Court Opinion

ID: 3243708
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:16:31.081654+00
Date Added: 2024-06-11T13:40:20.532426
License: Public Domain

On Rehearing.
The first question presented in appellants' application for rehearing relates to the sufficiency of their plea 7 — a plea of confession and avoidance — which not only in legal effect confesses the averments of the complaint declaring against defendants as joint makers, but in terms alleges "while on the face of the note sued on this defendant signed said note, he did so as a mere indorser, and not otherwise, and with the understanding between him and the plaintiff that his liability on said obligation was not to be otherwise than that on the said original contract evidencing said indebtedness," the plea previously averring that on the original contract, of which the note sued on is a renewal, he was an accommodation indorser for the other defendant.
There is nothing in the averments of the complaint or the plea showing, or tending to show, that there is anything on the face of the note producing ambiguity in respect to the capacity in which the defendant signed. The contention is, notwithstanding there is no such ambiguity, and notwithstanding he is prima facie a joint maker, the law permits him to plead and prove that he is in fact a mere accommodation indorser. In support of this contention he cites Long v. Gwin, 188 Ala. 196,66 So. 88; Hall v. First Bank of Crossville, 196 Ala. 627,72 So. 171; Smith et al. v. Pitts, 167 Ala. 461, 52 So. 402; Jackson et al. v. Wood, 108 Ala. 209, 19 So. 312; Tennessee-Hermitage Nat. Bank v. Hagan et al., 218 Ala. 390,119 So. 4; Carter et al. v. Long et al., 125 Ala. 280,28 So. 74; Spencer v. Blanke Mfg.  Supply Co., 220 Ala. 350,124 So. 904; Branch Bank of State of Alabama at Mobile v. James 
Darrington, 9 Ala. 949; Campbell v. Hughes, 155 Ala. 591,47 So. 45; Summerhill et al., v. Tapp, 52 Ala. 227.
There are some well-established rules of law, sometimes treated as exceptions to the general rule, that the terms of written contracts cannot be varied or changed by extrinsic evidence showing a contemporaneous oral agreement between the parties, though in fact they do not impinge this general rule. A statement of some of them will demonstrate that the authorities relied upon by appellants are inapt to the question presented in this case:
(1) That "An irregular indorsement, such as appears when at the inception of a note, a person other than the payee writes his name upon its back, does not conclusively imply a contract of a particular nature; therefore, the nature of the instrument and the relation to it of the person so indorsing it, whether as maker, guarantor or indorser, may properly become the subject of inquiry involving the *Page 279 
situation and intention of the parties to be arrived at upon averment and proof." Carter v. Long Bros., 125 Ala. 280,28 So. 74; Hawkins v. Shields, 100 Miss. 739, 57 So. 4, 4 A.L.R. 760.
Long v. Gwin, 188 Ala. 196, 66 So. 88, and Hall v. First Bank of Crossville, 196 Ala. 627, 72 So. 171, applied this rule, and are inapt as authorities to the question in hand.
(2) That one who signs with another as joint makers of a promissory note, when sued, may plead and prove in discharge of his liability that he is a surety in connection with any facts that release his liability, such as that the payee in the note has made a new contract with the principal debtor, upon valuable consideration, extending the time of payment, without the surety's consent and to which he is not a party. This was the rule applied in Branch Bank of State at Mobile v. James 
Darrington, 9 Ala. 949; Summerhill et al. v. Tapp, 52 Ala. 227; Compton v. Smith, 120 Ala. 233, 25 So. 300; Smith et al. v. Pitts, 167 Ala. 461, 52 So. 402; Jackson et al. v. Wood,108 Ala. 209, 19 So. 312; Campbell et al. v. Hughes, 155 Ala. 591,47 So. 45; Tennessee-Hermitage Nat. Bank v. Hagan et al.,218 Ala. 390, 119 So. 4; Gibson v. Wallace, 147 Ala. 322,41 So. 960. These cases, therefore, are likewise inapt as authority to sustain appellants' contention.
(3) Where it is doubtful from the face of the contract, whether it was intended to operate as the personal engagement of the party signing it or to impose an obligation upon some third person as his principal, parol evidence is admissible to show the true character of the transaction as between the original parties to the contract. This was the rule applied in Spencer v. Blanke Mfg.  Supply Co., 220 Ala. 350, 124 So. 904, and Briel v. Exchange Nat. Bank, 172 Ala. 475, 55 So. 808. This rule is incorporated in the statute, section 9048 of the Code.
