Opinion
1 Div. 954.
May 13, 1937. Rehearing Denied June 3, 1937.
Appeal from Circuit Court, Baldwin County; F. W. Hare, Judge.
Jesse F. Hogan, of Mobile, for appellant.
A mortgagor may abate the mortgage debt in recoupment, crediting on the debt any damage suffered by him and proximately caused by the default of the mortgagee and growing out of the same transaction. Parker v. Ward, 224 Ala. 80, 139 So. 215; Neal v. Williams, 168 Ala. 310, 53 So. 94; Julian v. Woolbert, 202 Ala. 530, 81 So. 32; Trammell v. Craddock, 100 Ala. 266, 13 So. 911; Tecumseh Iron Co. v. Camp, 93 Ala. 572, 9 So. 343; Abercrombie v. Virginia-Carolina Chem. Co., 206 Ala. 615, 91 So. 311. Appellee breached its contract with appellant to deliver fertilizer within the time agreed upon, or appellant was induced to enter into the contract to buy fertilizer from appellee by the false promise of the salesman representing appellant that the fertilizer would be delivered at once, well knowing that the promise was false. Appellee is liable to appellant for all damages resulting as the natural and proximate consequence of the breach. Cato v. Williamson, 209 Ala. 477, 96 So. 321; 17 C.J. 742; Southern L. T. Co. v. Gissendaner, 4 Ala. App. 523, 58 So. 737; St. Louis St. F. R. Co. v. McCrory, 2 Ala. App. 531, 56 So. 822; Ansley v. Bank of Piedmont, 113 Ala. 467, 21 So. 59, 59 Am. St.Rep. 122; Ball v. Farley, 81 Ala. 288, 1 So. 253; Jordan v. Pickett, 78 Ala. 331. Fraud that will support a rescission will support a recovery of damages. Cartwright v. Braly, 218 Ala. 49, 117 So. 477; Caffey v. Ala. M. S. Co., 19 Ala. App. 189, 96 So. 454; Ala. M. S. Co. v. Caffey, 213 Ala. 260, 104 So. 509. There was no evidence tending to show that the note had been placed with an attorney for collection, nor what was a reasonable attorney's fee for collecting the note. Allowance of attorney's fee was error. Thomas v. Barnes, 219 Ala. 652, 123 So. 18; Bell v. King, 210 Ala. 551, 98 So. 794; Anniston B. L. Co. v. Lapsley, 200 Ala. 377, 76 So. 293; Seed v. Brown, 180 Ala. 8, 60 So. 98; Pollard v. American F. L. M. Co., 103 Ala. 289, 16 So. 801.
Leon G. Brooks, of Brewton, for appellee.
There is no allegation or proof of fraud. A promise or expectation does not in general constitute fraud. 26 C.J. 1087; Majestic Coal Co. v. Anderson, 203 Ala. 233, 82 So. 483; Ansley v. Piedmont Bank, 113 Ala. 467, 21 So. 59, 59 Am.St.Rep. 122. Appellee was to receive a first mortgage on land. Both by law and by the contract it was given an opportunity to investigate the title; and, having discovered an uncanceled mortgage of record, was justified in delaying delivery under the sale contract until cancellation of this mortgage. The goods were to be sold entirely on credit and this mortgage created a material credit obstacle. 55 C.J. 480; 38 L.R.A.(N.S.) 30, note. The note and mortgage provided for a reasonable attorney's fee. The bill and evidence proves the beginning of foreclosure proceedings and the evidence establishes a reasonable attorney's fee for services. It is obvious that appellee has had to engage an attorney to protect its interest in the enforcement of its mortgage or collection of its debt. Stephenson v. Allison, 123 Ala. 439, 26 So. 290.
The bill in this cause was filed by James A. Bishop and Ida Bishop, husband and wife, to enjoin foreclosure of a mortgage executed by them to appellee, Swift Co., for redemption of the property, and, incidentally, the allowance of a set-off against the mortgage indebtedness.
The demand sought to be set off consisted of certain claimed damages, alleged to have been sustained by the said James A. Bishop, growing out of the breach of a contract he had with appellee for the purchase of fertilizer, and to secure the purchase price of which the mortgage in question was given. The appellee is alleged to be a foreign corporation, but duly authorized to do business in the state of Alabama.
The equity of the bill is not challenged in any of its aspects, nor are we of the opinion that it was subject to demurrer upon any ground. The major purpose of the bill is to effectuate redemption, and incidentally seeks the allowance of a set-off, the complainant offering to pay any balance due on the mortgage debt. The averments of the bill, and relief sought, clearly differentiate this case from the case of Caldwell v. Caldwell, 166 Ala. 406, 52 So. 323; 139 Am.St.Rep. 48, and bring it squarely within the principle stated in our more recent cases of McQuagge Bros., Inc., et al. v. Thrower, 214 Ala. 582, 108 So. 450; Heflin v. Heflin, 222 Ala. 662, 134 So. 20.
