of the debt due equally to him and bis wife secured by a lien enuring to lier benefit as well as to bis, in trust for lier to tbe extent of tliat part of tbe purchase money wbicb belonged to ber. Tbe deed from Mr. and Mrs. Nike to Strother and Harrington and the mortgage to Hike to secure tbe payment of tbe consideration of that deed, being cotempor-aneous in point of time, constituted parts of one and the same transaction, involving in one contract the sale and conveyance of tbe lot and provision for securing the payment of tbe purchase money; and it is to be taken that rhe mortgage to Mrs. Hike’s husband and co-tenant was executed in consonance with an understanding to that effect common to all tbe parties, including Mrs. Eilce. Tbe parties (bus united in (be substitution of the contract. lion of tbe mortgage in tbe stead of tbe implied •equitable lien for the security of tbe purchase money, thereby waiving tbe vendor’s lien. But tbe land for wbicb tbe. money was due having been tbe property of Air. and Airs. Hike in common, tbe money for which it was sold belonged equally to them, and had it been presently paid to Hike obviously bis wife would have been entitled to. one half of it, not as a mere debt due. from him to her, but as being ber property in bis bands as her agent or trustee. If there, bad been no mortgage and the money bad been subsequently paid to Hike, the result, would have been the same. Had there been no mortgage1 and the bind itself bad been afterwards conveyed to Hike in satisfaction of tbe debt due equally to him and bis wife, be would have held the title for her and for himself — in trust to tbe extent of an undivided half interest to ber use and for ber benefit. That the purchase, money was not presently paid can make no difference. That a mortgage was taken to secure it is of no consequence. Whenever paid and however paid and in whatever paid, when paid to Hike one half of it belonged to ber. Tbe security having been taken in tbe name of Hike alone by agreement of parties, enured to ber benefit; and when tbe security was realized upon and tbe land itself became vested in Hike in payment and satisfaction of tbe mortgage lien which he held for the benefit of both, to secure a debt due to both, he had title to one undivided lialf interest in bis own right and to the other undivided half interest in the right of and as trustee for Mrs. Nike. And this was the title he had when he executed the mortgage to complainant. This title appeared of record, and hence complainant had notice of it. Having notice she, of course, cannot subject Mrs. Rike’s equitable title to the satisfaction of her mortgage for she is not a bona fide purchaser, and the mortgage securing a debt of the husband is void as to Mrs. Rike’s interest in the land. We deem it unnecessary to discuss other questions that Avere mooted in the court below and some of them here, further than to say that the evidence satisfies us that the deed from Rike to his Avife of January 22, 1885, is supported by a valuable consideration, even conceding that the consideration of that conveyance is open to inquiry in this case Avhich Ave greatly doubt. The decree of the city court must be reversed and the cause remanded for further proceedings in conformity to this opinion. Reversed and remanded.