Leath v. Hancock , 210 Ala. 374 ( 1923 )

The evidence in the record affords no sound basis for the finding of the trial court that the mortgage debts sought to be enforced by foreclosure are the debts of the respondent Emma D. Leath. There is nothing to show that she agreed to be bound for the payment of either of them, and the recital in the mortgage of a joint indebtedness by her and her husband is neutralized entirely by the absence of her signature from the notes. The mere fact that she inquired about getting a loan for her husband and herself, if she did, falls very far short of showing that she meant to bind herself and her property for its payment.

So far as her individual interest in the mortgaged property was concerned, the mortgages were but securities for the payment of her husband's debts, and were therefore void under the statute. Code, § 4497. The decree was therefore erroneous in not limiting the foreclosure to the property of the husband, W. J. Leath, and in granting relief against Emma D. Leath.

The court was in error also in decreeing that the proceeds of the 12 bales of cotton should be applied to the $2,000 note. That cotton was mortgaged or pledged for the payment of the $1,000 note, and, when the mortgagee realized $1,037.64 from the sale of the cotton, he was bound to apply that sum to the $1,000 note, which is to say that the law so applied it, in the absence of an agreement by Leath that it could be otherwise applied. Taylor v. Cockrell, 80 Ala. 236; Boyd v. Jones,96 Ala. 305, 11 So. 405, 38 Am. St. Rep. 100; Larry v. Brown,153 Ala. 452, 44 So. 841. The record shows no such agreement, and a court of equity will treat the payment as a credit on the note to which it was legally applicable.

This credit, together with another admitted credit of $122.67 on the $1,000 note, completely extinguished that debt and its mortgage security.

For the errors noted, the decree will be reversed, and the cause will be remanded for further proceedings in accordance with this opinion.

Reversed and remanded.

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