Tuskaloosa Cotton-Seed Oil Co. v. Perry , 85 Ala. 158 ( 1887 )

CLOPTON, J.

There is no assignment of error, which requires us to consider the rulings of the court in respect to the admissibility in evidence of the declarations and promises of Caswell, the president of the defendant corporation. Unless it be want of jurisdiction of the subject-matter, which can not be waived by the parties, errors, though they may be apparent in the record, will not be regarded, if not assigned. — Lehman v. Meyer, 67 Ala. 396. The objection-to the documentary evidence is general and undefined, and, for this reason alone, could properly have been disregarded by tbe court. — Dreyer v. Lewis, 57 Ala. 551. The objection to the deposition o£ Williams is, that the commissioner’s certificate is fatally defective. The defect was disclosed in the deposition, and the objection, which goes to the admissibility of the entire deposition, was made after the trial was commenced. The' statute is imperative, that all objections to the admissibility in evidence of the entire deposition must be made before entering upon the trial, unless the matter is not disclosed in the deposition, and appears after the commencement of the trial, and prohibits such objections being made afterwards. — Code, 1886, § 2810.

Plaintiff’s intestate was president of the defendant corporation at the time of the execution of the note, which is the foundation of the suit, and as such officer signed the corporate name thereto. The note is payable to his order, and was indorsed by him, and after his death was paid by plaintiff as the administratrix of his estate. She now seeks by this action to recover the amount so paid. The indorsement of the name of her intestate on the note, does not, of itself, disentitle the plaintiff to sue thereon. Being payable to his order, and found in her possession, the presumption is, that the note was regularly returned to her, as his personal representative.' — Herndon v. Taylor, 6 Ala. 461. Independent of the presumption, the evidence incontestably shows that she obtained the note by paying the amount due, in discharge of the indorsement. The payee and first indorser of a note, which has been put in circulation, may pay it, and maintain an action on the note against the maker. Pinney v. McGregor, 102 Mass. 186.

The next assignment of error refers to the competency of the note as evidence to go to the jury. The complaint contains a special count on the note, which avers that it was made by defendant. Its execution was not put in issue by plea verified by affidavit. In such case, preliminary proof of execution is not requisite under the statute.— Wimberly v. Dallas, 52 Ala. 196. Also, if the plaintiff had been entitled to recover only on the common counts, the proof of execution and authority is sufficient to admit the note in evidence. It is not controverted, that it was the usual course of business, in the management of the affairs of defendant, that notes for money borrowed should be signed by the president, without previous order of the board of directors; and that many notes made by plaintiff’s intestate, and particularly two other notes of the same tenor, made in the same manner, about the same time, and for the same purpose as tbe note in suit, had been paid by the defendant. These acts of the president, in connection with such recognition and acquiescence of the corporation, are competent and sufficient evidence of the fact and scope of the agency. — Talladega Ins. Co. v. Peacock, 67 Ala. 253.

But the objection is not rested on a general want of authority to make notes binding on the corporation, but on the invalidity of the note on which the suit is founded. The specific objection now made is, that the note was executed by an officer of the corporation, payable to his own order— a contract with himself personally. The objection seeks to have the question whether it is a binding obligation on defendant determined by the court, without submitting it to the jury on the whole evidence. This can not properly be done. If there had been a special plea verified by affidavit, setting up the matter of the objection, the note and the evidence relating to the purpose, facts and circumstances of its execution, all should have gone to the jury, and the validity of the note determined by them under proper instructions from the court. The note is not void, merely because it appears on its face to have been made by the president, payable to his own order, and indorsed by. him. As, however, the question of its validity largely involves the merits of the controversy, we shall consider it as if properly raised. The general rule will be conceded, that an officer of a corporation can not use his official position for his own advantage — can make no valid contract with himself'personally, and can not represent the corporation in any transaction in which he has a personal interest. The question is, does the note, on the undisputed facts, fall within the principle? There is no disputation, that the note was given for money loaned or advanced by the First National Bank, at which bank it is payable ; the money thus borrowed was used by the corporation in the purchase of cotton-seed and other material necessary to the operation of its business; the note was carried as a liability on the books of the company, and it was indorsed by plaintiff’s intestate for the accommodation of the corporation, in order to enable it to obtain the money. It is manifest, from these facts, that the plaintiff’s intestate had no interest in the note, or in the money procured thereby; that it was not a contract made with him personally, but with the bank; and that it was not for his benefit or advantage. The note having been made to borrow money for the corporation, which it received; and having retained for its own benefit the fruits of the transaction, the defendant is estopped to deny, as against the holder from whom the money was borrowed, the binding character of the obligation, and the authority of the president to make the transaction, and equally against the accommodation indorser.

