Carter v. Odom

• Decision Date: 20 April 1899
• Citation: 121 Ala. 162,25 So. 774
• Parties: CARTER ET AL. v. ODOM.
• Court: Alabama Supreme Court

25 So. 774

121 Ala. 162

CARTER ET AL. v. ODOM.

Supreme Court of Alabama

April 20, 1899

Appeal from circuit court, Walker county, E. H. Cabaniss, Special Judge.

Action by James Odom, Sr., against D. K. Carter, John B. Carrington and John B. Shields on a promissory note. The complaint, as amended, contained five counts. Demurrers were sustained to all of the counts except the third, but, the appeal being taken by the defendants, it is unnecessary to set out the counts to which the demurrers were sustained or the demurrers themselves. The third count was as follows: (3) "Plaintiff claims of defendants the further sum of $708.50, due from them to plaintiff, with interest since the 1st day of January, 1896, for that on the 6th day of February, 1895, the Jasper Stone-Quarry Company, a corporation, through said F. A. Gamble, now deceased, as its president, made to plaintiff its promissory note for said sum of $708.50, due and payable on said 1st day of January, 1896 at the Jasper Trust Company's office, Jasper, Alabama, in words and figures, to wit: '$708.50. Jasper, Ala. Feb 6th, 1895. On the first day of Jan. (1896) after date we promise to pay to the order of James Odom, Sr., seven hundred and eight and 50/100 dollars, value received, at the Jasper Trust Company's office, Jasper, Ala., and all right to claim any exemption under the constitution or laws of this or any other state as against this debt is hereby expressly waived by the makers and indorsers of this note. Jasper Stone Quarry Company, per F. A. Gamble, President.' And the said F. A. Gamble, D. K. Carter, John B. Carrington, and John B. Shields then and there indorsed said promissory note in blank, and delivered it to plaintiff, and the same is yet due and unpaid. Plaintiff avers that said indorsers, each for himself, by so indorsing said promissory note, expressly waived his exemption as to personal property. Plaintiff further avers that on, to wit, the 4th day of January, 1896 said note was duly and legally presented for payment by John A. Gravlee, notary public, to the said executors of F. A. Gravlee, then deceased, and to the said other defendants in person, and payment thereof was then and there duly demanded and refused. Then and there the same was duly protested by said John A. Gravlee, notary public, and notice of protest then and there given to said executors and said other defendants; wherefore plaintiff sues." To the third count the defendants demurred upon the following ground: The said counts fail to allege that suit was brought on said note against the maker thereof to the first term of the court to which it could properly be brought after the indorsement thereof by defendants. This demurrer was overruled, and the defendants duly excepted. Thereupon the defendants filed the following pleas: "(1) Come the defendants, and for answer to the third count of the complaint say that the contract sued on was without consideration. (2) For further answer to the third count respondents say that the said contract sued on was a promise to answer for the debt, default, or miscarriage of another, and no note or memorandum thereof in writing expressing the considerations was signed by this defendant, or by any one thereunto by him lawfully authorized in writing. (3) In further answer to third count of the complaint these defendants say that he was never duly and lawfully notified of the protest of said note. (4) In further answer to the whole complaint these respondents deny all the material allegations therein contained. (5) Come the defendants, and for answer to the complaint say that the contract sued on was a special promise to answer for the debt, default, or miscarriage of another, to wit, the Jasper Stone-Quarry Company, and no agreement or note or memorandum thereof expressing the consideration was made in writing, and subscribed by the party to be charged therewith, or by any person thereunto lawfully authorized in writing; and these defendants further say that they indorsed the note sued on for accommodation in the hands of the payee." To the second and fifth pleas the plaintiff demurred upon the following grounds: "(1) The statute of frauds has no application as a defense to the said third count of the complaint. (2) It is not necessary that the contract of indorsement of a promissory note should show or express any consideration therefor." To the third plea the plaintiff demurred upon the following grounds: "(1) It was not necessary or obligatory upon the plaintiff to give defendants notice of said protest. (2) Said note is made payable at a specified place of payment named therein, and protest at said place of payment is all that the law requires." The demurrers to the second, third, and fifth pleas were sustained, and to each of these rulings the defendant duly excepted. Issue was joined upon the remaining pleas. On the trial of the case the following evidence was introduced by the plaintiff: (1) The note sued on. (2) The notary's certificate of protest hereto attached, and marked "Exhibit B." (3) It was admitted in open court that the money which is expressed in said note as the consideration was loaned by plaintiff to defendant; that the note was made and indorsed at one and the same time, and as one and the same transaction, for security for said loan of money; and that F. A. Gamble was president, and the said defendants John B. Shields, J. B. Carrington, and D. K. Carter were officers and stockholders, in said Jasper Stone-Quarry Company at the time said note was made and delivered as aforesaid; and said note has never been paid. Plaintiff also proved by John A. Gravlee, notary public, that he notified defendants of the said protest by mail; that notice or notices by this means was the custom. The note introduced in evidence was the same as that set out in the third count. There was attached to the note introduced in evidence the protest of the notary public. There was no evidence introduced for the defendants. The defendants demurred to the evidence of the plaintiff. Upon the consideration of the demurrer and the evidence it was overruled, to which ruling the defendants duly excepted. Judgment was thereupon entered for the plaintiff. The defendants appeal, and assign as error the several rulings of the trial court to which exceptions were reserved. Affirmed.

Coleman & Bankhead, for appellants.

Appling & McGuire, for appellee.

TYSON J.

The note sued upon was a negotiable instrument, and governed by the commercial law as to days of grace, protest, and notice. Code, § 869, and authorities cited under it. The record shows that the defendants admitted in open court that the note was given by the maker for borrowed money, and the indorsements by the defendants were executed by them contemporaneously with its execution by the maker. There was, then, a valuable consideration for their indorsements, and the statute of frauds has no application. The consideration expressed in the note will support the contract of indorsement, and it need express none other than the consideration which the note upon its face implies to have passed between the original parties. Moses v. Bank, 149 U.S. 298, 13 Sup.

Ct 900; De Wolf v. Rabaud, 1 Pet. 476; Read v. Rowan, 107 Ala. 366, 18 So. 211; Philipe v. Harberlee, 45 Ala. 597. And when a creditor takes a note of his debtor, with accommodation indorsements, in payment of an antecedent debt, he is a purchaser for value in due course of business equally as if he had advanced money on the faith of it. When such indorsement is made in blank, to be used by the maker in the payment of an antecedent debt due the payee, the indorser is liable to the payee, although the note was not put in circulation by him. Marks v. Bank, 79 Ala. 550. Such a contract of indorsement was not a collateral promise to answer the debt, default, or miscarriage of the maker, but was an original, substantive contract founded on a present, valuable consideration moving from the payee to the maker. Dunbar v. Smith, 66 Ala. 490; Rutledge's Adm'r v. Townsend, 38 Ala. 706; Underwood v. Lovelace, 61 Ala. 155; Espalla v. Wilson, 86 Ala. 487, 5 So. 867; Thornton v. Guice, 73 Ala. 321. If there was error in sustaining the demurrer to the pleas of the statute...