Graham v. O'Neal

• Citation: 242 Ala. 72,4 So.2d 897
• Decision Date: 04 December 1941
• Docket Number: 4 Div. 179.
• Court: Supreme Court of Alabama
• Parties: GRAHAM v. O'NEAL et al.

4 So.2d 897

242 Ala. 72

GRAHAM v. O'NEAL et al.

4 Div. 179.

Supreme Court of Alabama

December 4, 1941

Murphy & Cook, of Andalusia, for appellant.

Edw F. Reid, of Andalusia, for appellees.

FOSTER, Justice.

This is a bill filed by appellant, and seeks to exercise the equity of redemption in a certain mortgage on real estate in Andalusia, executed by Claude Wright, dated January 5, 1937 for the sum of $1,300, to secure fifty-two promissory notes in the principal sum of $25 each, and each bears interest at six percent. from date. The first was payable January 1 1937, though that was prior to the date of the transaction. The others were payable on the first of each month thereafter. The mortgage was made to Dr. O'Neal appellee.

By the sixth of December, 1937, several of the notes remained unpaid. On that day Claude Wright, the mortgagor, conveyed the property to complainant who made an agreement with him and with Dr. O'Neal to pay the balance of the installment notes. There was a transaction at Opp between the parties not material for consideration on this appeal except incidentally, but it is involved in this litigation.

The property at Andalusia and at Opp consisted of two gasoline filling stations. The arrangement was that for such amounts of gasoline as Dr. O'Neal should purchase during the month there should be an adjustment with him by which the excess of the amount of the note next maturing over the amount of such purchases should be paid in satisfaction of the note. By check dated January 28, 1938, such adjustment was made with a balance due Dr. O'Neal of $8.58 in respect to both stations on the note due January 1, 1938.

The next transaction was on March 25, 1938, after two notes had matured, one on February 1st and the other March 1, 1938. On said date of March 25th, appellant wrote a letter to Dr. O'Neal and enclosed two checks, one for $26.50, said to be in payment of the note due January 1, 1938, and one for $13.10 said to be in payment of the note due February 1, 1938. We think that the evidence sufficiently shows that confusion occurs here as in the testimony of some of the witnesses.

The agreement of counsel on page 112 of the record is that the note due March 1st was not paid. But on page 100 Dr. O'Neal testified that originally there were fifty-two notes of $25 each: that fourteen were paid, leaving thirty-eight unpaid, and that the total principal sum unpaid is $950. Thirty-eight notes of $25 each would make $950. The letter accelerating payment (page 109 of the record) recites this is on account of default in paying the note due April 1st.

Appellant did not live in Andalusia, but had an employee operating the filling station there. After the note due April 1st became due this employee sent to appellant at his home office in Atmore, Alabama, the amount of the unpaid purchases at the station by Dr. O'Neal. Deducting this amount from the note due on that date left a balance of $6.38. For this amount appellant wrote a check payable to Dr. O'Neal and sent it to his employee for delivery. But Dr. O'Neal paid his account at the filling station, and the check was returned to appellant and not offered to nor received by Dr. O'Neal.

The next occurrence was about "the middle part of April, 1938," when Dr. O'Neal placed the transaction in the hands of his attorney for collection. Soon afterwards he had an unsatisfactory conversation with a traveling salesman for appellant. Thereupon, on April 25, 1938, this attorney wrote to appellant and Claude Wright, calling their attention to the fact that the April 1, 1938, installment note was past due and unpaid, and that under the acceleration clause of the mortgage he declared all payments due and payable, and threatened foreclosure unless it was all paid with an attorney's fee. On April 29, 1938, appellant executed a check for the full amount of the April note, gave it to his agent for delivery to Dr. O'Neal. This check was offered to Dr. O'Neal and his attorney, and they refused to receive it.

Whether the note due March 1st has been paid or not, there is no dispute about the amount of the principal unpaid, or that at least one note was due and unpaid at the time they were all placed in the hands of an attorney for collection, and so remained at the time of the acceleration notice.

Thereupon a foreclosure notice was published beginning May 12th for the sale to occur June 10th. Before that date, appellant employed counsel, and they tendered to the attorney for defendant an amount which was approximately the full amount of the notes unpaid with interest, except it did not include an attorney's fee, nor expense of advertising. This tender was declined, whereupon this bill was filed June 6, 1938, and the amount of the tender was brought into court. There was no sale in foreclosure, pursuant to the notice.

Upon a consideration of the evidence, the court fixed the amount due at $1,406.17, and declared that appellant was personally liable for it, and ordered that the amount of the tender, to-wit, $1,034.25, be credited leaving a balance of $346.92, and allowed appellant thirty days in which to redeem the property by paying that amount, together with certain costs. In default of which a sale in foreclosure was ordered. During the examination of the witnesses counsel for appellant admitted the claims made for taxes and advertising fee, but denied the claim for attorney's fee.

The only provision in the mortgage for an attorney's fee was in event of a foreclosure under the power of sale. The notes contained a clause agreeing to pay all cost of collecting, including a reasonable attorney's fee whether collected by suit or otherwise. The mortgage contained a clause that if any part of the debt is not paid at maturity, then all of said notes and indebtedness shall at once become due and payable. The evidence of the attorneys in expressing their opinion as to the value of the attorney's services, answered a hypothetical question which included the defense of this suit. The amounts so expressed were from $100 to $150, except counsel for Dr. O'Neal, who said he felt like $200 would be a reasonable fee. As we make the calculations, the result reached by the court must have allowed an attorney's fee of approximately $200. The decree does not state the amount of each item, so allowed, nor the figures which entered into the calculation.

Dr. O'Neal filed answer and cross-bill. In it he claimed $200 as a reasonable attorney's fee. The cross-bill did not seek a foreclosure but a personal decree against appellant. But no such decree was rendered. He also filed a separate answer. The demurrer of complainant to the cross-bill was sustained. After the testimony was taken, the respondent amended his answer and cross-bill and refiled it to the bill as amended. There was no answer or demurrer, or decree pro confesso taken to it as amended and refiled, as respects this appellant against whom the personal judgment was sought. The issue thus made between appellant and Dr. O'Neal was on the bill as amended and answer to it.

We have stated the nature of the stipulations in the note and mortgage as to an attorney's fee. They are not sufficient to sustain a charge for defending this suit. Hylton v. Cathey, 225 Ala. 605, 144 So. 579; McGregor v. Shipp, 238 Ala. 221, 189 So. 740.

Moreover, the provisions in a note...