Kinney v. Pollak

• Decision Date: 22 October 1931
• Docket Number: 6 Div. 820.
• Citation: 137 So. 669,223 Ala. 654
• Parties: KINNEY ET AL. v. POLLAK ET AL.
• Court: Alabama Supreme Court

137 So. 669

223 Ala. 654

KINNEY ET AL. v. POLLAK ET AL.

6 Div. 820.

Supreme Court of Alabama

October 22, 1931

Rehearing Denied Dec. 3, 1931.

Appeal from Circuit Court, Jefferson County; J. Russell McElroy Judge.

Bill to redeem by Robert R. Pollak, Helene Pollak, and Charlotte L D. Pollak against P. E. Millsap and E. C. Kinney. From a decree for complainants, respondents appeal.

Corrected and affirmed.

A. J Harris, of Decatur, Jerone Edmundson, of Birmingham, and A. A. Griffith, of Cullman, for appellants.

Cabaniss & Johnston, of Birmingham, for appellees.

FOSTER J.

The former appeal in this case is reported in Pollak v. Millsap, 219 Ala. 273, 122 So. 16, 65 A. L. R. 110. We then stated the principles of law which we thought were pertinent to the facts as alleged in the pleadings then as now. Since that opinion was approved, the same principles have been several times reaffirmed by us in cases cited in our more recent case of Kelly v. Tatum, 222 Ala. 655, 133 So. 703.

On this appeal the inquiry is whether the evidence supports the allegations of the bill. On that question the dispute hinges upon whether a loan of money was in fact made to complainants by Brown and Kinney as alleged, for the security of which the deed was executed. The note was executed to Judge Brown; the deed was made with them both as grantees.

Appellants claim that the note did not evidence a debt, because it was never delivered to Judge Brown unconditionally, but that it was to be placed in escrow with the bank along with the deed, and was never to be delivered as evidence of a debt, but that the transaction merely extended to complainants an option to pay the amount of it by the date named; otherwise complainants should have no further claims on the land and owe no obligation.

We are not at all prepared to take issue with the contention that, if the note was by agreement only conditionally placed in the hands of Judge Brown as a conduit to the bank, or some other person, and to be held conditionally where it was to remain ineffective as an obligation by complainants until the time when complainants elected to pay the amount named in it, within the stipulated time, and that, if complainants should not do so within such time, there was not by it nor by their agreement otherwise expressed any obligation by complainants to pay the amount; there was not shown a debt for which the deed could be security. A review of some of the evidence we think shows that appellants' contention is not sustained.

On August 24, 1923, Judge Brown wrote them that the time for redemption had almost expired. This appeared to be incidental and but a friendly reminder. On August 28, 1923, they wrote him, "Please, if possible, negotiate for a new loan." On September 5, 1923, he answered by writing as follows:

"If you, Robert and Charlotte will execute a note for the amount necessary to redeem the property, including the fee of $50.00 for services rendered by me heretofore in redeeming the property from tax sale, which was agreed on between Robert and myself, and a fee of $100.00 for my services in securing this loan and redeeming the property, making a total of $3526.00, and request Mrs. Kirtley to execute a deed to the party advancing the money, this deed to be delivered in escrow and held by the Leeth National Bank, of this city, as a security for the payment of the note, as provided in the note. I can secure the money to redeem from this mortgage sale. I am enclosing herewith note to be executed, together with instruction to Mrs. Kirtley for the execution of the deed. You will note that the instructions to the bank are embodied in the note. I have not been able to secure the money yet, and inasmuch as the redemption must be made before October 8th we have very little time to find it.

"I was informed by attorneys representing Mrs. Kirtley that a Mr. Jarman, of Washington, D. C., had approached them about redemption of the property. If you want me to handle the matter you will have to withdraw Mr. Jarman's authority, if he has any, and let me have those papers at once. The note enclosed should be signed by you as administratrix of the estate and by you individually and by Robert and Charlotte, as well as the instructions to Mrs. Kirtley. This arrangement will give you another year to redeem the property."

