First Nat. Bank v. Laughlin , 209 Ala. 349 ( 1923 )

It is the general rule that notice to an agent is notice to the principal except in matters as to which the agent is personally interested. There also seems to be a limitation upon the exception, which is that, notwithstanding the agent is personally interested, if he is the sole representative in the transaction and is in effect the alter ego, notice to him is imputable to the principal. This seems to be the substance of our holding in the case of Tatum v. Commercial Bank, 193 Ala. 120,69 So. 508, and cases there cited. This case is also reported in L.R.A. 1916C, 767, and appears to be in harmony with the weight of modern authority.

The case of Frenkel v. Hudson, 82 Ala. 158, 2 So. 758, 60 Am. Rep. 736, is not in conflict with the Tatum Case. It merely lays down the general rule and the exception, but fails to note the limitation upon the exception as brought out in the Tatum Case when the interested agent is the sole representative of the principal in the transaction, and which point was doubtless not raised or suggested in said Frenkel Case.

The case of Robertson Banking Co. v. Brasfield, 202 Ala. 167,79 So. 651, is unlike this case or the Tatum Case. There the agent concocted and perpetrated a fraud upon Brasfield in the creation of the relationship. He knew all facts and had notice of everything before becoming the agent of Brasfield to lend the money to a man of straw. In other words, he received no notice of nor ascertained any facts after becoming Brasfield's agent that were not already in his breast when opening up negotiations leading up to the creation of the agency. It is sufficient to say that Laughlin's pleas 4 and 5 seem to conform to the rule declared in the Tatum Case, while plea 3 does not as it does not aver that Frost was the sole representative in the transaction. This comment also applies to such pleas of defendant Brooks as attempt to set up this defense.

The fact that the note was given for an antecedent debt did not render it wanting in consideration, and the trial court erred in not sustaining the demurrer to the pleas of each defendant proceeding upon this theory. Sections 4981, 4982, and 4984 of the Code of 1907; Volger v. Manson, 200 Ala. 351,76 So. 117; Davies v. Simpson, 201 Ala. 616, 79 So. 48.

The judgment of the circuit court is reversed, and the cause is remanded.

Reversed and remanded.

SAYRE, GARDNER, and MILLER, JJ., concur.