Bradley v. Bentley , 231 Ala. 28 ( 1935 )

The first count of the complaint is in detinue for the recovery of five mules, two two-horse wagons, 500 bushels of corn in shuck, and 300 bushels of cotton seed; the second is in trover for the conversion of the same property.

The plea was the general issue, pleaded in short by consent, with leave to give in evidence any matter that would constitute a defense if properly pleaded.

At the conclusion of the evidence the court, at plaintiff's request, gave the affirmative charge in writing for the plaintiff. The verdict which followed was for the plaintiff under the detinue count for the possession of the mules and wagons, or their alternate value, aggregating $285 and $110 for their wrongful detention; and under the trover count for $280 as damages for the conversion of 500 bushels of corn and 300 bushels of cotton seed, a. total of $675.

On motion of the defendant the verdict was set aside and a new trial ordered, and the plaintiff appealed to the Court of Appeals, where the order granting the new trial was reversed and the judgment on the verdict was reinstated.

The Court of Appeals, as a predicate for this reversal, finds the following facts:

"In 1931, plaintiff and defendant were respective landlord and tenant upon a contract whereby defendant was to cultivate plaintiff's land and to divide the crops. The only crop involved here is the cotton, the others having been disposed of in other ways. As to the cotton, defendant was entitled to three-fourths and the plaintiff to one-fourth. In March, 1931, the defendant desiring advances in money with which to make the crops and plaintiff being willing to assist him, applied to the Commercial National Bank for a loan and at the suggestion of Mr. Bell, president of the bank, defendant executed a note and mortgage to plaintiff, which included the crop for 1931 and the mules and wagons involved in this suit. Plaintiff in turn indorsed the note, transferred the mortgage to the bank, and the amount was placed to the credit of defendant subject to his check. The entire amount was subsequently drawn out and used by defendant.

"In the fall the defendant gathered from the rented land fourteen bales of cotton, had it ginned, placed in a warehouse, and the receipts placed with the bank, who held them until the spring of 1932, when the bank delivered the receipts to defendant with instructions that the cotton be sold and the proceeds brought to the bank. This was done and the amount extinguished the note and mortgage, which the bank marked paid and delivered them to the defendant. The mortgage having been duly recorded and also the transfer, the bank subsequently canceled same on the record. There was evidence tending toprove that plaintiff was a mere surety for defendant inobtaining the loan and the evidence is without dispute that plaintiff has never received pay for her part of the fourteen bales of cotton used by defendant in paying his debt to the bank. On payment of the debt due the bank, with the proceeds of the fourteen bales of cotton, one-fourth of which belonged toplaintiff, the legal and equitable title to note and mortgage immediately became vested in plaintiff." (Italics supplied.)

The Court of Appeals in the opinion of that court, and the majority opinion of this court base the plaintiff's right to recover on the provisions of section 9544 of the Code of 1923, which provide that "a surety who has paid his principal's debt is entitled to a transfer of the original and collateral security which the creditor holds; he has all the rights to realize thereon and to reimburse himself to the same extent as the creditor." (Italics supplied.)

It is clear that the Legislature in the adoption of this statute along with sections 9548, 9552, and 9553, used the word "surety" in its strict sense in said section and in sections 9548 and 9553, for in section 9552 it dealt with "indorsers" with a different result, limiting the subrogation to control of judgments recovered against the principal debtor, and paid by the indorser. Therefore, to bring this case within the influence of this statute, the plaintiff had the burden of showing that she was a surety on the note executed by the defendant Bentley to theplaintiff and indorsed by plaintiff to the bank, and that she had paid the debt of Bentley to the bank. Thrasher et al. v. Neeley, 196 Ala. 576, 72 So. 115; Reese v. Mackentepe, 224 Ala. 372,140 So. 550; Smith et al. v. Pitts, 167 Ala. 461,52 So. 402. The statement of the question conclusively demonstrates that Mrs. Bradley, the plaintiff, was not a surety on the note. "Contracts of suretyship and of guaranty have much in common — in both the undertaking is to answer for the debt, default, or miscarriage of another. The difference is that a surety insures the debt, is bound with his principal as an original promisor, is a debtor from the beginning; a guarantor answers for the debtor's solvency, must make good the consequences of his principal's failure to pay or perform, is bound only in case his principal is unable to pay or perform. To this effect is Saint v. Wheeler Mfg. Co., 95 Ala. 362, 10 So. 539, 36 Am. St. Rep. 210; 20 Cyc. 1400. From this difference, one consequence of importance in respect of the procedure to be followed in the enforcement of liability flows: 'A principal and a surety, being equally bound, may be joined in the same suit; but a guarantor, being bound by a separate contract, must be sued separately.' " J. W. Watkins Med. Co. v. Lovelady et al.,186 Ala. 414, 419, 65 So. 52, 54. (Italics supplied.)

