EMBRY, Justice.
This appeal, by James H. Whigham, Individually and as Executor of the Estate of Bessie A. Whigham, is from a judgment that denied recovery from Travelodge International, Inc., a corporation; Tuscaloosa TraveLodge, a copartnership; and Lloyd M. Baker and Janice Ann Baker, of the sum of approximately $180,000 plus, which Whigham claimed the estate of Bessie A. Whigham was compelled to expend for defendants' benefit in order to protect an interest in certain improved real estate.
We affirm.
Whigham sought recovery under the theories that: there was fraud or overreaching by defendants resulting in execution of a 1973 mortgage by him and Mrs. Whigham; there was breach of a contract obligation regarding the 1973 mortgage; and defendants were liable to him or Mrs. Whigham's estate as sureties for monies paid on their behalf by Whigham or the estate of Mrs. Whigham.
The trial court heard this action without a jury and its findings of fact is an excellent summary of the evidence, and amply supported by it:
"On December 12, 1962, the TraveLodge Corporation, a California corporation, and Loyd M. and Janice Ann Baker entered a 'Joint Venture Agreement.' The stated purpose of this joint venture, which was named the Tuscaloosa TraveLodge, was to jointly construct and operate a motel. TraveLodge Corporation assigned to the joint venture a lease of certain property upon which a motel had been partially completed.
"In March of 1963, a lease was executed. TraveLodge Corporation entered the agreement as lessee and throughout the lease Bessie A. Whigham was referred to as lessor. However, in executing the lease both Bessie A. Whigham and James H. Whigham signed as lessor. The lease was for a term of forty-eight years and five months expiring August 31, 2011, on a parcel of property located in Tuscaloosa, Alabama, on which TraveLodge proposed to build and operate a motel as a joint venture with Defendants Loyd and Janice Baker. Prior to that time, TraveLodge, with the approval of the lessor, had executed a mortgage to Life and Casualty Insurance Company of the property in question to secure a loan of $140,000 financing the construction of the motel. Under the terms of the lease, Travelodge agreed to pay rent of $400 per month plus 7 1/2% of the gross annual income in excess of $64,000 and to make the payments on the mortgage to Life and Casualty Insurance Company. The lease also stated that TraveLodge had the right at any time before the full payment of the mortgage to refinance 'the principal balance remaining due' at an interest rate not in excess of 6 1/4%, provided that the maturity date of the refinancing was not later than April 7, 1973. In the event of a refinancing of the principal balance remaining upon such terms, TraveLodge agreed in the lease to pay the refinanced balance. The lease expressly provided that '(u)pon written request from TraveLodge, Lessor shall execute any documents not to include the execution of any mortgage NOR THE ASSIGNMENT OF THIS LEASE which may be required to accomplish said refinancing.'
"TraveLodge entered into the lease in accordance with its obligation under a joint venture agreement with Defendant Loyd and Janice Baker dated December 15, 1962.
After its construction, the motel on the property leased from the Whighams was operated as a joint venture of TraveLodge and the Bakers pursuant to the joint venture agreement.
"In the early part of 1972, after the motel had been in operation for a number of years, Defendant Loyd Baker proposed to Bessie and James Whigham that a new mortgage on terms not contemplated by the refinancing provision of the lease be placed on the motel and property. Under Baker's proposal, the proceeds of the new mortgage loan would be used to pay off the existing mortgage to Life and Casualty Insurance Company and to upgrade the motel facility. The remainder of the proceeds would be divided evenly between TraveLodge and the Bakers, the intent of the Bakers being to use their share to establish a second TraveLodge motel in Tuscaloosa which they felt would generate more business for the existing motel. On May 5, 1972, James and Bessie Whigham signed an agreement stating that they consented to the execution of a new mortgage loan in the principal amount of '$180,000.00, payable over 15 years at an interest rate of 9%,' that they would subordinate their interest in the motel property to the new mortgage, and that they would directly receive none of the proceeds of the new mortgage loan.
