First Nat. Bank of Anniston v. Cheney

• Decision Date: 13 April 1897
• Citation: 21 So. 1002,114 Ala. 536
• Parties: FIRST NAT. BANK OF ANNISTON v. CHENEY.
• Court: Alabama Supreme Court

21 So. 1002

114 Ala. 536

FIRST NAT. BANK OF ANNISTON v. CHENEY.

Supreme Court of Alabama

April 13, 1897

Appeal from city court of Anniston; James W. Lapsley, Judge.

This was a suit commenced by attachment by the appellant, the First National Bank, against A. D. Cheney. The complaint counted upon several promissory notes, which were executed to the plaintiff by Hill, Bell & Cheney, a partnership of which the defendant, A. D. Cheney, was, at that time, a member.

The defendant filed 13 pleas, which were as follows:

(1) "That the allegations of the complaint are untrue."

(2) "That he has paid the debt for the recovery of which this suit was brought, before the action was commenced."

(3) "That the notes sued on in this action were made by Hill, Bell & Cheney, a partnership composed of W. I. Hill John T. Bell and this defendant; that on or about May 25 1891, said partnership was dissolved by the withdrawal therefrom of this defendant, and the business was continued by said W. I. Hill and John T. Bell in the name of Hill &amp Bell, who assumed the payment of all the indebtedness of said Hill, Bell & Cheney; that plaintiff was notified of the fact of said dissolution at the date thereof; and that Hill & Bell had assumed the payment of said notes due from Hill, Bell &amp Cheney; that when notes here sued on had become due plaintiff, without the knowledge or consent of this defendant, agreed with said Hill & Bell to extend, and did extend the time of payment thereof, for a valuable consideration, and accepted the notes of said Hill & Bell due on or about October 15, 1892, as evidence of said indebtedness, and this defendant says that by said acts of plaintiff he has been dischaged from liability on said notes." In each of the following pleas there were averred the same facts as to the former existence of the partnership of Hill, Bell & Cheney, and its dissolution; of the withdrawal therefrom of the defendant. The quotations from the remaining pleas, as noted by their numbers, respectively, are the averments seeking to set up the defense relied upon as stated in each of the pleas respectively, with the exception of the tenth and eleventh pleas; and these are set out in full.

(4) "That at the date of said dissolution as above stated, plaintiff held, as collateral security for the debt here sued on, solvent notes of sundry parties-secured by mortgages-amounting in the aggregate to more than $5,500 in value, and that afterwards, to wit, on or about October 1, 1891, plaintiff, without the knowledge or consent of this defendant, surrendered and delivered said collateral security to said Hill & Bell, and thereby discharged this defendant from further liability."

(5) "That plaintiff was notified of the fact of said dissolution at the date thereof, and that Hill & Bell had assumed the payment of the notes here sued on, and plaintiff assented thereto, and when said notes became due, plaintiff, without the knowledge or consent of this defendant, agreed with said Hill & Bell to extend the time of payment of said debt, and accepted notes of said Hill & Bell for said debt due on or about October 15, 1892, and defendant says that by said acts of plaintiff he has been discharged from liability on said notes."

(6) "As a part of the consideration of the dissolution of said firm, and the withdrawal of said defendant, and the selling of his interest in the assets of Hill, Bell & Cheney, said firm of Hill & Bell assumed the payment of and agreed to pay the plaintiff the debt for which this suit is brought, which assumption and agreement was known to plaintiff at the time when the same was made. That when said notes here sued on had become due, plaintiff, without the knowledge or consent of this defendant, agreed with said Hill & Bell to extend, and did extend, the time of the payment thereof, for a valuable consideration, and accepted the notes of said Hill & Bell due on or about October 15, 1892, as evidence of said indebtedness, and this defendant says that by said acts of plaintiff he has been discharged from liability on the notes, the foundation of this suit."

(7) Same as the sixth plea.

(8) "As a part of the consideration of the dissolution of said firm and the withdrawal of said defendant, said firm of Hill & Bell assumed the payment of and agreed to pay the debt of plaintiff, for which this action is brought, which assumption and agreement was known to the plaintiff at the time it was made, and it assented thereto, and agreed to look alone to the new firm of Hill & Bell for the payment of the notes here sued on, and thereby released this defendant from further liability on said debt to plaintiff."

