Appeal
from circuit court, Madison county; H. C. Speake, Judge.
Action
by the Alabama National Bank against Charles H. Halsey on a
note. There was a judgment for defendant, and plaintiff
appeals. Reversed.
This
action was brought by the appellant, the Alabama National
Bank, against the appellee, Charles H. Halsey, and counted
upon a promissory note. The suit was instituted on February
14, 1893. In one of the counts of the complaint, the note
sued on was set out in hæc verba. The defendant pleaded: (1)
The general issue. (2) That he was not indebted to the
plaintiff in the manner and form alleged in the complaint.
And the following special pleas: "(3) The alleged
indebtedness represented by said note was for a subscription
by the defendant to the stock of the Coal City Coal & Coke
Company, a corporation. And defendant shows that he was
induced to make said subscription by the following, among
other, representations made to him at the time by one Samuel
H. Buck, to wit: That C. C. Harris and W. W. Littlejohn, of
Decatur, Alabama, had subscribed for a large amount of stock
in said corporation; that J. R. Stevens, of Huntsville
Alabama, had agreed to take a large amount of stock in said
corporation, that arrangements had been made for the sale of
a large amount of coal by said corporation to Hunt & Co., of
Memphis, Tennessee, each month; and that the property of said
proposed corporation was then marketable and productive. And
defendant shows that said representations were wholly false
and that said Samuel H. Buck was interested in placing the
stock of said corporation with Joseph F. Johnston and R. D
Johnston, and was acting in behalf of the persons associated
together in placing the stock of said corporation; and, for
the stock so subscribed for by the defendant, said Samuel H
Buck procured the defendant to execute a note payable to said
R. D. Johnston, which said note was renewed and extended by a
note to the plaintiff, of which said Joseph F. Johnston was
then, and is now, the president; and said plaintiff, through
its said president, had notice that said representations of
said Buck were untrue. (4) There has been a failure of
consideration for the alleged indebtedness represented by the
note sued on, in this: that the original consideration for
said indebtedness was the sale to the defendant of a portion
of the capital stock of the Coal City Coal & Coke Company, a
corporation, in which Joseph F. Johnston, R. D. Johnston, and
others were interested, with one Samuel H. Buck; and said
Samuel H. Buck, acting in behalf of the persons so interested
in said corporation, represented that the stock thereof
agreed to be purchased by the defendant was worth more than
the sum of five thousand dollars, and by such representation
induced defendant to execute his note to said R. D. Johnston
for which said note, or the balance unpaid thereon, the
defendant executed his note to the plaintiff, of which said
Joseph F. Johnston was then, and is now, the president. And
said stock was then, and is now, worth greatly less than the
sum of the five thousand dollars, and is wholly worthless to
the defendant; and plaintiff, through its president, had
notice that the note sued on was given in extension or
renewal of said alleged indebtedness represented by said note
to R. D. Johnston. (5) The consideration for the alleged
indebtedness represented by the note sued on was and is
illegal and void, in this: that the only consideration for
the original note executed by this defendant to one R. D
Johnston was that twice the amount of said note in the stock
of the Coal City Coal & Coke Company, an Alabama corporation,
should be issued to the defendant, as a subscriber to the
stock of said corporation; and the stock so issued by said
corporation did not represent money, labor done, or money or
property actually received, but in the stock so issued there
was a fictitious increase of two dollars of stock for each
one dollar of money subscribed therefor; and the note sued on
is a renewal or extension of said alleged original
indebtedness represented by said note to said R. D. Johnston,
and the plaintiff, through its president, had notice that the
only consideration for said alleged indebtedness was the
issue to defendant of said illegal stock. (6) The
consideration for the alleged indebtedness represented by the
note sued was the issue to the defendant of shares of the
capital stock of the Coal City Coal & Coke Company, an
Alabama corporation; and defendant shows that said stock was
illegal and void, in this: that two dollars of said stock was
issued for each one dollar proposed to be paid therefor by
defendant. (7) The only consideration for the alleged
indebtedness represented by the note sued on was the issue to
defendant of shares of the capital stock of the Coal City
Coal & Coke Company, an Alabama corporation; and defendant
shows that he was induced to agree to take said stock by the
following, among other, representations made to him at the
time by one Samuel H. Buck, to wit: That C. C. Harris and W.
