Court Opinion

ID: 6505497
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:17:45.8566+00
Date Added: 2024-06-11T15:54:43.414694
License: Public Domain

GOLDTHWAITE, J.
—As a decree had been rendered against the estate of Yarborough, the representative of that estate had authority to pledge the notes sued on as collateral security for its payment.—Wheeler v. Wheeler, 9 Cow. 34. It is clear, also, under our decisions, that where a creditor has received notes as collateral security for his debt, unconditionally, without any instructions governing the course of collection, he is bound to take the necessary steps to perfect the liability of the parties ; and if the security is lost, or rendered unavailable, by his neglect, he must bear the loss.—Russell v. Hester, 10 Ala. 535, and cases there cited.
In the present case, however, it is urged on the part of the appellee, that the same principle does not apply, for the reason, that the party who received the notes had,not authority-to sue, but was by his agreement confined to a particular mode of collection. We think, the evidence, as set forth in the record, leaves this question in some doubt; but conceding that' Davis received the notes simply as a deposit, or pledge, to secure the payment of the decree, and without authority to sue, we still think the notice was properly given to him. *425Weissinger was, in law, the owner of thh notes. If he deposited them in the hands of a third party, to secure the payment of a decree which had been rendered against him in his representative capacity, retaining the power of control and direction so far as suit was concerned, the party in whose hands they were placed must, in law, be regarded as his agent to receive the money due upon the notes. The possession of the notes by Davis, with the consent of the- owner, and the authority to receive the money, was prima facie evidence that 'he was authorized to act generally in relation to them.—Erick v. Johnson, 6 Mass. 196. Were the rule otherwise, it would, in many cases, operate as a fraud. If Davis, when the notice was given him, had explained the extent of his powers, under the aspect in which we are considering it, it is possible that the case might be different; but the record does not advise us that such was the case. . Davis states in his evidence, that after the notice had been given, he informed the agent of Pickens that his principal need give himself no further trouble about the notes, as an arrangement had been made by which they would be paid without resorting to him for the money; but from this testimony we would not be warranted-to infer, as a legal conclusion, that the extent of the authority of Davis in relation to the notes was made known.
Our conclusions are, briefly, these: If a debtor deposits notes unconditionally with a creditor, as security for a debt, he thereby gives to the latter the control and direction so far as their-collection is concerned, and it then becomes the creditor’s duty to take all necessary measures to prevent the discharge of any of the parties to the notes received by him. If the creditor receives the paper under a special agreement, by which he is not to sue, but to collect in any other mode, he must, as to all parties without notice of the extent of his powers, be regarded as the general holder ; and in either aspect, upon the facts as disclosed by the record, the notice may have been properly given. We say “may”; for, assuming that Davis may not have .had authority to sue, the court was not warranted by the evidence in drawing the conclusion that the extent of his powers in this respect was made known to the agent of the appellant.
In relation to the sufficiency of the notice : The record *426shows, that the agent of Pickens gave notice to Davis, after lie had received the notes from Woissing-er, and while they wore in his possession, that his principal was the surety of Harrell upon them, and to bring suit upon the same against the parties thereto; and this, in our opinion, would have been sufficient as a statutory notice, had it been in writing. It meets substantially the requisitions of the act (Clay’s Digest 532, § 6; Shehan v. Hampton, 8 Ala. 943); and it requires no argument to show that the party to whom the notice is to bo given may waive its being in writing. If the notice, however, did not fully meet the requisitions of the statute, it would be good at common law, when connected with proof showing the failure to sue, and the damage to the surety from such failure.—Herbert v. Hobbs, 3 Stew. 9: Goodman v. Griffin, ib. 160; Bruce v. Edwards, 1 ib. 11.
Judgment reversed, and cause remanded.