Bostick v. Jacobs

| Ala. | Nov 15, 1901

TYSON, J.

The bill in this cause presents two theories upon which the complainant relies to have the two notes which he executed as surety for the rnortgagor, and upon which judgment was recovered against him, before the sale under the power contained in the mortgage was had, satisfied and discharged. The first of these proceeds upon the averment ¡that the terms of the mortgage, to which he is not a party, are not in accordance with the understanding had wdth him by which he agreed to’become bound as surety. This phase of the case, however, is not insisted upon in argument.

The other phase of the bill presents a case for equitable relief, not to the extent of having the entire proceeds derived from the sale under the mortgage applied to a release or satisfaction of the judgment, but only pro rata. By the terms of the mortgage, upon default in the payment of the first maturing note, upon which complainant was surety, the whole mortgage debt, including the other one upon which he was surety as well as the two notes executed by the mortgagor alone, became due and payable. In short, the default at maturity of the first maturing note matured the other three, thereby destroying all priority in the distribution of the proceeds of the sale, of one note over another. 2 Jones on Mortgages, § 1703; also §§ 1179-1183.

Again the mortgage conferring no authority upon the mortgagees to apply the proceeds of the sale of the mortgaged property to the payment of any notes to the exclusion of the others, the law applied the proceeds to the entire debt secured by the mortgage. This being true, the complainant as surety has the right to have the proceeds of the sale (sixteen hundred dollars) applied in just proporton to the discharge of that portion of the debt for which he is bound. — Fielder v. Varner, 45 Ala. 429" court="Ala." date_filed="1871-01-15" href="https://app.midpage.ai/document/fielder-v-varner-6507965?utm_source=webapp" opinion_id="6507965">45 Ala. 429; Orleans Co. Nat. Bank v. Moore, 3 L. R. A. 302; 2 Jones on Mortgages (5th ed.), § 1706.

It is scarcely necessary, in conclusion, to say that, under no possible aspect of the case is the complainant, and for that matter can never become, entitled to have the proceeds of the sale to Smith by the respondents, as purchasers, applied to a discharge of his liability to them.

The decree of ¡the court dismissing the bill for want of equity is reversed, and a decree will be here rendered overruling the motion.

Reversed and rendered.