He sent a note for their signature which contained the following clause: "This note is given for money loaned to be used in redeeming property sold by May H. Kirtley under a mortgage executed by the payers hereof on, to-wit: 9th day of June, 1920, which mortgage was foreclosed by the said May H. Kirtley, on, to-wit: 8th day of October, 1921, and for the purpose of securing this indebtedness we have caused to be deposited with the Leeth National Bank, of Cullman, Alabama, a statutory warranty deed executed by the said May H. Kirtley covering the property embraced in said mortgage; said deed is to be held by said Leeth National Bank in escrow until this debt is paid, and if we fail to pay this debt, together with the interest thereon, at maturity, or if we fail to keep the taxes on said property paid and allow said land to be advertised for sale for the taxes, then the said Leeth National Bank is authorized to deliver said deed to the grantee named therein."

He also sent an instrument giving instructions to the bank, as follows: "Mrs. May H. Kirtley, of Birmingham, Alabama, will forward to you a deed to certain property located in Birmingham, which is to be held by you in escrow to secure the payment of a note dated September 15, 1923, for $3,526.00, payable one year after date to Joel B. Brown. You are to hold this deed in escrow in accordance with the terms of said note"-also an instrument to the original mortgagee and purchaser at foreclosure sale providing that, upon payment of the amount necessary to redeem "from the foreclosure sale made by you under your mortgage you are authorized and requested to execute, to such person as Judge Joel B. Brown, of Cullman, Alabama, may designate, a statutory warranty deed to said property, and forward the same to the Leeth National Bank, of Cullman, Alabama."

By letter dated September 11, 1923, one of the complainants wrote Judge Brown, in which she said: "I am enclosing the papers you sent me properly signed and hope there will be no time lost in redeeming said lands."

Judge Brown testified that, after receiving the letter asking him to negotiate a loan and after he had sent the instruments to complainants, he completed arrangements at the bank for him and Kinney to get the money on their note to advance to Mrs. Kirtley, who held the land at foreclosure sale. She was directed to execute a deed to Brown and Kinney and attach it to a draft on the bank. This was done, and the money on account of the loan was advanced to them by the bank by paying the draft of Mrs. Kirtley with deed attached. He also testified that this note and the instructions to the bank duly signed were forwarded to him to be delivered to the bank, and that he deposited them with the bank in escrow.

But the correspondence between complainants and Judge Brown refers to a loan of money, and in none of it is there anything said about the note being delivered in escrow, nor is there other evidence of such stipulations. It was sent direct to him, and no conditions were mentioned nor anything to indicate that it did not constitute a complete unconditional delivery to him as evidence of a debt which they had requested him to negotiate. It then became an executed obligation to pay him money. The cashier of the bank testified that it was attached to the note of Brown and Kinney, and their note to the bank recites that the "paper attached pledged as collateral." So that the deposit of the note in escrow by Judge Brown had no effect upon the transaction between complainants and him because there was no such agreement in evidence. The day after the note of Brown and Kinney was due, Kinney paid it, had it transferred to himself, and took up all the papers. On the next day one of the complainants appeared at the bank, tried to pay the Brown note, but he was referred to Kinney, who refused to accept payment when it was offered to him on the same day and again a few days afterwards.

We see nothing in this arrangement but a loan of money by Brown and Kinney, later taken over by Kinney, who thereafter claimed the sole ownership of the property. There was an unconditional promise to pay the money shown by the execution and delivery of a note, containing provisions waiving exemptions and providing for an attorneys' fee for its collection. None of the correspondence nor instruments provide for its delivery in escrow, or that it was upon a condition. There was therefore a debt in every sense of the word, and it and the other documents clearly show that the deed was executed and delivered to secure its payment. The fact that the arrangement had the substantial effect of securing for complainants another year in which to redeem is not inconsistent with this view. It did in fact have such effect and went further than that.

At the time of offering to redeem the property by complainants, a cashier's check was tendered, but Kinney declined to permit redemption, not because a check rather than cash was offered, but because he claimed that the time had expired and they owed him nothing. Compl...