"In August of 1973, some 15 months after the May 5, 1972, agreement was signed, the new mortgage loan was obtained. A promissory note payable to City Federal Savings and Loan Association of Birmingham in the amount of $180,000 payable over 15 years at an interest rate of 9% was signed by the joint venture and endorsed by TraveLodge as guarantor. Simultaneously, a new mortgage in favor of City Federal was executed by Plaintiffs Bessie and James Whigham, TraveLodge, and the joint venture. The property pledged as security under the mortgage was the motel property itself
together with the interest of all the undersigned in that certain lease recorded in Deed Book 488, Page 740, and any amendments and/or modification thereto; (said lease being dated March 20, 1963, and filed for record on April 4, 1963) by and between the above referred to corporation as Lessee and the above referred to individuals as Lessors and the above referred to copartnership as Assignee of the above described real estate situated in Tuscaloosa County, Alabama.
"The proceeds of the new mortgage loan were used to pay off the $58,722.70 balance on the Life and Casualty Insurance Company mortgage and the $18,892.62 balance on a $20,000 loan that had been taken out for purposes of upgrading the motel furnishings in November of 1972. The excess was divided between the Bakers and TraveLodge as specified in the Agreement of May 5, 1972. TraveLodge's share amounted to $47,847.62; the Bakers' share also amounted to $47,847.62, out of which they purchased a TraveLodge franchise for $10,000 and used the remainder to invest in land on which the new TraveLodge was to be located.
"Payments on the new mortgage debt were made from August, 1973, until November 1974, when the income from the operation of the motel became insufficient to meet the mortgage payments as they became due. Defendant Loyd Baker testified that the joint venture began exploring various methods of remedying the past due status of the debt. He personally contacted the mortgagee with a request that the joint venture be allowed to pay only the interest on the loan until such time as business improved, but the mortgagee rejected this proposal. Travelodge offered to put up one half of the money to cure the arrearage and to lend the Bakers an equal amount to be used by them as their contribution, but Baker was reluctant to increase his personal indebtedness in view of his existing obligations.
"On March 4, 1975, Bessie A. Whigham died, naming her husband James H. Whigham as her sole testamentary heir and as the executor of her estate. On March 21, 1975, Plaintiff James Whigham purchased the note and mortgage from City Federal for the sum of $186,374.98. By letter to TraveLodge dated March 28, 1975, Plaintiff
James Whigham's attorney gave notice that the note had been purchased from City Federal and requested TraveLodge to contact him if it 'care(d) to discuss settlement of this matter with (him) before foreclosure proceedings (were) started. . . .' By a letter to Plaintiff James Whigham's attorney dated April 16, 1975, in response to his letter of March 28th, TraveLodge advised him of the negotiations between TraveLodge and the Bakers concerning the remedy of the mortgage arrearage and indicated that '(i)n any event, it should not be necessary for your office to initiate foreclosure proceedings.' On the next day, April 17, 1975, Plaintiff James Whigham's attorneys published the first foreclosure notice.
"On April 30, 1975, the original complaint in this action was filed requesting (1) an accounting of the proceeds of the August, 1973, loan transaction and a determination of the portion of such proceeds due the plaintiff as executor of the estate of Bessie A. Whigham, (2) immediate possession of motel premises, and (3) the sum of $185,374.98.
"On May 9, 1975, a foreclosure sale was conducted by Plaintiff James Whigham's attorney. James Whigham attended the sale, as did George Maynard, an attorney representing TraveLodge who testified at trial that he was authorized by TraveLodge to bid up to the amount of $190,000 and that he had made bank wire arrangements for that sum of money to be available in Tuscaloosa on the date of sale. Upon the opening of the bidding, Plaintiff James Whigham instantaneously bid $190,000, the amount of the indebtedness plus legal charges, thereby preempting a bid by Maynard on behalf of TraveLodge. There were no other bidders, and Plaintiff James Whigham purchased the property for himself at the sale. TraveLodge and the Bakers surrendered possession of the motel premises to Plaintiff James Whigham after the sale on May 9, 1975.
"An amended complaint was filed on June 10, 1976, in which certain of Plaintiff's original factual allegations were amended and plaintiff's demand for relief was reduced to a prayer that the Court 'issue a judgment in favor of Plaintiffs against said Defendants in said sum of One Hundred Eighty Thousand Dollars, interest and other legal charges paid by the Estate of Bessie A. Whigham for the benefit of the aforesaid Defendants, and the...
