Summary
In Alexander City Bank v. Federal Land Bank of New Orleans, 237 Ala. 1, 185 So. 169 (1938), the Alabama Supreme Court faced a situation similar in many ways to the one now before this Court.
Summary of this case from Mutual Life Ins. Co. of New York v. GrissettOpinion
5 Div. 268.
December 1, 1938.
Appeal from Circuit Court, Tallapoosa County; W. B. Bowling, Judge.
Richard H. Cocke, of Alexander City, and Denson Denson and L. J. Tyner, all of Opelika, for appellant.
Where a debt or demand is liquidated or certain, is due and not in dispute, payment by debtor and receipt by creditor of less sum is not satisfaction thereof, unless there be an independent valuable consideration or a written agreement of discharge, or surrender of the evidence of the debt. Abercrombie v. Goode, 187 Ala. 310, 65 So. 816; McCoy v. Wynn, 215 Ala. 172, 110 So. 129; Hodges v. Tennessee Implement Co., 123 Ala. 572, 26 So. 490; Scott Sons v. Rawls Rawls, 159 Ala. 399, 48 So. 710; Cotton States Life Ins. Co. v. Crozier, 218 Ala. 173, 118 So. 327; Ex parte Southern Cotton Oil Co., 207 Ala. 704, 93 So. 662; Roach v. Warren-Neeley Co., 151 Ala. 302, 44 So. 103; Brown v. Lowndes County, 201 Ala. 437, 78 So. 815; Brackin v. Owens H. M. Co., 195 Ala. 579, 71 So. 97; Gottlieb v. Chas. Scribner's Sons, 232 Ala. 33, 166 So. 685; Hand Lbr. Co. v. Hall, 147 Ala. 561, 41 So. 78. A mere receipt of money is open to explanation, modification or contradiction by parol evidence. Gravlee v. Lamkin, 120 Ala. 210, 221, 24 So. 756; Stegall v. Wright, 143 Ala. 204, 206, 38 So. 844; Barbour v. Poncellor, 203 Ala. 386, 83 So. 130.
Albert Hooton, of Dadeville, and J. Sanford Mullins, of Alexander City, for appellees.
In the absence of fraud, a release supported by a valuable consideration, unambiguous in meaning, will be given effect according to the intention of the parties, to be judged by the court from what appears within the four corners of the instrument itself, and parol evidence is not admissible to impeach it or vary its terms. Miles v. Barrett, 223 Ala. 293, 134 So. 661; Barbour v. Poncelor, 203 Ala. 386, 83 So. 130; Wright v. McCord, 205 Ala. 122, 88 So. 150. An obligation is extinguished by a release therefrom given to the debtor by the creditor, upon a new consideration or in writing with or without a new consideration. Code 1923, § 5643. Presumptively the release or satisfaction of a mortgage extinguishes the debt it was given to secure. 41 C.J. 832-834. Where a stranger gives something in satisfaction of another's debt or liability and it is accepted as such by the creditor, an accord and satisfaction is effected, at least where the debtor authorizes or ratifies the transaction. 1 C.J. 482. Appellant is estopped from asserting rights under its mortgage by execution of the indorsement and acceptance of the amount then paid to it. Federal Land Bank v. First National Bank of Scottsboro, post, p. 84, 185 So. 414.
The bill was filed by the appellant, The Alexander City Bank, under the "Declaratory Judgment Act," Gen.Acts 1935, p. 777, to settle or determine a controversy between the complainant bank and the Federal Land Bank as to the priority of their respective mortgages, and which incidentally affected the other respondents and cross complainants.
J. A. Eason, joined by his wife, executed to the Alexander City Bank a mortgage on his land. Subsequently, he made a mortgage to the Federal Land Bank to secure a loan for the purpose of discharging the existing liens or incumbrances on his land. The mortgage to the Federal Land Bank contained the same land embraced in the mortgage to the Alexander City Bank, as well as other lands, and was subsequent to the mortgage of the said Alexander City Bank. The Federal Land Bank made Eason, the mortgagor, a loan for the obvious purpose of discharging existing liens on the property and thereby making its mortgage a first or prior lien on the land. Before the matter was closed, the Federal Land Bank sent check payable to the respective lienors or mortgagees, including the Alexander City Bank, and, upon the back of the check, and above the endorsement, appeared the following release or statement: "The endorsers hereon hereby acknowledge to have received payment in full of all liens or encumbrances of any nature or character whatsoever against the property mortgaged to the Federal Land Bank and the borrower hereby approves distribution of the funds." (Italics supplied.) True, the Alexander City Bank did not receive in the distribution of the check a sum sufficient to pay its mortgage in full, but the execution of the endorsement, though not a receipt in full or a complete satisfaction of its mortgage, was a release or waiver of its prior lien as against the mortgage of the Federal Land Bank on the property embraced in its mortgage. It was, in effect, an estoppel against the Alexander City Bank from claiming a superiority as against the mortgage of the Federal Land Bank. The facts of this case are similar in many respects and the endorsement is identical with one dealt with in the case of Federal Land Bank v. First National Bank of Scottsboro, 185 So. 414, which in effect, held that by the endorsement in question the latter waived priority and subordinated its lien to that of the Federal Land Bank, but did not hold that the first mortgage was thereby satisfied in full. We therefore hold that the trial court properly held that the Federal Land Bank had a prior mortgage, but erred in holding that the Alexander City Bank's mortgage was satisfied in full and the cancellation should be limited to a subordination of the mortgage to that of the Federal Land Bank.
Post, p. ___.
The complainant is therefore entitled to redeem from the Federal Land Bank.
As to the respondents, other than the Federal Land Bank, they are subordinate to mortgages of both the Alexander City Bank and the Federal Land Bank and, in effect, stand in the shoes of the mortgagor.
The decree of the trial court holding that the Federal Land Bank has a superior claim is affirmed, but is in error in holding that the complainant's mortgage was satisfied, and the decree, as to this extent, is reversed and one is here rendered holding that the cancellation of complainant's mortgage should be limited as above indicated, and the cause is remanded, and the trial court is directed to order the cancellation in conformity with this opinion.
Affirmed in part, reversed and rendered in part, and remanded.
THOMAS, BROWN, and KNIGHT, JJ., concur.