109 Ala. 196 | Ala. | 1895
This action is by the Alabama National Bank against Halsey, on a promissory note executed by the defendant to the plaintiff, and payable at the latter’s bank in Birmingham, Ala. The defenses relied on were two, — false representations whereby defendant was induced to make the original note, which, through several renewals, constituted the consideration of that sued on ; and the illegality of the consideration of said first note and the renewals thereof. The 3rd, 4th and 7th pleas were intended to present the first defense mentioned, false representations by the plaintiff, or some one for whose representations in the premises the plaintiff is responsible. The 3rd and 4th pleas aver that the original note was made to R. D. Johnston, and that R. H. Johnston, Joseph F. Johnston and Samuel H. Buck were associated and interested together in placing or selling Corporation stock, that'Buck, acting for himself and his said associates, made alleged false representations to Halsey, and thereby induced him to buy the shares of said stock, which constituted the consideration of the original note. These facts imported responsibility on both R. D. and Joseph F. Johnston for the representations of Buck.
The misrepresentations averred in the third plea are clearly sufficient to avoid the original note and all mere renewals of it, as between Halsey and R. D. Johnston and his assignees with notice. The demurrer goes to both the 3rd' and 4th pleas, and this not separately, but jointly. Hence, even if the representations averred in the 4th plea are not of a character which, if false, would avid the contract, still the demurrer, so far as-this ground is concerned, was properly overruled, as to have sustained it would have been to adjudge the third plea also bad in this respect, which it clearly was not.— Weems v. Weems, 69 Ala. 104.
The further objection taken by the demurrer to these pleas, that they do not show that plaintiff had any notice of this infirmity of the original note, is in point of fact well grounded — the pleas do not show such notice — but in point of law the objection is untenable. Prima facie, the pleas, without averment of such notice,
* What is said above as to the sufficiency of pleas 3 and 4, notwithstanding they do not aver notice to plaintiff of the infirmity of said note therein alleged, applies also to pleas 10 and 11, to which this ground of demurrer was also interposed. Pleas 10 and 11 aver that the Coal City Coal & Coke Company is an Alabama corporation. It is contended in argument that to present the defense intended to be made by these pleas, viz., that the consideration of the original note was fictitious, and therefore void, stock of said company to be issued to Halsey, &c. &lq , they should have averred that the corporation was organized under the general incorporation laws of the State, so as to have excluded the idea that it was organized under a special charter authorizing stock to be issued as this is alleged to have been. Without stopping to inquire or decide whether the legislature has power under the Constitution to confer such authority upon any corporation, it will suffice to say that this objection to the plea is not pointed out in the demurrers ; and the rule established by our statute, and decisions upon it, is that no objection to pleading can be considered other than that specifically stated as ground of demurrer. — Code § 2690; 3 Brick. Dig. 705, §§ 70, et seq.; Turner Coal Co., v. Glover, 101 Ala. 289.
. Pleas 10 and 11 are not open to any of the objections which were taken to them by the several assignments of demurrer. They show that the consideration of Halsey’s original note was fictitious stock of the Coal City Coal & Coke Company, to be thereafter issued to him, the performance and consummation of the contract necessarily involving a violation of law, and therefore rendering it illegal and void, on the principles declared in Williams v. Evans, 87 Ala. 727; and that the note sued on is but a renewal of this original invalid contract.
The plaintiff did not take issue on either of defendant’s pleas numbered 3,4, 7, 10 and 33, which were the only pleas in the case at the trial except that of the general issue, but specially replied thereto setting up as an answer to all of them the following facts : That the ozúginal note znade by Halsey was for $5,000, and payable to the «Goal City Goal & Ooke Company, in February, 1890; that plaintiff discounted this note for said company at 8 percent, in August, 1889, in good faith, and without notice of any infirmity therein ; that said note was thezi indorsed to plaintiff by said company, and the proceeds thereof were thezi paid to said coznpany , that when said note fell due it was renewed by the defendant until June 4th, 3890, he paying the interest thereon then due and to accrue before maturity of the renewal note ; that this second note was renewed by Halsey to October 4th, 1890, he again paying the interest as before ; that the origizial note and those of February 4th and Juzio 4th, 1890, were payable -at the Alabama National Bazik, and were negotiable, and were acquired by plaintiff for value, without notice of any want or failure of cozisideration, or any defense, set off, dis'count or infirmity thereto, and said Halsey set up no such claizn ; “that the note due Oct. 4th, 1890, was not paid at maturity, and plaintiff placed it in the hands of attorneys for collection by suit or otherwise, and thereupon said Halsey, in January, 1891, proposed, in settlement and adjustment thereof, that if the plaintiff would accept the sum of $1,000. in cash and give him six znonths time, with the privilege of a further extension of six months in case he so desired it to pay the balance, he would pay the same proznptly when due ; and plaintiff accepted said proposition and took said Halsey’s note payable to itself, and released said Coal City Goal & Coke Company as indorser, and accepted the $1,000 and the note of said Halsey for $4,265-23, due June 7th, 1891; and that when said note fell due plaintiff renewed the same at Haisey’s request for a balance of $4,000; and when said last note fell due on January 7th, 1892, said Halsey asked for further time; and, upon payment by him ' to' plaintiff of-$l,000y plaintiff did grant - -him further time azid renewed- said note for-said balanee- of