It is too clear to permit of question that no one of these so-called exceptions to the general rule, nor all of them combined, sustain appellants' contention that the joint maker of a note, unambiguous on its face, may plead and prove that he in fact signed the note as an indorser. The rule is well settled to the contrary. Young v. Perry, 187 Ala. 122,65 So. 817, 52 L.R.A. (N.S.) 1146; Richmond Locomotive  Machine Works v. Moragne, 119 Ala. 80, 24 So. 834.
Nor is it permissible to vary the terms of a contract evidenced by a regular endorsement, as distinguished from an irregular endorsement, of such note. Day v. Thompson, 65 Ala. 269; Avery  Sons v. Miller, 86 Ala. 495, 6 So. 38.
In Day v. Thompson, supra, it was said: "The contract imported by the regular indorsement of a bill or note is of a fixed and definite character, and is interpreted by the law. It is legally incapable of explanation, contradiction, or modification, by parol evidence. This rule is founded on the soundest principles of reason and public policy, as well as on the weightiest authority. The reasons for its application to commercial paper are more cogent, if anything, than to other written contracts. In Tankersley v. Graham, 8 Ala. 251, the rule was declared by this court, in discussing its application to indorsements, to be too firmly established to be now unsettled, even if its correctness were doubted. There are cases which hold the contrary doctrine; but the weight of authority greatly preponderates against the admission of such evidence. * * * Some of the decisions relax the rule, also, in cases of irregular indorsements, as this court did in the case of Hullum v. The State Bank, 18 Ala. 805. * * * We are not willing to enlarge the scope of these exceptions. It would tend to destroy the growing value of commercial paper, and to impair a salutary rule of evidence, which was designed to correct the proverbial infirmities of human memory, and has done much to close the flood-gates against frauds and perjuries." Day v. Thompson, 65 Ala. 273, 274.
This has been the law of this court for almost a century, and no reason appears why it should now be departed from.
Plea 13, of which appellant says: "We have carefully examined plea 13, and no where in the same do we find anything that would warrant the construction that the renewal note was given in consideration of forbearance or extension of time for payment." The plea here is not pleaded by a single defendant, but by two defendants, and it avers the note in question was given in renewal of an original note "which was not paid when due, but has been renewed from time to time down to and including the note sued on." Therefore, construing the plea most strongly against the pleader, it does not exclude the inference or intendment that it was given in consideration of forbearance or in extension of the time for payment. Scharfenburg v. Town of New Decatur, 155 Ala. 651, 47 So. 95. Moreover, the plea shows that the original note was supported by a valuable consideration, to wit, the purchase price of a stock of goods, by the Highland Market, and that the defendants in this case indorsed the note given therefor.
In Cochran v. Perkins, 146 Ala. 689, 40 So. 351, there was but one defendant and both the original and renewal notes were alleged and shown to be without consideration.
In Alabama Nat. Bank v. Halsey, 109 Ala. 196, 19 So. 522; Nobles v. Bank of Eclectic 217 Ala. 124, 115 So. 13; Armstrong v. Walker, 200 Ala. 364, 76 So. 280, the original notes were given in consummation of illegal contracts.
In King v. Perry Ins.  Trust Co., 57 Ala. 118; Eslava v. Crampton et al., 61 Ala. 507; *Page 280 
Masterson v. Grubbs, 70 Ala. 406, the defense was usury, and all of our cases hold that this defense is not affected by a renewal unless renewed after it reaches the hands of an innocent purchaser. McCormick et al. v. Fallier et al., ante, p. 80, 134 So. 471, where the authorities are reviewed.
Kelly's Heirs v. Allen, 34 Ala. 663, was a bill in equity to abate the purchase money for land on account of fraud. The bill conceded liability, and the question was whether or not the delivery and the giving of new notes, which were without anynew consideration, justified the denial of relief.
Plaintiff's replication 3, setting up waiver of the defenses pleaded in defendant's pleas 8 and 9, was proven by the undisputed evidence.
The application for rehearing is without merit and will be overruled.
Overruled.
ANDERSON, C. J., and SAYRE and THOMAS, JJ., concur.