Crawford v. Chattanooga Savings Bank

• Decision Date: 15 November 1917
• Docket Number: 8 Div. 26
• Citation: 201 Ala. 282,78 So. 58
• Parties: CRAWFORD et al. v. CHATTANOOGA SAVINGS BANK.
• Court: Alabama Supreme Court

78 So. 58

201 Ala. 282

CRAWFORD et al. v. CHATTANOOGA SAVINGS BANK.

8 Div. 26

Supreme Court of Alabama

November 15, 1917

Rehearing Denied Feb. 16, 1918

Appeal from Chancery Court, Morgan County; James E. Horton, Jr. Judge.

Bill by the Chattanooga Savings Bank against Baxter Crawford and others to reform a mortgage, to ascertain the amount due on a note, and to foreclose. From a decree overruling demurrers to the bill, respondents appeal. Affirmed.

E.W Godbey, of Decatur, for appellants.

Spragins & Speake, of Huntsville, for appellee.

SAYRE J.

In appellants' brief most stress is laid upon the proposition that the mortgage held by appellee was not assignable, and therefore that appellee, who filed this bill to reform and foreclose, acquired no rights by the assignment under which it claims. The instrument is peculiar in several respects. Among other things, as will be seen by reference to the reporter's statement of the facts alleged in the bill, the mortgage provides that it shall become void in case the mortgagee shall die before foreclosure; that "before any foreclosure sale of the property in this mortgage, and before any decree for the sale of any part of the lands under this mortgage, she [the mortgagee, appellee's assignor] will also transfer to me such note [the note secured by the mortgage]; failing to make such transfer of such note, there must not be a sale of such mortgaged property;" and that if the mortgagor should pay over the sum secured by the mortgage without foreclosure, "the said Mrs. Dora Rawlings [[mortgagee] will transfer to me a note given to her by the said Claud C. Crawford," and upon these provisions is founded the contention that the security is nonassignable. It has been said that descendibility and assignability go hand in hand. But that generalization cannot be allowed to control this case. In this, as in most of the states, the doctrine that choses in action are not assignable at law has been greatly modified by statute. Code, § 5158. As to the assignability of private contracts, it may be now stated as a general rule that rights arising out of agreements or contracts between private individuals may be assigned in the absence of some provision or stipulation in the agreement or contract to the contrary. 4 Cyc. 20-21.

A surety, whether as guarantor or in some other form of suretyship, may stand upon the letter of his contract. Andrews Co. v. Stowers Furniture Co., 166 Ala. 244, 52 So. 316. But, accepting for the moment appellants' contention, made in the brief in this and other connections, that they were guarantors, the rule for the interpretation of such contracts obtaining in this jurisdiction is "that where the language is susceptible of two meanings, it should be taken most strongly against the guarantor, and in favor of the party who has parted with his property upon the faith of the interpretation most favorable to his rights." Scott v. Myatt & Morse, 24 Ala. 489, 60 Am.Dec. 485. "It is settled," however, "that when the intent of the guarantor has been ascertained or the terms of the guaranty are clearly defined, the liability of the guarantor is absolutely controlled by such intent, and is never to be extended beyond the precise terms." 20 Cyc. 1426.

We have stated above those provisions of the mortgage upon which appellant bases his contention for nonassignability. It will be seen that they do not, directly at least, stipulate against assignment. On the contrary, the mortgage is given to secure a note made payable to order, and the mortgage itself is made to the mortgagee "or her assigns." So far, then, as concerns the question raised on the stipulations quoted above, our opinion upon the whole instrument is that we give full effect to the intention of the parties when we hold, as we do, that the mortgage security was assignable subject to the condition, resulting from the stipulations aforesaid, that, to become effectual through foreclosure, a decree to that end must be rendered before the death of the mortgagee. Fearnley v. Fearnley, 44 Colo. 417, 98 P. 819. The contract shown by appellee's bill, i. e., the mortgage security, whether a contract of guaranty or indemnity, though not negotiable under the law merchant, was nevertheless assignable subject to the conditions stipulated between the original parties and passed by the assignment of the note secured. Bayliss on Sur. & Guar. 14-16. The parties might have stipulated otherwise, but they have not done so expressly, nor, in our judgment, is an intention to that effect to be inferred.

Purely personal contracts are not assignable, and something is said in the brief for appellants to the effect that the arrangement between the original parties to the mortgage was a family arrangement, and it is assumed in argument that, while the mortgagor was willing to secure his son's note to his (the son's) mother-in-law and to risk her forbearance, he was unwilling to trust himself into the hands of strangers. But the averment of facts in the bill affords no sufficient foundation for this argument. There is nothing to indicate personal trust or confidence. On the contrary, for aught appearing in the bill, the stipulations left the right of assignment unimpaired except in the respects particularly pointed out in those provisions to which we have referred.

We have quoted the provisions for a transfer of the principal debtor's note to appellee's assignor. It is argued that these provisions make the contract one of a personal nature, requiring a direct assignment from the mortgagee to appellant mortgagor, and excluding the possibility of a legal fulfillment of the agreement by the assignment which the appellee offers in its bill to make as a condition of the foreclosure prayed. Our judgment on this point, foreshadowed by what has been said already, is that the mortgagors herein stipulated for results only, and that the assignment offered by the bill will secure to appellants the complete right for which they contracted when executing the security, to wit: that before any decree of foreclosure the note must be transferred, failing which, there must not be a sale of the mortgaged property.

Whether the mortgage, by reason of its peculiar terms, was a contract of guaranty, or, as the...