On the trial, Halsey, as a witness in his own behalf, was permitted against plaintiff’s objection to testify as follows: “Buck stated to me that Capt. Joseph F. Johnston and his brother, R. D. Johnston, and others were interested in the company, that the property of the company was very valuable and would pay 20 per, cent. on the investment; and he showed me a letter he had from Capt. Johnston, in which Capt. Johnston stated that he, Buck, would like to get some of their friends in Huntsville interested in the company, that in his opinion the property would pay twenty per cent, easily and that it could be sold in a.little while at a profit; that witness said to Buck that he did not have the money to invest in the stock; that Buck then said to witness that he would have no monejr to pay, that he would only have’to make his note ■ for $5,000 for $10,000 of stock tobe issued.to him, that Captain Johnston would arrange to carry the note, and that he would get $10,000 of the stock, of the Coal City Coal & Coke Company when he paid the note.” Plaintiff’s objection was overruled, and an exception was reserved. At the close of Halsey’s testimony, as the bill of exceptions recites, “the plaintiff moved the court to exclude from the jury everything that he had said in regard to any statements made to him by Capt. Buck, or any conversation with Buck, and about Buck’s shówing him Captain .John ston’s letter and the contents of that letter, and any representations made to him by Buck, because the same was irrelevant, illegal and incompetent evidence. ” The court overruled this motion, and the plaintiff excepted. “The plaintiff renewed the motion,” the bill .of exceptions further shows, “at the conclusion of Captain •Johnston’s testimony, and also after all the evidence was in; and the court -made the same ruling, and the plaintiff excepted.” The - only suggestion made- by counsel in support of these rulings is that the objection and motions were too general, in that they went to a mass of evidence in a lump, and “that some, at least, of that evidence was’competent .under the pleadings," it being in direct support of averments in pleas upon which the plaintiff did not even join issue.” It is true that some of this evidence went to support defendant’s pleas
' The case below really turned upon the truth or falsity of the plaintiff’s replication upon which the defendant took issue.' The plaintiff not having taken issue on defendant’s special pleas, and the defenses relied on hot being within the general issue presented by the parties, it was essential to plaintiff’s recovery that the averments of the replication be proved. As we have seen, the replication avers that the note first given was payable to the Coal City Coal & Coke Company, and was by that company indorsed to the plaintiff. The evidence is directly conflicting as to one of these averments, and inferentially so as to the other. The evidence for the plaintiff goes in support of both ; but the testimony of the defendant is direct and positive that the original note was payable-to R. D. -Johnston, and not to said company; arid this, in connection with evidence for plaintiff tending to show indorsement.by the payee to it, affords some inference-that the -.indorsement was by
Again, the replication is intended to avoid the special pleas upon each and both of two considerations. First, by showing the bank had no notice of the infirmity of the original note, and purchased it for value, &c.; and upon this point of notice we have just seen the evidence was conflicting. And, second, by showing that defendant’s promise to pay plaintiff, evidenced by the note sued on, is supported by a new, independent and legal consideration, and is therefore obligatory on defendant, though the consideration of the original note was illegal and plaintiff had notice of the fact at the time of the discount. This new consideration is supposed to arise upon the facts that the original note was indorsed to the bank, and that subsequently the bank at defendant's request took his note payable directly to it-in lieu of the first note and indorsement, thereby .releasing the indorser, from whom, it is insisted, a recovery might have been had, even though the consideration of the indorsed paper were illegal and known to be so. In this connection, we may concede it tó be the' settled- l&w, that, while no number of mere renewals', and consequent extensions of the time for payment, of a promis
Charge 2 requested by plaintiff contravenes the well settled principle that mere renewals, however often repeated, of a promissory note, invalid because of illegality of consideration, do not heal the infirmity or prevent the maker from insisting upon it. Ware v. Morgan, 67 Ala. 461, 468.
Plaintiff’s third request for an instruction was bad for several reasons. In the first place, there is no averment in the replication that the original note was made payable to R. D. Johnston. Then, too, the charge assumes or declares that the attaching of the stock certificate to the note, even though both were still held by the company, was an issuance of the stock to Halsey, and this notwithstanding the jury may have found that no stock was to be issued to Halsey until he paid the note. And, moreover, the charge would have tended to mislead the jury to the conclusion .that mere renewals of a note, without claiming any defense to it, would eliminate original illegality of consideration.
The charges given at the instance of the defendant, in
For the error committed in overruling plaintiff’s motion in respect to certain testimony of Halsey, pointed out above, the judgment must be reversed. The cause is remanded.
