Slaughter v. First Nat. Bank

• Decision Date: 05 February 1896
• Citation: 109 Ala. 157,19 So. 430
• Parties: SLAUGHTER ET AL. v. FIRST NAT. BANK OF MONTGOMERY.
• Court: Alabama Supreme Court

19 So. 430

109 Ala. 157

SLAUGHTER ET AL. v. FIRST NAT. BANK OF MONTGOMERY.

Supreme Court of Alabama

February 5, 1896

Appeal from circuit court, Crenshaw county; John R. Tyson, Judge.

This action was brought by the First National Bank of Montgomery against N.M. Slaughter and others, and counted upon a promissory note, which was alleged to have been executed by the defendants. There were several pleas filed to the complaint, upon each of which pleas issue was joined. The tendencies of the evidence introduced upon the trial had upon the issues thus formed are sufficiently stated in the opinion. Upon the hearing of all the evidence, the court, at the request of the plaintiff, gave the general affirmative charge in its favor, and to the giving of this charge the defendants duly excepted. There were verdict and judgment for the plaintiff. The defendants appeal, and assign as error the giving of the charge requested by the plaintiff, and the judgment rendered. Reversed.

R. L Harmon, and I. H. Parks, for appellants.

M. W Rushton and John Gamble, for appellee.

HEAD J.

The note declared upon is governed by the commercial law. Bank v. Slaughter, 98 Ala. 602, 14 So. 545. Action upon it, therefore, must be prosecuted by the holder of the legal title. Code, § 2594. A sworn plea of defendants denies that it had been assigned to the plaintiff. The legal title to such paper can pass only by the indorsement of the payee. The words, "Montgomery Iron Works, J. J. Woodward Secretary & Treasurer," which appear on the back of the note in suit, do not, under the issue here presented, without more, prove an indorsement by the payee. It was essential to recovery by the plaintiff that the execution of the indorsement be proven. There was evidence from which the jury could legally infer that the indorsement was actually made by Woodward, though the plaintiff omitted to introduce direct proof of the fact.

The next plea is that the defendants did not sign the note which is the foundation of the action as a waive note or contract. The plaintiff joined issue upon this plea. It is pleaded in bar of the whole action, yet it may be regarded as simply controverting the fact of waiver of exemptions. Goetter v. Pickett, 61 Ala. 387. By the issue thus presented, all questions as to the rights of the plaintiff as a bona fide holder of commercial paper for value and without notice were eliminated and waived; and the only question for decision under that issue was whether the defendants signed the note as a waive note or contract. The evidence was in direct conflict upon this question, and the court erred in taking the issue from the jury.

The next pleas, which were in short, by consent, were (1) failure of consideration, (2) breach of warranty, and (3) fraud; and upon them issue was likewise joined. Here, again, all questions as to plaintiff's protection under the law merchant were waived. There was evidence tending to support, at least, the first and second of these pleas, and the court erred in taking the issue from the jury. The defendants, by pleas to so much of the complaint as seeks to establish that they had waived their rights to claim their lawful exemptions against the enforcement of the contract in suit, controverted, as authorized by the statute, the fact of such waiver; alleging nothing as to plaintiff's rights as a holder of the paper under the commercial law. As upon the other pleas, the plaintiff joined general issue upon these; waiving again all protection under the commercial law. There was evidence tending to support the pleas, and the issues were improperly taken from the jury.

The defendants N.M. and J. L. Slaughter, in proper form, under oath, pleaded non est factum. Issue was joined upon this plea. It was not disputed that D. L. Slaughter executed the note, for and in behalf of these two defendants, as their agent. There was evidence tending to show that he exceeded his authority, and executed a different contract from that he was authorized to execute, induced thereto by fraud on the part of the agent of the payee, who took the note. There was no replication raising the question of plaintiff's protection against such excess of authority, under the principles of the law merchant. Nor was there a replication raising the question of subsequent ratification. Thus the only issue was whether the agent materially exceeded his authority. This should have been submitted to the jury, if, indeed, the evidence upon it was not such as justified an affirmative instruction in favor of the two defendants.

Another plea sets up, in bar of the whole action, that the plaintiff discounted the note sued on at a greater rate of interest than 8 per cent. per annum. We suppose this plea is based on section 4140 of the Code of 1886 -which provides that "any banker who...