Lytle v. Bank of Dothan

• Decision Date: 17 May 1899
• Citation: 121 Ala. 215,26 So. 6
• Parties: LYTLE ET AL. v. BANK OF DOTHAN.
• Court: Alabama Supreme Court

26 So. 6

121 Ala. 215

LYTLE ET AL. v. BANK OF DOTHAN.

Supreme Court of Alabama

May 17, 1899

Appeal from circuit court, Dale county; J. W. Foster, Judge.

Action by the Bank of Dothan against R. A. Lytle & Co. as a partnership, and the individual members thereof, on three promissory notes, alleged in the original complaint to have been executed by defendants, and made payable to plaintiff. Judgment for plaintiff. Defendants appeal. Affirmed.

The complaint contained three counts, each of the counts claiming the amount due upon a separate note. One of these notes was for $280, and was executed on April 5, 1892, and payable October 5, 1892; one was for $250, and was executed on February 16, 1892, and payable September 1, 1892, and the other one was for $600, executed on March 23, 1892, and payable November 1, 1892. The defendants filed pleas of non est factum, payment, and set-off, and, upon offering to file the plea of usury, the court allowed said plea to be filed and a statement of the defendants' attorneys that such plea had been filed at a former trial of said cause. Upon inquiry the court was informed that the plea of usury had not been filed at a former term, and thereupon, upon motion of the plaintiff to strike said plea of usury, the court stated to the defendants that it would allow the plea of usury to remain in the case if they, the defendants, would pay the costs to the time of this trial. The defendants refused to comply with this condition, and the court thereupon struck the plea of usury from the file. In the plea of set-off it was averred that the plaintiff ought not to recover against the defendants, because in November, 1892, the defendants owned 52 bales of lint cotton, which the plaintiff converted to its own use, and has never accounted to the defendants for the value of said cotton; that the value of said cotton was $1,500, which the defendants thereby by offer to set off against the plaintiff's cause of action. The undisputed evidence showed that the signature of the defendants' firm name to the instruments sued on was made by one Charles Newman; that at the time of the execution of said instruments Charles Newman was the business manager of the defendants' mercantile business in the city of Dothan from February 8th to some time in June, 1892; that in June 1892, said Newman left the city of Dothan and the country. The testimony for the plaintiff tended to show that Charles Newman, as general manager of the defendants' mercantile business at Dothan, had authority to execute the instruments sued on, and that said instruments were executed by him in connection with said business of the defendants; Newman stating at the time that it was in connection with the defendants' business that he wished to use the money. There was further evidence introduced in behalf of the plaintiff tending to show that in the discharge of the defendants' business said Charles Newman replenished the stock of goods in the defendants' place of business attended to all the transactions incident to the carrying on of a general mercantile business, and at various times borrowed money for said business, and executed notes therefor, in the name of the defendants, which said notes the defendants paid; and in the different transactions incident to such business he signed the names of the defendants, which transactions were ratified by the defendants.

J. R Crawford, the vice president, and J. L. Crawford, the cashier, of the plaintiff, testified that R. A. Lytle, of the firm of R. A. Lytle & Co., prior to the execution of the instruments sued on, told them that, in the event Charles Newman needed money to carry on the defendants' business to let him have it, and Lytle & Co. would be responsible therefor. This witness further testified that the money which was given to Charles Newman upon two of the notes sued on and which he deposited to the credit of R. A. Lytle & Co., was drawn out by him by checks; that R. A. Lytle, of the defendants' firm, every month had the firm's bank pass book balanced, and that in making out the balance of said book these items were charged by the plaintiff against the defendants; that, after Newman had left the country, it was shown by the balance on said pass book that there was several hundred dollars of overchecks due the plaintiff, which amount was paid by the defendant, and that at the time of said settlement of the overchecks the plaintiff showed to R. A. Lytle, of the defendants' firm, a note executed to the plaintiff by said Newman for R. A. Lytle & Co., and that R. A. Lytle settled this note by the execution of a new note, which he subsequently paid. This witness further testified that, after Newman departed, the instruments here sued on were presented to R. A. Lytle, and he promised to pay them. There was other evidence introduced for the plaintiff, which corroborated the evidence of these two witnesses. R. A. Lytle, the senior member of the firm of R. A. Lytle & Co., testified that Charles Newman had no authority to execute the instruments here sued on in the defendants' name; that he had no authority to sign the defendants' name in any way, or under any circumstances; and that as general manager he had no powers or authority, except such as were given him by his contract of employment, by the terms of which he was employed as general manager, to be paid 30 per cent. of the profits of the business. The execution of this contract was proved, and it was introduced in evidence. The provisions of said contract, which had reference to the powers or authority of said Newman, were as follows: "It is expressly understood and agreed, however, that said Newman is not in any wise to be considered a partner in said business, but he is simply the manager of same, under the guidance, direction, and control of said R. A. Lytle & Co., and subject to their orders in all matters concerning the management of said business. It is further covenanted and agreed by and between said parties that said Newman is not to buy, purchase, or contract for any goods, wares, and merchandise, except groceries and provisions for the use of said business, but said parties of the first part are to attend to all buying and contracting for goods for said store, save as above excepted; and said R. A. Lytle & Co. are in no wise to be bound for any debts that said Charles Newman may make, contract, or enter into for himself or for his own account. It is further covenanted and agreed by and between said parties that said Charles Newman shall not take any hazardous risk, or make any doubtful sales, in the course of said business, unless the same are fully and sufficiently secured; nor shall any credit be extended by him to any one except to parties now on the books of said firm, and to them only on proper and sufficient security; and in no event shall any goods be sold on credit after the first day of Sept., 1892, and from and after that date all sales made shall be for cash only." The witness R. A. Lytle denied that he at any time promised J. R. Crawford or J. L. Crawford that he would pay the instruments sued on. It was further shown by the testimony of the defendants that on November 7, 1892, John W. Drewry bought from the defendants 45 bales of cotton, for the payment of which he gave to the defendants a check on the Bank of Dothan, the plaintiff, for $1,556.12; that upon the delivery of this check to the defendants, the defendants delivered to Drewry the warehouse receipt for said cotton; that Drewry deposited these warehouse receipts with the Bank of Dothan as collateral security for the payment of the check given by Drewry to the defendants; that a few days thereafter, when the bookkeeper of the defendants presented said check to the Bank of Dothan for payment, J. L. Crawford, the cashier of said bank, undertook to cash said check by delivering to the defendants' bookkeeper the three notes here sued on, and the difference between said notes and the check in money. Defendants' bookkeeper declined to accept the notes as part payment of said check, and demanded of the cashier a delivery to him of the cotton receipts, which was refused. It was further shown in reference to said cotton transaction that upon notifying Drewry of the failure of the Bank of Dothan to cash said check Drewry agreed to return the cotton receipts to the defendants, and executed to the defendants his duebill for the amount of the check; said duebill not to be considered as binding if said Drewry failed to get the warehouse receipts. The warehouse receipts were never returned to the defendants, nor did Drewry ever otherwise pay the defendants for the cotton so purchased, and subsequently the defendants brought a suit in the state of Georgia against said Drewry, counting upon said duebill; but that the defendants recovered nothing by said suit. In reference to this matter the plaintiff's evidence tended to show that, upon the defendants' bookkeeper...