Case Name: TRADERS' TRUST CO. v. WAYNE. In re GEORGE R. JONES & CO., Inc.
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1926-05-06
Citations: 13 F.2d 111
Docket Number: No. 4732
Parties: TRADERS’ TRUST CO. v. WAYNE. In re GEORGE R. JONES & CO., Inc.
Judges: Before WALKER, BRYAN, and FOSTER, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 13
Pages: 111–112

Head Matter:
TRADERS’ TRUST CO. v. WAYNE. In re GEORGE R. JONES & CO., Inc.
(Circuit Court of Appeals, Fifth Circuit.
May 6, 1926.)
No. 4732.
Walter McElreath and Thomas Howell Scott, both of Atlanta, Ga., for appellant.
Leonard Haas, of Atlanta, Ga. (Underwood & Haas, of Atlanta, Ga., on the brief), for appellee.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.

Opinion:
FOSTER, Circuit Judge.
This is an ap-' peal from a judgment disallowing in part a claim of appellant as a secured debt against the estate of George R. Jones & Co., Inc., bankrupt. It appears that in May, 3923, the George R. Jones Company was indebted to the Decatur Bank & Trust Company in the sum of $5,000, represented by a note, and executed a deed of trust covering certain land to secure it. The material part of the deed is as follows:
"This deed is made to secure the payment of a debt, pursuant to the laws of Georgia in such ease made and provided, or any renewal of said debt, or any part thereof, which debt is evidenced by a certain promissory note bearing even date herewith for the sum of five thousand ($5,000.00) dollars, signed by Geo. R. Jones Company, Ine., bearing interest from date at the rate of eight (8%) per cent, per annum, and providing for the payment of ten (10) per cent, as attorney's fees. This deed is intended, not only to secure the above-described note, but any other indebtedness that may be now or hereafter owing by the said Geo. R. Jones Company, Ine., to said bank, or any renewal of such indebtedness; the purpose and object of this deed being to secure a line of credit by said Geo. R. Jones Company, Inc., from said bank, so long as the same may be mutually agreeable to the parties hereto. This deed is executed pursuant to the following resolution passed by the directors of said Geo. R. Jones Company, Inc., to wit:
" 'Resolution.
" 'Resolved, That the officers of this corporation, to wit, George R. Jones Company, Ine., be and they are hereby authorized to arrange with the Decatur Bank & Trust Company for a line of credit from said bank to this corporation in the sum of five thousand dollars ($5,000.00), and to execute from time to time such notes as may be necessary to secure such hank for said sum or any part thereof, and to renew any such note or notes, and from time to time to sign new notes for additional sums advanced by said bank for this corporation, not exceeding at any time five thousand dollars ($5,000.00), ^nd said officers are also authorized to convey to said bank as security for any note or notes that may be executed by this corporation pursuant to this resolution, the following described land, to wit.' "
The George R. Jones .Company was adjudicated bankrupt in September, 1925. Prior to that time the Decatur .Bank & Trust Company had transferred certain > notes charged to the bankrupt, amounting to over $15,000, and its rights under the trust deed, to appellant, and that company filed a proof of debt as a secured claim to the amount of $14,772.48. The trastee objected to the allowance of the claim as secured in any amount exceeding $5,000, and the referee entered an order maintaining the contention of the trustee, which \ order was in turn approved, by the District Court. Appellant now contends that the-deed was intended to secure any indebtedness up to $10,000.
The only question presented for review is the construction of the deed of trust by the court below. We agree with the referee and the District Court in their construction of the deed of trust. Considering the provisions above quoted, including the resolution óf the company, it seems clear that it was the intention of the grantor to secure a line of credit at all times of $5,000, but not to secure any indebtedness exceeding that amount. The testimony of Jones, president, and Andrews, treasurer,. of the bankrupt, sustains this construction. In this connection it may be noted that the proof of debt filed by appellants shows only one note of $5,000 made by the Jones Company to the Decatur Bank & Trust Company. The other notes going to make up the amount claimed are either notes to the Jones Company, indorsed and discounted by it with the bank, or notes of the Jones Company to third persons, indorsed and discounted by them. It would be stretching the provisions of the deed of trust too far to say that it was the intention of the parties, when it was executed, that notes such as these were intended to be secured by it.
Affirmed.