Smith v. Kirkland

• Decision Date: 21 February 1887
• Citation: 81 Ala. 345,1 So. 276
• Parties: SMITH and others v. KIRKLAND.
• Court: Alabama Supreme Court

1 So. 276

81 Ala. 345

SMITH and others v. KIRKLAND.

Supreme Court of Alabama

February 21, 1887

Appeal from circuit court, Henry county.

Action on bond.

Smith Stewart & Co. sued one Crawford and said Kirkland and one Oates on a bond.At the same said Kirkland signed said instrument, Crawford, the principal on the bond, represented to him that the instrument was a recommendation to Smith Stewart & Co. of his (Crawford's) efficiency as a commercial traveler.Kirkland could read writing, but did not read the instrument.Crawford further represented to Kirkland that W. S. Oates, one Koonce, and one Walker would sign the instrument.Thereupon Kirkland signed the said paper writing under the impression that it was of the nature represented by said Crawford, and with the understanding and agreement that it was not to be used by said Crawford, or delivered to said Smith, Stewart & Co. until said Oates, Koonce, and Walker signed it, but it was delivered to said parties without the agreed signatures.The said instrument purported to be signed by said Oates, but his plea of non est factum was sustained.The defendant, Kirkland, interposed as a defense that the bond sued on was delivered to his co-obligor Crawford, with the condition that it was not to be delivered to Smith, Stewart & Co. until it had been signed by said Oates, Koonce, and Walker, and that said Crawford delivered said bond to said Smith, Stewart & Co. without complying with said condition.Plaintiff filed a replication to defendant Kirkland's plea, to which replication Kirkland demurred and the court sustained his demurrer.Issue was joined on the plea.The court refused certain charges asked by plaintiffs, and gave one asked by defendant, Kirkland, which action of the court is assigned as erroneous.

Roquemore, White & Long, for appellants.

Oates & Cowan, contra.

SOMERVILLE J.

It has been long settled in this state, by a line of decisions which seem to be supported by the weight of authority, that it is a good defense to an action on a bond that a defendant, who is a surety, intrusted the bond to the principal obligor as an escrow, with authority to deliver it only on the express condition that other named persons should join as sureties in its execution prior to such delivery, and that the instrument was delivered to the obligee in violation of this condition.Guildv.Thomas, 54 Ala. 414, and authorities there cited;Bibbv.Reid, 3 Ala. 88.There are two established modifications of this rule: (1) It does not apply to commercial paper which has come into the hands of a bona fide purchaser before maturity, who is without notice of the condition.Marksv.First Nat. Bank.79 Ala. -----;1 Daniel, Neg. Inst.(3d Ed.) §§ 855, 856.(2) It does not apply where the surety, having knowledge or notice of the delivery of the bond, suffers the principal to act under it to the prejudice of the obligee, so as to waive the condition, and thus estop the surety from insisting on the defense.Wrightv.Lang, 66 Ala. 389.The defendant's plea of non est factum constituted, under this principle, a good defense to the action, if the jury believed the evidence in support of it, apart from the issue raised by the plaintiff's replication to this plea.

2.The main question arises on the sufficiency of this replication which, in substance, avers that a defendant signed the instrument upon the false representation of the principal obligor, Crawford; that it was a mere rec...