U.S. Fidelity & Guaranty Co. v. Charles

• Decision Date: 18 December 1901
• Court: Alabama Supreme Court
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. CHARLES ET AL.

31 So. 558

131 Ala. 658

UNITED STATES FIDELITY & GUARANTY CO. v. CHARLES ET AL.

Supreme Court of Alabama

December 18, 1901

Appeal from city court of Montgomery; A. D. Sayre, Judge.

Action by the United States Fidelity & Guaranty Company against T T. Charles and others. Judgment for defendants, and plaintiff appeals. Affirmed.

This action was upon certain promissory notes, containing a waiver of exemptions, executed by one Caldwell as principal, and appellees as sureties, and payable to appellant. The defendants (appellees) set up by way of special defense that they signed the note as sureties for said Caldwell, and upon a promise or agreement on the part of the plaintiff not to prosecute said Caldwell for an embezzlement of which he was guilty, as an employé of the Standard Building & Loan Association; the plaintiff being a surety on his bond as such employé. A demurrer to the pleas setting up this defense was based upon the ground that it appeared that there was a valid and legal consideration as against the principal of the notes, but this demurrer was overruled. Upon the trial it was shown that the agent of the plaintiff, after satisfying Caldwell's defalcation, told him that if he would give plaintiff a note, with sureties, for the amount of the defalcation, it would be all right, otherwise the law would have to take its course; that thereupon Caldwell requested defendants to sign the notes; and that, but for this language used to Caldwell, defendants would not have signed the same and there was no other consideration for defendants' signature to the same. Upon this evidence the plaintiff requested two written charges, which were refused, and are as follows: "(1) In order to constitute a defense to the notes sued on, the defendants must show by clear proof that in consideration of the execution of the notes sued on, the plaintiff agreed to refrain from criminal proceedings against F. W. Caldwell for the embezzlement of the funds made good by plaintiff." "(3) If the agreement between the plaintiff and the defendants which induced the signing of the notes sued on is equally capable of two constructions, one legal and the other criminal, the jury should rather hold to the construction making the agreement legal, than to the construction making the agreement criminal." There were verdict and judgment for defendants, and plaintiff appeals.

Marks &amp Sayre, for appellant.

Ray Rushton, for appellees.

DOWDELL J.

The first and third pleas, to which demurrers were interposed by plaintiff and overruled by the court, set up the illegality of the consideration of the notes sued on. These pleas aver that the notes were given in consideration of an agreement and promise made by the payee not to prosecute the principal maker of said notes, viz., one Caldwell, for the embezzlement by him of $650 from the Standard Building & Loan Association of Montgomery, Ala., in the employment of which company he was engaged as a bookkeeper. It is further shown by said pleas that the payee guaranty company was security upon the employment bond of said Caldwell at the time of said embezzlement by him, and as such surety paid to said building and loan association the said sum so embezzled. That there was an implied contract, under the law, on the part of Caldwell, to pay to the said guaranty company the amount so paid by it to the building and...