Bruce v. Citizens' Nat. Bank of Lineville

Decision Date27 November 1913
Citation64 So. 82,185 Ala. 221
CourtAlabama Supreme Court
PartiesBRUCE v. CITIZENS' NAT. BANK OF LINEVILLE.

Appeal from Clay County Court; D.H. Riddle, Special Judge.

Assumpsit by the Citizens' National Bank of Lineville against John S. Bruce. Judgment for plaintiff, and defendant appeals. Affirmed.

The pleas were:

(1) The general issue.

(2) Failure of consideration.

(3) Failure of consideration.

(4) "The note which forms the foundation of this suit was procured from defendant for one share preferred stock to be issued by the Atlantic Furniture & Lumber Company of which the cashier of plaintiff bank was secretary and treasurer and defendant avers that before said note was executed that plaintiff, through its cashier, fraudulently and falsely represented that said subscription in settlement of which the note was given would make the said Atlantic Furniture &amp Lumber Company a going concern, and in a safe condition, and defendant further avers that the directors of plaintiff bank made the same representations to defendant, and in this manner induced defendant to execute the note which is the foundation of this suit, and defendant avers that, at the time said representations were made, the said Atlantic Furniture & Lumber Company, was hopelessly insolvent, and was due plaintiff's bank a large sum of money, and that the said false and fraudulent representations were made to defendant by the said officer and director of plaintiff's bank for the purpose of saving said bank in the matter of the large indebtedness due it by the said Atlantic Furniture &amp Lumber Company, and defendant avers that said stock has never been issued by the secretary and treasurer who is also the cashier of plaintiff's bank, and defendant avers that the fraud practiced upon him by the cashier and director of plaintiff bank in securing said note from him which he averred was fraudulent and wholly without consideration, are acts which are chargeable to plaintiff bank, and defendant says plaintiff participated in said fraud, and should not recover from defendant on the note which forms the foundation of this suit."

(5) "Defendant says that the consideration for which said note was given has wholly failed, in this, that said note was given in payment for one share preferred stock in the Atlantic Furniture & Lumber Company, a corporation, organized under the laws of Alabama, and that two of directors of said plaintiff bank, to wit, W.D. Mitchell and R.A. Gaines, who were also directors of the said corporation, came to defendant and solicited him to buy one share of said alleged preferred stock in said corporation; at first, defendant refused to purchase any of said stock, whereupon the two directors named stated that they and M.M. Eppes, cashier of the Citizens' National Bank, and also secretary and treasurer and director of said corporation, had investigated the condition of said corporation, and that the same was solvent, and that the said corporation owed certain debts which must be paid, among which was a debt to the Citizens' National Bank, and the two first-named directors further represented to defendant that, if the stockholders of the corporation would increase their stock to about $4,200 in the aggregate, it would be able to move its stock of furniture, realize on indebtedness due it, pay what it was due, and be saved from bankruptcy, that, if defendant would take $100 of said preferred stock upon which they would guarantee a dividend of 8 per cent. per annum, defendant would save his stock of $1,000, which he had in said corporation, that it would be better to pay $100, even if he was not able to buy said stock, than to lose $1,000 of stock defendant already had in said corporation, and before defendant executed said note for said stock he saw the cashier of plaintiff bank, and also secretary and treasurer and director of said corporation, and that the cashier made the same representation to defendant as made by the said two other named directors above detailed; and defendant says that he relied upon said representation, and executed the note which is the foundation of this suit in payment of one share of the alleged preferred stock of said corporation, and that for said note said Eppes, as secretary and treasurer, agreed to issue to defendant one share preferred stock in said corporation, with a guaranty of 8 per cent. dividend per annum; and defendant further says that, at the time said note was alleged to have been discounted to plaintiff's bank the said Eppes was both cashier of the bank and secretary and treasurer of the corporation, and knew that no stock or other consideration had been given for said note, and said directors knew that no consideration or stock had been given or received by defendant for said note; and defendant further says that the transaction whereby plaintiff bank bought or discounted the note in suit was had with said Eppes, or when Eppes was present as cashier and director of plaintiff bank, and that at the same time said Eppes was also secretary and treasurer of said corporation, and, that at the time said note was discounted to plaintiff bank, Eppes, cashier and director of said bank, and secretary, treasurer, and director of said corporation, knew that said stock had not been issued to the bank, and that both he and said above-named directors both of plaintiff bank and said corporation knew or were in possession of facts which, if followed up, would cause them to know that, at the time they procured defendant to execute said note, said corporation was hopelessly insolvent, and that said representations made to defendant in order to induce him to sign said note were false and fraudulent, and that in executing said note defendant relied entirely upon said representation, and defendant says that said false and fraudulent representations were made to defendant to enable plaintiff bank to realize on the indebtedness that said corporation was then due said bank. Wherefore, defendant says," etc.

Walter S. Smith, of Lineville, for appellant.

Cornelius & Cornelius, of Ashland, for appellee.

SAYRE J.

Plaintiff bank, appellee, sued as transferee of a promissory note for $100 made payable to the Atlantic Furniture & Lumber Company a corporation. The record proper and the bill of exceptions differ in their recitals of the rulings on demurrers to the several pleas filed. We are concluded by the record proper. On demurrer, plea 3 was held insufficient, leaving on the file a so-called plea of the general issue, about which no question has been raised, and pleas 2, 4, and 5. Plea 2 was that the note in suit was wholly without...

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10 cases
  • Tennessee Valley Bank v. Williams
    • United States
    • Alabama Supreme Court
    • 1 Marzo 1945
    ... ... notice to plaintiff. Bruce v. Citizens National ... Bank, 185 Ala. 221, 64 So. 82; Central of ... ...
  • Sherrill v. Merchants' & Mechanics' Trust & Sav. Bank
    • United States
    • Alabama Supreme Court
    • 16 Diciembre 1915
    ... ... Code 1907, §§ ... 5007, 5014; Bruce v. Bank, 185 Ala. 221, 64 So. 82, ... 84; Drinkall v. Bank, 11 N.D. 10, ... ...
  • Brockway v. U.S. Finance Co.
    • United States
    • Alabama Supreme Court
    • 10 Agosto 1972
    ...or defect in the title of the person negotiating it. Sections 54 and 61 of Title 39, Code of Alabama, 1940. Bruce v. Citizens' National Bank, 185 Ala. 221, 64 So. 82; Tennessee Valley Bank v. Williams, 244 Ala. 468, 14 So.2d In light of this presumption and the judgment of the trial court i......
  • Malcomb v. Robinson
    • United States
    • Alabama Supreme Court
    • 9 Mayo 1935
    ... ... pages 981, 982, § ... 1289; First National Bank v. Dawson, 78 Ala. 67; ... Lehman Brothers v. Tallassee ... pp ... 981, 982, § 1289; Bruce v. Citizens' National ... Bank, 185 Ala. 221, 64 So. 82 ... ...
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