Muscle Shoals Nat. Bank v. Hallmark
| Decision Date | 29 May 1981 |
| Citation | 399 So.2d 297 |
| Parties | MUSCLE SHOALS NATIONAL BANK v. Norma J. HALLMARK, et al. 79-888. |
| Court | Alabama Supreme Court |
Charles W. Cochran, III of Keller & Cochran, Florence, for appellant.
Charles D. Rosser of Rosser & Munsey, Tuscumbia, for appellees.
Truman C. Hallmark and his wife, Norma J. Hallmark, obtained a loan from Muscle Shoals National Bank (Muscle Shoals) on July 22, 1975. As security for the loan, they executed a promissory note and a second mortgage to Muscle Shoals on a parcel of real property situated in Colbert County, and in addition, Muscle Shoals took a security interest in fixtures and equipment owned by Truman C. and Norma J. Hallmark d/b/a Captain Hook's restaurant. As further security for the loan, Muscle Shoals required the execution of guaranty agreements by appellees Thompson, Tillman, and Martin.
In the fall of 1975, it was discovered that First Colbert National Bank (First Colbert) had also taken a security interest in fixtures and equipment being used in the operation of Captain Hook's restaurant. After discussion among the parties involved, Muscle Shoals released its security interest in the restaurant equipment and fixtures in favor of First Colbert.
Muscle Shoals purchased the first mortgage on the real property from Sheffield Federal Savings and Loan Association. In 1977, Truman C. Hallmark filed for bankruptcy, and both the promissory note secured by the first mortgage and the one secured by the second mortgage were discharged. Shortly thereafter, Muscle Shoals conducted a mortgage foreclosure sale on the real property on June 23, 1977. At the foreclosure sale, Muscle Shoals bid in the sum of $56,550.79 (amount of the loan plus interest, attorney's fees, and expenses of the sale). There were no other bidders, so a mortgage foreclosure deed was executed to Muscle Shoals and recorded June 29, 1977.
On November 15, 1978, Muscle Shoals conveyed the property to purchasers, Bobby and Mary Frances Clardy, for the sum of $51,000.00. On December 14, 1978, it filed suit against Norma J. Hallmark and against the guarantors, Roy D. Thompson, Mrs. Oscar H. Tillman, and Robbie Martin, for the deficiency. Defendants failed to answer, and a default was entered against them on February 13, 1979. On February 15, 1979, a judgment was entered in appellant's favor in the amount of $12,744.27. The original defendants filed a Motion for Relief from Judgment on April 27, 1979. After a hearing on this motion, the trial court denied relief to the appellees. The appellees then filed a Motion for a New Trial, or in the Alternative, to Alter or Vacate a Judgment. On June 13, 1980, the trial court entered an order vacating its previous order and entered a judgment in favor of appellees based on the fact that foreclosure had occurred. Hence, this appeal.
Appellants urge us to adopt a rule of law that would allow a mortgage holder who, at a foreclosure sale, bids in the property for the full amount of the debt, including expenses and attorney's fees, thus...
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...on similar grounds. 8 If the proceeds had satisfied the entire outstanding balance of the mortgage debt as in Muscle Shoals Nat. Bank v. Hallmark, 399 So.2d 297 (Ala.1981), relied on by LaBonte, then liability under the guaranty would have been extinguished despite the failure of the due an......
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...(citing BFP v. Resolution Trust Corp., 511 U.S. 531, 114 S.Ct. 1757, 128 L.Ed.2d 556 (1994)). 3 See also Muscle Shoals National Bank v. Hallmark, 399 So.2d 297 (Ala.1981) where the Supreme Court of Alabama held that where a mortgagee bid in the full amount of the outstanding loan plus expen......
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Allstate Ins. Co. v. James
...sale of the property brought the full amount of the debt, the note and mortgage would be extinguished, see, e.g., Muscle Shoals Nat'l Bank v. Hallmark, 399 So.2d 297 (Ala.1981), and Allstate would not be liable to the mortgagees under the loss payable clause of the policy. Gordon's Transpor......
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First Federal Sav. and Loan Ass'n of Bismarck v. Scherle, 10706
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