Appeal
from circuit court, Lauderdale county; Thomas R. Roulhac
Judge.
Brickell
C.J., and Coleman, J., dissenting.
This
action was brought by the appellant, the First National Bank
of Cambridge, Ill., against the appellees, John W. Hall and
H. P. Wisdom. The complaint contained two counts. In the
first count the plaintiff claimed $1,000 due by a promissory
note, made by the defendants on May 20, 1891, payable to the
Florence National Bank, at said bank, 30 days after date; and
the plaintiff avers that said note was, by said Florence
National Bank, transferred to plaintiff for value before
maturity, and is the property of the plaintiff. In the second
count the plaintiff claims of the defendants $1,000 due by
promissory note made by the defendants on May 20, 1891, and
payable to Hall & Wisdom, a firm composed of the defendants
at the First National Bank of Florence, Ala., 30 days after
the date thereof; and it was averred in said count that said
note was, by Hall & Wisdom, transferred before maturity, for
value, to the Florence National Bank, and by the Florence
National Bank transferred, before maturity, to the plaintiff.
The
defendants pleaded payment, and that the note sued on was not
the property of the plaintiff. They also filed the following
special pleas: "Second. That the note sued on in this
cause was hypothecated by the Florence National Bank with the
plaintiff bank as collateral security for a certificate of
deposit issued by said Florence National Bank to the
plaintiff. That said note in suit was made payable to and at
the Florence National Bank, and was by said plaintiff, before
its maturity, sent to the Florence National Bank 'for
collection for account First National Bank, Cambridge
Illinois.' That said note matured on the 22d day of June
1891, and that on the morning of said day, at the
commencement of business on that day, the defendants had to
their credit in said bank more than sufficient funds to meet
said note, principal and interest, in full. That on the
morning of said day, about the hour of nine o'clock, the
defendant went to said bank, and tendered his check for the
full amount of said note, but was told by the cashier of said
Florence National Bank that said note had already been
charged to defendant's account, and said note was
exhibited to the defendant stuck on the canceling spindle and
stamped 'Paid.' And the defendant alleges that the
same was thereby paid, and was charged to his account, and
was subsequently delivered to him. That at said time said
Florence National Bank had in its vaults more than sufficient
funds in currency, subject to check, to have paid said note
in full. That the defendants had no knowledge or notice,
until after the failure of said Florence National Bank, that
said note had been transferred by said Florence National Bank
to the plaintiff. Third. That the note sued on in this cause
was transferred to the plaintiff bank on or about the 17th
day of June, 1891, as collateral security for a certain
certificate of deposit issued to the plaintiff bank. That
said note in suit was made payable at the Florence National
Bank, and was by said plaintiff bank, before its maturity,
forwarded to the said Florence National Bank 'for
collection for account First National Bank, Cambridge,
Illinois.' That said note matured and became due and
payable on the 22d day of June, 1891, and that on the morning
of said day, at the time said bank opened for business,
defendants had to their credit in said bank more than
sufficient funds with which to pay said note in full, which
said funds had been deposited for the purpose of paying said
note, of which said purpose the cashier of said Florence
National Bank had been advised, and instructed to so
appropriate a sufficient portion of said deposit. That on the
morning of said 22d day of June, 1891, shortly after the
opening of the bank for business on that day, the defendant
John W. Hall, one of the members of said firm of Hall &
Wisdom, went to the said Florence National Bank, and tendered
the cashier of the same a check on said funds deposited as
aforesaid in payment of said note, but was advised by said
cashier that a check was unnecessary, as said note had
already been charged to the account of defendants and
canceled, and said cashier exhibited to said defendant said
note stuck on the canceling spindle and stamped
'Paid,' and defendant alleges that said note was paid
and charged to his account, and subsequently delivered to
him. That at said time the said Florence National Bank had in
its vaults, in cash, subject to check, more than sufficient
funds with which to have paid said note in full. That at said
time defendants had no notice or knowledge that said note had
been transferred to plaintiff, and were not advised of said
transfer until after the failure of said bank."
To the
second plea the plaintiff demurred upon the following
grounds: "(1) Said plea is argumentative. (2) The facts
set out in said plea do not show a payment of said note sued
on. (3) That the sticking the note sued on on the canceling
spindle by the cashier of the Florence National Bank did not
constitute a payment or discharge thereof. (4) That the
instruction by defendants to the cashier of Florence National
Bank to use their funds in bank to pay the note sued on
constituted said cashier the agent of said defendants, and
said note would not have been paid until said agent actually
applied the funds of said defendants to the payment thereof
and said plea does not show that such application was ever
made. (5) Said plea does not state or show, as matters of
fact, that said note ever was charged to the account of
defendants. (6) Said plea does not state or show that the
amount of said note ever was credited to the account of the
plaintiff. (7) The fact that defendants had no knowledge of
the transfer of said note is no defense to this suit, and
does not excuse defendant from paying it in the proper manner
and to the proper person. (8) Said note having been sent by
plaintiff to the Florence National Bank for collection, said
Florence National Bank had no authority to receive anything
but money in payment thereof, and said plea does not show
that any money was ever paid or tendered therefor." To
the third plea the plaintiff demurred upon the following
grounds: "(1) The facts in said plea do not show a
payment of said note. (2) The tender of a check did not
constitute a payment of said note. (3) The placing of said
note on the canceling spindle did not constitute a payment
thereof. (4) The facts that said note was placed on the
canceling spindle, and subsequently charged to the account of
defendants and delivered to them, do not constitute a payment
thereof nor discharge the obligation of defendants. (5) Said
plea shows that the cashier of Florence National Bank was
made the agents of defendants to appropriate their funds to
the payment of said note, and until said funds were so
appropriated said note was not paid, and the plea does not
allege or show any such appropriation. (6) Nothing but an
actual payment of money by defendants or their agent to
plaintiff or its agent would be a payment thereof, unless
plaintiff consented to receive something else in lieu
thereof, and said plea does not show any such payment or any
such consent, or any discharge of the obligation of said
note. (7) The facts that said note was placed on the
canceling spindle, stamped 'Paid,' and charged to the
account of defendants, did not constitute a payment or
discharge thereof, although the said Florence National Bank
had sufficient funds to pay; and said plea does not show that
any funds ever were applied to the payment thereof, or that
any credit ever was entered in favor of the plaintiff, nor
that the obligation of said note ever has been
discharged." These demurrers were overruled, and the
plaintiff duly excepted. Thereupon the plaintiff filed the
following replications to the defendants' second and
third pleas: "(1) That the facts stated in said pleas
are not true. (2) That the authority from the plaintiff to
the Florence National Bank to collect the note in suit had
been revoked before the said note was received by said
Florence National Bank, and before the said 22d day of June,
1891. (3) That at the time of the maturity of said note, on
the 22d day of June, 1891, and at the time of the alleged
payment, said Florence National Bank was insolvent, and the
use of the funds referred to in said pleas (if any funds were
used) was in violation of the national banking laws, and
void. (4) That at the time of the maturity of said note, on
said 22d day of June, 1891, said Florence National Bank was
insolvent, and not authorized to make said collection in the
manner alleged. (5) That on said 22d day of June, 1891, said
Florence National Bank, being a national bank under the
banking laws of the United States, was in contemplation of
insolvency, and had no authority, under the laws of the
United States, to make any payment or do any act which would
constitute a preference of one creditor over the others, or
which would prevent the ratable distribution of its assets
among its creditors. (6) That, at the time of and prior to
the alleged payment of the note sued on, the Florence
National Bank of Florence, Ala., was a national bank,...
