Armstrong v. Walker

• Decision Date: 17 May 1917
• Docket Number: 6 Div. 520
• Citation: 76 So. 280,200 Ala. 364
• Parties: ARMSTRONG v. WALKER.
• Court: Alabama Supreme Court

76 So. 280

200 Ala. 364

ARMSTRONG v. WALKER.

6 Div. 520

Supreme Court of Alabama

May 17, 1917

Appeal from Circuit Court, Cullman County; R.C. Brickell, Judge.

Action by A.E. Walker, as superintendent, against J.I. Armstrong. Judgment for plaintiff, and defendant appeals. Transferred from Court of Appeals under Acts 1911, p. 450, § 6. Reversed and remanded.

Callahan & Harris, of Decatur, for appellant.

Eyster & Eyster, of Albany, for appellee.

McCLELLAN J.

The plaintiff, appellee, sued the defendant, appellant, on a promissory note executed by the defendant to the German Bank of Cullman; that bank having failed, and its affairs having passed into the hands of the plaintiff for administration.

The defendant filed a number of pleas, among which was plea No 2, reading: "There was no consideration for the note sued on." No demurrer to this plea appears in the record, but the judgment entry recites that demurrer thereto was sustained. According to the apt authority of Kolsky v. Enslen, 103 Ala. 97, 15 So. 558, Ragsdale v Gresham, 141 Ala. 308, 37 So. 367, and Milligan v Pollard, 112 Ala. 465, 20 So. 620, the plea was not subject to any possible ground of demurrer. It was therefore error to sustain demurrer to it. Smith v. Dick, 95 Ala. 311, 10 So. 845.

The complaint does not disclose that the bank was even purchaser of the obligation of the defendant of which that sued on may be said to be a consequence. Hence the sufficiency of the pleas thereto must be determined without reference to principles available where the complaint discloses that the plaintiff was a bona fide holder of the negotiable instrument of which that sued on is a renewal.

It is averred, in substance, in plea B, that the note sued on was a renewal of an indebtedness evidenced by notes executed by the defendant to the Southern States Fire & Casualty Insurance Company which were transferred by that company to the German Bank of Cullman; that the consideration of the original notes was the promise of one Tyler who assumed to represent the insurance company, that the company would issue to the defendant shares of its capital stock, and the further promise upon the part of the alleged agent of the insurance company that the company would thenceforth, and in consideration of the defendant's execution of the original notes for the capital stock, issue to the defendant contracts of insurance with a rebate of 15 per cent. off of its regular premiums charged for such insurance. Rebates of the character described in the plea are forbidden by positive law in this state. Code, § 4579. The plea alleges, as appears, that a part of the consideration for the notes was the unlawful promise to accord the defendant a forbidden rebate. According to the allegations of the plea, the consideration for the original notes was affected with a partial illegality; and, if so, operated to render the contract void. Wadsworth v. Dunnam, 117 Ala. 661, 23 So. 699. If the original notes were so affected with illegality their renewal was subject to the same invalidating consequences. Ala. Nat. Bank v. Halsey, 109 Ala. 196, 208, 19 So. 522. This plea presented a good defense to the complaint as framed, and the demurrer to it should not have been sustained.

In plea D it was averred that the note sued on is for the renewal of an indebtedness evidenced by two original notes executed by the defendant to the Southern States Fire &amp Casualty Insurance Company and transferred by that company to the German Bank of Cullman; that the execution of said original notes was induced by the...