The facts as found by the Court of Appeals were that the note and mortgage covering the cotton, to be grown by the defendant as tenant for the year 1931, were executed and delivered to the plaintiff, and the note was then indorsed and delivered to the bank, and the mortgage transferred to the bank. In these circumstances the plaintiff, by virtue of the statute, as well as the common law as settled in this state, was a regular indorser, and hence a conditional guarantor of the debt to the bank, and the terms and legal effect of the contract could not be varied by parol evidence. Day v. Thompson, 65 Ala. 269, 273,274. In that case it was observed: "The contract imported by the regular indorsement of a bill or note is of a fixed and definite character, and is interpreted by the law. It is legally incapable of explanation, contradiction, or modification, by parol evidence. This rule is founded on the soundest principles of reason and public policy, as well as on the weightiest authority. The reasons for its application to commercial paper are more cogent, if anything, than to other written contracts. In Tankersley v. Graham, 8 Ala. [247] 251, the rule was declared by this court, in discussing its application to indorsements, to be too firmly established to be now unsettled, even if its correctness were doubted"; and the statute confirms this rule as to all indorsements, whether regular or irregular, unless the indorser "clearly indicates by appropriate words his intention to be bound in some other capacity." Code 1923, § 9089.

The rule stated in Day v. Thompson, supra, was restated and applied in Holczstein et al. v. Bessemer Trust Savings Bank,223 Ala. 271, 136 So. 409, along with a statement of the rule applicable to irregular indorsements, without noting the change wrought by the statute. Pointer v. Farmers' Fertilizer Co.,230 Ala. 87, 160 So. 252; 8 C. J. 75, § 122.

The plaintiff being an indorser on the face of the contract, and not a joint maker of the note, section 9548, which is merely declaratory, is not applicable. The rule as to a joint maker who signs as a surety is also restated in Holczstein et al. v. Bessemer Trust Savings Bank, supra, where the authorities are collected.

However, if it be assumed that section 9548 is applicable, the most that the opinion of the Court of Appeals finds is,"There was evidence tending to prove that plaintiff was a meresurety for defendant in obtaining the loan." (Italics supplied.) This, at most, made the question one for the jury, and the trial court erred in giving the affirmative charge in favor of the plaintiff. This error justified the court in granting a new trial, and the Court of Appeals erred in reversing the order of the court granting a new trial.

The statement of facts in the opinion of the Court of Appeals does not show that the plaintiff paid the debt of Bentley to the bank. There was no division of the cotton separating the rent cotton from the entire mass, and if it should be conceded that the plaintiff as landlord could waive her landlord's lien as to the bank, and at the same time reserve it against the defendant, the lien is not property or the right of property. It is but a statutory legal right to charge the crops with the payment of the rent, in priority to all other rights or liens, the property and right of property remaining in the tenant. This question was settled more than a half of a century ago by this court speaking through Brickell, C. J.: "The lien is not property, or a right of property. It is a statutory legal right to charge the crops with the payment of the rents * * * the property and right of property remaining in the tenant." Wilson v. Stewart, 69 Ala. 302; Stern v. Simpson Johnson, 62 Ala. 194; Ehrman v. Oats, 101 Ala. 604, 14 So. 361; First Nat. Bank of Stevenson v. Crawford et al., 227 Ala. 188,149 So. 228. The cotton was not tortiously disposed of by the tenant, but devoted to the payment of a debt in accordance with the arrangement of the parties. Nor did the tenant receive money therefor. In these circumstances there is no basis for the assertion that the proceeds of the cotton or any part thereof ex aequo et bono belonged to the plaintiff, in such sort as to support an action for money had and received. Connecticut General Life Ins. Co. v. Smith, 226 Ala. 142,145 So. 651; Moody v. Walker, 89 Ala. 619, 7 So. 246.

The full property in the cotton devoted to the payment of the debt to the bank being in Bentley, there is no basis for the contention that the delivery of the cotton or its proceeds to the bank in payment of the debt was a payment in whole or in part by the plaintiff, and the case is wholly outside of the influence of section 9544 of the Code.

"Payment" is the transfer of property absolutely in the performance of an obligation. Winchell, Executor, et al. v. Sanger et al., 73 Conn. 399, 47 A. 706, 66 L.R.A. 935; 21 R. C. L. 7, § 1; Smith et al. v. Pitts, 167 Ala. 461, 52 So. 402.

The plaintiff not having any property in the cotton, its delivery by the owner, Bentley, to the bank in discharge of his obligation was not a payment in whole or in part, in law, by the plaintiff.

In the following cases, Reese v. Mackentepe, 224 Ala. 372,140 So. 550, Thrasher et al. v. Neeley, 196 Ala. 576,72 So. 115, and Anniston Banking Co. v. Green, 197 Ala. 567,73 So. 81, there was no question but that the party making the payment was the surety, and the money paid was the property of the surety; therefore, these cases do not support the holding of the Court of Appeals.

There is another matter apparent on the statement of facts: The plaintiff was to receive one-fourth of the cotton as rent — 3 1/2 bales — and if the value of this cotton be estimated at from 10 to 15 cents per pound, the recovery was certainly excessive, and the trial court's order granting a new trial should not be reversed.

The plaintiff could not recover more than the amount of her claim under the trover count. Karter v. Fields, 130 Ala. 430,30 So. 504.

I therefore respectfully dissent.

BOULDIN, J., concurs in the foregoing dissent.