Corinth Bank & Trust Co. v. Pride

• Decision Date: 11 April 1918
• Docket Number: 8 Div. 69
• Citation: 201 Ala. 683,79 So. 255
• Parties: CORINTH BANK & TRUST CO. v. PRIDE et al.
• Court: Alabama Supreme Court

79 So. 255

201 Ala. 683

CORINTH BANK & TRUST CO. v. PRIDE et al.

8 Div. 69

Supreme Court of Alabama

April 11, 1918

On Rehearing, May 9, 1918

Appeal from Circuit Court, Colbert County; C.P. Almon, Judge.

Suit by the Corinth Bank & Trust Company against Mary M. Pride and others.

From an adverse decree, complainant appeals. Affirmed.

Kirk &amp Rather, of Tuscumbia, for appellant.

Jos. H Nathan and Andrews & Peach, all of Sheffield, for appellees.

McCLELLAN J.

This cause was previously here on appeal from the decree overruling the separate demurrers of the respondents to the present appellant's bill as then amended. Sheffield Nat. Bank et al. v. Corinth Bank & Trust Co., 196 Ala. 275, 72 So. 127. The amended bill was further amended after the affirmance of the decree overruling the demurrers, as will be later stated. The primary ground of complainant's (appellant's) bill, at all stages, has been and is that the appellant was or became a creditor of Mrs. Mary M. Pride, thus, as was the case in Hitt Lumber Co. v. Cullman Coal Co., 76 So. 347, constituting the complainant's creditorship of Mrs. Pride an indispensable prerequisite to relief sought by the bill as amended. This condition precedent to the right to the relief sought is not sustained by the evidence.

Mrs. Pride owned the "Pride home place," comprising about 2,100 acres. For the year 1914 she rented this place to her husband, L.T. Pride, for $4,500, taking therefor the rent note reproduced in the opinion on former appeal. Mr. Pride needed funds with which to operate during that year, and at his request Mrs. Pride indorsed her rent note and delivered it to him, with the view to its use by him to borrow money. He negotiated a loan of $7,500 from the appellant. This loan was to Mr. Pride, not to Mrs. Pride. He gave three notes to the appellant, each for $2,500. At the same time he deposited his rent note (payable to Mrs. Pride and indorsed in blank by her) with the appellant as collateral security for the loan thus made to him. Under the evidence there is no doubt of the correctness of this conclusion of fact. Without qualification the cashier of the appellant so testified. The vice president entertained the view that the appellant bought the note, but it is evident from his testimony that his view and statement was only the utterance of an opinion that was opposed to the manifest fact. Mrs. Pride had no representations to appellant; had no negotiations or dealing with the appellant. The loan was, as stated, to Mr. Pride only. Where the loan is to the husband alone, and the effort is to secure the payment (not pay) his debt with the wife's property, neither she nor her property is bound, whatever the form in which the suretyship is cast. Code § 4497. If the rent note had been sold to the appellant, not taken, as it was, as collateral security for Mr. Pride's loan, then the doctrine of First National Bank v. Nelson, 106 Ala. 535, 18 So. 154, and Brooks v. Griel Bros. Co., 179 Ala. 459, 470, 471, 60 So. 387, relied on in the brief for appellant, would be entitled to consideration. The transaction under review in Warren v. Crow, 73 So. 989, involved a loan made to both the wife and the husband, thus readily distinguishing that case from the one at bar. Since the wife's rent note was assigned as collateral security for the husband's debt to the appellant, the appellant acquired no right in the premises that in any degree postponed or impaired the wife's rights as landlord.

There is no evidence of any fraud conceived or practiced by Mrs. Pride or the Sheffield National Bank against the appellant within the pertinent statement in Russell v. Peavy, 131 Ala. 563, 567, 32 So. 492. Fraud is never presumed. It must be proven. The undisputed evidence is to the effect that Mrs. Pride had no personal connection with the dealings between her husband and the appellant. The transactions between Mrs. Pride and the Sheffield National Bank were not at all shown to be affected with any fraudulent design or effect on the part of either.

It results that the appellant is not a creditor of Mrs. Pride; that it is without right to invoke the court's powers to have the mortgage to the Sheffield National Bank declared a general assignment in virtue of the statute, Code, § 4295. The court below so concluded. Its decree is affirmed.

Affirmed.

ANDERSON, C.J., and SAYRE and GARDNER, JJ., concur.

On Rehearing.

McCLELLAN J.

The proposition urged in the application for rehearing is this That the indorsement of the rent note by Mrs. Pride and its delivery by her to her husband, L.T. Pride, and its subsequent deposit with the appellant by L.T. Pride as collateral security for his loan from appellant, the appellant having no knowledge or notice that the note was the property of L.T. Pride's wife or that the payee, Mary M. Pride, was the wife of the payor, L.T. Pride, requires the application to the appellant's advantage and protection, of the doctrine of First National Bank v. Nelson and Brooks v. Griel Bros. Co., noted in the original opinion. The element of the stated proposition that would accord particular effect to the absence of knowledge or notice on the part of the appellant that the payee in the rent note was the wife of the borrower, L.T. Pride, is referable to principles of law whereby protection is extended a bona fide purchaser for value and without notice. Independent of that reference, the absence of knowledge or notice is ineffectual to avert the application of the statute. Bley v. Lewis, 188 Ala. 535, 542, 66 So. 454, treating charge A. Code, § 4497, provides: "*** But the wife shall not, directly or indirectly, become surety for the husband." It has been repeatedly ruled that the statute operates to render absolutely void all efforts, direct or indirect, to subject or appropriate the wife's property to the discharge of the debt of her husband through contracts or processes that constitute a suretyship, the single exception recognized being that illustrated in Scott v. Taul, 115 Ala. 529, 22 So. 447, that conclusion being "based," as noted in Evans v. Faircloth Co., 165 Ala. 176, 179, 51 So. 785, 21 Ann.Cas. 1164, "upon the principles of title...