Brown v. Fowler , 133 Ala. 310 ( 1901 )

HARALSON, J.

1. The Code prescribes a form for a suit by an assignee against the assignor or indorser of a note, upon which suit has been brought to charge the maker, judgment obtained and execution issued accordr ing to law and returned “no property found,” as required in such sases, before proceeding against the assignor or indorser to make him liable, as by section 892 of the Oode. 'There is no form prescribed for suits [to charge the indorser, when he has in writing waived suit to charge himself (Oode, § 893), or when the holder of the indorsed or assigned paper is excused from bringing suit for one of the several causes excusing him from so doing, as prescribed by section 894 of the Code. 'That section provides, “That the hólder is excused from bringing the suit, obtaining the judgment and issuing ' execution thereon,” when one of the prescribed conditions, as therein laid down, exists. The 7th and last of these excuses is: “When, by any act or promise of the indorser, the plaintiff is induced to delay bringing such suit.” The statute, itself, seems plainly to excuse the bringing of the suit at 'any time against the maker after default to sue to the first term after the note is due, to hold Hie indorser liable, when one of the excuses for not doing so exists, and that under this section, with one of the excuses for not so suing the maker existing, the holder of the indorsed paper, without afterwards suing the maker af all, may proceed against- the indorser, as against the maker in the first instance, to enforce his, the indorser’s, liability on the same. In Lindsay v. Williams, 17 Ala. 229, it was said by Hargan, 0. j.: “We should hold, if an indorser [holder] did not know in what county the maker resided, and could not by diligent inquiry ascertain the county of his residence in time to sue to the first court, that this would be a sufficient excuse for failing to sue at the first term, and I think it may be questioned whether it would not dispense with the necessity of a suit altogether, even if the holder by inquiry should afterwards ascertain thé residence of the maker.”

The complaint in this case, appears to be apt, in declaring the liability of the defendants as indorsers of the note. It is a mistaken view, that the suit is upon the judgment which the plaintiff obtained in the circuit court against the maker of the note, or a special action on the case against defendants, — one or the other of which, the defendants, on appeal, suggest the action to be. It is a clear case of a suit by the payee of a non-negotiable note against the indorsers thereon, to charge them with its payment. The complaint alleges that the defendants indorsed the note, which is set out in haee verba, and avers that in the interim between the maturity of the note — the 25th December, 1894 — and the first term of the court to which suit might have been brought, — the 18th day of May, 1895,— “defendants, each, requested plaintiff not to bring suit against said Ragland Coal & Coke Company, (the maker of the note) and expressly promised to pay the debt evidenced by said note, thereby inducing plaintiff to delay bringing suit against the said Ragland Coal & Coke Company, wherefore plaintiff now sues to recover of defendants, (the indorsers of said note), the sum of $2,421.56, and also the said sum of $8.05, the costs of suit against the makers, with interest,” etc. While the statute, under the allegations of the complaint, did not require this suit to be instituted against the maker before suing the indorsers to charge them, it was clearly not against their interest for it to have been done. It was a step in their interest, to enforce payment, if it could be done, out of the maker of the note, without resort to the defendants as indorsers. It was an act of good faith, without the effect, as contended by defendants, of a waiver of the promise of defendants to pay, as an inducement to delay suit, and one at which they cannot be heard to complain. The refusal of the court to grant the motion of defendants ¡to strike that part of the complaint setting up the institution of that suit, the rendition of judgment therein, issuance of execution thereon and its return of “no property found,” was not reversible error. Furthermore, the ruling on the motion appears alone in the minute entry and is not here reviewable. Nor was there reversible error in overruling the demurrers to the complaint on ¡the same ground, or for allowing in evidence the certified transcript of the judgment, the execution and the return of the sheriff thereon.

2. The legislative history of sections 892, 893 and 894 of the Code was reviewed, and construction carefully given to them by Beickell, C. J., in the late case of Caulfield v. Finnegan, 114 Ala. 39. Of section 894, and its subdivision 7, it. ivas said: “Without now assuming to decide what acts, promises, inducing the delay of suit, the subdivision may comprehend, it is enough to say, that an express promise to pay the debt with or without writing, or representation of the solvency of the maker, inducing the delay of suit, made before the period of suit had expired, we incline to the opinion, would constitute a promise, or an act, within its meaning. The promise to pay, must, however, be express; it must not be a mere implied promise deduced from a verbal waiver of suit, for that would render nugatory the mandate of the statute that the waiver to be availing must be in writing (section S93), and if it was in writing, there would be no occasion for resorting to the subdivision.” A clear distinction "is drawn in the decision between a waiver of time for bringing suit under section 893, and an express promise to pay the debt, as an excuse for not suing, under section 894. 1'n the one case, the waiver must be in .writing, and in tbe other the promise need not be.

