Guttery v. Kilgore

• Decision Date: 07 January 1937
• Docket Number: 6 Div. 51
• Citation: 172 So. 627,233 Ala. 514
• Parties: GUTTERY et al. v. KILGORE.
• Court: Alabama Supreme Court

172 So. 627

233 Ala. 514

GUTTERY et al. v. KILGORE.

6 Div. 51

Supreme Court of Alabama

January 7, 1937

Rehearing Denied March 4, 1937

Appeal from Circuit Court, Walker County; R.L. Blanton, Judge.

Action on a promissory note by Polly Kilgore against W.L. Guttery and others. From a judgment for plaintiff, defendants appeal.

Affirmed.

J.J Curtis, of Jasper, for appellants.

J.B Powell, of Jasper, for appellee.

KNIGHT Justice.

Suit upon a promissory note. The trial was had before the court without the intervention of a jury, and resulted in judgment for plaintiff for $1,175.30.

The complaint at first consisted of but a single count, and declared upon the note as if all defendants were comakers.

Before the trial was entered upon, the plaintiff amended her complaint by adding count A thereto. This count, so far as here necessary to be stated for a proper understanding of the case, is as follows:

"Count A. The plaintiff claims of the defendant $800.00 due by promissory note executed by W.L. Guttery on the first day of February, 1932, and payable to the order of plaintiff on the first day of February, 1933, with interest from date, which note was before delivery thereof endorsed by M.H. Johnson, W.C. Clark, E.W. Long and C.P. Chabert, the other defendants in this cause.

"Plaintiff further avers that in and by said note, and as a part thereof, and by the endorsements thereof, the defendants agreed in writing to waive demand, protest and notice of protest, and all requirements necessary to hold defendants liable as maker or endorsers of said note."

There were demurrers to each count of the amended complaint. These demurrers were separately assigned by the several defendants. The court overruled the demurrers to each of the counts, and this ruling constitutes the first assignment of error by the separate appellants.

Manifestly there is no merit in the demurrer to the first count of the complaint. It is in Code form, and under our uniform rulings is sufficient. Code. § 9531; Ahrens-Rich- "Rich Auto Co. v. Beck, etc., Iron Co., 212 Ala. 530, 103 So. 556

.

The demurrer to count A presents quite another and different question.

This court is firmly committed to the proposition that an ordinary indorser may not be sued in the case along with the maker. The obligation assumed by each is not the same. A regular and unqualified indorser engages that on due presentment it (the instrument) shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it. Code, § 9092; Schillinger v. Leary, 201 Ala. 256, 77 So. 846; Scarbrough v. City National Bank, 157 Ala. 577, 48 So. 62, 131 Am.St.Rep. 71.

However, it appears from count A that the named indorsers indorsed the note before its delivery, and waived demand, protest, and notice of protest, and all requirements necessary to hold them liable as makers or indorsers of said note.

This court in the case of Hamill v. McCalla, 228 Ala. 281, 153 So. 412, 415, had occasion to deal with a case where the indorser had indorsed the note, as here, before delivery, and where the indorser had waived the statutory conditions to fasten liability upon him.

In that case we held that by waiver of the statutory conditions, the obligation of the indorser became absolute upon default; and that such an indorser was not subject to the conditions of a statutory indorsement, but his obligation was dependent upon the nature and terms of his undertaking, and governed by the principles otherwise applicable to contracts.

And in the Hamill Case, supra, it was held: "If his indorsement was before the initial delivery, and contained such a waiver, his liability accrued at the same time as that of the maker, and by the same instrument, and upon the same conditions and consideration, and to the same extent. Holczstein v. Bessemer Trust & Savings Bank, 223 Ala. 271, 136 So. 409; Carter v. Long Brothers, 125 Ala. 280, 28 So. 74; Long v. Gwin, 188 Ala. 196, 66 So. 88; Carter v. Odom, 121 Ala. 162, 25 So. 774."

It must be conceded the indorser may enlarge his liability by a waiver of the statutory requirements to bind him, or he may limit it by restrictive indorsement. 8 Corpus Juris, § 558, p. 377.

In view of the above-declared rule, there can be no possible objection to the joining of indorsers along with the maker in a suit upon the note, with proper averments showing that the indorsement was made before delivery and the waiver of all statutory requirments to bind the indorsers to the payment of the obligation.

The demurrer taking the point that the maker and indorsers could not be jointly sued, was without merit, and therefore overruled without error. Authorities supra.

It may seem, on casual reading, that, in this case, we are departing from our uniform holding that an indorser cannot be sued jointly with the maker, yet this is the first time, so far as we have been able to find from a most diligent investigation of our adjudged cases, that a case has come before this court, wherein it was attempted to join the maker and indorsers in the same suit, under a complaint which averred that the note was indorsed before delivery, and in which the indorser had waived all statutory requirements to hold them to liability on the note. This waiver of statutory requirements distinguishes the instant case from Carrington v. Odom, 124 Ala. 529, 27 So. 510.

While it is true that the liability of the indorser is contingent upon the compliance by the holder with all statutory requirements, yet if these requirements are in advance waived, the necessary result is to convert the otherwise contingent liability into a fixed liability along with the maker. There would, therefore, seem to be no good reason why all parties thus made initially liable on the paper should not be sued in the same action. This result can be accomplished without doing violence to any right of the indorser as against the maker, for section 9552 of the Code will take care of the situation that may confront the indorsers. This section provides: "9552. (5393) Control by indorser.--Every indorser who shall pay off and discharge the debt on which he is indorser, either pending the action or after judgment, whether the judgment be joint against the principal and all the indorsers or several against such shall be entitled to control the judgment and execution founded thereon against the principal...