60 So. 744 | Ala. Ct. App. | 1912
Lead Opinion
As between the parties and all others not bona fide holders a negotiable promissory note occupies the same position, in a suit for its collection, as a promissory note which is not negotiable, and is subject to the same identical defenses. In fact, when the assignee of a negotiable promissory note brings a suit against its, maker upon the note for its collection, and the maker pleads want of consideration, breach of warranty, fraud between the original parties, or any other defense which is valid as between the maker and the payee of the note, then, if the plaintiff desires to invoke for his protection the law merchant, he must do so by special replication. — Slaughter’s Case, 109 Ala. 157, 19 South. 480; Craft v. Russell, 67 Ala. 9; Hodges v. Winston, 94 Ala. 576, 10 South. 535.
(A) A surety signing a note upon the representation by the principal maker of the note that the name o'f another whose name appears on said note as one of its obligors is the signature of such other obligor, when, in fact, such signature was forged to such note, and such surety, by reason of such forged signature, is induced to sign such note, is not, as between the parties to the note, liable thereon, unless, after a discovery of
(B) Sureties signing a note on condition that others shall sign it as sureties before delivery by the principal obligor are not bound by the note as between the original parties to the note, if the principal obligor delivers it without obtaining the signatures of such sureties, unless such sureties do something to estop themselves from interposing such defense. — White Sewing Machine Co. v. Saxon, supra; Guild v. Thomas, 54 Ala. 414, 25 Am. Rep. 703.
The surety is under no obligation to sign the note, and as that is true, he may, to use the language of McClellan, C. J., “put such limitations and conditions upon his favor as seem to him proper or to his interest.”— White Sewing Machine Co. v. Saxon, supra.
It is undoubtedly the general rule that a dismissal or discontinuance as to one co-defendant in an action ex contractu effects a discontinuance as to the entire action. This rule is not one of universal.application, however; for if there is a sufficient legal excuse for the discharge of the dismissed defendant, as where the defendant advances a personal defense such as coverture, infancy, bankruptcy, or the like, then there is no discontinuance. —6 Ency. P. & Pr. pp. 857, 858, 859. Where one of the defendants in such a suit advances by a plea such a personal defense to the action, the plaintiff may admit the truth of the defense, and dismiss as to that defendant, and proceed against the other defendants. — Reynolds v. Simpkins, 67 Ala. 378.
The plea of J. D. Masters, above referred to, was a plea of bankruptcy, and was, within the meaning of the above rule, a plea setting up by Masters a personal defense to the action. While the trial court had the right to order a stay of the proceedings against the bankrupt until the question as to whether the federal court would grant to the bankrupt his discharge had been determined, we know of no rule of law which precludes a plaintiff, upon the filing of such a plea, from accepting that plea as a defense to such action in the state court,
We deem it useless to discuss the other pleas which set up, or attempt to set up, in various ways, the defense which the appellee in plea 13 alleges he possesses to this action. We presume that the views above expressed will be a sufficient guide to the court below on any question that may arise on the pleadings when this case is again tried.
The court might well have struck, upon motion of appellants, plea 2, which is but the general issue in another form.
There was no sworn plea impeaching the consideration of the notes, and the notes were themselves, therefore, prima facie evidence of the fact that they were made upon sufficient consideration.' — Code 1907, § 3966.
Reversed and remanded.
Norn — The foregoing opinion was prepared by Judge de Graffenried, while he was a judge of this court, and is adopted by the court.
Rehearing
On Rehearing.
Section 5013 of the Code provides: “In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defense as if it were non-negotiable.” Counsel for appellees, Golberg & Lewis, insist on rehearing that the appellees are “holders in due course” of the instrument sued on, which is a negotiable paper, and that it is not open in their hands to the defenses set up in the pleas. This presents for consideration the sole question: Can the payee of a negotiable instrument be a “holder in due course” as against the makers? We think not. Section 5007 of the Code defines a holder in due course as follows: “A holder in due course is a holder who has
From this it therefore clearly appears that the payee-of a negotiable instrument, though the holder of it, is-yet not the “holder of it in due course”; for in order for the holder to be a “holder in due course” under the-present statutes he must have acquired the paper, not as;
In the case of Rawleigh Medical Co. v. Wilson et al., 7 Ala. App., 60 South. 1001, we collated the authorities on the defenses set up in the pleas in this case.
The application for rehearing -is overruled