King v. Peoples Bank

127 Ala. 266

• Court: Supreme Court of Alabama
• Decided: November 15, 1899
• Status: Published

Opinion

HARALSON, J.

The note sued on was for $500, dated the 30th December, 1897, and was payable at the plaintiff bank to W. C. Carroll, on the first day of July afterAvards, and bore interest' from date. The' plaintiff bank purchased the same from the payee, Carroll, who transferred it by his indorsement' to plaintiff, on the 14th January, 1898, at which date about $1.66 interest, had run on it, paying for it $500. The case was 'tried by agreement of counsel, on the general issues and plea numbered 5, which set up failure of consideration and that the plaintiff was a banker, and in- the regular course of its business discounted said note for the payee, at a greater rate of interest 'than eight per cent. per annum. A demurrer was interposed to this plea by the plaintiff, which was overruled, and the plaintiff was forced to take issue on it. The defendant insists, that plaintiff having discounted the note for $500, — the amount for which it was given, when there was the sum of $1.66 interest due on it, — it was discounted at -a greater rate of interest than eight per cent, per annum, and, therefore, the plaintiff was not a bona fide purchase1!' of the same, entitled to protection against defenses existing between the defendant and the payee, at the date of the purchase.

It is not pretented-that the transaction between the defendant and Carroll, the payee of the note, involved any element of usury; and, as between the plaintiff and the payee, the transaction of the transfer of the note to the bank by the latter, ivas not one, in any sense, “for the payment of interest upon the loan or forbearance of goods, money, things in action, or upon any contract whatever, at a higher rate than” at eight dollars upon one hundred dollars for one year. There was no money borrowed by the payee on the note. He transferred the title absolutely to the plaintiff. Code, §§ 2626, 2630.

The cashier of the plaintiff bank testified, and there is no evidence to the contrary, that he, for the bank, discounted the note, that is, as he explained, “I myself purchased said note. I, as cashier of the bank purchased the note.”

It is well settled with us, “that commercial paper (such as this note was) may be bought and sold in the market like any other chattel, at its real or supposed value, and that the transfer of such paper at a discount beyond the legal rate of interest is not usurious, although the holder may indorse it, unless" the transaction was a mere1 device to evade the statute against usury.” — Capital City Ins. Co. v. Quinn, 73 Ala. 558; Hart v. Adler, 109 Ala. 467; Scott v. Taul, 115 Ala. 529; Orr v. Sparkman, 120 Ala. 9; Holmes v. Bank of Fort Gaines, 120 Ala. 493.

Tlie evidence sustained tlie plea of tlie failure of conisderation, but it does not -sustain that other part of the plea, — coupled with failure, of consideration,- — that plaintiff discounted the note -at a greater rate of interest than eight per cent, per annum. It was incumbent on defendant to sustain the truth of both these defenses set up and connected together as they were in one plea. Bienville W. S. Co. v. The City of Mobile, 125 Ala. 178.

There ivas no error in any of the rulings of the court, and its judgment is affirmed.

Affirmed.