The property conveyed by the mortgage belonged to the husband-mortgagor, and the indebtedness was that of the husband, and the wife joined in the execution of the mortgage for the purpose solely of relinquishing dower.
Some time after the filing of the bill, the wife died, and her death was suggested. The court ordered the cause abated as to the wife, "her heirs or personal representatives," and directed that the cause should proceed in the name of James A. Bishop, the remaining complainant. This was the proper course to pursue. McCaleb v. Worcester et al., 224 Ala. 360, 140 So. 595.
On final hearing the court refused to allow the complainant his claimed set-off, and, without reference to the register, fixed the amount of the mortgage indebtedness then remaining due and unpaid at the sum of $955.04, which included an allowance of an attorney's fee to appellee of $125. The court allowed the complainant sixty days from the date of the decree within which to pay said indebtedness, and failing in which, the court ordered the cause to stand dismissed.
We have carefully read and considered all the evidence offered and noted upon the hearing, and are of the opinion that the court properly denied relief to complainant as to the asserted set-off.
The evidence is without any sort of conflict that DeWitt Smith, who received from the complainant the order for the fertilizer, was only a traveling salesman with no authority whatever to bind appellee upon any contract of sale; that all orders for goods had to be forwarded to appellee at New Orleans, La., for approval or rejection.
The order in question was in writing and contained the following stipulation:
"Written and printed this agreement is binding only when confirmed in writing by seller at New Orleans, La., and no verbal or written qualifications affecting prices, terms or any other provision whatsoever will be binding unless confirmed in writing by Swift Company at its offices in New Orleans, La."
The order was not confirmed on its receipt by Swift Co., as it developed that there was a prior uncanceled mortgage of record against the property, and it was not until this mortgage was satisfied of record that the order was accepted by Swift Co. No delay whatever was chargeable to Swift Co. in shipping the fertilizer after the satisfaction of the prior outstanding mortgage. The seller received telegraphic instructions of the satisfaction of said mortgage on February 16, 1932, and thereupon promptly confirmed the sale, and shipped the goods.
The complainant accepted the fertilizer, and, so far as appears to the contrary in the evidence, never one time complained of any delay in the shipment, either before or after the goods arrived. The first complaint seems to have been made when the appellee commenced foreclosure proceedings.
The order given appellee's salesman by appellant was nothing more or less than an offer to buy the fertilizer at the prices stated, and on the terms set forth in the written offer. It could not become a binding contract upon either party, until accepted by the appellant. Sturdivant v. Mt. Dixie S., L. I. Co. et al., 197 Ala. 280, 72 So. 502; Kenan v. Lindsay, 127 Ala. 270, 273, 28 So. 570, 572; Hodges v. Sublett, 91 Ala. 588, 8 So. 800; Horst v. Moses, 48 Ala. 129, 140.
It is next insisted that the court committed error in including an attorney's fee in the amount it ascertained to be due and owing on the mortgage indebtedness. This insistence must be sustained. There is absolutely no evidence in the case showing, or tending to show, that the appellee had placed the note and mortgage, or either, in the hands of an attorney for collection, prior to the filing of the bill in this cause. It is true the bill avers that the appellee was proceeding to foreclose its mortgage, but it nowhere appears that it was being done by and through an attorney. For aught appearing to the contrary, it was proceeding without the aid of an attorney. The burden was upon the appellee to show that he had incurred an attorney's fee in the attempted collection of the debt, or in the foreclosure proceedings prior to the filing of the bill.
It does appear, however, that appellee, after the bill was filed, engaged an attorney, who has represented him throughout this proceeding. However, no cross-bill praying a foreclosure of the mortgage was filed in the cause, and under our uniform ruling the appellee was not entitled to an allowance of an attorney's fee in defending a suit for redemption. Beasley v. Ross (Ala.Sup.) 174 So. 764; Thomas, Supt. of Banks, et al. v. Barnes, 219 Ala. 652, 123 So. 18; Lampkin v. Irwin, 202 Ala. 14, 79 So. 300; Bell v. King, 210 Ala. 551, 98 So. 794; Kelly v. Carmichael et al., 221 Ala. 371, 129 So. 81.
Post, p. 335.
The note and mortgage made no provision for an attorney's fee for defending redemption suit, while they do provide for an attorney's fee in the collection of the notes and foreclosure of the mortgage.
In all other respects, the decree is free from error, prejudicial to appellant.
We will here correct the decree by eliminating the attorney's fee allowed by the court, viz., $125. This will leave the mortgage indebtedness, as of the date of the decree, $830.04 instead of $955.04.
The time allowed by the court for the payment of the mortgage, before a dismissal order should be effective, having passed pending this appeal, it is ordered that the complainant be, and he is hereby allowed ninety days from this date within which to pay appellee the amount above fixed, as still due and owing on said mortgage, together with interest at rate of 6 per centum per annum from December 1, 1936.
As corrected, the decree of the circuit court is affirmed.
Corrected and affirmed.
ANDERSON, C. J., and THOMAS and BROWN, JJ., concur.