Langley & Watters, LLP, and Richard L. Watters
Michael Gamble, as personal representative of the Estate of Barbara Long
from Mobile Circuit Court (CV-14-900620)
Stuart, C.J., and Bolin, Parker, Main, Wise, Bryan, and
Mendheim, JJ., concur.
J., concurs specially.
Sellers, J., dissents.
concur to affirm the judgment of the Mobile Circuit Court
without an opinion. I write specially to address Justice
Sellers's dissenting opinion. Under the ore tenus
standard of review, I believe that there was sufficient
evidence to support the trial court's judgment that an
equitable mortgage existed in this case.
Long executed a deed to certain property she owned in Conecuh
County. The issue in this case is whether the execution of
the deed was an outright sale of the property or was intended
to be collateral for a loan, thus creating an equitable
"'At common law, a deed of conveyance of land
absolute and unconditional on its face, but intended and
understood by the parties to be merely a security for the
payment of a debt, will be treated in equity as a mortgage,
conferring upon the parties the relative rights and remedies
of the mortgagor and mortgagee, and nothing more.'"
Smith v. Player, 601 So.2d 946, 949 (Ala. 1992)
(quoting Andress v. Parish, 239 Ala. 67, 69, 193 So.
727, 729 (1940)).
"To prove an equitable mortgage, it must be shown that:
(1) the mortgagor has a mortgageable interest in the property
sought to be charged as security; (2) a definite debt is due
from the mortgagor to the mortgagee; and (3) the intent of
the parties is to secure the debt by mortgage, lien, or
charge on the property."
Hall v. Livesay, 473 So.2d 493, 494 (Ala. 1985). So,
although the deed on its face indicated that Barbara conveyed
the land, if it was actually intended to be a security,
mortgage, lien, or "charge on the property" for a
debt, the law will treat the purported conveyance as an
case, it is alleged that Barbara needed a loan so she could
pay a tax lien on or redeem the property and that Ted Langley
agreed to loan her that money. It is further alleged that the
deed, which purports to transfer the land to Langley &
Watters, LLP ("the partnership"), was intended to
be collateral for that loan. Langley contended, however, that
the transaction was actually a sale of the property to the
partnership but that Barbara had the option to repurchase it
within a certain period.
intent of the parties--whether the deed represented an
absolute sale of the property or instead security/collateral
for a loan of money to pay the taxes--was hotly debated at
trial. At that point, Barbara was deceased, and we have no
testimony by her as to her intent. However, in the course of
the proceedings before the trial, which also dealt with other
issues, much evidence was generated regarding the
transaction. Richard L. Watters, Barbara's attorney and a
partner in the partnership who facilitated the transaction,
had previously executed an affidavit, portions of which were
read into evidence at trial. The affidavit stated, in part:
"Shortly before the [tax] redemption time had run
[Barbara] contacted me and asked me if I could find someone
to loan her the funds for the redemption." In
depositions taken before trial, portions of which were read
into evidence, Watters and Langley both identified the
transaction as a "loan" for which no interest was
charged, both testified that Barbara would "repay"
the loan (within 30 days, according to Watters, or three
months, according to Langley), and both indicated that the
deed to the property was "collateral" for that
"[Counsel:] What was the next conversation with
[Barbara] as far as what was going to happen and how was this
all going to work?
"[Watters:] I called her up. [Langley] didn't want
to do a mortgage. He just wanted to do a straight
loan. At first he just wanted it paid back
within a week. But then I got him to agree to thirty days and
[Barbara] said that she could get the money up in thirty
"[Counsel:] This loan from [Langley], was it
ever put down on paper as to the actual terms, interest rate,
"[Watters:] There was no interest. He didn't want
any interest. He just wanted the money paid back
within thirty days."
"[Counsel:] But you were willing to loan
[Barbara] this money but the collateral you needed was a
quitclaim deed, not just a mortgage?
"[Counsel:] Okay. Was there any discussion between you
and your brother about the terms of the loan other
than what we just discussed?
"[Langley:] Just that it was going to be interest free.
I was lending the money. All I wanted was my money
back. If they repaid it then we were going to
use the money for another interest that we had.
"[Counsel:] How long was the loan supposed to be?
"[Langley:] You know, my recollection of the period
seems to differ from what I heard Richard testify. But I
remember it being three months and that I'd give her