Owings Lumber Co. v. Marlowe

SOMERVILLE, J. It has been held in this state, in line with the general current of authority, that: “Where the maker of a promissory note becomes the proprietor of it in the regular course of trade (after it had been in circulation), it is extinguished ipso facto.” Wallace v. Br. Bk. Mobile, 1 Ala. 565. [1, 2] The respondent Owings did not become the owner of his own' note to Mrs. Jones. He received it merely as' collateral security for Mrs. Jones’ note to the bank. Mrs. Jones’ note was the principal obligation, and of it Owings did become the owner. His interest in his own note was limited and conditional. It was but a collateral security appendant to the Jones note, and when he transferred the Jones note to complainant, he transferred its collateral security with it. The rule first above stated has no application to such a case. But, apart from this, even if a promissory note were discharged by its transfer in due course to its maker, the maker may revive it by transferring it to another, and, as to the maker, the note and all of its securities are thereby continued in force as a new and primary obligation. The deed of transfer executed by Owings and his wife to complainant for a valuable consideration recognized the Owings note and mortgage to Mrs. Jones as valid and subsisting obligations, and operates as ‘ a complete estoppel against the claim now made by Owings that they had been discharged. [3] Complainant’s contention is that the sufficiency of the lands as security for the Owings note to Mrs. Jones is the only question presented by the bill, and not whether complainant has a sufficient margin of security for her claim against Mrs. Jones, outside of the timber on the lands in the Owings mortgage. Respondents’ contention, on the other hand,' is that the question is whether complainant has sufficient security for her $4,-000 note from Mrs. Jones, apart from the timber on the Owings lands; and, if so, then there is no ground for equitable intervention by injunction. If complainant’s contention is correct, the pleadings and evidence fully support the chancellor’s ruling. If, on the •other hand, respondents’ contention is correct, we think the chancellor’s action was erroneous, since on the. undisputed evidence complainant has as security for a $4,000 debt, with interest, lands worth about $12,000, without the timber here sought to be preserved. But complainant does not seek to foreclose her own mortgage from Mrs. Jones. On the contrary, she is proceeding to foreclose only the Owings mortgage to Mrs. Jones, and in so doing she is in equity but the agent of Mrs. Jones, exercises the rights of Mrs. Jones, and must «account to her for the proceeds of this property. In this aspect of the case complainant succeeds to and is entitled to enforce the equitable rights of Mrs. Jones, exactly the same as if Mrs. Jones were here suing in her own person. We conclude, therefore, that complainant is, upon the showings submitted to the chancellor, entitled to the retention of the writ of injunction pending the final decree, under the principles declated in Moses v. Johnson, 88 Ala. 517, 7 South. 146, 16 Am. St. Rep. 58. [4] While the insolvency of the mortgagor, Owings, or of his vendee, the Owings Lumber Company, would aggravate the necessity for protection of the security by injunction, such insolvency is not an element of the equity here invoked. The rule is that: “If the threatened injury is irreparable in its nature, as in the cutting of timber’, and so impairs the mortgage security as to render it inadequate, the mortgagee may have an injunction without averring or proving the insolvency of the mortgagor.” 1 High on Injunctions (4th Ed.) § 480. Indeed, why should the law allow a mortgagee to be stripped of the security upon which he has relied, and remitted to a purely personal remedy against the mortgagor? The wrong- is .not in merely rendering the mortgage debt uncollectible, but in rendering it insecure, and impairing, if not destroying, its commercial value. Let the decree be affirmed.’ Affirmed. ANDERSON, C. J., and MAYFIELD and THOMAS, JJ., concur.