3. The complaint alleges, — as to the endorsement of the note, — its date having been given as the 2d December, 1893: “Plaintiff avers that on tbe 2d day of December, 1S93, the defendants indorsed a written obligation executed by the England Coal & Coke 'Company, a corporation, in words and figures following” (setting out the note). The act of endorsement, either in blank or in full, without qualification, says Mr. Parsons, “forms a new contract with the indorsee, that the maker will pay the same at maturity, when duly called upon and notified, and that the indorser Avill pay the same if he does not. It is an original undertaking, and not a promise to pay the debt of another under the statute of frauds.” — 2 Parsons on Notes and Bills, pp. 23, 25; Story on Notes, § 135. The indorsement is prima facie evidence, between the immediate parties, of a full and valuable consideration, but as a matter of defense, it may be inquired into, the burden being on him who disputes the consideration. — 2 Parsons on Notes & Bills, 23; Story on Prom. Notes, § 7; 181, 196; Gee v. Nicholson, 2 Stew. 512; Parkham v. Stringfellow, 5 Ala. 346; Code, § 1800.

The demurrer to the complaint was properly overruled.

4. The demurrer to defendant’s pleas was properly sustained. The 4th is not a denial of the consideration of the note, but of the promise to pay, to induce defendant not to sue the maker, What consideration there was for the promise is set out in the complaint, which the plea of the general issue put in issue. Furthermore, there was no valuable consideration needed for the alleged promise. The vices of the 6th and 7th pleas fully appear from what has already been said.

5. The presumption from the allegations of the complaint is, that defendants separately indorsed said note. Any evidence on the part of either of them that he made a special, individual promise to pay was good as against him; and the evidence tends to show that each defendant recognized the debt as his individual obligation, and made such promise.

6. Evidence of the solvency of the Ragland Coal & Coke Company at the time the note fell due, and the property then owned by it and its value, as proposed to be proved by defendants, were facts entirely irrelevant to the issue in the case, and were properly disallowed by the court. On the cross-examination of the defendant, J. R. Brown, examined in chief by defendants, he was asked by plaintiff’s counsel: “If on the 25th of December, 1894, [which was the date of the maturity of the note], he, witness and W. T. Brown did not own a majority of the capital stock in the Ragland Coal & Coke Company?” There was no error in allowing him to answer, against the objection that the evidence sought was illegal and immaterial, that they did own a. majority of the stock. The vital issue in the case was, whether or not the defendants requested plaintiff not to sue the Coal & Coke Company, and promised to be personally responsible for the debt. If they had no interest in the company, it might appear unreasonable, that they had made such a request and promise; but, if they owned a majority of the stock in the company, and practically controlled it, they had motive and interest in such request and promise, and it was competent to go to the jnrv in determining on all the evidence, whether they made such request and promise or not.

7. Evidence of N. O. Hamilton was offered by plaintiff, that in the year 1896 or 1897, he had a conversation with the defendants in Asheville, in which they said that they had told the plaintiff that either of them was worth ¡the debt; that W. T. Brown said that he went to Fowler and told him that he and his brother were worth the debt, and both of them said that they had offered to give plaintiff a mortgage on the company’s property and pay $300 per month until the debt was settled. Motion was made by defendants to exclude this evidence, on the ground that it was illegal, irrelevant and immaterial.' There was no error in overruling the motion. The evidence tended to show an admission hv defendants of the request and promise alleged to have been made to induce plaintiff not to sue the maker of the note, and was competent inconnection with the other evidence tending to establish ¡the promise.

8. The letter of J. R. Brown to J. G. Fowler in 1896 was properly admitted, against the objection of illegality and irrelevancy, and because it appeared to have been written for, and at the instance of the Goal & Coke Company. It contains an individual promise to pay at that time, and also an expression of what he and the other endorser had desired in the past, viz., “we wanted you to still hold the same paper.” When taken with all the evidence, it tends to support the main issue in the cause.

9. The motion to exclude the evidence of John Gf. Fowler was properly overruled. The motion went to the entire evidence, portions of which were unobjectionable. No objections appear to the evidence as the witness gave it. Furthermore, the evidence tends to establish the promise as alleged. The same is true of the evidence of W. H. Fowler.

10. There was no error in the' charges given at the request of plaintiff. The suit is not on a joint contract, or cause of action, as contradistinguished from a several undertaking by defendants. The parties, as the evidence tends to show, each made the promise counted on. Under the allegations of the complaint, the plaintiff might have sued either of defendants without the other and maintained the suit on his individual promise. It is only when the complaint avers a joint contract or cause of action, that the evidence must show, for a recovery, a joint and not a several promise. Jackson v. Bush, 82 Ala. 396; Jones v. Englehardt, 78 Ala. 505. Charge two may have been subject to an objection of being argumentative, or laying stress on a particular phase of the evidence, but this is not reversible error.

It needs no discussion to show that the charges requested by defendants were properly refused.

Let the judgment be affirmed.