LANGLEY & WATTERS, LLP, and Richard L. Watters
v.
Michael GAMBLE, as Personal Representative of the Estate of Barbara Long
Rehearing
Denied March 22, 2019
Appeal
from Mobile Circuit Court (CV-14-900620), Jay A. York, Judge
Joe
Carl "Buzz" Jordan, Mobile; and Frank L. Thiemonge
III, Mobile, for appellants.
Troy T.
Schwant of Burns, Cunningham & Mackey, P.C., Mobile, for
appellee.
OPINION
PER
CURIAM.
AFFIRMED. NO OPINION.
Stuart,
C.J., and Bolin, Parker, Main, Wise, Bryan, and Mendheim,
JJ., concur.
Shaw,
J., concurs specially.
Sellers,
J., dissents.
SHAW,
Justice (concurring specially).
I
concur to affirm the judgment of the Mobile Circuit Court
without an opinion. I write specially to address Justice
Sellerss dissenting opinion. Under the ore tenus standard of
review, I believe that there was sufficient evidence to
support the trial courts judgment that an equitable mortgage
existed in this case.
Barbara 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 mortgage.
" 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
equitable mortgage.
In
this 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.
Page 1229
The
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, Barbaras 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
loan:
"[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] didnt 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 days."
(Emphasis added.)
"[Counsel:] This loan from [Langley], was it
ever put down on paper as to the actual terms, interest rate,
anything?
"[Watters:] There was no interest. He didnt want any
interest. He just wanted the money paid back within
thirty days."
(Emphasis added.)
"[Counsel:] But you were willing to loan
[Barbara] this money but the collateral you needed was a
quitclaim deed, not just a mortgage?
"[Langley:] Correct.
"[Counsel:] Okay. Was there any discussion between you
and your brother[1] 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 ...