Bradley v. Bentley, 7 Div. 306

• Decision Date: 09 May 1935
• Docket Number: 7 Div. 306
• Citation: 163 So. 351,231 Ala. 28
• Parties: BRADLEY v. BENTLEY.
• Court: Alabama Supreme Court

163 So. 351

231 Ala. 28

BRADLEY v. BENTLEY.

7 Div. 306

Supreme Court of Alabama

May 9, 1935

Rehearing Denied Oct. 10, 1935

Certiorari to Court of Appeals.

Action in detinue by May Bradley against W.H. Bentley. A judgment granting defendant's motion for new trial after directed verdict for the plaintiff was reversed and remanded by the Court of Appeals (163 So. 349), and defendant applies for certiorari.

Writ denied.

BOULDIN and BROWN, JJ., dissenting.

Merrill Jones & Whiteside, of Anniston, for the motion.

Ross Blackmon, of Anniston, opposed.

KNIGHT Justice.

This cause comes to this court on petition for writ of certiorari to the Court of Appeals, to review and revise the opinion and judgment of that court in the case of Mrs. May Bradley v W.H. Bentley.

The Court of Appeals in the opinion filed in the cause held that as to the indebtedness to the Commercial National Bank of Anniston, Ala., the petitioner here, the said W.H. Bentley, was the principal and Mrs. May Bradley was his surety.

In this view we are in accord with the Court of Appeals, upon the facts found by that court, and which appear in the court's opinion.

In the case of State v. Parker, 72 Ala. 181, it was observed: "A contract of suretyship is usually defined to be a contract whereby one person engages to be answerable for the debt, default, or miscarriage of another. Brandt on Suretyship, § 1. In Evans v. Keeland, 9 Ala. 42, 56, it was said to be 'an obligation accessorial to that of the principal debtor.' It was further observed: 'The debt is due from the principal, and the surety is merely a guarantor for its payment. A corollary from this definition is, that it is of the essence of such a contract that there be a valid obligation of the debtor.' Id. 9 Ala. [42] 46."

And in the case of Tennessee-Hermitage National Bank v. Hagan, 218 Ala. 390, 119 So. 4, 9, it was said: "The relation of principal and surety is also defined as, when one is liable to pay the debt or discharge the obligation, or [[[and] is entitled, if enforced against him, to indemnity from him who ought to have made the payment or performed before the surety was so compelled. It is immaterial in what form the relation is established. The relation of principal and surety is fixed by arrangements and equities between the debtors or obligors, and may be known or unknown to the creditor. Bright v. Mack, 197 Ala. 214, 72 So. 433. See definition of Suretyship in Rollings v. Gunter, 211 Ala. 671, 101 So. 446; 12 A.L.R. 722, note; Hoffman v. Habighorst, 38 Or. 261, 63 P. 610, 53 L.R.A. 911; 32 Cyc. 32, note; Leonard v. State Exchange Bank (C.C.A.) 236 F. 316; Moerschel v. O'Bannon (C.C.A.) 246 F. [[[887] 891."

Section 9548 of the Code provides: "If the fact of suretyship does not appear on the face of the contract, it may by proved by parol, either before or after the judgment."

The obligation of the Commercial National Bank of Anniston, as between Bentley, the tenant, and Mrs. Bradley, the landlord, was the primary obligation of the tenant. He received from the bank the moneys advanced, and Mrs. Bradley was his surety.

The next question presented for determination is, Did Mrs. Bradley pay the debt, or any part of it, for which she was surety? If she did, she, by force of sections 9544 and 9553, was thereby subrogated, both at law and in equity, to all the rights of the creditor, the said Commercial National Bank of Anniston. Thrasher et al. v. Neeley, 196 Ala. 576, 72 So. 115; Reese v. Mackentepe, 224 Ala. 372, 140 So. 550.

It is insisted by Bentley, the tenant, that Mrs. Bradley did not pay the mortgage indebtedness to the bank, nor any part of it; that the rent cotton was never delivered by him to Mrs. Bradley, nor did she ever have possession of the same; that she had no legal title to any part of the cotton grown on the rented premises; that, while as landlord, she had a lien upon the cotton, this lien was not a jus ad rem, nor a jus in re. We have so held. Jackson v. Bain, 74 Ala. 328; First National Bank of Stevenson v. Crawford et al., 227 Ala. 188, 149 So. 228.

