104 So. 19 | Ala. | 1925
B. L. Gaddis, Jr., being president of the Merchants' Bank, lent to himself $12,500 of the funds of the bank, and gave to the bank his promissory note, payable on demand, and indorsed by John A. Gaddis and J. R. Gamble. Afterwards the superintendent of banks — plaintiff's predecessor in office — upon an examination of the affairs of the bank, demanded that the bank get additional security or call in the note. Gaddis, president of the bank, informed Lancaster of the situation, telling him that the superintendent of banks would be satisfied with his signature, whereupon Lancaster indorsed the note, and afterwards was informed that his indorsement had satisfied the superintendent, and that the board of directors of the bank would carry the loan for a while longer. There had been no agreement at the time of the execution of the original note that additional security would be furnished, nor did Lancaster receive anything directly for his indorsement. The consideration, if any there was, moved to Gaddis or the bank, one or both. Some months later the bank suspended payment, and its affairs were taken over by the superintendent, who brought this action on the note. Defendant, appellee, pleaded in short by consent "no consideration" and "the statute of frauds." Plaintiff, appellant, contends that a consideration was shown for defendant's indorsement, that the contract shown in evidence was not obnoxious to the statute of frauds, and, in any event, defendant is estopped to assert either defense.
It is generally agreed that the indorsement of a note by one other than the payee or holder, whether before or after delivery, must be supported by a consideration, and that, if the indorsement is made subsequent to delivery, a new consideration is necessary, unless made pursuant to prior agreement. Any consideration which would support a simple contract, such as forbearance, extension of time, release of collateral, etc., will suffice. 8 C. J. p. 250, § 392; Code 1923, § 9053. And it may be for the benefit of a third person who is not a party to the paper. 8 C. J. p. 214, § 348. Appellee became an indorser for the accommodation of Gaddis, and would be liable to a subsequent transferee for value before maturity, "notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party." Code 1923, § 9055. But, as between the original parties, that is, appellee and the bank, the latter being fully advised of all the circumstances attending the indorsement, the bank, in whose right plaintiff as a statutory receiver brings this action, cannot, according to the decision in Hood v. Robbins,
Appellant, for the argument only conceding everything else, contends — to quote the language of the headnote in State ex rel. Lattanner, Superintendent of Banks, v. Hills,
"Where a note is executed to a bank for the purpose of meeting the requirement of the state superintendent of banks that deficiency of the assets of said bank be made good, and for the purpose and with the result of enabling such bank to continue its business for some period during which debts are created and new depositors acquired, neither the defense of want of consideration nor failure of consideration for such note is available in an action brought to recover thereon by the state superintendent of banks."
And it would follow that, if want or failure of consideration may not be successfully pleaded in such case, the statute of frauds would likewise be unavailable in defense. Vallely v. Devaney (N.D.)
In two instances appellant reserved exceptions to rulings on the admission of evidence; but in both cases appellant afterwards had the answers desired, so that no reversible error is shown.
Affirmed.
ANDERSON, C. J., and GARDNER and MILLER, JJ., concur.