O'Neal v. Peaden

• Decision Date: 21 December 1933
• Docket Number: 4 Div. 739.
• Citation: 228 Ala. 21,151 So. 877
• Parties: O'NEAL ET AL. v PEADEN.
• Court: Alabama Supreme Court

151 So. 877

228 Ala. 21

O'NEAL ET AL. v PEADEN.

4 Div. 739.

Supreme Court of Alabama

December 21, 1933

Appeal from Circuit Court, Covington County; Emmet S. Thigpen Judge.

Action in assumpsit by Nela Peaden against Dudley L. O'Neal, as administrator of C. S. O'Neal, deceased, T. E. Henderson and others. From a judgment for plaintiff, the named defendants appeal.

Affirmed.

Powell Albritton & Albritton, of Andalusia, for appellants.

E. O Baldwin, of Andalusia, and Watson & Pasco & Brown, of Pensacola, Fla., for appellee.

BROWN Justice.

Action of assumpsit by the appellee against the appellants to recover the amount of an indebtedness due to the appellee from the Andalusia National Bank, evidenced by a certificate of deposit in words and figures as follows:

"The Andalusia National Bank No/103 "Andalusia, Ala. October 23rd, 1931

"Mrs. Nela Peaden has deposited in this bank Ten Thousand and no/100 Dollars $10,000.00 Payable to the order of herself twelve months after date on the return of this certificate properly endorsed. Interest at rate of 4%, payable quarterly.

"D. E. Fletcher, Vice-President, Cashier."

On the back of said certificate was the following writing: "We hereby guarantee payment of this certificate at maturity." This was signed by C. S. O'Neal, the intestate of the defendant Dudley L. O'Neal, sued as the administrator of C. S. O'Neal, deceased, and the defendants R. N. McLeod, C. A. O'Neal, L. M. Milligan, and T. E. Henderson.

The complaint, filed February 28, 1933, consisting of a single count, which, after averring that said certificate was issued by said Andalusia National Bank, on the 23d of October, 1931, setting out the certificate and the writing on the back thereof, with the signatures thereto appended, avers "that said amount as evidenced by said certificate, together with the interest thereon, as provided therein, was not paid at maturity, and that said amount, together with interest as provided therein, is still due and unpaid."

Appellants' first contention, presented on the trial by appropriate demurrer filed separately by each of them, is that the parties who signed on the back of the certificate of deposit, signed as indorsers, and an averment of presentment to the payor on the due date, its failure or refusal to pay, and due notice of such default, is essential to the statement of a cause of action against them.

In support of this contention, section 9089 of the Code of 1923 (section 63 of the N. I. L.), section 9210 of the Code (section 192, N. I. L.), and Jaronko v. Czerwinski et al., 117 Conn. 15, 166 A. 388, are cited.

Section 9089 provides that "a person placing his signature upon an instrument otherwise than as a maker, drawer, or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound is some other capacity." (Italics supplied.)

And section 9210 provides, "The person 'primarily' liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are 'secondarily' liable." (Italics supplied.)

There can be no question but what the Andalusia National Bank was the principal obligor, and, under the provisions of section 9210, was primarily liable; that the signers of the stipulation on the back of the certificate were either guarantors or indorsers.

If guarantors, the guaranty is an absolute guaranty of payment, and the guarantors were not entitled to notice of the principal's default, in the absence of express stipulation therefor.

It is well settled in this jurisdiction, in consonance with the great weight of authority, that where the guaranty is absolute in terms and for the performance of a specific act at a fixed period, liability of the guarantor becomes fixed on default of the principal, and the guarantor must take notice of the principal's default, unless notice is stipulated for in the contract. Donley v. Camp, 22 Ala. 659, 58 Am. Dec. 274; Leftkovitz v. First National Bank of Gadsden, 152 Ala. 521, 44 So. 613, 617; Baskett Lumber & Mfg. Co. v. Gravlee et al., 15 Ala. App. 359, 73 So. 291; Crawford et al. v. Chattanooga Savings Bank, 203 Ala. 133, 82 So. 163; Jaronko v. Czerwinski, 117 Conn. 15, 166 A. 388, 389.

"In such cases, no demand is necessary upon the principal debtor, and nothing of a preliminary nature on the part of the creditor is required by law to perfect his rights. It becomes the duty of the guarantor, in such cases, to see that his principal pays the debt at the time stipulated." Leftkovitz v. First National Bank of Gadsden, 152 Ala. 521, 527, 44 So. 613, 615; First National Bank of Abbeville v. Capps, 208 Ala. 235, 94 So. 112.

There is nothing on the face of the obligation pleaded, or in the facts alleged in the complaint, that develops any ambiguity in the obligation, or that would justify the conclusion that the parties thereto undertook otherwise than as absolute guarantors. Beardsley v. Hawes, 71 Conn. 39, 40 A. 1043; Edgerly v. Lawson, 176 Mass. 551, 57 N.E. 1020, 51 L. R. A. 432; Noble v. Beeman-Spaulding-Woodward Co., 65 Or. 93, 131 P. 1006, 46 L. R. A. (N. S.) 162; Conn v. Atkinson, 227 Ky. 594, 13 S.W.2d 759.

The verbiage of the obligation, written on the back of a promissory note, and signed by some of the parties, considered in Jaronko v. Czerwinski et al., supra, was: "For value received I hereby waive demand, protest and notice of protest and non-payment of this note, and guarantee payment of the same, notwithstanding any extensions of time that may be granted the maker in making payments, and I agree also to pay attorney's fees for collection or any other fees, charges and expenses that said The Polish Investment and Loan Co., Inc., may be put to in order to effect collection. Endorsements," etc.

The action was by one of the signers of the stated obligation who had been compelled to pay a judgment recovered on the note, against the principal and the other signers of the secondary obligation, and was presented on the facts going to show an irregular indorsement. In disposing of the case on appeal, it was observed: "The only language in the printed form signed by the parties which might be taken as evidencing an intention to be bound in any other capacity than as indorsers is, 'I hereby...