Emanuel v. Atwood

6 Port. 384

• Court: Supreme Court of Alabama
• Decided: January 15, 1838
• Status: Published

Opinion

COLLIER, C. J.

The plaintiff in error brought as-sumpsit against the defendant, in the Circuit court of Wilcox, and declared as indorsee of John Jenkins, on a promissory note, by which the defendant, on the 14th March, 1827, promised to pay to Jenkins fourteen hundred and sixty-six 4-100 dollars, on the tenth day of January thereafter, “payable and negotiable at either of the banks in Mobile.” The pleas were non assumpsit payment, and set-off. It appears from a bill of exceptions, taken at the trial, that the plaintiff having read to the jury his note and indorsement, with a protest for non-payment, — also proved and read an agreement thereto appended, in these words: “ Whereas, I have this day given to Mr. John Jenkins, my note for fourteen hundred and sixty-six dollars and 04 cents, due 10th Jarra-sary next; also, one for seven hundred dollars, due same Sime. I do hereby hind myself unto the said John Jenkins, to give him a satisfactory indorser upon said notes, living and residing in Mobile, provided he cannot negotiate said notes to answer his purpose without. March 14,1827 .”

The defendant also offered in evidence, by way of set-off, a promissory note in these words: “ $3036 38-100. Dale, Wilcox eounty, June 1st, 1826. On the first day of January next, I promise to pay to the order of Mr. John Jenkins, three thousand and thirty-six dollars, 38 cents, payable and negotiable at the Bank of Mobile, for value received.” (Signed,) “John B. Bass,” endorsed, “John Jenkins,” and proposed to shew that he was the person to whom the note was endorsed— that it was not paid at maturity' — and that a demand, was made, and notice of non-payment given to the in-dorser. To the admission of ail this evidence, the plaintiff objected; hut his objection being overruled, the note, with the proof of demand of Bass, and notice of nonpayment to Jenkins, was allowed to go to the jury. Whereupon the plaintiff excepted, and verdict and judgment being rendered against him, he has sued out a writ of error to this court.

Apart from statute, we consider it clear, that where one malees a promissory note negotiable at bank, and the hank becomes its purchaser, no set-off can he allowed against it, in favor of the maker against the payee. By thus agreeing that the holder may pass the property in the paper to the hank, the maker impliedly stipulates that he will forego, every defence against the payee and intervening holders, should it be thus negotiated; and is equivalent to saying to the hank, “if you will purchase my note, 1 will honor it at maturity.” But it is needless to consider this question at greater length, for it was expressly decided in Mandeville vs. Union Bank,

* that it would he a fraud on the hank, to set up off-sets against a note, under such circumstances growing out of transactions between the parties ; that the off-sets were waived, and could not, after the note has been discounted, be again set up.

Let us inquire whether the case at bar comes within the influence of the principle we have stated. The defendant makes his potes in favor of Jenkins, payable and negotiable at either of the banks in Mobile, and at the same time agrees with him in writing to furnish a satisfactory indorser upon each of the notes, residing in that city, if he cannot negotiate them so as to answer his purpose .without. This agreement does not contemplate a negotiation of the notes with the banks only, but with any one and in any way that may best sub-serve Jenkins’ purpose. And it is not merely an implied, but an express assent that they may be passed off in the course of business, and if necessary to effect that object, an undertaking to furnish a suitable indorser. Placing this agreement out of view, and it would not be insisted that had the bank become the proprietor of-the note in question, an offset was allowable. Taking the note in connection .yvith the agreement, and the case is considered quite as strong against the defendant. It was clearly not the expectation of the .one party, or the intention of the other, that the notes should remain in the hands of the.payee until maturity — such an idea is opposed to the defendants undertaking, which never would have been given but from the clear understanding of the parties, that the notes were to be used for the purposes of trade, even before maturity. In fact the stipulation of the defendant furnishes conclusive proof that nothing else whs designed, and amounts to a waiver, in advance of all offsets against either of the notes in the hands of á bona fide indorsee.

The notes and agreement of the defendant being simultaneously made, the latter must be taken to be an incident to the former, and equally - binding with them; and cannot in the absence of proof be considered as merely gratuitous. Our opinions are, that the offset offered by the defendant was not admissible, and that the court erred in allowing his evidence to go to the jury.

The judgment is reversed and the cause remanded.

GOLBTHWAITE, J — Not sitting.

9 Cranch. R. 9.