Bolling v. McKenzie

• Decision Date: 06 May 1890
• Citation: 89 Ala. 470,7 So. 658
• Parties: BOLLING ET AL. v. MCKENZIE.
• Court: Alabama Supreme Court

7 So. 658

89 Ala. 470

BOLLING ET AL. v. MCKENZIE.

Supreme Court of Alabama

May 6, 1890

Appeal from circuit court, Butler county; JOHN P. HUBBARD, Judge.

E P. Morrisett, for appellants.

Richardson & Steiner, for appellee.

STONE C.J.

The bill of exchange which is the foundation of the present suit is described in the complaint as drawn by the Southern Railway Construction & Land Company upon C. W Scofield, president, payable to the order of B. B. McKenzie, and by him indorsed to R. E. Bolling & Son. The bill bears date, as it is averred, June 1, 1887, and it is not stated when it matured or would mature. We suppose no day was fixed for its payment. We must presume it was payable when presented. The complaint avers that "the said bill, not being paid at maturity, was duly protested, of which the defendant [McKenzie] had due notice." The legal implications of this transaction were and are that the Southern Railway Construction & Land Company had funds in the hands of Scofield subject to its draft, that it was indebted to McKenzie, and that by this bill or draft it appointed and directed the payment of its debt to McKenzie out of the funds so held by Scofield. In McKenzie's hands, the bill, prima facie, represented an indebtedness to him from the Construction & Land Company. When he traded and indorsed it to Bolling & Son, the prima facie intendment was and is that, for a valuable consideration, he appointed the payment of this indebtedness which the Construction & Land Company owed to him to be made to R. E. Bolling & Son. The bill or draft, and its subsequent indorsemennt, do not, on their face, purport to rest on one and the same consideration. McKenzie's obligation to pay Bolling & Son was not primary and unconditional. It was contingent. That is, it bound him to pay in the event Scofield failed to pay, and he (McKenzie) was duly notified of the failure. One reason for requiring due and prompt notice to the indorser of the principal debtor's failure to pay, is that the indorser may take prompt measures to obtain indemnity against loss. Story, Bills, § 112; Story, Promp. Notes, § 153; Jordan v. Bell, 8 Port. (Ala.) 53; Rives v. Parmley, 18 Ala. 256; Flowers v. Bitting, 45 Ala. 448; John v. Bank, 57 Ala. 96.

It is not pretended that notice of nonpayment by Scofield, or by the Southern Construction & Land Company, was given to McKenzie until a month or more after the bill was dishonored. In fact, it is not shown it ever was presented to Scofield, or that McKenzie was notified that he would be looked to for payment, until a month or more after he indorsed the bill to Bolling & Son. The defense on which this case went off was raised by pleas of defendant, denying that the bill had been presented for payment, either to the Railway Construction & Land Company, or to Scofield, and denying that notice of nonpayment had been given to McKenzie. To these pleas plaintiff interposed two replications. We will consider them in their inverse order. The second of the replications avers "that the said defendant is the real debtor, owing the debt represented by said bill of exchange, the consideration thereof being goods and merchandise sold by plaintiffs to defendant." A demurrer was interposed to this replication, which the court sustained. The complaint contains a single special count on the indorsement of a bill of exchange. The replication, if otherwise sufficient, counts on the consideration of the indorsement, and in the absence of a count, general or special, claiming for goods sold and delivered, it is a departure from the cause of action set forth in the complaint. But it is insufficient for another reason; it does not negative the fact that the bill in the hands of McKenzie, before it was traded to Bolling & Son, represented a debt due from the Railway Construction & Land Company to him. This, as we have shown, in the absence of a negative averment, is the legal implication arising out of the giving of the bill; and, even if the complaint had contained a count for goods sold, the replication would have been insufficient, if it had not either negative indebtedness from the Railway Construction & Land Company to McKenzie, or denied that the bill was given in payment or part payment of such indebtedness. In other words, to make the offered replication sufficient, it must have been shown that the bill, until it was traded to Bolling & Son, was mere accommodation paper on the part of the Railway Construction & Land Company, given to enable McKenzie to raise money, or money's worth.

The other replication to defendant's pleas set up "that since the maturity and protest of the bill of exchange sued on, the defendant, with knowledge that the usual steps of demand, protest, and notice were not duly taken, acknowledged his liability as indorser on said bill, and promised plaintiff to pay the same." To this there was a demurrer, because it did not aver that the acknowledgment and promise...