79 So. 48 | Ala. | 1918
Lead Opinion
The appellant, complainant, filed this bill against E. L. Simpson, the Tennessee Valley Bank, a corporation, and her husband, W. S. Davies. The court sustained demurrers to the amended bill; and the appeal is from that decree. The relief the complainant desires is the cancellation of a mortgage to Simpson on the real estate of the complainant; the contention being that the mortgage was given, in opposition to the statute (Code, § 4497), to secure the debt of the complainant's husband, W. S. Davies, to Simpson, which, with the several notes for this indebtedness, Simpson has assigned to the Tennessee Valley Bank as collateral for money loaned Simpson by the bank; but, if mistaken in this particular reason for relief, the complainant invokes the compulsory power of the court to restrain Simpson from disposing of or incumbering other properties owned by him that would be available to the bank, and should be availed of by the bank, to collect its debt from Simpson, to the end that the complainant's lands, described in the mortgage, may be exonerated from subjection to the satisfaction of Simpson's indebtedness to the bank, at least until Simpson's assets have been exhausted. It was decided in Scott v. Taul,
The real question presented for review with respect to the aspect of the amended bill bearing upon the objection taken by the *618
demurrer that the bill's averments disclose the bank's status and relation to have been that of bona fide purchaser of the notes is this: Is the bank's status and relation that of bona fide purchaser of the notes the mortgage was an incident thereto (Thompson v. Maddux,
The other theory of the bill, erected upon the notion that, when Simpson assigned these notes to the bank as collateral security for his loan from the bank, the complainant or her property were placed in the posture and relation of surety, for Simpson as principal, to the bank as creditor, is entirely unsound. According the effect stated to the averments of the amended bill, the bank became a bona fide holder in due course, its right being complete and unassailable to the notes and mortgage; and the complainant was, so far as the bank was concerned, primarily liable, along with her comaker, the husband, as the contract evidenced by the notes and mortgage promised and provided. The unrestricted transfer of a negotiable instrument, before maturity, in the usual course of business, for a valuable consideration, and without notice, creates in the transferee an original and paramount right of action; and in the hands of such transferee the contract is exempt from all legal and equitable defenses to which it might have been subject before such transfer. Capital City Ins. Co. v. Quinn,
From these considerations it results that no error affected the ruling of the court below in sustaining the demurrer noted in the assignments of error.
Affirmed.
ANDERSON, C. J., and SAYRE and GARDNER, JJ., concur.
Addendum
The argument for rehearing has been carefully considered. The court remains satisfied with the conclusion attained. When due account is taken of the fact that the decision in Scott v. Taul,
Reference to the original opinion will disclose that the court, in construing the bill, original and as amended, did not indulge a presumption that the notes possessed all the qualities or characteristics essential to constitute a negotiable instrument; but, far differently, deduced the conclusion that they were negotiable instruments, possessing all their qualities or characteristics, from what appeared on the face of the pleading, under the influence and exaction of the applicable, familiar rule which requires, on hearing or demurrer, the pleading to be construed most strongly against the pleader.
The appellant is not related to the transaction as a surety to Simpson in his relation of debtor to the bank. The reasons for this conclusion are stated in the original opinion. The bill seeks the complete cancellation of the instruments. It does not invoke the powers of the court to ascertain and determine the extent to which the bank, as a bona fide purchaser for value and without notice, may be protected, and beyond that (the indebtedness of Simpson to the bank) the annullment of the notes and mortgage as securities for the husband's indebtedness to Simpson. That question is not presented, and hence is not decided.
The application for rehearing is denied.
ANDERSON, C. J., and SAYRE and GARDNER, JJ., concur.