(9) "That when the notes here sued on had become due, plaintiff, without the knowledge or consent of this defendant, agreed with said Hill & Bell to extend, and did extend, the time of payment thereof for a valuable consideration, and accepted the notes of said Hill & Bell due on or about October 15, 1892, as evidence of said indebtedness; that at the time when the notes here sued on became due, and for a long time thereafter, both said Hill and Bell were solvent, but are now and have been since the commencement of this suit insolvent, and by reason of these acts of plaintiff defendant says he has been discharged from liability on said notes."

(10) "Defendant for further answer to said complaint says that at the time of the making of the notes here sued on, the makers thereof placed with plaintiff, as collateral security for said notes, solvent notes on sundry parties secured by mortgages, amounting in the aggregate to more than $5,500 in value, a full list of which is hereto attached, marked 'A,' and that plaintiff has converted to its own use a large part of said collateral, to the damage of this defendant in the sum of $2,500, which sum he asks to recoup against the debt of plaintiff in this action."

(11) "Defendant for further answer to said complaint says that at the time of the making of the notes hereon sued, the makers thereof placed with the plaintiff as collateral security for said notes, solvent notes on sundry parties in the aggregate to more than $5,500 in value, a full list of which is hereto attached, marked 'A,' and that plaintiff has converted said collateral notes to its own use, to the damage of defendant in the sum of $3,000, which sum he asks to recoup against the debt of the plaintiff in this action."

(12) "That when the notes here sued on had become due, plaintiff, without the knowledge or consent of this defendant, agreed with said Hill & Bell to extend the time of payment and did extend the time of payment thereof for a valuable consideration, and accepted the notes of said Hill & Bell due on or about October, 1892, as evidence of said indebtedness; and when said last named notes became due, plaintiff again, without the knowledge or consent of this defendant, agreed with said Hill & Bell for a further extension, and did extend the time of payment of the notes here sued on, for a valuable consideration, and accepted the notes of said Hill & Bell due about November 1, 1893, as evidence of said indebtedness, and defendant says that by each of said extensions of plaintiff he has been discharged from liability on said notes."

(13) "That when the notes here sued on became due, and for a long time thereafter, the said Hill & Bell had a sum of money on general deposit with plaintiff, which was then engaged in a banking business, sufficient to pay each of said notes as they severally became due; that it did not appropriate said sums of money or any of it to the payment of said notes, but permitted said Hill & Bell to check the same out for other purposes, and that since said time said Hill & Bell, W. I. Hill and John T. Bell have become insolvent, and defendant says that by reason of said acts of plaintiff he has been discharged from all liability on said notes."

To the third, fourth, fifth, sixth, seventh, eighth, ninth, and twelfth pleas the plaintiff demurred upon the following grounds:

(1) The facts as set out in said pleas do not show that defendant was discharged by acts of plaintiff from his liability on said notes.

(2) It is not shown that the taking of Hill & Bell's notes, as stated in said pleas, was in payment or satisfaction of the notes of Hill, Bell & Cheney.

(3) It is not sufficiently shown in said plea that plaintiff agreed that Hill & Bell might assume the debt of Hill, Bell & Cheney, and that said Cheney would be released therefrom.

(4) The surrendering of said collaterals to said Hill & Bell did not thereby discharge defendant from his liability to plaintiff.

(5) If it is true, as stated in said plea, that plaintiff agreed with said Hill & Bell to extend the time of payment of said debt, and accepted the notes of said Hill & Bell for said debt due on or about the 15th of October, 1892, this would not discharge defendant from his liability on said notes of said Hill, Bell & Cheney.

(6) It does not sufficiently appear from said plea that plaintiff agreed to, or did, discharge or release said Cheney from his liability to plaintiff on said notes of Hill, Bell & Cheney.

To the tenth and eleventh grounds the plaintiff demurred upon the following grounds: "(1) It is not sufficiently stated or shown how or wherein plaintiff converted said collateral to its own use. (2) It is not sufficiently shown what collateral or collaterals plaintiff converted to its own use. (3) There is no negligence, malfeasance, or misfeasance of plaintiff averred in said plea in the collection of said collateral."

To the thirteenth plea the plaintiff demurred; the principal grounds of which demurrer are copied in the opinion.

Each of the demurrers to...