Norvell v. Gilreath

66 So. 635, 189 Ala. 452, 1914 Ala. LEXIS 193
CourtSupreme Court of Alabama
DecidedNovember 7, 1914
StatusPublished
Cited by3 cases

This text of 66 So. 635 (Norvell v. Gilreath) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norvell v. Gilreath, 66 So. 635, 189 Ala. 452, 1914 Ala. LEXIS 193 (Ala. 1914).

Opinion

SAYRE, J.

This is a suit upon a written guaranty executed by appellants contemporaneously with a certain mortgage given by the Carbon Hill & Lost Creek Coal Company as further security for the mortgage debt; the mortgage and the guaranty containing cross-references to each other and together showing the consideration upon which the two contracts were executed.

There was no error in allowing the amendment to the complaint. Indeed, if any significance whatever is to be attached to- the use of the descriptive word or phrase “trustee” or “as trustee” in connection with the averment of the party defendant in the suit to which the complaint refers, the amendment was necessary to the harmony of the complaint in that respect, for at [457]*457different places the defendant there was averred to he “Gilreath trustee” and “Gilreath, as trustee.” But aside from this, the formal description in the complaint before us of the defendant in the former suit, whether that suit was at law or in equity, was of no consequence save in the way of a proper verbal accuracy. It indicated nothing as to the merits of either controversy, for in both the rights of the parties were and are to be determined upon consideration of the substantial averments of the pleadings and the tenor of the judgment or decree rendered or to be rendered.—A. C. G. & A. Ry. Co. v. Heald, 178 Ala. 636, 59 South. 461. According to principles prevailing in this court in reference to the amendment of pleadings, the amendment here was properly allowed.—Brown v. Loeb, 177 Ala. 106, 58 South. 330.

The mortgage from the Carbon Hill & Lost Creek Coal Company to plaintiff, set out in extenso in the complaint, recites an indebtedness to be secured to plaintiff in a certain event alleged in the complaint to have happened. It is also alleged in the complaint that defendants did guarantee the payment of the same debt in the same event. This recital of the mortgage and this allegation of the complaint suffice to answer those grounds of demurrer which go upon the notion that there is no allegation of a promise on the part of the coal company or defendants to pay any debt to plaintiff.

As we have said, the mortgage and the contract of guaranty contain cross-references to each other. The two were executed on the same day, and have a common purpose. They are therefore to be construed as part and parcel of one transaction. The guaranty was expressed in the following language:

[458]*458“For valuable considerations, set forth and expressed in a certain agreement [meaning, the mortgage] made contemporaneously herewith by Belton G-ilreath, trustee, as party of the first part, Carbon Hill & Lost Creek Coal Company, as party of the second part, and Peyton Norvell and Evan Bynom, as parties of the third part, the said Peyton Norvell and Evan Bynom hereby guarantee the performance of the 'foregoing agreement by the said Carbon Hill & Lost Creek Coal Company. In‘witness whereof,” etc.

It is said by the demurrer that this agreement appears to be obnoxious to the statute of frauds, for that it fails to express the consideration upon which it was made. The mortgage agreement shows a new consideration very plainly, to wit, the mortgagee’s forbearance pending the suit to determine the title to the land. The two agreements having been exjecuted contemporaneously, the consideration of the principal contract, moving concurrently to the obligors in both, was sufficient to support the collateral, and none other was necessary.—Dilworth v. Home Furniture Co., 183 Ala. 608, 62 South. 812.

The demurrer took the further ground that the complaint failed to show that suit had been brought against the principal debtor and plaintiff’s remedy against it exhausted by a return of “no property found” — this under section 5153 of the Code, et seq. But the statute has no application. Instruments by which the maker, as in the case at bar-, guarantees the payment of a specific sum of money at the end of a stated period.are usually held to be absolute contracts of guaranty, and in such cases nothing of a preliminary nature on the part of the creditor is required by law to perfect his rights. It becomes the duty of the guarantor in such cases to see that his principal pays the debt at the time [459]*459stipulated. This is substantially the language of Leftkovitz v. First Nat. Bank of Gadsden, 152 Ala. 527, 44 South. 613, where authorities are cited. True, the liability of defendants here was conditioned upon the determination of the then pending suit in a certain way; but this condition is met by the specific averment of the complaint. In Caulfield v. Finnegan, 114 Ala. 39, 21 South. 484, cited by appellants on this branch of their agreement, the suit was by an indorsee of a nonnegotiable promissory note • against his indorser; the indorsement in that case, like the indorsement of a paper negotiable according to the law merchant, imparting a contract or engagement, not as absolute surety or guarantor, but that the paper will be paid according to its tenor, conditioned on due diligence on the part of the holder. And in such case the statute' prescribes the measure of diligence to be exercised by the indorsee. So in Kyle v. Bellenger, 79 Ala. 516, and the other cases cited by appellants to this point. They are without point for the reason that plaintiff was not an indorsee. It follows that the demurrer to the complaint was properly overruled. It results, also, from what we have said in this paragraph, that the demurrers to special pleas 4, 5, 16, and 17 should have been sustained, as they were.

Plea 7 was bad. The substance of this plea was that the mortgage had been foreclosed, the property sold, and the mortgage thereby satisfied. It is to be noted {that there is no allegation that the debt in suit had been paid or satisfied. A mortgagee after default has several remedies. Among others, he may foreclose, and, if the proceeds are insufficient to discharge the mortgage debt, the mortgagor is personally liable for the deficiency. But an exhaustion and extinguishment of [460]*460the mortgage security does not necessarily imply' a satisfaction in full of the mortgage debt.

Plea 18 seems to be bad for like reasons. The substance of this plea is that the mortgage had been foreclosed, the property sold for the sum of $2,500, and the said mortgage thereby satisfied. Let it be noted that is no averment that the debt had been paid or discharged, nor any that the sum of $2,500, enough to discharge the debt, had been paid. Upon a strict construction it seems necessary to read something into the plea in order to make it good. If, however, the plea be construed as a sufficient averment of the payment or discharge of the mortgage debt — and it could not have served any other purpose — still no harm resulted to appellants by its rejection for the reason that they might have made the same defense under plea 6, which was that the debt sued on had been paid before the institution of this suit, and upon which the case went to the jury, and as matter of fact they offered evidence with that end in view.

Plea 12 was that: “The alleged contract of these defendants was a guaranty of a pre-existing debt and no consideration moved to these defendants for such guaranty.”

Plea 13 was to the same effect, except that the averment was that no new consideration moved to defendants.' These pleas were nothing more than a reiteration of the theory of the demurrer to the complaint.

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Bluebook (online)
66 So. 635, 189 Ala. 452, 1914 Ala. LEXIS 193, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norvell-v-gilreath-ala-1914.