Clark v. O'Neal

• Decision Date: 19 December 1935
• Docket Number: 4 Div. 844
• Court: Alabama Supreme Court
• Parties: CLARK v. O'NEAL et al.

165 So. 853

231 Ala. 577

CLARK v. O'NEAL et al.

4 Div. 844

Supreme Court of Alabama

December 19, 1935

Rehearing Granted Jan. 23, 1936

Further Rehearing Denied March 5, 1936

Appeal from Circuit Court, Covington County; R.B. Carr, Judge.

Action by Franklin A. Clark against Dudley L. O'Neal, as administrator of the estate of C.S. O'Neal, deceased, and T.E. Henderson. From a judgment for defendants, plaintiff appeals.

Affirmed on rehearing.

Ralph A. Clark and E.O. Baldwin, both of Andalusia, for appellant.

Powell Albritton & Albritton, of Andalusia, for appellees.

THOMAS Justice.

The suit was upon a certificate of deposit drawing interest, and upon which certificate the defendants were indorsers.

This is the second appeal. O'Neal et al. v. Clark, 229 Ala. 127, 155 So. 562.

It is admitted that on the last trial the pleadings were recast.

At the outset and when the cause was for trial, there was a motion to suppress the depositions of Miss Brewington on the grounds, among others, that "the interrogatories filed by the defendant were not sworn to as required by the statute [Code 123, § 7764]," and "there was no affidavit as required by law attached to the interrogatories." The attorney for the defense testified that he in fact swore to same and asked the notary to take the acknowledgment of his oath and mail the same, and this was not done. The interrogatories were filed November 27, depositions taken December 10, 1934, and the commissioner or notary public certified to same December 19, 1934. The notary was permitted at the trial, and over plaintiff's objection, to add her signature to the jurat to the interrogatories as of date of November 24, 1934, and after the depositions were taken returned to the court, and testimony published. There was error in this action of the court, and the depositions of the witness should have been suppressed.

The indorsers claim a discharge for want of a due presentment and notice of dishonor. The trial was had upon the complaint as amended, the original pleas as refiled by the defendants, and additional pleas 1A, 2A, 3A, 4A, 5A, 6A, and 8A. These pleas presented the defense of a lack of a due presentment to the Andalusia National Bank; that notice of dishonor of the certificate sued on had not been given to the defendants within the time required by law; that the defendants respectively, were joint indorsers on the instrument sued on; that they were not partners as affecting such transaction; that their several indorsements created a contingent joint obligation; and that the due and legal notice of dishonor was not given to each of the joint indorsers.

Demurrers were overruled to all the pleas, except plea 7A, and plaintiff sought to file replications to which demurrers were sustained.

The case was submitted to the court, without a jury, on the testimony of plaintiff and defendants, and judgment was rendered in favor of the defendants.

It is noted, as indicated by appellant's counsel, that on the former trial judgment was rendered on the instrument sued on and indorsements thereon, against R.N. McLeod, C.A. O'Neal, L.M. Milligan, and T.E. Henderson, together with Dudley L. O'Neal, as administrator of the estate of C.S. O'Neal, deceased; that of such defendants, only Dudley L. O'Neal, as administrator of the estate of C.S. O'Neal, deceased, and T.E. Henderson took an appeal, and the judgment there rendered was not appealed from by the other parties defendant, and as to them was not set aside and vacated.

The rights and status of the parties not taking an appeal in the first instance are not now to be considered. We may repeat, that here the parties defendant filing the pleas in question are Dudley L. O'Neal, as administrator of the estate of C.S. O'Neal, and T.E. Henderson; that the citation of appeal in the case before us is directed only to said parties, and the assignments of error are limited to the court's action on the trial as to such personal representative and T.E. Henderson as defendants and sole appellees.

A general statement of pertinent facts is contained in the report of O'Neal et al. v. Clark, 229 Ala. 127, 155 So. 562, 564. In that decision it was stated that the defenses then considered were "want of presentment and notice of dishonor." It was further observed that these "indorsers were original parties to the instrument"; that the "instrument was not (actually) presented for payment at maturity" at the payor's place of business; that "prior to maturity" the certificate declared upon was "filed with the receiver (of the Andalusia National Bank, the named payor in the certificate sued on) as a claim against the closed bank, and there remained at the date of maturity."