If, however, Mrs. Bradley did in fact pay a part of the principal's debt to the bank, and the tenant paid the balance, so that the debt to the creditor was entirely discharged, then, and in that event, the surety would be subrogated pro tanto to the right of the bank. This precise question was so decided in the case of Magee v. Leggett, 48 Miss. 139, 146, wherein it was said: "We do not understand the rule as requiring that the 'surety' must make entire payment; it is enough if the creditor has been fully paid, part by the principal debtor, and part by the surety. In such case, subrogation will accrue pro tanto to the extent of his payment."

To the same effect is the holding in the cases of Comins v. Culver, 35 N.J.Eq. 94, and Wilkins v. Gibson, 113 Ga. 31, 38 S.E. 374, 84 Am.St.Rep. 204.

Subrogation has always been one of the recognized subjects of equity jurisdiction. No one, we assume, would question the right of a surety, where property, upon which he had a lien, had been exhausted in payment of the obligation of the principal, to invoke the jurisdiction of a court of equity to enforce equitable subrogation to the rights of the creditor, whose claim had been paid by the proceeds of the property upon which this surety had a lien. Such a right is founded upon the plainest principles of equity and morality.

Sections 9544 and 9553, Code, while in a sense are declaratory of the equitable right of subrogation, as it existed at common law, go further and furnish the surety a remedy at law for the enforcement of the right.

With these applicable principles in mind, a brief statement of the facts, as found by the Court of Appeals, will serve to demonstrate that the surety, Mrs. Bradley, was entitled to recover the property sued for in this action. The facts were: Mrs. Bradley was the landlord and Bentley the tenant during the year 1931. By the terms of the rental contract, Bentley was to pay Mrs. Bradley, as rent, one-fourth of the crops. In March, 1931, the tenant desiring advances in money to make the crop and plaintiff being willing to assist him, applied to the Commercial National Bank of Anniston for a loan, and at the suggestion of the cashier of the bank, defendant executed a note and mortgage to plaintiff, which included the crop for 1931 and the mules and wagon 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 the defendant.

In the fall the defendant gathered from the rented land 14 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 the same on the record. The evidence is without dispute that plaintiff has never received pay for her part of the 14 bales of cotton used by defendant in paying his debt to the bank. The foregoing is a short statement of the facts as found by the Court of Appeals.

In Price v. Pickett, 21 Ala. 741, it was held: "Where the possession is not adverse, the true owner is entitled to recover the rents which have been received by another; in such case, it is money had and received to the use of the owner; and, as the person to whom the rent was paid would be compelled to account in equity, he may also be held responsible in the equitable action for money had and received."

In Westmoreland v. Foster, 60 Ala. 448, it was held that the assignee of a note, given for rent of land, may maintain an action for money had and received against a purchaser of the tenant's crop, who, having bought with knowledge of his lien, has sold the crop, and received the proceeds of the sale; and he may also maintain a bill in equity against such purchaser, notwithstanding his remedy at law.

In our recent case of Patton et al. v. Darden, 227 Ala. 129, 148 So. 806, 808, it was observed: "And it was long ago held in this state that one, who receives the price of property sold by him, having notice that another has a lien on such property, may be compelled in equity to account for such purchase price as being held in trust, or may be sued at law in the equitable action for money had and received. Price v. Pickett, 21 Ala. 741; Westmoreland v. Foster, 60 Ala. 448, 455; Ehrman v. Oats, 101 Ala. 604, 606, 14 So. 361; Peters v. Rhodes, 157 Ala. 25, 47 So. 183; Thompson v. Thompson, 107 Ala. [163] 169, 18 So. 247, 250. See, also, Clews v. Jamieson, 182 U.S. 461, 21 S.Ct. 845, 45 L.Ed. 1183."

And in the case of Webb & Aigner v. Darrow, 227 Ala. 441, 150 So. 357, it was held: "The lien [landlord's] follows the proceeds of crops so long as they may be identified in the hands of the tenant or other person with notice of such lien. The equitable action at law for money had and received is merely cumulative and not exclusive of the general jurisdiction in equity for an accounting as for funds impressed with a trust."

The foregoing authorities demonstrate that as between plaintiff and defendant, but for the claim of the bank, the plaintiff landlord, on the sale of the cotton by the defendant, could have sued the latter at law, in the equitable action of money had and received, and have recovered one-fourth of the proceeds of the cotton. These authorities further demonstrate that the...