W. Littlejohn, of Decatur, Alabama, had subscribed for a
large amount of the stock of said corporation; that J. R.
Stevens, of Huntsville, Alabama, had agreed to take a large
amount of the stock of said company; that a contract had been
made with Hunt & Company, of Memphis, Tennessee, for the sale
to said Hunt & Company of a large amount of coal to be mined
by said company; and that the property of said company was
then marketable and productive. Said representations were
wholly false. Said Samuel H. Buck, at the time said
representations were made, was associated with Joseph F.
Johnston, R. D. Johnston, and others in placing the stock of
said corporation, and, in procuring the defendant to agree to
take said stock, was acting for and in behalf of the persons
so associated together. And, for the stock so agreed to be
taken by defendant, said Joseph F. Johnston, who was then,
and is now, the president of the plaintiff, sent to the
defendant a note to be signed, which said note was made
payable to said R. D. Johnston or order; and defendant signed
said note, and returned it to said Joseph F. Johnston; and
the certificate for said stock, which was to be issued to
defendant, was never delivered to him, but was retained by
the plaintiff, which became the holder of said note; and the
note sued on is a renewal note for part of the alleged
indebtedness represented by said note to said R. D. Johnston.
(8) The only consideration for the alleged indebtedness
represented by the note sued on was and is illegal and void,
in this: that said alleged indebtedness was originally
evidenced by a note signed by defendant, and made payable to
one R. D. Johnston, which said note was sent by defendant to
Joseph F. Johnston, who was then, and is now, president of
plaintiff. And the only consideration for said original note
was that there should be issued therefor to the defendant ten
thousand dollars of the capital stock of the Coal City Coal &
Coke Company, an Alabama corporation, which said stock so to
be issued to the defendant did not represent money, labor
done, or money or property actually received by said
corporation, but in the stock so to be issued to the
defendant there was a fictitious increase of two dollars of
stock for each one dollar of money undertaken by said note to
be paid for the issue thereof to defendant. And defendant
shows that the certificate for said stock had not been
delivered to the defendants, but the plaintiff, with
knowledge and notice of the facts in this plea stated,
received said original note and said certificate of stock,
and held the same, and the note sued on was given for part of
said alleged indebtedness represented by said original note
to said R. D. Johnston. (9) The note sued on was given in
renewal of part of an alleged indebtedness, the only
consideration whereof was and is illegal and void, in this:
the only consideration of said original alleged indebtedness
was the proposed issue to the defendant of shares of the
capital stock of the Coal City Coal & Coke Company, an
Alabama corporation. And defendant shows that said stock was
illegal and void, in this: that two dollars of said stock was
to be issued for each one dollar proposed to be paid therefor
by the alleged agreement of defendant to take said stock.
(10) For further answer to the complaint, the defendant says
that the only consideration for the alleged indebtedness
represented by the note sued was and is illegal and void, in
this: that said note was given for part of an illegal
indebtedness originally represented by a note signed by
defendant, and made payable to one R. D. Johnston, which said
note was held by the plaintiff. And the only consideration
for said original note was the promise to have issued
therefor to the defendant ten thousand dollars of the capital
stock of the Coal City Coal & Coke Company, an Alabama
corporation, which said stock so promised to be issued to the
defendant was not to represent money, labor done, or money or
property actually received by said corporation, but in the
stock so to be issued to the defendant there was to be a
fictitious increase of two dollars of stock for each one
dollar of money so undertaken to be paid in therefor by the
defendant; and said stock so proposed to be issued has not
been issued to and received by defendant. (11) The
consideration for the alleged indebtedness represented by the
note sued on was and is illegal and void, in this: that said
note was given for part of an alleged indebtedness originally
represented by a note signed by defendant, and made payable
to one R. D. Johnston, which said note was acquired and held
by the...
