McBrayer v. National City Bank of Rome

Fifth Circuit

McBrayer v. National City Bank of Rome

493 F.2d 463, 1974 U.S. App. LEXIS 8930

CourtCourt of Appeals for the Fifth Circuit

DecidedApril 29, 1974

DocketNo. 74-1063

StatusPublished

This text of 493 F.2d 463 (McBrayer v. National City Bank of Rome) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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McBrayer v. National City Bank of Rome, 493 F.2d 463, 1974 U.S. App. LEXIS 8930 (5th Cir. 1974).

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Opinion

PER CURIAM:

When McBrayer Enterprises, Inc. borrowed $39,500 from the National City Bank of Rome, Georgia, a promissory note for the loan was secured by “assigned various stocks” registered in the name of Ann P. McBrayer, the appellant. Mrs. McBrayer assigned each stock certificate in blank. The note, representing that McBrayer Enterprises owned and had “full power and authority” to pledge the collateral, was endorsed by Mrs. McBrayer and her husband. He was the president of Mc-Brayer Enterprises, and she was the secretary-treasurer; they were the principal stockholders. Before the note became due, McBrayer Enterprises initiated bankruptcy proceedings. The bank then filed a petition in the bankruptcy court for leave to sell the stocks and to apply the proceeds against the corpora-¹ tion’s note. The appellant argued in response to the petition that the bank was not a secured creditor, because the stocks were owned personally by her and title had never passed to the corporation. The court held that Mrs. McBrayer would not be permitted to introduce pa-rol evidence concerning matters surrounding the execution of the promissory note pledging the stocks as collateral, and ruled that the bank could sell the securities. We affirm.

The only question we address is whether under Georgia law the parol evidence rule¹ must, in this case, give way before one of its exceptions — that parol evidence is “admissible to explain all ambiguities, both latent and patent”. Ga.Code Ann. § 38-502. The appellant argues that the phrase “various stocks” is patently ambiguous. She contends that reference must be made to evidence outside the note to determine exactly what stocks are meant to be included. [465]*465We agree that the phrase is ambiguous; but that ambiguity is not relevant here. There is no issue in this case concerning what securities are involved. The appellant may not force her way past the pa-rol evidence rule by seizing upon a minor and immaterial ambiguity and extending it to other non-ambiguous provisions of the note. We find no ambiguity in the relevant provision of the note, that McBrayer Enterprises was pledging the stock as collateral.

Affirmed.

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PER CURIAM:

When McBrayer Enterprises, Inc. borrowed $39,500 from the National City Bank of Rome, Georgia, a promissory note for the loan was secured by “assigned various stocks” registered in the name of Ann P. McBrayer, the appellant. Mrs. McBrayer assigned each stock certificate in blank. The note, representing that McBrayer Enterprises owned and had “full power and authority” to pledge the collateral, was endorsed by Mrs. McBrayer and her husband. He was the president of Mc-Brayer Enterprises, and she was the secretary-treasurer; they were the principal stockholders. Before the note became due, McBrayer Enterprises initiated bankruptcy proceedings. The bank then filed a petition in the bankruptcy court for leave to sell the stocks and to apply the proceeds against the corpora-¹ tion’s note. The appellant argued in response to the petition that the bank was not a secured creditor, because the stocks were owned personally by her and title had never passed to the corporation. The court held that Mrs. McBrayer would not be permitted to introduce pa-rol evidence concerning matters surrounding the execution of the promissory note pledging the stocks as collateral, and ruled that the bank could sell the securities. We affirm.

The only question we address is whether under Georgia law the parol evidence rule¹ must, in this case, give way before one of its exceptions — that parol evidence is “admissible to explain all ambiguities, both latent and patent”. Ga.Code Ann. § 38-502. The appellant argues that the phrase “various stocks” is patently ambiguous. She contends that reference must be made to evidence outside the note to determine exactly what stocks are meant to be included. [465]*465We agree that the phrase is ambiguous; but that ambiguity is not relevant here. There is no issue in this case concerning what securities are involved. The appellant may not force her way past the pa-rol evidence rule by seizing upon a minor and immaterial ambiguity and extending it to other non-ambiguous provisions of the note. We find no ambiguity in the relevant provision of the note, that McBrayer Enterprises was pledging the stock as collateral.

Affirmed.

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493 F.2d 463, 1974 U.S. App. LEXIS 8930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcbrayer-v-national-city-bank-of-rome-ca5-1974.

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