It is manifest that the plaintiff is entitled to recover, unless the special defense set up avails to defeat the suit. The special plea avers, that plaintiff’s intestate contracted with the company to take stock for all his claims and demands against the corporation, which the defendant has always been willing, and is now willing to deliver, but that neither plaintiff, nor her intestate, has ever demanded the stock. A demurrer to the plea having been overruled, we must, on this appeal, which is taken by defendant, treat it as a defense to the action, if sustained by proof. The only evidence which was offered to support the plea is, that in a conversation in the summer of 1885, between plaintiff’s intestate and Caswell, then the general manager of the company, the former agreed to subscribe for additional stock to the amount of five thousand dollars, and to pay for such stock by satisfying the accounts which he held, or might thereafter hold against the company. The contract, as set forth in the plea, is to take stock for claims and demands which plaintiff’s intestate then had, and has no reference to demands subsequently acquired, or to a subscription for stock. It is clear there is a material variance between the averments of the plea and the evidence; and the court might properly have instructed the jury, that the truth of the plea was not proved. But, passing the'consideration of the effect of this variance, the agreement as proved is executory — to subscribe for stock in the future, and to pay for it by satisfying claims and demands against the company. No subscription for stock was made, and the agreement was not even partially performed. An oral agreement, that a promissory note is to be discharged by doing something other than paying money, so long as it remains executory, is inoperative, and no defense to a suit on the note. — Patrick v. Kelly, 83 Ala. 420. It is neither payment, nor accord and satisfaction, until performed. On a failure to perform such executory agreement, the corporation can only recover the damages suffered by its breach. •

It should further be observed, that the agreement was made in the summer of 1885, and that the note was not executed until the first of October thereafter, which, with the other two notes of the same tenor, executed in the same manner, and for the same purpose, heretofore referred to, aggregated the sum of six thousand dollars. It is not pretended that, at the time the notes were made, any thing was said or understood as to either of- them being solvable in stock The plaintiff’s intestate was a manufacturer and repairer of machinery, and had furnished machinery to defendant, for a part of which it was indebted to him at the time the agreement was said to have been made; and no doubt it was anticipated that he would have to repair and furnish other machinery. It would be an unauthorized extension of the agreement, to include within its terms demands which accrued by the subsequent indorsement of a note of defendant for its accommodation, and to enable it to borrow money from another; on which the defendant was primarily liable, and which was to be paid in money. If, therefore, plaintiff’s intestate had subscribed for stock in pursuance of the agreement, which the defendant was ready and willing to issue, it would be no defense to this suit.

And besides, the evidence shows that, after plaintiff had paid and held the note, the president and general manager of defendant promised the attorney of the plaintiff that it should be paid on or before September 1st, 1886, if suit was suspended until that time, which was done.

The defense that an arrangement was made by the president of the defendant with the holder of the note, for an extension of the time of payment, is not set up by plea; and if it was, an indefinite arrangement, unsupported by a valuable consideration, was a mere gratuity, which bound neither the holder nor the indorser. It was the right of plaintiff to pay the note after maturity, without demand or suit, and resort to the maker for reimbursement.

On the undisputed facts, and the indisputable conclusions from the evidence, the court would not have erred, had the affirmative charge in favor of the plaintiff been given; consequently there are no errors which could have worked injury.

Affirmed.