Russell v. Garrett

• Decision Date: 22 January 1920
• Docket Number: 3 Div. 433
• Citation: 85 So. 420,204 Ala. 98
• Parties: RUSSELL v. GARRETT.
• Court: Alabama Supreme Court

85 So. 420

204 Ala. 98

RUSSELL v. GARRETT.

3 Div. 433

Supreme Court of Alabama

January 22, 1920

Rehearing Denied Feb. 12, 1920

Appeal from Circuit Court, Montgomery County; Wm. L. Martin, Judge.

Action by W.P. Russell, as administrator cum testamento annexo of the estate of W.P. Russell, deceased, against Eva F. Garrett as executrix of the estate of C.W. Garrett, for breach of contract entered into between their testators. From judgment sustaining demurrers to the complaint, plaintiff appeals. Reversed and remanded.

To be available, a statute of limitations must be specially pleaded.

The following is count 2, which also contains the contract referred to in the opinion:

(2) Plaintiff claims of the defendant the further sum of $10,783.15 with interest from February 26, 1917, damages for the breach of agreement entered into by defendant's testator, C.W. Garrett, deceased, on, to wit, January 15 1910, in words and figures as follows, to wit:

"For and in consideration of $1 to me in hand paid by W.P. Russell, and the payment of $6,902.94 to me for the joint note of the Hayneville & Montgomery Railroad Company for $12,635, made to Russell & Garrett, February 4, 1909, I hereby agree, in case the said W.P. Russell should at any time fail to collect or lose any or all of the above-named amount of $6,902.94, that I will reimburse the said W.P Russell for any and all losses which he may sustain by reason of making the above loan. Now in order to better secure the said W.P. Russell, I hereby waive all my exemption rights which I have under the laws of Alabama in favor of the said W.P. Russell.

"It is hereby agreed and understood that I have the right to say when the above-described note against the Hayneville & Montgomery Railroad Company shall be foreclosed.

"[Signed] C.W. Garrett."

And plaintiff avers that the said joint note of the Hayneville & Montgomery Railroad Company for $12,635 made to Russell & Garrett, February 4, 1909, was payable on or before January 1, 1910, and bore interest from its date, and that neither the said C.W. Garrett during his lifetime nor the defendant, as executrix of his estate under his last will and testament, ever notified the said W.P. Russell, deceased, or his personal representative, to foreclose or bring suit upon the said note described in the agreement set out, but that the executors under the last will and testament of said W.P. Russell, deceased, duly instituted suit upon said note against said Hayneville & Montgomery Railroad Company in the circuit court of Lowndes county, Ala., and judgment in their favor in the sum of $21,266 was duly rendered by said court on, to wit, August 2, 1916. Plaintiff avers that said Hayneville & Montgomery Railroad Company was a corporation engaged in the business of operating a railroad as a common carrier of passengers and freight between the stations of Tyson and Hayneville in Lowndes county, Ala., and that substantially all of its property was used in connection with the operation of said railroad, and that from the time of the rendition of the judgment to February 26, 1917, said Hayneville & Montgomery Railroad Company remained and was insolvent wholly. And plaintiff avers that to secure the payment of said note the said Hayneville & Montgomery Railroad Company assigned as collateral security therefor 14 bonds of said Hayneville & Montgomery Railroad Company in the denomination of $1,000 each, and one Charles Schuessler also assigned to W.P. Russell and C.W. Garrett, as collateral security for said note, 24 bonds of the Hayneville & Montgomery Railroad Company in the denomination of $1,000 each; that neither said note nor said judgment was paid, and after the death of W.P. Russell, deceased, plaintiff, as administrator of his estate, and in pursuance of the statutes of the state of Alabama in such cases made and provided, did sell said 38 bonds of said Hayneville & Montgomery Railroad Company at public outcry, for cash, in front of the courthouse door, in Hayneville, Ala., during the legal hours of sale, on the 26th day of February, 1917, at and for the sum of $10,000, which sum was the highest, last, and best bid received for said bonds; that the amount due on said note, with interest thereupon to the date of said sale, was the sum of, to wit, $20,783.15, and that after deducting the amount received for said bonds there was a balance of $10,783.15 of the principal and interest of said note, which the plaintiff has failed to collect, and the defendant has failed to reimburse plaintiff for said sum as agreed to be done by her said testator; hence this suit. And plaintiff further avers that within the time allowed by law he did duly file a verified statement of said claim in the offices of the judge of probate of Lowndes county, Ala., by which judge of probate letters testamentary on the estate of defendant's testator had been duly issued to her.

Rushton, Williams & Crenshaw, of Montgomery, for appellant.

Harry T. Smith & Caffey, of Mobile, Steiner, Crum & Weil, of Montgomery, and Joseph R. Bell, of Hayneville, for appellee.

SAYRE J.

After judgment sustaining appellee's demurrer to appellant's complaint the latter suffered a nonsuit and by exception reserved the ruling for review in this court. Code, § 3017.

Subject to the rule 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 further extended, the law of this jurisdiction is that, where the language of the contract in controversy 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. Crawford v. Chattanooga Savings Bank, 201 Ala. 282, 78 So. 58. The parties are agreed, and there appears to be no occasion for doubt, that, upon the whole, the instrument set forth in the second count of the complaint evidences an intent on the part of appellee's testator, to whom we may refer as Garrett, to guarantee collection and not payment of the debt due from the Hayneville & Montgomery Railroad Company--that it is a guaranty conditioned upon a failure to collect by due diligence. As affecting the question whether the instrument has any definite meaning in respect of other conditions of liability, the relations of the parties, as disclosed by the allegations of the count, are to be considered. The parties to the paper, appellant's intestate, to whom we may refer as Russell, and Garrett, were joint owners of a note of the Hayneville & Montgomery Railroad Company which was secured by a pledge of $38,000 of the first mortgage bonds of their debtor. That note was past due at the date of the transaction evidenced...