The material facts of the two records are thus stated on the first appeal:

"C.S. O'Neal, one of the indorsers, died, and an administrator of his estate was appointed prior to the maturity of the instrument.

"On January 2, 1933, the date of maturity (January 1st being on Sunday), Dr. Clark filed in the probate court a verified claim against his estate, which is set out in the report of the case, and on the same day caused a copy to be handed Dudley L. O'Neal, the administrator of such estate.

"No notice of dishonor is shown to have been given to appellant T.E. Henderson until February 23, 1933, when a letter was written demanding payment from him as a party who had guaranteed the payment of the claim.

"The indorsers resided in the town of Andalusia."

And it was there held, that "Without question *** this instrument is subject to the requirements of law touching presentment for payment and notice of dishonor." O'Neal et al. v. Clark, 229 Ala. 127, 130, 155 So. 562, 564.

Dr. Clark testified that he discussed payment of his certificate of deposit with Mr. Dixon, the receiver of the payor bank, and Mr. Dixon said "he couldn't pay it"; that it was declared that proceedings had started for collection from the O'Neal estate; that he (Dr. Clark) informed the administrator of such facts and further that he had filed the certificate at the bank, and Mr. Dixon said "they would not give it any preference." These facts show such other or due presentment of the certificate was impossible to be made under the receivership of such National Bank before and at the maturity of that certificate of deposit. Section 9109, Code; Roberts v. Mason, 1 Ala. 373; Calkins v. Vaughan, 217 Ala. 56, 114 So. 570; Daniel on Negotiable Instruments (7th Ed.) § 1289. Treating this phase of the case, the court said on first appeal that "under the law, presentment was dispensed with or excused in the case at bar." O'Neal et al. v. Clark, 229 Ala. 127, 131, 155 So. 562, 565.

The questions of fact resolve to the inquiry, Was the certificate dishonored, and was due notice thereof given to the indorser or indorsers so as to bind by the indorsement? To that end we again examine the statutes, and note that in the former opinion they were carefully considered.

That opinion, in dealing with the several statutes as to notice of dishonor, cited the following:

Section 9114 of the Code, providing that, "Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged," and section 9121, as to notice to the personal representative in case of death of the indorser; and held that: "Notice of dishonor is made a condition to the liability of an indorser, a law-made condition, written into the contract. It is not a question of knowledge of dishonor, otherwise acquired, nor of injury to the indorser from want of notice." Hightower v. Ivy, 2 Port. 308; Calkins v. Vaughan, 217 Ala. 56, 59, 114 So. 570; Daniel on Negotiable Instruments (7th Ed.) § 1123.

No question of waiver of notice was presented on the former appeal, nor on this appeal (sections 9114, 9121, 9131, Code); neither is the question presented that it is a case where notice of dishonor is not required; not being within section 9135 of the Code.

In the former appeal it was held, and we now adhere to those holdings, that these parties were not accommodation indorsers within the meaning of the statute, because they were officers of the bank (sections 9106, 9135, Code; O'Neal v. Clark, 229 Ala. 127, 132, 155 So. 562, and authorities collected), and that the statutory liability of stockholders of national banks to creditors of the bank for amounts equal to their respective holdings did not excuse the giving of notice of dishonor in order that indorsers might be bound (12 U.S.C.A. §§ 63, 64 and 65), and the failure to duly give the required notice resulted in the discharge of such indorsers.

It was further held, and on this holding the reversal rested, that the copy of the claim against the estate of C.S. O'Neal, one of the indorsers of the certificate of deposit, stating that the debt was not paid and that the holder looked to the estate for payment, was not sufficient notice of dishonor of that certificate by nonpayment at maturity, so as to charge the indorser under the several provisions of the statute that bind in the premises. Sections 9109, 9114, 9119 and 9121, Code.

Adverting again to the statutes as to notice of dishonor, we cite section 9114, providing that, "when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged"; section 9119 prescribing the form and sufficiency of the notice as "A written notice need not be signed, and an insufficient written notice may be supplemented and...