Court Opinion

ID: 3239552
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:13:10.645919+00
Date Added: 2024-06-11T13:46:45.544844
License: Public Domain

The Hanover National Bank was the holder of the defendant's (appellee's) note, sued on by Manson, the plaintiff, under an assignment thereof by the payee, the German Bank, to the Hanover National Bank, effectuated many months before the maturity of the note. Subsequent to the maturity of this note, it was sold by the Hanover National Bank in enforcement of that bank's rights to dispose of this note, along with other collateral, to gain proceeds to apply to the payment, pro tanto, of the German Bank's indebtedness to the Hanover National Bank. The note in suit was due November 3, 1914, bore date February 3, 1914, and was transferred to the Hanover National Bank on the __________ day of __________, 1914, before its maturity.
The defendant asserted in his pleading, and offered evidence tending to support, this defense: That on October 29, 1914, he paid $650 to the German Bank, as the authorized agent of the Hanover National Bank, in partial payment of the note sued on, and that on November 3, 1914 — the date of the maturity of this note — he likewise paid the balance due on the note, viz. $350, taking receipts for these payments, the latter of which showed that the payment then made satisfied the balance due on this note. At the time these payments were made, the German Bank did not have this note in its possession, and it was not delivered to defendant or any one for him. The note was in the possession of the transferee, the holder, Hanover National Bank. If the full payments thus made were made to the German Bank as the authorized agent of the Hanover National Bank to accept payment of this note — an issue of fact, under the whole evidence, which was due to be and was submitted by the trial court to the jury for decision — then the contract, the obligation evidenced by this note was completely extinguished at its maturity. Where a negotiable instrument is paid to the holder at maturity by the maker, "the liability of all the parties thereto is discharged, the paper is dead, and the contract evidenced thereby is entirely extinguished." Code, § 5068, subdiv. 1; 3 R. C. L. p. 1272; Mabry v. Matheny, 10 Smedes  M. 323, 48 Am. Dec. 753, 754. The reissue, subsequent to maturity, of a negotiable instrument, after its obligation has been extinguished by payment by the maker to the holder, at its maturity, will subject the party reissuing it to a liability, but the maker's liability thereon is not revived unless the maker acquiesces in or consents to the reissue of the instrument. 3 R. C. L. p. 1272; 2 Daniel's Neg. Instr. § 1238; Mabry v. Matheny, supra; Cochran v. Wheeler, 7 N.H. 202, 26 Am. Dec. 732; note, 11 Am. Dec. p. 66.
In purchasing the note, subsequent to its due date, at the foreclosure sale of it, along with other collateral transferred by the German Bank to the Hanover National Bank, Manson, the plaintiff, took this note subject to whatever defenses the maker then had against the Hanover National Bank. Code, § 5013 (Uniform Neg. Instr. Act), wherein it is provided:
"But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality, has all the rights of such latter."
While this plaintiff became clothed — by the assignment to him of the defendant's note several months subsequent to its maturity — with authority to sue thereon in his own name, yet this plaintiff's rights in the premises were only such as the Hanover National Bank had at the time of the sale of this, along with other, collateral. If the note was fully paid at maturity to an authorized agent of the Hanover National Bank, the contract was extinguished, and this plaintiff could not recover.
Plea 11, as amended, asserted that the plaintiff was not the owner of the note. According to the authority afforded by Agee v. Medlock, 25 Ala. 281, that plea only put in issue the genuineness of the indorsement. There was a general plea of payment in the Code form. Code, vol. 2, p. 1202, form 35. The plaintiff replied that he purchased the note at the foreclosure sale of the collateral, and that it had not been paid. The defendant rejoined (rejoinder numbered 3) to this effect: That the note sued on "was paid by the defendant to the German Bank, the duly authorized agent of said Hanover National Bank, before said note was acquired by the plaintiff." It was ruled, in effect, in Vogler v. Manson, 76 So. 117,2 that evidence of payment of the note at any time was admissible under the general plea of payment (in Code form) already interposed when the third rejoinder was filed, and, if so, no prejudice to the plaintiff resulted from the court's action in overruling the plaintiff's demurrer to the quoted rejoinder. In the state of the averments of the pleading in both the Vogler and this case, at the stage when the substance of the quoted rejoinder was introduced, it may be assumed that no harm to *Page 85 
any of the parties could or did result from the action of the court in retaining the third rejoinder, notwithstanding demurrer, in the list of issue-tendering pleadings in the cause, though reference to considerations controlling the decision in Barbour v. Washington Ins. Co., 60 Ala. 433, might, under other circumstances, induce conclusions in partial qualification of the assertion that, under a plea of payment in the Code form, payment at any time would be admissible, especially if the payment relied on by the defendant was made at maturity by the maker, extinguishing the obligation of the contract (3 R. C. L. p. 1272), and the note was subsequently assigned by the holder who received the payment at maturity to one who thereby became invested with no better right than his assignor had.
The court refused to give these specially requested instructions:
"B. Under the evidence in this case if you believe the same, I charge you that the plaintiff Manson is the owner of the note sued on."
"E. I charge you gentlemen of the jury that if you believe the evidence in this case the defendant has failed to establish his plea No. 11 as amended, to wit, that the plaintiff is not the owner of the note sued on."
"Z. If you believe the evidence I charge you plaintiff is the owner of the note sued on."
The requests were calculated to mislead the jury, and were, for that reason, well refused. They conclude that the plaintiff was the owner of the note. If the note was effectually paid by the maker, at maturity, to the German Bank as the authorized agent of the Hanover National Bank, the holder in due course, then the plaintiff, through the note's subsequent assignment, took nothing, was the owner of nothing, except the right to sue on the note in his own name, because the obligation of the contract had been, theretofore, at maturity, extinguished. To unqualifiedly advise the jury that the plaintiff was the owner of the note — regardless of the conclusion upon the issue of fact stated — was at least likely to impress the jury with the erroneous idea that, notwithstanding the obligation of the note may have been extinguished by its payment at maturity still the plaintiff owned the note; that the note was capable of ownership. Special requests for instructions to juries may be refused without error if they are not clear and certain, or if they require explanation, or if they are so doubtful in meaning as to appear to need explanation of them that misunderstanding of them may be avoided. No such rules pertain to pleadings. The fact that this court in Agee v. Medlock, 25 Ala. 281, construed the term owner in a plea as only denying the genuineness of the indorsement of the note sued on is not an authority for so interpreting the word owner in the quoted special requests for instructions to the end that error of the trial court in refusing such requests may be pronounced. On appeal all reasonable intendments are resolved in favor of, not against, the correctness of the action and judgment of the trial court.
I cannot, therefore, concur in affirming error of the trial court in refusing the special charges quoted above.
2 200 Ala. 351.