Taylor v. Southern Bank Trust Co. , 227 Ala. 565 ( 1933 )

On Rehearing. Upon application for rehearing appellant's counsel have elaborated upon the question first above considered relating to the matter of indebtedness secured by the assignments, with citation of authorities [among them St. John v. O'Connel, 7 Port. 466; In re Haynesworth (D.C.) 34 F.(2d) 334; St. Lucie County Bank Trust Co. v. Aylin, 94 Fla. 528, 114 So. 438; Gillet v. Bank of America, 160 N.Y. 549, 55 N.E. 292; Armstrong v. Chemical National Bank (C. C.) 41 F. 234, 6 L.R.A. 226; Turner et al. v. Bank of Mountain View (Mo.App.)19 S.W.(2d) 19; note 68 A.L.R. 912; In re Anger Baking Co. (C.C.A.) 228 F. 181; Kelter v. American Bankers' Finance Co., 306 Pa. 483,160 A. 127, 82 A.L.R. 999], all of which have been examined with care. Each of them is readily distinguishable from the instant case. Illustrative of some differentiating features is the Florida case of St. Lucie County Bank Trust Co. v. Aylin, supra, where the language of the contract as to the collateral security was construed as having application to liabilities arising from transactions between the parties thereto, and not those arising out of a purchase by the bank from third parties, and wherein the court followed the New York court in the analogous case of Gillet v. Bank of America, supra.

But a review here of each case would extend this opinion to undue length. Some of them state the principle, recognized, of course, by all the authorities, that in the absence of an agreement to the contrary or of facts from which an agreement may be presumed, a pledgee may not apply collateral for one debt in discharge of another debt, or, as stated in Phillips v. Thompson, 2 Johns. Ch. (N.Y.) 418, 7 Am. Dec. 535, a security given for a specific purpose is to be applied to that purpose alone and not another. And it is also true, as insisted by appellant, that the question is one of intention of the parties as determined from the terms of the contract of pledge, the subject-matter and course of dealing to which it relates. 49 Corpus Juris 920.

But, as stated in the above noted text of 49 Corpus Juris, "Where the intention is clear and contravenes no rule of law and sufficient words are used to arrive at the intention, it should be enforced irrespective of technical rules of construction."

Appellant's contention, forcibly presented in brief of counsel, is in substance and effect, that the mere fact the insured borrowed of the bank the sum of $265.20 for premium payment, executing his note therefor, and contemporaneously the assignments of the policies were executed by himself and wife, suffices to disclose that the policies were assigned as collateral for that particular loan and nothing more. But the argument overlooks other pertinent facts.

Subsequent premiums were paid by the bank, and, as noted in the original opinion, the policies were without any cash surrender value. Insured was indebted to the bank at that time in excess of $66,000. Insured executed and delivered to the bank the assignments and the policies, the execution of the assignments being duly acknowledged. The record is silent as to who prepared the assignments, though the indications point to the fact that they were on blank forms furnished by the company. The statement in the record is merely that they were executed by the insured and by him delivered to the bank. Clearly under these circumstances, the language of the assignments, whatever rule of construction be applied, is not to be given so restrictive a meaning as contended by appellant. Such a construction would do violence to the plain unambiguous language of the assignment contract, which should here suffice for all purposes. The interest of the bank was measured by the "pecuniary claim against the assignor existing at the time of any settlement of the policy." Perhaps the discussion could be strengthened by a detailed consideration of the meaning of the words "pecuniary" and "claim," which are broad in their scope. But we consider this unnecessary. Certainly there is nothing in this language that would justify a conclusion the interest of the bank in the assignment of these two policies, aggregating $15,000, was to be limited to the sum of $265.20, that day advanced. The plain language of the contract is to the contrary.

It embraces the assignee's pecuniary claim against the assignor existing at the time of the settlement of the policy, not when the note for $265.20 became due (a fact not here appearing), nor even such claim then existing; but such as might be in existence when the policy was settled. True, the language employed is not in the wording of authorities cited by appellant, as in Merchants' National Bank v. Demere,92 Ga. 735, 19 S.E. 38, 39, "any general balance due or to become due," or "any other liability," as in Cross v. Brown (R.I.)33 A. 370, 371, or "any other unsecured liability, or liabilities," as in Wilson v. Carothers (Ky.) 43 S.W. 684, or "this or any other obligation due or to become due" as in Boney Harper Milling Co. v. J. C. Stevenson Co., 161 N.C. 510,77 S.E. 676. But the words used are broad and comprehensive, and are to be properly construed as equally capable of conveying a like thought and purpose. But we forego further comment.

We are persuaded the original opinion is correct, and sufficiently disposed of the question; but out of deference to the earnest insistence of counsel for appellant, we have thought it proper to further extend the discussion.

The application for rehearing will be denied.

Application overruled.

ANDERSON, C. J., and BOULDIN and FOSTER, JJ., concur.