Lefkovits v. First Nat. Bank

• Decision Date: 02 July 1907
• Citation: 44 So. 613,152 Ala. 521
• Parties: LEFKOVITS v. FIRST NAT. BANK OF GADSDEN.
• Court: Alabama Supreme Court

44 So. 613

152 Ala. 521

LEFKOVITS v. FIRST NAT. BANK OF GADSDEN.

Supreme Court of Alabama

July 2, 1907

Appeal from City Court of Bessemer; William Jackson, Judge.

Action by the First National Bank of Gadsden against Sam Lefkovits. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

This was an action to enforce an agreement which is in words and figures as follows: "State of Alabama, County of Etowah Know all men by these presents, that whereas, the firm of Wohl Bros., a partnership composed of Morris Wohl and David Wohl, are justly indebted to the undersigned in the amounts set opposite the following names, respectively, viz.: [Here follows a lot of names and amounts, among them 'Sam Lefkovits, $500.00.'] And whereas, the said Wohl Bros are justly indebted also to the First National Bank of Gadsden, a corporation, as is evidenced by certain promissory notes executed by Wohl Bros. to said bank, and by certain overdrafts held by said bank against said Wohl Bros., and by certain drafts or bills of exchange drawn by Wohl Bros. and certain parties therein named, which drafts or bills of exchange were deposited to their credit by Wohl Bros., but which were returned to said bank unpaid, all of which notes drafts, overdrafts, and bills of exchange amount in the aggregate to the sum of $4,397. And whereas, the said First National Bank has, at our request, granted to the said Wohl Bros. an extension of time of the payment of the above-mentioned obligation due said bank, and has foreborne to sue on the same or to attempt to collect the same by legal process: Now, therefore, in consideration of the premises and of the sum of $1.00 to us in hand paid by the said First National Bank, and in consideration of a further extension of time and forbearance to said Wohl Bros. by said bank, and a further extension of credit by the said bank to Wohl Bros. in the sum not to exceed $4,000, which is made at our request in order that the said Wohl Bros. may continue the business in which they are now engaged, we, the undersigned, do hereby guarantee to the said First National Bank of Gadsden, its successors or assigns, the payment to it in full, on or before the 1st day of January, 1906, of the said sum of $4,397.00, with interest, together with all other sums which the said bank may advance to Wohl Bros., but in no instance to exceed the sum of $8,000, the same in all respects as if said debts or obligations were our own; and to secure the payment of all such sums we hereby waive our right to all exemptions allowed us under any laws. But it is agreed and understood that the undersigned parties shall be individually responsible to said bank for the payment of the sum or sums as aforesaid only in an amount not to exceed the amounts herein above set opposite our respective names. It is further understood and agreed that said bank may from time to time require all accounts held by it against Wohl Bros. for overdrafts, outstanding checks, etc., to be closed by note but will not in any instance affect our liability under this guarantee. [ Here follows a lot of signatures and the following:] It is agreed that I am only responsible for $500.00. Sam Lefkovits." Counts 1 and 2 were for money due by account and for money loaned. Count 3 set out the contract in hæc verba, and alleged a breach as described in the opinion.

The demurrers to count 3 were as follows: "(1) That said count is in form in debt, when same should be in assumpsit. (2) It does not appear threrefrom that said defendant has breached said contract. (3) That it does not appear therefrom that the said Wohl Bros. have not paid plaintiff the said debt of $4,397, together with any and all other sums which plaintiff may have advanced them under said contract. (4) For that it does not appear therefrom that the said amount alleged to be due plaintiff by Wohl Bros. on January 1, 1906, was any debt or liability guaranteed by defendant by said contract. (5) For that it does not appear therefrom that the conditions on which defendant agreed to become liable under said contract had been performed or have occurred, nor that there has been default or miscarriage by said Wohl Bros. under said contract."

The seventh count was practically the same as the third. The pleas are sufficiently stated in the opinion, except the seventh and ninth pleas, which are as follows: "(7) That as part of the consideration for the contract sued on plaintiff agreed to extend to Wohl Bros. a further credit of $4,000. That plaintiff breached said agreement, in that it failed or refused to extend said further credit of $4,000 to Wohl Bros., to defendant's damage in the sum of $1,500, which he hereby offers set off against plaintiff's demand, and he claims judgment for the excess." Plea 9 alleges that defendant is also a creditor of Wohl Bros., sets up the conditions of the contract in reference to the extending of further credit by the bank to Wohl Bros., and its failure to do so, that Wohl Bros. were in failing circumstances, and that the contract was entered into for the purpose of enabling Wohl Bros. to stay in business, and if it had been performed by the bank he would have stayed in business, and defendant would have been enabled to collect his debt against him. Wherefore defendant is damaged in the sum of $1,500, which he offers to set off.

There was judgment for plaintiff, and defendant appeals.

George Huddleston and Pinkney Scott, for appellant.

R. B. Kelly and Boykin & Brindley, for appellee.

HARALSON J.

This is an action upon a contract whereby the appellant, with certain other creditors of Wohl Bros., guaranteed the past-due indebtedness of the said Wohl Bros. to the First National Bank of Gadsden, the plaintiff and appellee in this case, and also guaranteed such future advances as the plaintiff might thereafter make to the said Wohl Bros., not to exceed a total sum of $8,000. The agreement provided for a guaranty to plaintiff of the payment in full on or before the 1st day of January, 1906, of said indebtedness, the same in all respects as if said debts or obligations were those of the guarantors or obligors.

The third and seventh counts of the complaint to which there were demurrers, are the only counts forming a basis of an assignment of error. Each of these counts claims of the defendant the sum of $500, the amount he agreed to guarantee in and by the contract above mentioned, under and by virtue of said agreement which is set out in full in said counts. The third count then avers a compliance on the part of the complainant with all of the terms and conditions of said agreement, and each of said counts further avers that on the 1st day of January, 1906, the firm of Wohl Bros. was indebted to the plaintiff in the sum of,...